Freightos (NASDAQ: CRGO) 2025 loss narrows as bookings grow 44%
Rhea-AI Filing Summary
Freightos Limited files its Form 20-F for the year ended December 31, 2025, detailing a net loss of approximately $17.5 million, improved from $22.5 million in 2024, and gross bookings value of $1.286 billion, up 44%.
The company remains unprofitable and has not generated positive operating cash flow, while pursuing a 2026 shift to a solutions-led model that prioritizes SaaS adoption to drive later platform volumes. As of December 31, 2025, it had 51,376,890 ordinary shares outstanding.
Freightos highlights heavy exposure to macro cycles and severe disruptions in global freight, including Red Sea attacks and widespread Middle Eastern airspace closures that removed significant air cargo capacity and drove sharp rate volatility. Risks include seller concentration, intense AI-enabled competition, currency headwinds, regulatory exposure in customs brokerage, dependence on a small index-calculation team, and leadership transitions following the founder-CEO’s departure and the new CEO/CFO’s dual role.
Positive
- None.
Negative
- None.
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form
(Mark One)
REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
OR
ANNUAL REPORT PURSUANT TO SECTION 13 OR 5(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
OR
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Date of event requiring this shell company report
Commission file number
(Exact name of Registrant as specified in its charter
and translation of Registrant’s name into English)
(Jurisdiction of Incorporation or Organization)
(Address of principal executive offices)
Chief Executive Officer and Chief Financial Officer
+
IR@freightos.com
(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)
Securities registered or to be registered pursuant to Section 12(b) of the Act.
Title of each class | Trading | Name of each exchange on |
The | ||
| The |
Securities registered or to be registered pursuant to Section 12(g) of the Act. None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act. None
Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.
Table of Contents
As of the close of business on December 31, 2025, the issuer had
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes ☐
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ☐ | Accelerated filer | ☐ |
☒ | Emerging growth company |
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act.
† | The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012. |
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting over Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
US GAAP ☐ | Other ☐ |
If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow. Item 17 ☐ Item 18 ☐
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
Table of Contents
TABLE OF CONTENTS
INTRODUCTION | 1 | ||
PRESENTATION OF FINANCIAL INFORMATION | 2 | ||
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS | 3 | ||
PART I | 5 | ||
ITEM 1. | IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS | 5 | |
ITEM 2. | OFFER STATISTICS AND EXPECTED TIMETABLE | 5 | |
ITEM 3. | KEY INFORMATION | 5 | |
A. Reserved | 5 | ||
B. Capitalization and Indebtedness | 5 | ||
C. Reasons for the Offer and Use of Proceeds | 5 | ||
D. Risk Factors | 5 | ||
ITEM 4. | INFORMATION ON THE COMPANY | 53 | |
A. History and Development of the Company | 53 | ||
B. Business Overview | 54 | ||
C. Organizational Structure | 77 | ||
D. Property, Plants and Equipment | 78 | ||
ITEM 4A. | UNRESOLVED STAFF COMMENTS | 78 | |
ITEM 5. | OPERATING AND FINANCIAL REVIEW AND PROSPECTS | 78 | |
A. Operating Results | 78 | ||
B. Liquidity and Capital Resources | 92 | ||
C. Research and Development, Patents and Licenses, Etc. | 93 | ||
D. Trend information | 94 | ||
E. Critical Accounting Estimates | 94 | ||
ITEM 6. | DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES | 95 | |
A. Directors and Senior Management | 95 | ||
B. Compensation | 98 | ||
C. Board Practices | 103 | ||
D. Employees | 105 | ||
E. Share Ownership | 106 | ||
F. Disclosure of a Registrant’s Action to Recover Erroneously Awarded Compensation | 106 | ||
ITEM 7. | MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS | 106 | |
A. Major Shareholders | 106 | ||
B. Related-Party Transactions | 109 | ||
C. Interests of Experts and Counsel | 112 | ||
ITEM 8. | FINANCIAL INFORMATION | 112 | |
A. Consolidated Statements and Other Financial Information | 112 | ||
B. Significant Changes | 112 | ||
ITEM 9. | THE OFFER AND LISTING | 112 | |
A. Offer and Listing Details | 112 | ||
B. Plan of Distribution | 112 | ||
C. Markets | 112 | ||
D. Selling Shareholders | 113 | ||
E. Dilution | 113 | ||
F. Expenses of the Issue | 113 | ||
ITEM 10. | ADDITIONAL INFORMATION | 113 | |
A. Share Capital | 113 | ||
B. Memorandum and Articles of Association | 113 | ||
C. Material Contracts | 113 | ||
D. Exchange Controls | 113 | ||
E. Taxation | 114 | ||
F. Dividends and Paying Agents | 127 | ||
G. Statements by Experts | 127 | ||
H. Documents on Display | 127 | ||
I. Subsidiary Information | 127 | ||
J. Annual Report to Security Holders | 127 | ||
i
Table of Contents
ITEM 11. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK | 127 | |
ITEM 12. | DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES | 128 | |
PART II | 129 | ||
ITEM 13. | DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES | 129 | |
ITEM 14. | MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS | 129 | |
ITEM 15. | CONTROLS AND PROCEDURES | 129 | |
ITEM 16. | [RESERVED] | 130 | |
ITEM 16A. | AUDIT COMMITTEE FINANCIAL EXPERT | 130 | |
ITEM 16B. | CODE OF ETHICS | 130 | |
ITEM 16C. | PRINCIPAL ACCOUNTANT FEES AND SERVICES | 130 | |
ITEM 16D. | EXEMPTION FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES | 131 | |
ITEM 16E. | PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS | 131 | |
ITEM 16F. | CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT | 131 | |
ITEM 16G. | CORPORATE GOVERNANCE | 131 | |
ITEM 16H. | MINE SAFETY DISCLOSURE | 131 | |
ITEM 16I | DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS | 131 | |
ITEM 16J | INSIDER TRADING POLICIES | 131 | |
ITEM 16K | CYBERSECURITY | 132 | |
PART III | 132 | ||
ITEM 17. | FINANCIAL STATEMENTS | 132 | |
ITEM 18. | FINANCIAL STATEMENTS | 132 | |
ITEM 19. | EXHIBITS | 133 | |
SIGNATURES | 135 | ||
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS | F-1 | ||
ii
Table of Contents
INTRODUCTION
Unless otherwise indicated or the context otherwise requires, all references in this annual report (the “Annual Report”) to the terms “Freightos,” “Freightos Limited,” the “Company,” “our company,” “we,” “us,” and “our” refer to Freightos Limited, a Cayman Islands exempted company limited by shares, including its subsidiaries.
Freightos became a publicly traded company as a result of a business combination transaction (the “Business Combination”) that was completed on January 25, 2023 pursuant to a Business Combination Agreement, dated as of May 31, 2022 (the “Business Combination Agreement”), by and among the Company, Gesher I Acquisition Corp., a Cayman Islands exempted company limited by shares (“Gesher”), Freightos Merger Sub I, a Cayman Islands exempted company limited by shares and a direct wholly owned subsidiary of Freightos (“Merger Sub I”) and Freightos Merger Sub II, a Cayman Islands exempted company limited by shares and a direct wholly owned subsidiary of Freightos (“Merger Sub II”). Pursuant to the Business Combination Agreement, (a) Merger Sub I merged with and into Gesher (the “First Merger”), with Gesher surviving the First Merger as a wholly-owned subsidiary of Freightos and (b) immediately following the First Merger and as part of the same overall transaction as the First Merger, the Surviving Entity merged with and into Merger Sub II (the “Second Merger,” and together with the First Merger, the “Mergers”), with Merger Sub II surviving the Second Merger as a wholly-owned subsidiary of Freightos. Our ordinary shares, par value $0.00001 per share (“Ordinary Shares” or “Freightos Ordinary Shares”) began trading on the Nasdaq Stock Market LLC (“Nasdaq”) under the symbol “CRGO” on January 26, 2023, and our warrants exercisable for Freightos Ordinary Shares (“Freightos Warrants” or “Warrants”), which are subject to substantially the same terms and conditions as had been applicable to the warrants of Gesher that had traded publicly until the Business Combination, began trading on Nasdaq under the symbol “CRGOW” on January 30, 2023.
1
Table of Contents
PRESENTATION OF FINANCIAL INFORMATION
Our fiscal year ends on December 31. Our audited consolidated financial statements as of December 31, 2025 and 2024, and for the three years ended December 31, 2025, 2024 and 2023, have been prepared in accordance with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board. None of our financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
Our financial information is presented in U.S. dollars. All references in this Annual Report to “$” are to U.S. dollars.
We have made rounding adjustments to some of the figures included in this Annual Report. Accordingly, numerical figures shown as totals in some tables may not be an arithmetic aggregation of the figures that preceded them.
2
Table of Contents
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report contains or may contain forward-looking statements as defined in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that involve substantial risks and uncertainties. All statements other than statements of historical fact contained in this Annual Report, including statements regarding our future financial position, business strategy and plans and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “believe,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “expect,” “predict,” “potential” or the negative of these terms or other similar expressions. Forward-looking statements include, without limitation, our expectations concerning the outlook for our business, productivity, plans and goals for future operational improvements and capital investments, operational performance, future market conditions or economic performance and developments in the capital and credit markets and expected future financial performance, as well as any information concerning possible or assumed future results of operations of the Company.
Forward-looking statements involve a number of risks, uncertainties and assumptions, and actual results or events may differ materially from those projected or implied in those statements. Important factors that could cause such differences include, but are not limited to:
| ● | Our ability to effectively drive the adoption of our software solutions to drive strategic growth and the subsequent expansion of our Platform bookings; |
| ● | Whether we are able to attract and retain carriers, freight forwarders and importers/exporters to use our products and services, and to increase the level of activity of such users; |
| ● | Our history of net losses and the prospect for us not becoming profitable in the foreseeable future; |
| ● | Whether we are able to maintain and improve the quality of our products and services, so that we succeed at attracting and retaining users; |
| ● | Whether we are able to keep pace with rapid technological changes, particularly the transition to native operations; |
| ● | Whether we are able to successfully compete and maintain or gain market share in the fiercely competitive LogTech (logistics technology) industry; |
| ● | Whether we are able to retain the limited number of sellers of logistics that provide a substantial portion of the offerings available on our Platform; |
| ● | Our ability to successfully integrate acquired businesses; |
| ● | Global economic conditions, geopolitical issues, trade policy shifts and other factors, which impact our global operations and the international freight industry; |
| ● | Acute disruptions to the global supply chain and international shipping and aviation; |
| ● | Whether we need to raise additional funds to finance our future capital needs and grow our business; |
| ● | Whether we are able to maintain our growth and effectively manage our transition to a solutions-led model in 2026 and growth in the future, and maintain and enhance our brand; |
| ● | Our ability to manage through leadership and workforce transitions; |
| ● | Whether we are able to accurately calculate freight indexes and comply with our published guides for calculating an index, thereby avoiding potential liability or reputational damage; |
| ● | Whether we successfully navigate the complex regulatory environment to which we are subject, including with respect to data privacy and at our customs clearance operations, and thereby avoid penalties that could adversely impact our business; |
3
Table of Contents
| ● | Whether our internal computer and information technology systems, and those of our vendors, users or contractors, successfully avoid cyberattacks and security incidents, including sabotage, that could have numerous adverse impacts for our company; |
| ● | The impact on our multinational operations of ongoing military conflicts and political tension around the world; |
| ● | Whether there are changes in tax laws, tax incentives and benefits applicable to us; and |
| ● | The other matters described in “Item 3. Key Information— D. Risk Factors” of this Annual Report. |
We caution you against placing undue reliance on forward-looking statements, which reflect current beliefs and are based on information currently available as of the date a forward-looking statement is made. Forward-looking statements set forth herein speak only as of the date of this Annual Report. We undertake no obligation to revise forward-looking statements to reflect future events, changes in circumstances, or changes in beliefs. In the event that any forward-looking statement is updated, no inference should be made that we will make additional updates with respect to that statement, related matters, or any other forward-looking statements.
Any corrections or revisions and other important assumptions and factors that could cause actual results to differ materially from forward-looking statements, including discussions of significant risk factors, may appear in our public filings with the SEC, which are or will be (as appropriate) accessible at www.sec.gov, and which you are advised to consult.
4
Table of Contents
PART I
ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
Not applicable.
ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE
Not applicable.
ITEM 3. KEY INFORMATION
A. [Reserved]
B. Capitalization and Indebtedness
Not applicable.
C. Reasons for the Offer and Use of Proceeds
Not applicable.
D. Risk Factors
An investment in our securities involves a high degree of risk. You should carefully consider the risks described below before making an investment decision. Our business, prospects, financial condition or operating results could be harmed by the realization of any of these risks, as well as other risks not known to us or that we consider immaterial as of the date of this Annual Report. The trading price of our securities could decline due to any of these risks, and, as a result, you may lose all or part of your investment. The following discussion should be read in conjunction with our financial statements and notes thereto included herein. You should carefully consider the following risk factors in addition to the other information included in this Annual Report, including matters addressed in the section titled “Cautionary Statement Regarding Forward-Looking Statements.”
Risks Related to Our Business and Industry
We may fail to effectively drive the adoption of our software solutions, which would prevent us from achieving our strategic growth and the subsequent expansion of our Platform bookings.
Our strategy for 2026 is focused on “solution adoption”—embedding our SaaS and software tools into the daily workflows of our customers. We believe that when our software is integral to customer operations, platform bookings follow naturally. However, if we fail to achieve significant adoption of our Solutions segment, or if customers do not find our software essential to their workflows, our Solutions revenue and subsequently our transaction growth and the resulting network effects will be severely limited. This strategy represents a shift in resource allocation toward our Solutions segment. Long-term, we view our SaaS offerings as the critical enabler for our Platform; failure to execute on this “solutions-first” sequence may result in lower growth in 2027 and beyond.
The international freight industry is historically slow to adopt new technology. Our success depends on our ability to convince carriers, forwarders, and enterprise importers and exporters to move away from legacy manual processes and toward our solutions and digital booking platform. If the industry does not shift toward the digital workflows enabled by our solutions, our revenue growth will stagnate.
5
Table of Contents
Our long-term growth depends on our ability to attract and retain carriers, freight forwarders and importers/exporters using our products and services, and the failure to maintain or grow the number of users, and the level of activity of such users, could adversely impact our business.
Our ability to achieve significant growth in revenue in the future will depend, in large part, upon our ability to retain our current users and attract new users, including air and ocean carriers, freight forwarders and large, medium and small enterprise importers/exporters participating in the global freight ecosystem. In 2026, we are prioritizing software-led engagement as a stimulant for subsequent Platform growth.
Sellers of logistics services on the Platform (“Sellers”), such as carriers and freight forwarders, have many different ways of marketing their services, securing clients and obtaining payments from clients, including advertising to, and engaging with, prospective clients through other online or offline platforms and methods, using third-party brokers and offering their services directly to customers. The purchasers of logistics services on our Platform (“Buyers”), such as freight forwarders and importers/exporters, have similarly diverse options to find and engage service providers, such as other online or offline platforms, engaging providers directly or using other brokerage services.
If we fail to attract and retain a community of carriers that service the routes sought by freight forwarders and importers/exporters, or freight forwarders servicing geographic regions where importers/exporters need services, or if Sellers resist adopting our Solutions or integrating their existing information technology systems with our Platform, the quality and types of services provided on our Platform may not be satisfactory to Buyers on our Platform, services in geographic regions in which Buyers seek to engage freight services may not be available, and Buyers may decrease their use of, or cease using, our Platform. If Buyers reduce their usage of the Platform, Sellers may see less value in adopting our Solutions.
Our inability to attract and retain an active, diverse user base across our Solutions and Platform offerings could significantly hinder our long-term growth and business performance.
We expect to increasingly engage in sophisticated, costly and lengthy sales, marketing, internationalization and localization efforts. These efforts and others may not generate additional users, retain current users or advance our business in a cost-effective manner. We may not be successful in growing spending from target users, and in the event our current users decrease their usage that is not offset by increased activity from new users, that may result in a temporary or long-term deceleration in the growth of the value of transactions consummated between Buyers and Sellers on our Platform (referred to as our gross bookings value, or “GBV”, throughout this Annual Report). We may also modify our pricing model, or introduce new, modify or consolidate existing offerings or otherwise change our services and features to attract and retain users. Such actions may not have the intended effect of attracting and retaining users at the levels we anticipate and may have unintended negative consequences, such as a loss of users or a reduction of user activity or spend on our Platform.
Any decrease in the attractiveness of our Platform, failure to attract and retain users or reduced spending by users could lead to decreased activity, diminished network effects or a decrease in GBV on our Platform, each of which could adversely affect our business, revenue, financial condition and operating results.
We have a history of net losses, and we may experience net losses for the foreseeable future.
You should consider our business and prospects in light of the risks, expenses and difficulties encountered by companies that have not yet reached profitability. Although we launched our business in 2012, airline integrations reached critical mass in 2020. In addition, we recently shifted our business model from a bifurcated SaaS offering for carriers and freight forwarders, and a marketplace offering for our end customers, to a comprehensive model encompassing all of our customer segments. And, 2026 is a transition year focused on sequencing growth through software adoption. Accordingly, we have limited representative operating history upon which to base an evaluation of our current business and prospects and customers may not adopt the new model and we may face increased customer attrition.
6
Table of Contents
Changes in our offerings and pricing, and the continued evolution of our business strategy, subject us to a number of uncertainties, including our ability to plan for and model future growth and make accurate projections regarding our future performance. In addition, we have in the past seen, and may in the future see, unexpected or unintended negative effects, as a result of changes to our pricing model, offerings and sales, brand positioning, and marketing efforts, including a failure to attract and retain carriers, freight forwarders and shipping companies or attract new end customers that adopt our solutions and spend on our Platform or the loss of spend from existing end customers. We cannot ensure that we will be successful in addressing these and other challenges we may face in the future, and our business may be adversely affected if we do not manage these challenges successfully.
We have experienced significant net losses since our inception and, given the significant operating expenditures associated with our business plan, we anticipate continuing net losses for the foreseeable future. If we do achieve profitability, we cannot be certain that we will be able to sustain or increase such profitability. We incurred a loss of approximately $17.5 million for the year ended December 31, 2025 compared to a loss of approximately $22.5 million (which included a one-time, non-cash $3.0 million impairment of goodwill related to an acquisition from 2022) for the year ended December 31, 2024. We have not generated positive cash flow from operations, and we cannot be certain that we will be able to generate positive cash flow from operations in the future. To achieve and sustain profitability, we must accomplish numerous objectives, including broadening and stabilizing our sources of revenue and increasing the number of users and monetizing transactions. Accomplishing these objectives may require significant additional investments and we cannot be certain that we will be able to raise additional investments on attractive terms, or even at all. Ultimately, we may not be able to achieve our objectives.
If we fail to maintain and improve the quality of our products and services, we may not be able to attract and retain users.
To satisfy users, we need to continue to improve their experience as well as innovate and introduce features and services that they find useful and that cause them to adopt our Solutions and use our Platform more frequently. This includes improving our technology to enhance user experience, such as by optimizing search results, tailoring our database to additional geographic and market segments and improving the user-friendliness of our Platform and our ability to provide high-quality support.
Our users depend on our support organization to resolve issues relating to our products and services. Our ability to provide effective support is largely dependent on our ability to attract and retain employees who are well versed in our offerings. As we continue to grow our international user base, our support organization will face additional challenges, including those associated with continuing to deliver support to users who speak an increasing number of languages. Any failure to maintain high-quality support, or a market perception that we do not maintain high-quality support, could harm our reputation or adversely affect our ability to market the benefits of our products and services to existing and prospective users.
In addition, we need to adapt, expand and improve our offerings and user interfaces to keep up with changing user preferences. We invest substantial resources in researching and developing new features and enhancing our products and services by incorporating these new features, improving functionality and adding other improvements to meet our users’ evolving needs. The success of any enhancements or improvements to our offerings or any new features depends on several factors, including timely completion, adequate quality testing, integration with existing technologies on our Platform and third-party partners’ technologies and overall market acceptance. Because further development of our products and services is complex, challenging and dependent upon an array of factors, the timetable for the release of new features and enhancements is difficult to predict, and we may not offer new features as rapidly as users require or expect. Additionally, the time, money, energy and other resources we dedicate to developing new features or enhancements to our offerings may be greater than the short-term, and potentially the total, returns from these new offerings.
It is difficult to predict the problems we may encounter in introducing new features to our products and services and we may need to devote significant resources to the creation, support and maintenance of these features. We provide no assurances that our initiatives to improve our user experience will be successful. We also cannot predict whether any new features will be well received by users or whether improvements will be successful or sufficient to offset the costs incurred to offer these new features. If we are unable to improve or maintain the quality of our offerings, our business, prospects, financial condition and results of operations could be materially and adversely affected.
7
Table of Contents
Failing to keep pace with rapid technological changes, particularly the transition to native operations, could fundamentally disrupt our business, and render our existing Solutions and Platform obsolete.
The market for global freight, including the LogTech market, is characterized by rapid technological change, frequent new product introductions, and evolving industry standards, which is being accelerated through the increasing use of artificial intelligence (“AI”) and machine learning. The market may soon undergo a fundamental transformation driven by generative AI and autonomous agents. Our future success depends not only on our ability to continue enhancing our Platform’s functionality and our SaaS products, including through AI integration, to meet rapidly evolving customer demands. Our long-term success depends on our ability to adapt our software as an AI-first environment where autonomous agents manage complex booking and coordination tasks.
Our competitors, including new “AI-native” entrants and established tech giants, may be able to respond more quickly and effectively than we can to new or changing opportunities, technologies, standards, or customer requirements, particularly in their deployment and integration of AI technologies by developing systems that bypass traditional user interfaces entirely in favor of natural language orchestration. Many of our competitors have substantially greater financial, technical, and other resources than we do, enabling them to make significant investments in AI research and development, deployment, and implementation, including to train proprietary models or secure exclusive access to advanced compute resources.
If we are unable to enhance our products and services to incorporate new technologies, including AI and machine learning capabilities, in a timely and cost-effective manner, or if our competitors develop and introduce more sophisticated AI-powered products and features that achieve broader market acceptance, our Platform may become less competitive. Our long-term success may depend on our ability to transition from a “tool-based” SaaS model to an “agentic” AI model. Our competitors may develop autonomous logistics engines that disintermediate our Platform or make our Solutions obsolete. Our competitors may develop tools that:
| ● | Execute complex, multi-modal shipments autonomously without human intervention |
| ● | Utilize proprietary datasets to provide predictive pricing and capacity far more accurately than our models |
| ● | Create “zero-touch” booking experiences that make traditional dashboard-based SaaS obsolete |
| ● | Significantly reduce the “time-to-book” through advanced natural language processing |
Additionally, we may face difficulty recruiting and retaining skilled personnel with AI expertise due to intense competition for such talent. We are increasingly finding ourselves competing in an exceptionally constrained market for AI engineering and data science talent. Any failure to attract and retain the personnel needed to advance our AI capabilities, which could include pivoting our entire product architecture toward an AI-native foundation, could impair our ability to compete effectively.
We face intense competition and could lose market share to our competitors, which could adversely affect our business, operating results and financial condition.
The global freight industry is highly competitive, rapidly evolving, fragmented and subject to changing technology, shifting needs, virtual integration and frequent introductions of new competitors as well as new offerings and services. The level of competition within, and the frequency and likelihood of increased third-party investment and new competitors entering, this market segment further intensified due to the COVID-19 pandemic and the global supply chain disruptions that resulted, in large part, from the pandemic. We compete with a number of online and offline platforms and services domestically and internationally, as well as traditional freight brokerage businesses, to attract and retain users and increase the number of transactions booked through our Platform. Our main competitors vary based on specific parts of our product portfolio and include the following:
● | For WebCargo by Freightos air cargo booking platform: Cargo.one, CargoAi, WiseTech, CargoBooking.aero; |
● | For freightos.com (shipping marketplace): primarily other forwarders, such as Ship4wd, Flexport, FedEx, UPS and others; |
● | For WebCargo by Freightos Rate & Quote freight forwarder SaaS (Ocean): Descartes Portrix, Magaya Catapult,WiseTech CargoSphere, Freightify by Cargo.one; |
● | For WebCargo by Freightos Forwarder Rate & Quote SaaS (Air): Cargo.one, Cargo.Ai; |
8
Table of Contents
● | For Freightos Procure (Shipsta): Freightender, Tendereasy, Transporeon, and non-freight specific sourcing software such as Keelvar; and |
● | For Freightos Terminal (data): Xeneta, Platts, NYSHEX, and Drewrey and TAC and WorldACD for air cargo. |
In addition, well-established internet companies, such as Amazon, and businesses that operate driving, delivery and other commoditized marketplaces, such as Uber Technologies, have entered or may decide to enter into our market segment or adjacent markets such as trucking. Some of these companies have launched or may launch, or have acquired or may acquire, companies or assets that offer products and services that directly compete with our Platform. Many of these established internet companies and other competitors are considerably larger than we are, have considerably greater financial and other resources than we do, and could offer products and services similar to our offerings for lower fees.
Internationally, we compete against online and offline channels and products and services in most countries. Local competitors, or competitors that have invested more in international expansion, might have greater brand recognition than us in some countries and a stronger understanding of local or regional culture and commerce. Some competitors also offer their products and services in local languages and currencies that we do not offer. As our business grows internationally and we expand and grow our services offerings, we may increasingly compete with these international companies. We also compete against locally sourced service providers and traditional, offline means of identifying freight resources, such as local freight brokers and professional networks.
We also compete with companies that utilize emerging technologies and assets, artificial intelligence and machine learning. These competitors may offer products and services that may, among other things, use machine learning algorithms to connect users more effectively than we do, or otherwise change the way that businesses engage or pay service providers so as to make our Platform less attractive to users. Many of the companies and services that utilize these technologies in our market are still new and not yet fully mature in their capabilities or network scale; however, we may face increased competition should these companies or services or new entrants, succeed.
Many of our current and potential competitors, both online and offline, enjoy substantial competitive advantages, such as greater name recognition and more prominent brand reputation; pre-existing relationships with desirable service providers and end customers; more experience with international operations and localization of their offerings; longer operating histories; greater financial, technical and other resources; more users; newer technologies; greater appeal to certain segments of users; and, in some cases, the ability to rapidly combine online platforms with traditional global freight solutions. These companies may use these advantages to offer services similar to ours at a lower price, develop different or superior services to compete with our Platform or respond more quickly and effectively than we do to new or changing opportunities, technologies, standards, regulatory conditions or user preferences or requirements. In addition, while we compete intensely in more established markets, we also compete in developing technology markets that are characterized by dynamic and rapid technological change, many and different business models and frequent disruption of incumbents by innovative online and offline entrants. The barriers to entry into these markets can be low, and businesses easily and quickly can launch online or mobile platforms and applications at nominal cost by using commercially available software or partnering with various established companies in these markets.
Moreover, current and future competitors may also vertically integrate their services or make strategic acquisitions or establish cooperative relationships among themselves or with others, including our current or future third-party partners. By doing so, these competitors may increase their ability to meet the needs of our existing or prospective users. These developments could limit our ability to obtain revenue from existing and new users. For all of these reasons, we may not be able to compete successfully against our current and future competitors. If we are unable to compete successfully against current and future competitors, our business, operating results and financial condition would be adversely impacted.
9
Table of Contents
A limited number of Sellers provide a substantial portion of the offerings available on our Platform. If we fail to retain these Sellers, our Platform may not be as attractive to Buyers.
For the year ended December 31, 2025, approximately 21% and 55% of GBV was generated through the top Seller and the top-five Sellers on our Platform, respectively. For the year ended December 31, 2024, approximately 14% and 45% of our GBV was generated through the top Seller and the top-five Sellers on our Platform, respectively. As a result, our performance could be materially and disproportionately impacted by changes in the offerings made available to Buyers on our Platform by these few Sellers or any other significant future Seller. If any of our significant Sellers decrease, alter or discontinue the offerings available on our Platform, the value of our Platform to Buyers could be materially and adversely affected, which in turn could have a negative impact on our financial condition and results of operations. If we do not further diversify our Seller base, we will continue to be susceptible to risks associated with Seller concentration.
The integration of any businesses and technologies that we acquire, including their operations and employees, with our own, involves risks, and the failure to integrate them successfully may adversely affect our future results.
In recent years, we have been implementing a growth strategy that is centered on our vision of digitalizing the freight industry end-to-end. In August 2024, we acquired all of the outstanding shares of Shipsta, a leading freight-tender procurement platform used by enterprises to procure freight services at scale from leading freight forwarders and carriers— a segment representing an estimated 50-70% of the total air and ocean freight market. We believe that acquiring Shipsta has begun to, and will continue to, enable us to address the needs of importers, exporters, forwarders and carriers that seek comprehensive solutions beyond spot freight bookings and sales. In the past, we acquired several other businesses, including 7LFreight in 2021 and Clearit in 2022. We also may, in the future, enter into relationships with other businesses to expand our Platform or our ability to provide our Platform to more users, which could involve obtaining preferred or exclusive licenses, additional channels of distribution, or discount pricing, or the acquisition of, or investments in, other businesses.
Any failure to successfully integrate the business, operations and employees of future acquired businesses, or to otherwise realize the anticipated benefits of such acquisitions, could harm our results of operations. Our ability to realize these benefits will depend on the timely integration and consolidation of organizations, operations, facilities, procedures, policies and technologies, and the harmonization of any differences in the business cultures between these companies and their personnel with our own. Integration of acquired businesses with ours is complex and time-consuming, involves additional expense and could disrupt our business and divert our management’s attention from ongoing business concerns.
The benefits we expect to realize from potential future acquisitions will, necessarily, be based on projections and assumptions about the combined businesses of our company, and assume, among other things, the successful integration of acquired entities into our business and operations. Our projections and assumptions concerning our acquisitions may be inaccurate, however, and we may not successfully integrate the acquired companies and our operations in a timely manner, or at all. We may also be exposed to unexpected contingencies or liabilities of the acquired companies, and that may be accompanied by unforeseen or additional operating difficulties, risks and expenditures.
In order to effect any such acquisition, we may:
| ● | use cash that we may need in the future to operate our business; |
| ● | become subject to different laws and regulations due to the nature or location of the acquired business, products, technologies or other assets, or become subject to more stringent scrutiny or differing applications of laws and regulations than those to which we are currently subject as a result of such transactions; |
| ● | issue additional equity or convertible debt securities that would dilute our shareholders’ ownership interest; |
| ● | incur expenses or assume substantial liabilities; |
| ● | encounter difficulties retaining key personnel of the acquired company or integrating diverse software codes, operations or business cultures; |
| ● | encounter difficulties in assimilating acquired operations and development cultures or otherwise fail to realize the anticipated benefits of such transactions; |
10
Table of Contents
| ● | become subject to adverse tax consequences, substantial depreciation or deferred compensation charges; |
| ● | incur debt on terms unfavorable to us or that we are unable to repay; or |
| ● | be required to adopt new, or change our existing, accounting policies. |
Any of these by-products of our acquisition strategy could adversely impact our business and operating results. If we do not realize the anticipated benefits of our acquisition transactions, our growth strategy and future profitability could be adversely affected.
Adverse global economic conditions, as well as geopolitical issues, trade policy shifts, and other factors, could negatively impact our increasingly global operations and adversely affect our business, results of operations, financial condition and liquidity.
As a global company, our performance is affected by global economic conditions, geopolitical issues and other conditions with global reach, including changes in political conditions and in governmental policies; changes in and compliance with international and domestic laws and regulations; and wars, civil unrest, acts of terrorism, embargoes and other conflicts. The international freight industry in which we operate may be particularly subject to global economic trends and policy changes, including due to increases in tariffs and protectionist policies by the United States and other countries, while freight rate levels are at the same time also subject to capacity trends within the air and ocean markets. Macroeconomic weakness and uncertainty and the increasing fragmentation of global trade into regional blocs make it more difficult for us to manage our operations and accurately forecast financial results.
While macroeconomic risks apply to most companies, we are particularly vulnerable because the international freight industry is highly cyclical and especially susceptible to trends in economic activity. Our primary business is to facilitate the transportation of goods, so our business levels are directly tied to the purchase and production of goods - key measurements influenced by, among other things, inflation and deflation, supply chain disruptions, interest rates and currency exchange rates, labor costs, fuel and energy prices, buying patterns, debt levels, credit availability, disposable income, increased global concerns regarding working conditions and environmental sustainability; and changes in consumer attitudes regarding goods made in countries other than their own. Our revenue and profitability can be negatively impacted when demand for air or ocean freight decreases, reducing demand for our services, or when a drop in demand or sharp increase in supply puts downward pressure on freight rates.
When individuals and companies purchase and produce fewer goods, we facilitate the transportation of fewer goods, and as companies move manufacturing closer to consumer markets (“near-shoring” or “friend-shoring”) covering shorter distances, the high-value international transaction volumes that contribute to our Platform revenue may be reduced. Certain retailers are making investments to house goods in closer proximity to customers in connection with the growth in e-commerce demand and we expect this trend to continue. As we continue to grow our business, we are increasingly affected by the health of the global economy, the rate of growth of global trade, world trade policies (including significant tariffs such as U.S. Section 301 duties), international taxes, government-to-government relations and the typically more volatile economies of emerging markets.
Recent military escalations have demonstrated the fragility of these global networks. As a result of the ongoing military conflict between the United States, its Gulf allies and Israel, on the one hand, and Iran, on the other hand, global air freight networks have experienced a severe and sudden contraction. Following the escalation of hostilities in early 2026, the closure of sovereign airspace across much of the Middle East—including Iran, Iraq, Jordan, and Israel—coupled with the grounding of commercial and freighter fleets at major global hubs in Dubai, Doha, and Abu Dhabi, has removed an estimated 16% to 22% of global air cargo capacity. This “air bridge” collapse has forced long-haul traffic between Asia and Europe to utilize significantly longer and more costly detours, resulting in aircraft payload restrictions and skyrocketing freight rates. For example, on the Europe-Middle East lane, air cargo rates jumped by 73% within a number of days, according to the Freightos Air Index.
Instability in volume can also stem from other factors that have impacted global freight, such as the persistent attacks by Houthi rebels and other Iranian-backed groups in the Red Sea, the ongoing military conflict between Russia and Ukraine, as well as the ensuing sanctions on certain Russian and Belarussian persons and global trade relations. Any or all of these factors could negatively affect demand for global freight, our business, financial condition and result of operations. In addition, new requirements or restrictions could come into effect which might increase the scrutiny on our business or result in one or more of our business activities being deemed to have violated sanctions prohibitions.
11
Table of Contents
While it is not entirely conclusive, trade tensions and policy shifts may be contributing to weakness in the global economy, which could adversely affect our business, results of operations and financial condition. “Trade wars” could cause increased costs for goods transported globally, which may reduce customer demand for these products if the parties having to pay those tariffs increase their prices, or could result in trading partners further restricting their trade with countries that impose such measures. Political uncertainty surrounding international trade disputes could negatively impact business and consumer confidence and spending.
A reduction in global freight volumes may adversely affect our customer base and our opportunities for growth. A significant portion of our services are “spot market” opportunities, which refers to the freight services our service providers provide without contractually set rates. The spot market generally is impacted more quickly than the contract market by overall economic conditions. If rate conditions or a downturn in our end customers’ business cycles causes a reduction in the volume of freight they ship, particularly among certain national retailers or in the food, beverage, retail, manufacturing, paper or printing industries, carrier availability and our operating results would be adversely affected.
In addition, the container market is also facing record container vessel capacity growth which is also contributing to downward pressure on container rates across lanes. Red Sea diversions absorbed capacity starting in late 2023 and pushed average container rates up more than 3X for transpacific and Asia - Europe lanes in 2024 compared to the previous year. With Red Sea diversions still absorbing capacity throughout 2025 however, average container rates on these lanes for 2025 fell by 45% compared to 2024, demonstrating that ocean rates faced downward pressure even on lanes where demand grew in 2025, with more capacity scheduled to enter the market in 2026.
So as some of our Platform revenue is directly linked as a percentage of GBV, if there is price deflation, our revenue will be negatively impacted. When market prices decline, our results of operations are generally adversely affected.
In addition, the global freight market is also subject to cost increases outside of our control that could materially reduce the amount of global freight services that our end customers require. Such cost increases include, but are not limited to, increases in wage rates, fuel prices as noted, interest rates, taxes, tolls, license and registration fees, insurance, equipment and healthcare for employees. Such conditions could therefore have an adverse effect on our business, results of operations and financial condition.
Our employees and contractors include professionals located in various international locations, including Israel, China, Hong Kong, Taiwan, the Palestinian Authority and Catalonia. Political changes, or the escalation of local conflicts, could disrupt or limit the work our employees and contractors are able to perform, and thus negatively affect the range of services we are able to provide our users or our cost for such services.
Current economic conditions in global markets, including due to lingering inflation, moderately high interest rates, and tight credit conditions, tend to reduce overall demand in the global freight industry. While inflation has somewhat moderated from its peak periods, and central bank policies have shifted, there can be no assurance that instability in credit and financial markets and a deterioration in confidence in economic conditions will not occur once again. Our general business strategy may be adversely affected by any such economic downturn, liquidity shortages, volatile business environment or continued unpredictable and unstable market conditions. Should the equity and credit markets deteriorate once again, or if adverse developments are experienced by financial institutions, it may cause short-term liquidity risk and also make any necessary debt or equity financing more difficult, more costly, more onerous with respect to financial and operating covenants and more dilutive. Failure to secure any necessary financing in a timely manner and on favorable terms could have a material adverse effect on our growth strategy, financial performance and share price and could require us to alter our operating plans.
In addition, there is a risk that one or more of our service providers, financial institutions and other partners may be adversely affected by the foregoing risks, which could directly affect our ability to attain our operating goals on schedule and on budget.
12
Table of Contents
Acute disruptions to the global supply chain and international shipping and aviation, such as intermittent disturbances in the Red Sea and the closure of Middle Eastern airspace, could adversely impact our business and results of operations.
Given our operation in the international shipping industry, any material disruptions to the global supply chain or to international shipping routes and air corridors pose a potential material risk to our business and results of operations. Following the onset of Israel’s war with Hamas in October 2023 that expanded to military conflict with Hezbollah in Lebanon, a war with Iran, and military action against other state and non-state actors (as described below under “Risks Related to Freightos’ Operations in Israel and Certain Other Jurisdictions - Relations between Israel and the other jurisdictions in which we operate, and geopolitical issues in the various jurisdictions in which our employees and users reside, could materially affect our business.”), global air freight and maritime networks have experienced multiple periods of disruption.
Those attacks, including by the Houthi organization in Yemen, significantly reduced container liner use of the Red Sea, which ordinarily provides a vital maritime route for international trade and, together with the Mediterranean Sea and the Suez Canal that bridges between those two seas, connects Asia with Europe. Most shipping companies and charterers have been routing, and have indicated that they will continue to route, their tankers and cargoes via a much longer route around the Cape of Good Hope for so long as the risk of attacks on ships remains significant in the Red Sea region. Certain major shipping lines like Maersk and Hapag-Lloyd are cautiously resuming select Red Sea transits as of February 2026, often under naval escort, following a prolonged avoidance of the route due to Houthi attacks. However, while some services briefly returned, many carriers re-suspended transits in March 2026 due to the ongoing military conflict involving Iran.
The escalation of hostilities with Iran in early 2026 led to the widespread closure of sovereign airspace across the Middle East and the effective suspension of operations at major global transit hubs in Dubai, Doha, and Abu Dhabi. This “air bridge” collapse removed significant global air cargo capacity, forcing long-haul traffic between Asia and Europe to utilize significantly longer and more costly detours. These disruptions caused aircraft payload restrictions, grounded freighter fleets, and resulted in a massive reduction in air traffic that negatively impacted the air cargo shipments facilitated by our Solutions and Platform. The reduced use of the Red Sea trade route, and the crisis in Middle Eastern air capacity, even though counteracted by increased use of alternate routes, has resulted in delays in supplier deliveries, extended lead times, and increases in the cost of freight, jet fuel, maritime insurance, purchased materials and manufacturing labor. If these effects become more pronounced, the added costs may lead to reduced sales of goods, and, as a result, reduced volume of shipping, which could lead to reduced usage of our Platform and our other services. That could impact our results of operations and financial condition in a material adverse manner.
We may need to raise additional funds to finance our future capital needs, which may dilute the value of our outstanding Ordinary Shares or prevent us from growing our business.
We may need to raise additional funds to finance our existing and future capital needs, including developing new services and technologies, and to fund ongoing operating expenses. We have not generated positive cash flow from operations in the past. While we anticipate that we will be able to reach financial breakeven by the end of 2026, there is no guarantee that we will be, and we may not be in the foreseeable future. If we raise additional funds through the sale of equity securities or securities convertible into equity securities, these transactions may dilute the value of our outstanding Ordinary Shares. We may also decide to issue securities, including protected securities, that have rights, preferences and privileges senior to our Ordinary Shares. Any debt financing would increase our level of indebtedness and could negatively affect our liquidity and restrict our operations. We also can provide no assurances that the funds we raise will be sufficient to finance any future capital requirements. We may be unable to raise additional funds on terms favorable to us or at all. If financing is not available or is not available on acceptable terms, we may be unable to fund our future needs. This may prevent us from increasing our market share, capitalizing on new business opportunities or remaining competitive in our industry, which could materially and adversely affect our business, prospects, financial condition and results of operations.
13
Table of Contents
If we are unable to maintain our current growth trajectory or effectively manage our transition to a solutions-led model in 2026, our business, revenue, and financial condition could be adversely affected.
We have experienced significant growth in a relatively short period of time. While our total GBV grew by 44% in 2025 to $1.286 billion, GBV is primarily a trailing indicator of the adoption of our products and services. Consequently, this historical GBV growth may not be indicative of future growth performance. Future period-over-period growth metrics, when compared against the results of 2025, may fail to meet the expectations of investors or securities analysts as we prioritize the integration of our software into customer workflows. Moreover, oscillations in the global freight market driven by shifting consumer behavior and macroeconomic volatility may be significant (for example, disruptions caused by the military conflicts in the Middle East), which may further impact period-over-period growth rates.
Sustaining our growth and executing our 2026 transition will place significant demands on our management as well as on our administrative, operational and financial resources. To manage our growth, we must continue to improve our operational, financial and management information systems and processes; expand, motivate, retain and effectively manage and train our workforce; and effectively collaborate with our third-party partners, all of which can be more difficult with an increasingly remote workforce and an increasingly competitive labor market. If we are unable to manage our growth successfully without compromising the quality of our offerings or user experience, or if new systems that we implement to assist in managing our growth do not produce the expected benefits, our business, operating results, financial condition and ability to successfully market our products and services and serve our users could be adversely affected.
Our recent and historical growth should not be considered indicative of our future performance. We have encountered, and will encounter in the future, risks, challenges and uncertainties, including those frequently experienced by growing companies in rapidly changing and highly competitive industries. For example, in prior periods we have adjusted our revenue forecasts and implemented cost-saving initiatives to align with market conditions, and we may do so again in the future. If our assumptions regarding our 2026 “transition year” strategy are incorrect or change our financial condition and operating results could differ materially from our expectations, our growth rates may slow, and our business would be adversely impacted.
We may not successfully manage our growth.
We have grown rapidly and substantially in the last several years, including by expanding our internal resources and by making acquisitions, and in the future may seek to make additional acquisitions and enter into new markets. For the 2026 fiscal year, we have initiated a transition to deliberately sequence our growth, focusing resources first on the adoption of our Solutions (SaaS) to embed more deeply our software in customer workflows, which we believe will naturally increase subsequent Platform bookings. We intend to continue to focus on growth in our business, including organic growth through bringing on new users of our solutions and increased number of transactions with existing market participants. In addition, we may pursue additional transactions to grow into new markets or expand our offerings. We may experience difficulties and higher-than-expected expenses in executing these strategies as a result of unfamiliarity with new markets, changes in revenue and business models, entry into new geographic areas, inability to find suitable acquisition partners and increased pressure on our existing infrastructure and information technology systems from multiple project implementations. Specifically, if our 2026 strategy fails to result in the expected “pull-through” of Platform transactions, our overall growth may stagnate. We may need to curtail such expenses related to our growth from time to time to enhance our profitability, as we have done in prior periods.
Our growth plans may place a significant strain on our management, operational, financial and information technology resources. We seek to continually improve existing procedures and controls, as well as implement new transaction processing, operational and financial systems and procedures and controls to expand, train and manage our employee base. Our working capital needs may continue to increase as our operations grow. Failure to manage our growth effectively, including the timing of our segment-specific investments, or obtain necessary working capital, could have a material adverse effect on our business, results of operations, cash flows and financial condition.
14
Table of Contents
If we fail to maintain and enhance our brand, our business, results of operations and prospects may be materially and adversely affected.
We believe that maintaining and enhancing our brand are of significant importance to the success of our business. A well-recognized brand is critical to increasing the number and the level of engagement of users of products and services. Successful promotion of our brands and our offerings depends on, among other things, the effectiveness of our marketing efforts, our ability to provide reliable, trustworthy and useful products and services, and our ability to provide quality support. In order to maintain and enhance our brands, we will need to continuously invest in marketing programs that may not be successful in achieving meaningful awareness levels. However, brand promotion activities may not yield increased revenue, and even if they do, the increased revenue may not offset the expenses we incur in building and maintaining our brand. We have conducted and may continue to conduct various marketing and brand promotion activities. We cannot assure that these activities will be successful or that we will be able to achieve the brand awareness we expect. In addition, our competitors may increase the intensity of their marketing campaigns, which may force us to increase our advertising spend to maintain our brand awareness.
In addition, any negative publicity relating to our products or services or us, regardless of its veracity, could harm our brand. If our brands are harmed, we may not be able to grow or maintain our carriers or user base, and our business, prospects, financial condition and results of operations could be materially and adversely affected.
Our revenue growth and ability to achieve and sustain profitability depend in part on being able to increase the productivity, effectiveness and efficiency of our sales force.
In order to increase our revenue from our offerings and achieve and sustain profitability, we must improve the effectiveness and efficiency of our sales force and generate additional revenue from new and existing users on an ongoing basis. There is significant competition for sales personnel with the skills and technical knowledge required to maintain a productive and efficient sales force. Our ability to achieve significant revenue growth will depend, in large part, on our success in recruiting, training, effectively deploying and retaining sufficient numbers of sales and sales support personnel to support our growth. It is difficult to find, and we may be unable to retain, a sufficient number of sales personnel with the specific skills and technical knowledge needed to sell our offerings, particularly in light of the current global labor shortage. Furthermore, hiring and effectively deploying sales personnel, particularly in new markets, is complex and requires additional costs that we may not recover if the sales personnel fail to achieve full productivity. Even if we are able to hire qualified sales personnel, doing so may be costly and lengthy, as new sales personnel require significant training and can take a number of months to achieve full productivity. In addition, new sales personnel do not always achieve productivity milestones within the timelines that we have projected. Not all of our sales personnel and planned hires have or will become productive or do so as quickly as we expect. When our new sales personnel do not become fully productive on the timelines that we have projected, or at all, our revenue will not increase at anticipated rates, or at all, and our ability to achieve long-term projections may be negatively impacted. If our sales personnel are not successful in obtaining new business or increasing sales to our existing user base, our business and results of operations will be adversely affected.
If we are unable to maintain our payment partner relationships on favorable terms, or at all, our business could be adversely affected.
Our payment partners consist of payment processors and disbursement partners. We rely on banks and payment partners to provide us with corporate banking services, FBO accounts and clearing, processing and settlement functions for the funding of all transactions on our Platform and disbursement of funds to users, and we do not always have a sufficient surplus of vendors in the event one or more relationships are terminated for any reason.
Our payment partners are critical to our business. In order to maintain these relationships, we have in the past been, and may in the future be, forced to agree to terms that are unfavorable to us. If we are unable to maintain our agreements with current payment partners on favorable terms, or at all, or we are unable to enter into new agreements with new payment partners on favorable terms, or at all, our ability to collect payments and disburse funds and our revenue and business may be adversely affected. This could occur for a number of reasons, including the following with respect to our payment partners:
| ● | our partners may be unable or unwilling to perform the services we require of them, such as processing payments to service providers in a timely manner, including in a manner that is satisfactory to us as it relates to compliance with U.S. federal, state and international laws and regulatory requirements; |
15
Table of Contents
| ● | we may choose to cease doing business with our partners for a number of reasons, including as a result of their failure to comply with applicable payment or banking regulations or due to allegations of fraud or other impropriety by them or their third-party partners; |
| ● | our partners may be subject to investigation, regulatory enforcement or other proceedings that result in their inability or unwillingness to provide services to us or our unwillingness to continue to partner with them; |
| ● | our partners may be unable to effectively accommodate changing service needs, such as those which could result from rapid growth or higher volume or those which relate to international expansion and local jurisdictions; |
| ● | our partners could, and, in some cases, have notified us in the past that they would, increase the rates that they charge us or our users, especially in light of changes in those partners’ interpretation and enforcement of their rules, increased declines of client payment methods or increased client-issued chargebacks; |
| ● | our partners could choose to terminate or not renew their agreements with us, or only be willing to renew on different or less advantageous terms; |
| ● | our partners could reduce the services provided to us, cease doing business with us or cease doing business altogether; |
| ● | our partners could be subject to delays, limitations or closures of their own businesses, networks, partners or systems, causing them to be unable to process payments or disburse funds for certain periods of time; and |
| ● | we may be forced to cease doing business with certain partners if card association operating rules, certification requirements and laws, regulations or rules governing electronic funds transfers to which we are subject, change or are interpreted to make it difficult or impossible for us to comply. |
Our newly appointed Chief Executive Officer and other members of our senior management team have limited experience managing a public company.
Our management team has limited experience managing a publicly traded company, interacting with public-company investors and complying with the increasingly complex laws pertaining to public companies in the United States. This is particularly relevant following the permanent appointment of our Chief Executive Officer, Pablo Pinillos, who currently also serves as our Chief Financial Officer. While Mr. Pinillos has deep operational and financial knowledge of the Company, he has not previously served as the chief executive officer of a principal operating business or a publicly traded company. The transition from a founder-led organization to new leadership involves inherent risks, and any failure by Mr. Pinillos to effectively adapt to the requirements of the CEO role—including strategic execution and public market engagement—could adversely affect our business. Furthermore, following Mr. Pinillos’ appointment as CEO, we have only recently initiated a formal search for a permanent Chief Financial Officer. Until a successor is identified and onboarded, Mr. Pinillos may continue to bear significant financial reporting and oversight responsibilities in addition to his new duties as CEO. This dual focus, or any delay in recruiting a high-quality candidate with the necessary public-company experience, could divert management’s attention from our 2026 strategic transition, increase our reliance on third-party advisors, and potentially impact the efficiency of our internal controls and financial reporting.
Our North American customs brokerage operations, conducted through Clearit, subject us to complex regulatory requirements, potential financial liabilities for duties and taxes, and the risk of license revocation, any of which could materially harm our business and reputation.
We are subject to stringent licensing and regulatory requirements in the United States and Canada, and the failure to maintain our licenses or comply with evolving regulations would terminate our ability to provide customs brokerage services.
Our customs clearance business depends on the maintenance of active customs broker licenses from U.S. Customs and Border Protection (CBP) and the Canada Border Services Agency (CBSA). These licenses require us to maintain “responsible supervision and control” over our operations, typically through the employment of individually licensed Customs Brokers. If we lose the services of these key individuals or fail to comply with the rigorous administrative and ethical standards mandated by these agencies, our licenses could be suspended or revoked. Furthermore, changes in trade agreements, such as the USMCA, or the introduction of new filing requirements, may increase our compliance costs or disrupt our ability to clear shipments efficiently.
16
Table of Contents
We may be held liable for fines, penalties, or unpaid duties and taxes if we or our customers fail to comply with customs laws and regulations.
As a customs broker, we are responsible for the accurate entry of goods, including their classification under the Harmonized Tariff Schedule (HTS), valuation, and country-of-origin declarations. The complexity of these regulations is increasing, particularly with the frequent assessment of Section 301, 232 and reciprocal tariffs and anti-dumping or countervailing duties. Any errors in these filings—even if based on information provided by our customers—can result in the assessment of “liquidated damages,” civil penalties, or fines. While we generally seek indemnification from our customers, we may be unable to recover these costs, and repeated non-compliance could lead to increased scrutiny from government authorities and damage our standing in the industry.
We face significant credit and liquidity risks related to the payment of duties and taxes on behalf of our customers.
For the majority of our customers, Clearit facilitates the payment of import duties, taxes, and other government fees on behalf of its customers. In certain scenarios, we may be held primarily or secondarily liable by the government for these amounts. If a customer becomes insolvent or otherwise fails to reimburse us for these significant outlays, we could experience substantial financial losses. Additionally, any sharp increase in global tariff rates would require us to utilize more of our working capital to bridge these payments, which could strain our liquidity and limit our ability to invest in other areas of our business.
Our reliance on government-operated technology systems subjects our brokerage operations to risks of technical failure and data breaches.
Our ability to clear cargo is entirely dependent on the continuous availability of government-mandated electronic data interchange (EDI) systems, such as the U.S. Automated Commercial Environment (ACE). Any prolonged downtime, system failure, or cyberattack targeting these government portals—or our own connection to them—would prevent us from filing entries, leading to shipment delays, storage fees for our customers, and potential loss of business. Furthermore, as we handle sensitive commercial and financial data for importers, any breach of our systems could result in regulatory penalties and a loss of trust from our brokerage clients.
We are subject to currency risk, and changes in the relative values of different currencies could have a material impact on our financial results.
The U.S. dollar is our functional currency and our financial results are reported in U.S. dollars. Our revenue is denominated in U.S. dollars, Euros and Canadian Dollars, as well as other currencies to a lesser extent, and certain components of our cost of revenue and operating expenses, primarily payroll and rent, are denominated in New Israeli Shekel (“NIS”) and Euros. We also incur expenses in other currencies, such as the Canadian Dollar, Indian Rupee and Chinese Yuan, although to a lesser extent. As a result of our utilization of these multiple currencies, we are exposed to the risk that the NIS and Euro may appreciate relative to the dollar, or, if the NIS and Euro instead devalue relative to the dollar, that the inflation rate in Israel and/or Europe may exceed such rate of devaluation of the NIS or Euro, or that the timing of such devaluation may lag behind inflation in Israel or Europe (as applicable). For example, if the NIS appreciates against the U.S. dollar or if the value of the NIS declines against the U.S. dollar at a time when the rate of inflation in the cost of Israeli goods and services exceeds the rate of decline in the relative value of the NIS, then the U.S. dollar cost of our operations in Israel would increase and our results of operations could be materially and adversely affected.
In 2025 and the early part of 2026, this risk has been pronounced, as the U.S. dollar has devalued significantly against many foreign (non-U.S.) currencies. The NIS and the Euro appreciated relative to the U.S. dollar by 14.3% and 13.1%, respectively, in 2025 (in each case, based on the change in the average representative exchange rates throughout the year relative to in 2024). In previous years, there were less impactful changes in exchange rates, as in 2024, the NIS appreciated by only 0.3% against the U.S. dollar, while the Euro-U.S. dollar exchange rate did not change. The annual rate of inflation in Israel amounted to 3.8% and 3.2% in 2025 and 2024, respectively, while in the Euro Area, the annual inflation rates were 2.0% and 2.4% in 2025 and 2024, respectively. This trend of stronger Israeli and European currencies relative to the U.S. dollar have increased the U.S. dollar cost of our operations in Israel and Europe, thereby hurting our financial results.
17
Table of Contents
We do from time-to-time attempt to mitigate the risk of currency rate fluctuations by entering into forward contracts to hedge certain forecasted payments denominated in NIS, mainly payroll and rent. However, there can be no assurance that our attempts to hedge will be successful. Our non-U.S. operations also could be materially and adversely affected if we are unable to effectively hedge against currency fluctuations in the future. We cannot predict any future trends in exchange rate changes or the rate of inflation in the countries where we operate. We are also subject to counterparty risk related to our hedging transactions. If our hedging program is not successful, or if we change our hedging activities in the future, we may experience significant unexpected expenses from fluctuations in exchange rates. Any hedging technique we implement may fail to be effective. During the years ended December 31, 2025 and 2024, we entered into forward contracts to hedge certain forecasted payments denominated in NIS for a period of up to twelve months. We had outstanding forward contracts that were not qualified as hedging instruments in a cash flow hedge, in the aggregate notional amount of $1.4 million and $1.9 million as of December 31, 2025 and 2024, respectively. The fair value of the outstanding forward contracts as of December 31, 2025 and 2024 was $0.1 million and positive $0.0 million, respectively. If the dollar cost of our operations continues to increase, our dollar-measured results of operations will be adversely affected. See “Item 11. Quantitative and Qualitative Disclosures about Market Risk-Foreign Currency Risk.”
Segments of our industry are subject to seasonal volume fluctuations, business cycle fluctuations, and long-term trends. Unusual or otherwise unanticipated seasonality or other changes in volumes and prices could have an adverse effect on our operating results and financial condition.
Segments of our industry are subject to seasonal volume fluctuations. If we were to experience lower than expected revenue during any such period, whether from a general decline in economic conditions or other factors beyond our control, our expenses may not be sufficiently offset, which would have a disproportionately adverse impact on our operating results and financial condition. If we cannot maximize volume during peak seasonal periods, that may impact our operating results and financial condition.
Extreme or unusual weather conditions, earthquakes, fires, floods and other natural disasters or acts of God can disrupt the transportation ecosystem and our operations, impact freight volumes, carrier availability and our costs, any or all of which could have a material adverse effect on our business results.
Certain extreme or unusual weather conditions, such as snowstorms and hurricanes, natural disasters, such as earthquakes, fires, floods and climate change-caused events and acts of God, including pandemics (such as the COVID-19 pandemic) and epidemics, as well as acts of war, can disrupt the transportation ecosystem and affect freight volumes, operations, costs and revenues. The frequency and severity of some catastrophic events, such as flooding, hurricanes, tornadoes, extended droughts and wildfires are contributed to by global climate change, which many in the scientific community, in governmental bodies and elsewhere believe will continue for decades to come, potentially resulting in increased disruption to us. Geopolitical trends, including nationalism, protectionism, restrictive visa requirements, or acts of war (such as Iran’s recent threatened closure of the Strait of Hormuz in response to military strikes against Iran), could limit the expansion of our business in certain regions. Our business operations are subject to interruption by, among others, natural disasters, fire, power shortages, earthquakes, floods, nuclear power plant accidents and events beyond our control such as industrial accidents, terrorist attacks and other hostile acts, labor disputes and public health issues. A catastrophic event that results in a disruption or failure of our systems or operations could result in significant losses and require substantial recovery time and significant expenditures in order to resume or maintain operations, which could have a material adverse impact on our business, financial condition and results of operations.
We are subject to various risks related to Freightos data products and in particular our freight indexes. If we are unable to accurately calculate an index or comply with our published guides for calculating an index, we may face claims, suffer reputational damage and lose clients and revenue, which could have a material impact on our financial results.
We act as the calculating agent for the Freightos Baltic Index (“FBX”) and the Freightos Air Index (“FAX”). The FBX is published every weekday to provide indicative market prices for shipping a 40-foot container on twelve trade lanes, plus a global average. While we act as the data provider and calculating agent for FBX, the Baltic Exchange in London is the benchmark administrator responsible for legal and regulatory compliance of the benchmark. Some of the FBX indices have futures contract trading on the Chicago Mercantile Exchange and the Singapore Exchange, SGX. These derivative products are relatively new and trading volumes are still minimal, but we believe that FBX is the most used benchmark of containerized shipping prices. The FAX is published daily to provide indicative market prices per kilogram for air cargo on various region-to-region routes. FAX is currently not regulated and we may act as the benchmark administrator for FAX in the future. We may launch further data products including benchmarks in the future.
18
Table of Contents
Our ability to calculate the FBX and the FAX are contingent upon our continued access to market information from the active use of our Platform. Analyzing the underlying data and calculating an index can be operationally challenging and can also be subject to interpretation. The production and calculation of our indexes are handled by a small, specialized team, and we are heavily dependent on their technical expertise and deep understanding of the global freight industry to maintain the accuracy and integrity of our data products. Because this team is small, we lack significant redundancy in these roles. If we were to lose the services of even a few of these key employees, or if they were unable to perform their duties for an extended period, our ability to reliably maintain and publish these indexes would be placed at significant jeopardy. We may not be able to find, recruit, or train suitable replacements in a timely manner, which could lead to calculation errors, publication delays, or the temporary suspension of our data products.
Upon the occurrence of certain events, a benchmark administrator or calculation agent may need take one or more of the following actions: (i) postpone the day on which a calculation or publication is due to take place; (ii) suspend the calculation, publication and dissemination of the index; (iii) make a modification or change to the index; (iv) restate historical index data; (v) discontinue and cancel the index; (vi) exercise discretion in the calculation of the index in accordance with the published guide for that index, or (vii) notify the market. For example, the FBX methodology needed to be changed in March 2022 as a result of the underlying data not accurately capturing surcharges imposed on freight shipments and in August 2022 the Baltic Exchange issued a circular notifying the market of incorrect implementation of the calculation methodology. There can be no assurance that if any of the foregoing actions are taken in the future that the indexes will remain credible to the market and continue to be used widely.
Futures contracts or other derivatives are and may be traded based on one or more of our indexes. Further, different market participants may use a published index to settle privately negotiated contracts. If we are unable to accurately and timely calculate and publish an index, we may be subject to claims, which may result in an adverse effect on our Company, such as claims for damages as a result of the mispricing of derivatives or freight contracts, a loss of goodwill with users, reputational harm, lost revenue and an increase in costs to us. Even if these claims do not result in litigation or are resolved in our favor, these claims, and the time and resources necessary to resolve them, could result in legal, settlement or other financial costs, divert the resources of our management and adversely affect our business and operating results. Any failure to maintain high-quality indexes, or a market perception that we do not maintain high-quality indexes, could harm our reputation or adversely affect our ability to market the benefits of our Platform to existing and prospective users.
We face payment and fraud risks that could adversely impact our business.
Our Platform systems and controls relating to customer identity verification, user authentication and fraud detection are complex. If such systems and controls are not effective, our Platform may be perceived as not being secure, our reputation may be harmed, we may face regulatory action and our business may be adversely impacted. In addition, bad actors around the world use increasingly sophisticated methods to engage in illegal activities involving personal information, such as unauthorized or fraudulent use of another’s identity, payment information or other information; misrepresentation of the user’s identity, location or skills, including using accounts that they have purchased, borrowed or leased; and the improper acquisition or use of credit or debit card details and banking or other payment account information. These types of illegal activities may increase as platforms like ours gain more prominence, including due to recent disruptions to the global supply chain, and as we become more visible as a result of our brand promotion efforts, as bad actors seek to take increasing advantage of us or our users. This conduct on our Platform could result in any of the following, each of which could adversely impact our business:
| ● | bad actors may use our Platform, including our payment processing and disbursement methods, to engage in unlawful or fraudulent conduct, such as money laundering, moving funds to regions or persons restricted by sanctions or export controls, terrorist financing, fraudulent sale of services, bribery, breaches of security, unauthorized acquisition of data, extortion or use of ransomware, distribution or creation of malware or viruses, piracy or misuse of software and other copyrighted or trademarked content and other misconduct; |
| ● | we may be, and historically have been, held liable for the unauthorized use of credit or debit card details and banking or other payment account information and required by card issuers, banks and other payment partners to return the funds at issue and pay a chargeback or return fee, and if our chargeback or return rate becomes excessive, credit card networks may also require us to pay fines or other fees or cease doing business with us; |
| ● | we may be subject to additional risk and liability exposure, including for negligence, fraud or other claims, if employees or third-party service providers, including service providers on our Platform, misappropriate our banking, payment or other information or user information for their own gain or to facilitate the fraudulent use of such information; |
19
Table of Contents
| ● | if service providers are unable to perform their offered services, Buyers may seek to hold us responsible for the service providers’ acts or omissions and may lose confidence in our Platform, decrease or cease use of our Platform or seek to obtain damages and costs; and |
| ● | we may suffer reputational damage adversely impacting our business as a result of the occurrence of any of the above. |
We do not have control over users of our Platform and cannot ensure that any measures we have taken to detect, prevent and mitigate these risks will stop or minimize the use of our Platform for, or to further, illegal or improper purposes.
Buyers sometimes fail to pay their invoices, necessitating action by us to compel payment.
In connection with our Platform, we provide a “payment guarantee” to Sellers for invoiced services on behalf of Buyers and subsequently invoice the Buyers for such services. In order to maintain these relationships, we have in the past been, and may in the future be, forced to agree to terms that are unfavorable to us, including extended payments terms and providing cash deposits. We also extend credit to certain eligible Buyers in the ordinary course of business as part of our business model. By extending credit, we increase our exposure to uncollected receivables.
From time to time, Buyers fail to pay for services rendered by service providers, and as a result, we may be adversely affected both from the inability to collect amounts due and the cost of enforcing the applicable agreement or our terms of service, including through arbitration or litigation. Furthermore, some Buyers may seek bankruptcy protection or other similar relief and fail to pay amounts due, or pay those amounts more slowly, either of which could adversely affect our operating results, financial position and cash flow. All of these risks are made more likely during a macroeconomic downturn and could result in increased costs to us as we guarantee payments to service providers and seek to compel payment from our Buyers.
We are subject to disputes with or between users of our Platform.
Our business model involves enabling connections between Buyers and Sellers of freight services that contract directly through our Platform. Carriers utilize their own terms of service, and often have separate contracts with freight forwarders and other Buyers. Buyers and Sellers on the freightos.com marketplace are subject to various rules and terms for buying and selling on our Platform. Disputes sometimes arise between Buyers and Sellers with regard to their contract terms, service relationship or otherwise, including with respect to service standards and payment. These disputes may occur more frequently during a macroeconomic downturn or when freight costs are particularly high. If either party believes the contract terms were not met, we provide a mechanism for the parties to request assistance from us. Whether or not Buyers and Sellers decide to seek assistance from us, if these disputes are not resolved amicably, the parties might escalate to formal proceedings, such as by filing claims with a court or arbitral authority. Given our role in facilitating and supporting these arrangements, claims may sometimes be brought against us directly as a result of these disputes. Through our terms of service, we disclaim responsibility and liability for any disputes between users; however, we cannot guarantee that these terms will be effective in preventing or limiting our involvement in user disputes or that these terms will be enforceable or otherwise effectively prevent us from incurring liability as a result of disputes between users. In addition, users may assert claims against us regarding their experience on our Platform. Disputes between Buyers and Sellers, and between users and us, may become more frequent based on conditions outside our control, such as a macroeconomic downturn. Such disputes, or any increase in the number of disputes, may result in an adverse effect on our business prospects, such as a loss of goodwill with users, reputational harm, lost revenue and an increase in costs. Even if these claims do not result in litigation or are resolved in our favor, these claims, and the time and resources necessary to resolve them, could result in legal, settlement or other financial costs, divert the resources of our management and adversely affect our business and operating results.
20
Table of Contents
Our business depends largely on our ability to attract and retain talented employees, including senior management and key personnel. If we lose the services of key members of our senior management team, as occurred during 2025 and 2024 with the departures of our founder and chief executive officer, and our chief financial officer, or other key personnel, we may not be able to execute on our business strategy.
Our future success depends in large part on the continued services of senior management and other key personnel and our ability to attract, retain and motivate them. Until very recently, we were substantially dependent on Dr. Zvi Schreiber, our founder and former Chief Executive Officer, for much of our vision and strategic direction, until he and we mutually determined to part ways in December 2025, effective as of January 31, 2026. In November 2024, our then Chief Financial Officer, Ran Shalev, decided to conclude his tenure in that role with effect from December 31, 2024. Pablo Pinillos was appointed as our Chief Executive Officer effective March 16, 2026, after being hired as our Chief Financial Officer effective March 1, 2025. Our reliance on one individual to fill each of our most senior executive and finance positions could overburden Mr. Pinillos and our other management team members. If we are unable to hire and retain a suitable permanent chief financial officer in the near future, that could potentially risk the effective management of our business and strategy.
We rely on other members of our leadership team and other key personnel in the areas of product, research and development, operations, security, marketing, support and general and administrative functions. While our senior management and many other key personnel are employed pursuant to employment agreements, there can be no assurance that such persons will continue to provide services to us (as was the case with Dr. Schreiber and Mr. Shalev). Further, our senior management and other key personnel are employed in jurisdictions where courts may or may not enforce non-competition and other restrictive covenants included in our employment agreements. If we lose the services of senior management or other key personnel, if our succession plans prove inadequate, or if we are unable to retain, attract, train, and integrate the highly skilled personnel we need, our business, operating results and financial condition could be adversely affected.
We have made, and may continue to make, changes that have been and will be disruptive to our personnel, such as short-term changes in strategic direction, acquiring other businesses, changes to the composition of our leadership team and other key personnel and realignment of reporting lines of our workforce. These changes have resulted, and future personnel changes may result, in increased attrition or reduced productivity of our personnel, including senior management and key personnel, stemming from organizational restructuring, as new reporting relationships are established and as other companies may increasingly target our executives and other key personnel, particularly during the current highly competitive market for qualified personnel. Any such changes may also result in a loss of institutional knowledge, cause disruptions to our business, impede our ability to achieve our objectives or distract or result in diminished morale in, or the loss of, personnel.
Our future success also depends on our continuing ability to retain, attract, train and integrate highly skilled personnel, including software engineers and sales personnel. We face intense competition for qualified personnel from numerous software and other technology companies. In addition, competition for qualified software engineers is particularly intense. We may not be able to retain our current key personnel or attract, train, integrate or retain other highly skilled personnel in the future, all of which may be more difficult given our shift to a flexible work model for our workforce. We may incur significant costs to attract and retain highly skilled personnel, we may lose employees to our competitors or other technology companies before we realize the benefit of our investment in recruiting and training them and our succession plans may be insufficient to ensure business continuity if we are unable to retain key personnel or were to lose a significant portion of our personnel. Further, even highly skilled personnel may fail to be productive. We may not be able to retain personnel of the business that we have acquired, or may acquire in the future. To the extent we move into new geographies, we would need to attract and recruit skilled personnel in those areas.
While we enter into non-competition covenants with our employees in certain jurisdictions, we may be unable to enforce these covenants under the laws of the jurisdictions in which our employees work, and it may be difficult for us to restrict our competitors from benefiting from the expertise our former employees developed while working for us. For example, labor courts have required employers seeking to enforce non-compete undertakings of a former employee, in some cases, to pay the former employee during the term and/or to demonstrate that the competitive activities of the former employee will harm one of a limited number of material interests of the employer, such as the protection of a company’s trade secrets or other intellectual property. Also, to the extent we hire personnel from competitors, we may be subject to allegations that they have been improperly solicited, that they have divulged proprietary or other confidential information or that their former employers own their inventions or other work product developed while employed by us.
21
Table of Contents
Volatility or lack of appreciation in the trading price of our Ordinary Shares may also affect our ability to attract new skilled personnel and retain our key personnel. If we are unable to attract and retain suitably qualified individuals who are capable of meeting our growing technical, operational and managerial requirements, on a timely basis or at all, or if we need to increase our compensation expense to retain our employees, our business, operating results, financial condition and cash flows may be adversely affected.
Our ability to use our net operating loss carry-forwards and certain other tax attributes is limited.
As of December 31, 2025, we had estimated net operating loss carry-forwards for Israeli income tax purposes of $117.1 million available to offset future taxable income recognized in Israel, for Hong Kong income tax purposes of $22.3 million available to offset future taxable income recognized in Hong Kong and for Luxembourg income tax purposes of $51.2 million available to offset future taxable income recognized in Luxembourg. Realization of these net operating loss carry-forwards depends on future income, and there is a risk that our existing carry-forwards could expire unused and be unavailable to offset future income tax liabilities, which could materially and adversely affect our operating results.
In addition, under Sections 382 and 383 of the United States Internal Revenue Code of 1986, as amended, if a corporation undergoes an “ownership change,” generally defined as a greater than 50% change (by value) in its equity ownership over a three-year period, the corporation’s ability to use its pre-change net operating loss carry-forwards and other pre-change tax attributes, such as research tax credits, to offset its post-change income may be limited. In addition, we may experience ownership changes in the future as a result of subsequent shifts in our share ownership. As a result, if we earn net taxable income in the near future and/or following an ownership change, our ability to use our pre-change net operating loss carry-forwards and other tax attributes to offset U.S. federal taxable income may be subject to limitations, which could potentially result in increased future tax liability to us.
Our business could be adversely affected by strikes or work stoppages by seaport or airport employees or employees in other areas of the global freight network.
There may be labor unrest, including strikes and work stoppages, among workers at various transportation providers and in industries affecting the transportation industry, such as ports, railroad, warehousing and trucking. Freight service providers could be affected, and we could lose business, due to any significant work stoppage or slowdown. Strikes, work slowdowns or labor shortages among longshoremen and other workers at ports in recent years have resulted in reduced activity at the ports for a time, creating an impact on the transportation industry. Work stoppages occurring among owner-operators in a specific market have increased costs periodically in the past. In recent years, there have been strikes involving railroad workers. Future strikes by railroad employees in North America or Europe or anywhere else that our customers’ freight travels by railroad could adversely affect our business. Any significant work stoppage, slowdown or other disruption, including disruption due to restrictions imposed as a result of a pandemic, involving port employees, railroad employees, warehouse employees or truck drivers could adversely affect our business and results of operations. Our employees in Barcelona are represented by a government-mandated collective bargaining agreement, and none of our other employees are represented by a collective bargaining agreement. If in the future our employees decide to unionize, this could increase our operating costs and potentially force us to alter the way we operate causing an adverse effect on our operating results.
Risks Related to Our Intellectual Property, Information Technology, Data Privacy and Security
Errors, defects or disruptions in our products and services could diminish demand, adversely impact our financial results and subject us to liability.
Our products and services enable our users to manage important aspects of their businesses, and any errors, defects or disruptions in our offerings, or other performance or availability problems with our infrastructure, could harm our brand and reputation, negatively impact our operating results or otherwise damage our business or the businesses of our users. As we introduce new offerings and services and look to expand our reach with more industry participants over time, we will need an increasing amount of technical infrastructure and continued infrastructure modernization, including network capacity and computing power, to continue our operations. We may fail to effectively scale and grow our technical infrastructure to accommodate these increased demands, which may adversely affect our user experience. We also rely on third-party software and infrastructure, including the infrastructure of the internet, to provide our products and services. Any failure of or disruption to this software and infrastructure could also make our offerings unavailable to our users. Internet shutdowns in certain jurisdictions are becoming more frequent, including in response to civil unrest or prior to contested political elections, and any shutdown in a jurisdiction in which a significant number of our users are located will adversely affect user activity of our products and services throughout the duration of such shutdown.
22
Table of Contents
Our products and services are constantly changing with new updates, which may contain undetected errors when first introduced or released. Any errors, defects, disruptions in service, or other performance or stability problems with our offerings, or the inadequacy of our efforts to adequately prevent or timely detect or remedy errors or defects, could result in negative publicity, loss of or delay in market acceptance of our offerings, loss of competitive position, our inability to timely and accurately maintain our financial records, interference with our customers’ ability to contract for, or the ability of service providers to complete bookings on our Platform, inaccurate or delayed invoicing of end customers, delay of payment to us or service providers, claims by users for losses sustained by them or investigation and corrective action taken by regulatory agencies. In such an event, we may be required, or may choose, for customer relations or other reasons, to expend additional resources in order to help resolve the issue. Accordingly, any errors, defects or disruptions in our products and services could adversely impact our brand and reputation, revenue and operating results.
If we are unable to comply with our security obligations or our computer systems are or become vulnerable to security incidents or other operational disruptions, we may face reputational damage and lose clients and revenue.
The services we provide are often critical to our users’ businesses. Our contracts generally require us to comply with security obligations, which could include maintaining network security and backup data, not breaching any security protocols on our users’ systems that we have access to, ensuring our network is virus-free, maintaining business continuity planning procedures and verifying the integrity of employees and contractors that work with our users. Any failure in a user’s system, whether or not a result of or related to the services we provide, or breach of security relating to the services we provide to the user could damage our reputation or result in a claim for substantial damages against us. Our liability for breaches of data security or information security requirements, for which we may be required to indemnify our users, may be extensive. Any significant failure of our equipment or systems, or any major disruption to basic infrastructure like power and telecommunications in the locations in which we operate, could impede our ability to provide services to our users, have a negative impact on our reputation, cause us to lose users and adversely affect our results of operations.
In addition, we often have access to or are required to collect and store confidential user data. If any person, including any of our employees or contractors or former employees or contractors, penetrates our network security, accidentally exposes our data or code or misappropriates data or code that belongs to us, our users, or our users’ customers, we could be subject to significant liability from our users or from our users’ customers for breaching contractual confidentiality provisions or privacy laws. Unauthorized disclosure of sensitive or confidential data, whether through breach of our computer systems, systems failure, loss or theft of confidential information or intellectual property belonging to our users or our users’ customers, or otherwise, could damage our reputation, cause us to lose users and revenue, and result in financial and other potential losses by us.
Our internal computer and information technology systems, or those of our vendors, users or contractors, have been and may in the future be subject to cyberattacks or security incidents, which could result in a material operational or developmental disruption, or otherwise adversely affect our business, financial condition, results of operations, cash flows, result in reputational damage and cause us to lose existing or future users and revenue.
Despite our efforts to implement security measures, our internal computer and information technology systems and those of our vendors, users and contractors are vulnerable to attack and damage from computer viruses, malware, denial of service attacks, unauthorized access or other harm, including from threat actors seeking to cause disruption to our business. We face risks related to the protection of information that we maintain - or engage a third-party to maintain on our behalf - including unauthorized access, acquisition, use, disclosure or modification of such information. Cyberattacks are increasing in their frequency, sophistication and intensity and have become increasingly difficult to detect. In particular, the rapid advancement and widespread availability of generative artificial intelligence have enabled threat actors to create highly sophisticated and automated attacks, including ultra-realistic “deepfake” voice and video phishing, automated exploit generation, and hyper-personalized social engineering at scale. Cyberattacks could include the deployment of harmful malware, ransomware, denial-of-service attacks, social engineering and other means to affect service reliability and threaten the confidentiality, integrity and availability of information. Cyberattacks also could include phishing attempts or e-mail fraud to cause unauthorized payments or information to be transmitted to an unintended recipient or to permit unauthorized access to systems. A material cyberattack or security incident could cause interruptions in our operations and could result in a material disruption of our business operations, damage to our reputation, financial condition, results of operations, cash flows and prospects.
23
Table of Contents
Moreover, geopolitical tensions, particularly the ongoing conflicts in the Middle East and the Russia-Ukraine war, have contributed to a surge in cyber-attacks targeting companies with Israeli connections and their global supply chain partners, posing a threat to critical infrastructure. We have experienced and expect to continue to experience actual and attempted cyber-attacks of our IT networks and systems, such as through phishing scams and ransomware. Although none of these actual or attempted cyber-attacks has yet had a material adverse impact on our operations, financial condition, or reputation, we cannot guarantee that such incidents will not have such an impact in the future. For example, as we transition to a solutions-led model where our software products are more deeply embedded in customer workflows, we face increased data privacy and security risks.
Furthermore, our own use of AI introduces new attack vectors, such as “prompt injection” attacks, the potential for data leakage through AI training sets, and the risk of “model poisoning” where manipulated data leads to biased or incorrect automated decision-making. Threats include potential data leaks, social engineering attacks, and decision-making based on manipulated information. Growing regulatory requirements for information security and data protection add to the challenge. While we are continually working to maintain secure and reliable systems, our security, redundancy, and business continuity efforts may be ineffective or inadequate. We must continuously improve our design and coordination of security controls across our business groups and geographies. Despite our efforts, it is possible that our security systems, controls, and other procedures that we follow or those employed by our third-party service providers, may not prevent breaches, failures, or disruptions. Such breaches, failures, or disruptions have in the past and could in the future subject us to the loss, compromise, destruction, or disclosure of sensitive or confidential information, including personal data, or intellectual property, either of our own information or intellectual property or that of our customers (including end customers) or other third parties that may have been in our custody or in the custody of our third-party service providers, financial costs or losses from remedial actions, litigation, regulatory issues, liabilities to customers or other third parties, damage to our reputation, delays in our ability to process orders, delays in our ability to provide products and services to customers, including SaaS or other hosted or managed services offerings, research and development or production downtimes, or delays or errors in financial reporting. Information system breaches or failures at one of our partners, including hosting providers or those who support other cloud-based offerings, may also result in similar adverse consequences. Any of the foregoing could harm our competitive position, result in a loss of customer confidence, and have an adverse impact on our business and harm our business and financial condition.
In the ordinary course of our business, we collect and store data that we are required to protect, including, among other data, personal information about our employees, intellectual property and proprietary business information. We also collect and store data, including through the use of third parties that host the data on our behalf, on behalf of our users, which could include their personal data, and information about their business that they deem proprietary, among other data. As we prioritize the adoption of our Solutions, the volume and sensitivity of the data we manage on behalf of our users—including proprietary pricing, capacity, and supply chain data—is expected to grow. This increases the potential impact of any breach. Any cyberattack or security incident that leads to unauthorized access, acquisition, use, modification or disclosure of any such information, whether pertaining to us, our users (former, current, prospective), could harm our reputation, cause us not to comply with increasingly stringent global data breach notification laws, data security requirements, our contractual obligations and otherwise subject us to liability under laws and regulations that protect the privacy and security of personal information and under contract. In addition, we could be subject to risks caused by misappropriation, misuse, leakage, falsification or intentional or accidental release or loss of information maintained in our information systems and networks and those of our vendors, including personal information of our employees and company, user and vendor confidential data.
In addition, outside parties have previously attempted and may in the future attempt to penetrate our systems or those of our vendors or fraudulently induce our personnel or the personnel of our vendors to disclose information in order to gain access to our systems or data or seek to gain a fraudulent payment (such as through a phishing/wire fraud scheme). The use of AI-driven tools by these parties makes it increasingly difficult for our personnel to distinguish between legitimate and fraudulent communications. The number and complexity of these threats continue to increase over time. If a material breach of our information technology systems or those of our vendors occurs, the market perception of the effectiveness of our security measures could be harmed and our reputation and credibility could be damaged, resulting in increased costs and potential losses to us.
24
Table of Contents
Our insurance coverage may not be adequate to cover all losses associated with security incidents, and in any case, such insurance may not cover all of the types of costs, expenses and losses we could incur to address a security incident. Furthermore, as AI-based threats evolve, the cost of cyber insurance premiums may increase, or certain types of AI-driven attacks may be excluded from standard coverage. As a result, we may be required to expend significant additional resources to protect against the threat of these issues or to alleviate problems caused by the same. In addition, we could be subject to regulatory actions and/or claims made by individuals and groups in private litigation related to data collection and use practices and other data privacy laws and regulations, including claims for misuse or inappropriate disclosure of data, as well as unfair or deceptive practices. Although we develop and maintain systems and controls designed to prevent these events from occurring, and we have a process to identify and mitigate threats, the development and maintenance of these systems, controls and processes is costly and requires ongoing monitoring and updating as technologies change and efforts to overcome security measures become increasingly sophisticated. Moreover, despite our efforts, the possibility of these events occurring cannot be eliminated entirely and there can be no assurance that any measures we take will prevent cyberattacks or security incidents that could adversely affect our business, financial condition, results of operations, cash flows and prospects.
In addition, we work with numerous business partners (including without limitation, vendors, suppliers, service providers, etc.), which themselves are subject to various laws and regulations. A transgression by a business partner, such as a data breach or unauthorized processing, could be associated with our company, thereby causing Freightos reputational damage and adversely affecting our ability to attract or retain customers.
We are vulnerable to intellectual property infringement claims and challenges to our own intellectual property rights brought against us by third parties.
We operate in a highly competitive industry, and there has been considerable activity in the software industry to develop and enforce intellectual property rights. Intellectual property infringement claims against us or our users or third-party partners could result in monetary liability or a material disruption in the conduct of our business. We cannot be certain that aspects of our products and services, content and brand names do not or will not infringe valid patents, trademarks, copyrights or other intellectual property rights held by third parties, including our competitors. Also, we may in the future be subject to legal proceedings and claims relating to the intellectual property of others, including our competitors. The likelihood of intellectual property-related litigation and disputes may increase due to the increased attention on our market segment due to recent disruptions to the global supply chain. Companies, including non-practicing entities, have also sent us demand letters alleging that we infringe their intellectual property. We may receive such demand letters seeking licensing fees, royalties and damages and demanding that we cease certain commercial activity in the future. Our competitors and other third parties may in the future challenge our registration or use of our trademarks, including “Freightos,” and other intellectual property rights, and such a challenge, even if not successful, could adversely affect our brand and business. Our competitors and others may now and in the future have significantly larger and more mature patent portfolios than we have or trademarks or other rights that pre-date and take precedence over our own. We may also be obligated to obtain licenses from third parties or modify our offerings or marketing strategy, and each such obligation would require us to expend additional resources and could divert the attention of management. Some of our infringement indemnification obligations related to intellectual property are contractually capped at a very high amount or not capped at all.
Any litigation or other disputes relating to allegations of intellectual property infringement could subject us to significant legal costs, devotion of internal resources and liability for damages, invalidate our proprietary rights or force us to do one or more of the following:
| ● | cease conducting certain operations in some or all jurisdictions, or stop using technology that contains the allegedly infringing intellectual property; |
| ● | stop using the name “Freightos” or other trademarks in some or all jurisdictions; |
| ● | incur significant legal expenses; |
| ● | pay substantial damages or ongoing royalty payments to the party whose intellectual property rights we may be found to be infringing; |
| ● | pay substantial amounts in settlement to a party that asserts allegations of intellectual property infringement; |
25
Table of Contents
| ● | prevent us from offering aspects of our products or services or make expensive and disruptive changes to our products or services or our methods of doing business; or |
| ● | attempt to obtain a license to the relevant intellectual property from third parties, which may not be available on reasonable terms or at all. |
Even if intellectual property claims do not result in litigation or are resolved in our favor, these claims, and the time and resources necessary to resolve them, could divert resources and the attention of management and adversely affect our business and operating results. We expect that the occurrence of infringement claims is likely to grow as the market segment for optimized global freight solutions and the users that engage them grows. Accordingly, our exposure to damages resulting from infringement claims could increase and this could require us to expend additional financial and management resources.
Failure to protect our intellectual property could adversely affect our business.
Our success depends in large part on our proprietary technology and data. We rely on various intellectual property rights, including patents, copyrights, trademarks and trade secrets, as well as confidentiality provisions and contractual arrangements, to protect our proprietary rights. In addition, to protect our brand, we may be required to expend substantial resources to register and defend our trademarks and to prevent others from using the same or substantially similar marks. As competitors enter our market segment, our exposure to unauthorized copying and use of our Solutions segment offerings, our Platform, technology, intellectual property and other proprietary information may increase. If we do not protect and enforce our intellectual property rights successfully or cost-effectively, our competitive position may suffer, which would adversely impact our operating results.
Our pending and future patent or trademark applications may not be approved, or competitors or others may challenge the validity, enforceability or scope of our patents, the registrability or validity of our trademarks or the trade secret status of our proprietary information. If we are unsuccessful in a dispute or litigation, we may be unable to stop competitors or others from using our marks or confusingly similar marks and we may suffer dilution, loss of reputation, genericization or other harm to our brand. Efforts to protect and enforce our intellectual property rights, even if successful, may be costly, negatively impact our brand, negatively affect worker productivity and be time consuming and distracting to our management. Furthermore, the rapid advancement of artificial intelligence has created legal uncertainty regarding the protectability of AI-generated code and outputs. If our core products and services are increasingly built upon or integrated with AI-driven components, we may face challenges in establishing clear ownership for these critical assets.
There can be no assurance that additional patents or trademarks will be issued or that any patents or trademarks that are issued will provide significant protection for our intellectual property. In addition, our patents, copyrights, trademarks, trade secrets and other intellectual property rights may not provide us a significant competitive advantage. There is no assurance that the particular forms of intellectual property protection that we seek, including business decisions about when and where to file patents or register or renew trademarks and when and how to maintain and protect trade secrets, will be adequate to protect our business, or that common law protection will be sufficient for marks or in jurisdictions where we do not register the marks.
We may not pursue or file patent applications or apply for registration of copyrights or trademarks in the jurisdictions in which we have a presence with respect to our potentially patentable inventions, works of authorship and marks and logos for a variety of reasons, including the cost of procuring such rights and the uncertainty involved in obtaining adequate protection from such applications and registrations. Moreover, recent amendments to developing jurisprudence regarding, and possible changes to, intellectual property laws and regulations may affect our ability to protect and enforce our intellectual property rights or defend against claims alleging we are infringing others’ rights. If the intellectual property rights that we develop are not sufficient to protect our proprietary technology and data, our brand, business, financial condition and operating results could be adversely affected.
26
Table of Contents
In addition, the laws of some countries provide varying levels of protection for our intellectual property. As we operate globally, our exposure to unauthorized copying and use of our offerings and proprietary information could increase. Despite our precautions, our intellectual property is vulnerable to unauthorized access through employee or third-party error or actions, theft, cybersecurity incidents and other security breaches and incidents. It is possible for third parties to infringe upon or misappropriate our intellectual property, to copy our Platform and to use information that we regard as proprietary to create products and services that compete with ours. Effective intellectual property protection may not be available to us in every country in which our Platform is available. In addition, many countries limit the enforceability of patents or other intellectual property rights against certain third parties, including government agencies or government contractors. In these countries, patents or other intellectual property rights may provide limited or no benefit. Further, certain countries impose additional conditions on the transfer of intellectual property rights from individuals to companies, which may make it more difficult for us to secure and maintain intellectual property protection in those countries. We may need to expend additional resources to defend our intellectual property rights domestically or internationally, which could be costly, time consuming, and distracting to management and could impair our business or adversely affect our domestic or international expansion. If we cannot adequately protect and defend our intellectual property, we may not remain competitive, and our business, operating results and financial condition may be adversely affected.
We rely on trade secrets as an important aspect of our intellectual property program and to cover much of our technology and know-how. We seek to protect our trade secrets and obtain rights in intellectual property developed by service providers through confidentiality and invention assignment or intellectual property ownership agreements with our employees, contractors and other parties. We also take other measures to protect our information and data, including implementing acceptable use policies, limiting access to our information and data through technological means and monitoring and limiting the dissemination of our information and data outside of company-owned information systems. We cannot ensure that these agreements, or all the terms thereof, will be enforceable or compliant with applicable law, or that these agreements and other measures will be effective in controlling access to, use of, and distribution of our proprietary information or in effectively securing and maintaining exclusive ownership of intellectual property developed by our current or former employees and contractors. Most of our employees and contractors work remotely much of the time, which may make it more difficult to control use of confidential materials, increasing the risk that our source code or other confidential or trade secret information may be exposed.
Further, these agreements with our employees, contractors and other parties may not prevent other parties from independently developing technologies that are substantially equivalent or superior to our intellectual property. In addition, trade secret protection will not be able to stop third parties from independently developing competing technology. Any failure to protect intellectual property that we develop or our proprietary technology and data would adversely affect our business, operating results and financial condition.
Even if we spend significant time and resources securing and monitoring our intellectual property rights, we may not be able to detect infringement by third parties. Our competitive position may be adversely impacted if our efforts to secure and protect our intellectual property are not successful, or we cannot detect infringement or enforce our intellectual property rights quickly or at all. In some circumstances, we may choose not to pursue enforcement because an infringer may have a dominant intellectual property position or for other business reasons. In addition, competitors might avoid infringement by designing around our intellectual property rights or by developing non-infringing competing technologies. We may in the future be forced to rely on litigation, opposition and cancellation actions and other claims and enforcement actions to protect our intellectual property, including to dispute registration, use of marks that may be confusingly similar to our own marks or use of technologies that infringe on our intellectual property. Similar claims and other litigation may be necessary in the future to enforce and protect our intellectual property rights. Litigation brought to protect and enforce our intellectual property rights could be costly, time-consuming and distracting to management and could result in the impairment or loss of portions of our intellectual property. Further, our efforts to enforce our intellectual property rights may be met with defenses; counterclaims attacking the scope, validity and enforceability of our intellectual property rights; or counterclaims and countersuits asserting infringement by us of third-party intellectual property rights.
Our failure to secure, protect and enforce our intellectual property rights could adversely affect our brand and our business, and we could lose the right to use certain intellectual property or lose the opportunity to license our technology to others or to collect royalty payments based upon successful protection and assertion of our intellectual property against others.
27
Table of Contents
Our SaaS offerings, our Platform and other software contain open-source software components, and failure to comply with the terms of the underlying licenses could restrict our ability to market or operate our Platform.
Our SaaS offerings, our Platform and other software incorporates certain open-source software components. An open-source license typically permits the use, modification and distribution of software in source-code form subject to certain conditions. Some open-source licenses contain conditions that any person who distributes a modification or derivative work of software that was subject to an open-source license make the modified version subject to the same open source license. Distributing software that is subject to this kind of open-source license can lead to a requirement that certain aspects of our products and services be distributed or made available in source code form. Although we do not believe that we have used open source software in a manner that might condition its use on our distribution of any portion of our products and services in source code form, the interpretation of open source licenses is complex and, despite our efforts, it is possible that we may be liable for copyright infringement, breach of contract or other claims if our use of open source software is adjudged not to comply with the applicable open source licenses.
Moreover, we cannot ensure that our processes for controlling our use of open-source software will be effective. If we have not complied with the terms of an applicable open source software license, we may need to seek commercial licenses from third parties to continue offering our products and services and the terms on which such licenses are available may not be economically feasible, to re-engineer our offerings to remove or replace the open source software, to discontinue offering our products and services if re-engineering could not be accomplished on a timely basis, to pay monetary damages or to make available the source code for aspects of our proprietary technology, any of which could adversely affect our business, operating results and financial condition.
In addition to risks related to license requirements, use of open-source software can involve greater risks than those associated with use of third-party commercial software, as open source licensors generally do not provide warranties or assurances of title, performance or non-infringement, nor do they control the origin of the software. There is typically no support available for open-source software, and we cannot ensure that the authors of such open source software will implement or push updates to address security risks or will not abandon further development and maintenance. Many of the risks associated with the use of open-source software, such as the lack of warranties or assurances of title or performance, cannot be eliminated, and could, if not properly addressed, negatively affect our business.
We rely on AWS and Google Cloud and other cloud and technology providers to deliver our products and services to our users, and any disruption of service from AWS or Google Cloud or material change to our arrangement with AWS or Google Cloud could adversely affect our business.
We currently host our software solutions, serve our users and support our operations using AWS and Google Cloud, providers of cloud infrastructure services. We do not have control over the operations of the facilities of AWS or Google Cloud that we use. AWS’s and Google Cloud’s facilities are vulnerable to failure, damage or interruption from a number of causes, including from earthquakes, hurricanes, floods, fires, cybersecurity attacks, terrorist attacks, power losses, telecommunications failures and similar events or could be subject to break-ins, computer viruses, sabotage, intentional acts of vandalism and other misconduct. The occurrence of any of these events, a decision to close the facilities or cease or limit providing services to us without adequate notice or other unanticipated problems could result in interruptions to our Platform, including lengthy interruptions. Furthermore, our increasing use of artificial intelligence models hosted on these cloud infrastructures introduces additional risks, including potential shortages in specialized “compute” capacity (such as GPUs) required to run our predictive engines, or technical failures in the AI-specific APIs provided by our cloud partners
Our SaaS products’ and services’ continuing and uninterrupted performance is critical to our success and users may become dissatisfied by any system failure that interrupts our ability to provide our solutions to them. We may not be able to easily switch our AWS or Google Cloud operations to another cloud or other data center provider if there are disruptions or interference with our use of AWS or Google Cloud, and, even if we do switch our operations, other cloud and data center providers are subject to the same risks. Sustained or repeated system failures could reduce the attractiveness of our offerings to users, cause users to decrease their use of or cease using our products and services and adversely affect our business. Moreover, negative publicity arising from these types of disruptions could damage our reputation and may adversely impact our financial performance. We currently do not carry business interruption insurance to compensate us for losses that may occur as a result of any events that cause interruptions in our services.
Neither AWS nor Google Cloud has an obligation to renew its agreements with us on commercially reasonable terms, or at all. As the demand for high-performance cloud computing increases—driven by global AI adoption—we may face significant price increases from these providers. If we are unable to renew our agreements or unable to renew on commercially reasonable terms, our agreements are prematurely terminated or we add additional infrastructure providers, we may experience costs or downtime in connection with the transfer to, or the addition of, new data center providers. If these providers charge high costs for or increase the cost of their services, we may have to increase the fees to use our products and services and our operating results may be adversely impacted.
28
Table of Contents
Legal and Regulatory Risks Related to Our Business
Regulatory, legislative or self-regulatory/standard developments regarding privacy and cyber security matters could adversely affect our ability to conduct our business and cause increased costs of compliance.
We, along with a significant number of our users, are subject to laws, rules, regulations and industry standards related to data privacy and cyber security, and restrictions or technological requirements regarding the collection, use, storage, protection, retention, transfer and other processing of personal data. For example, the European Union General Data Protection Regulation, or GDPR regulates processing operations carried out in the context of the activities of an establishment in the European Economic Area (the “EEA”), and any processing by entities not established in the EEA and relating to the offering of goods or services to individuals in the EEA and/or the monitoring of their behavior in the EEA. Furthermore, new and evolving regulations governing the use of AI in processing personal data may require us to modify our Solutions segment offerings to ensure compliance with transparency and automated-decision-making restrictions. Also, the United Kingdom has implemented its own version of the GDPR, the so-called U.K. GDPR; therefore, as a practical matter, the GDPR continues to apply in substantially equivalent form to processing operations carried out in the context of the activities of an establishment in the United Kingdom, and any processing by entities not established in the United Kingdom and relating to the offering of goods or services to individuals in the United Kingdom and/or monitoring of their behavior in the United Kingdom. Accordingly, where we refer to the GDPR in this section, we are also referring to the U.K. GDPR in the context of U.K. processing operations, unless the context requires otherwise.
In the United States, the rules and regulations to which we may be subject include those promulgated under the authority of the Federal Trade Commission, state regulators and regulator enforcement positions and expectations. At the state level, all states have implemented security breach notification laws. Many states have adopted issue-specific laws pertaining to the use of GPS and biometrics, among other technologies. Additionally, various state laws have been passed, imposing obligations regarding the processing of personal data. This trend began with the California Consumer Privacy Act (the “CCPA”) which came into force on January 1, 2020 and created new individual privacy rights for consumers (as that word is broadly defined in that law) and placed increased privacy and security obligations on entities handling personal data of consumers or households. Among other requirements, the CCPA requires covered companies to provide disclosures to California consumers and provide such consumers several rights, including ways to opt-out of certain sales of personal information. The CCPA provides for civil penalties for violations and allows for a cause of action for data breaches. Other similar state laws create numerous privacy and security obligations for businesses and service providers, as well as rights for data subjects and individuals. As our business is directed exclusively to business consumers, we may not be subject to all such consumer-directed privacy laws. Nonetheless, we must evaluate whether and to what extent we are required to comply with any such law; to the extent that we are subject to these or other privacy laws, we may be required to implement additional processes or procedures or change the way in which we do business, ultimately increasing costs and limiting our ability to collect, use and share data subject to those laws.
The GDPR provides that EEA member states and the United Kingdom may make their own further laws and regulations to introduce supplementary requirements in certain areas. Such country specific regulations, as well as differing and/or conflicting interpretations of the GDPR across the EEA and the United Kingdom, may lead to divergence in the application of the laws that govern our processing of personal data across the EEA and/or the United Kingdom. Our endeavoring to comply with each of these laws may increase our costs and could increase our overall compliance risk. Such country-specific regulations could also limit our ability to collect, use and share data in the context of our EEA and/or U.K. operations, or in any operations that could be subject to such laws, and/or could cause our compliance costs to increase, ultimately having an adverse impact on our business and harming our business and financial condition.
29
Table of Contents
Collectively, European data protection laws (including the GDPR) are wide-ranging in scope and impose numerous, significant and complex compliance burdens in relation to the processing of personal data. Specifically, the GDPR introduced numerous privacy-related changes for companies operating in the United Kingdom and EEA, including greater control over personal data by data subjects (e.g., the “right to be forgotten”), increasing transparency obligations to data subjects, requiring the establishment of a legal basis for processing personal data, creating obligations to appoint data protection officers and/or U.K. and/or EU representatives in certain circumstances, establishing obligations to implement certain technical and organizational safeguards to protect the security and confidentiality of personal data, introducing data breach notification requirements and increasing fines. In particular, fines of up to €20 million or up to 4% of the annual global revenue of the noncompliant company, whichever is greater, could be imposed for violations of the GDPR’s requirements. In addition to administrative fines, a wide variety of other potential enforcement powers are available to competent supervisory authorities in respect of potential and suspected violations of the GDPR, including extensive audit and inspection rights and powers to order temporary or permanent bans on all or some processing of personal data carried out by noncompliant actors. The GDPR also includes a private right of action on data subjects and consumer associations to lodge complaints with supervisory authorities, seek judicial remedies and obtain compensation for damages resulting from violations of the GDPR. Additionally, as noted above, the United Kingdom has transposed the GDPR into the laws of the United Kingdom by way of the U.K. GDPR, which could expose us to two parallel regimes, each of which potentially authorizes similar fines, with the U.K. GDPR permitting fines of up to the higher of £17.5 million or 4% of annual global revenue of any noncompliant company; as well as other potentially divergent enforcement actions for certain violations.
The GDPR requirements apply not only to third-party transactions, but also to transfers of personal data between, and other processing of personal data by, us and our subsidiaries, including employee information. The GDPR also restricts transfers of personal data to the United States and other countries, known as ‘third countries’, in respect of which the European Commission or other relevant regulatory body has not issued a so-called ‘adequacy decision’, unless the parties to the transfer have implemented specific safeguards to protect the transferred personal data. This is an area of evolving complexity and achieving effective compliance with ever changing requirements and guidance in relation to data transfers governed by GDPR is highly challenging. If we are unable to implement sufficient safeguards to ensure that our transfers of personal data governed by GDPR are lawful, we may face increased exposure to regulatory action(s), substantial fines and injunctions against processing personal data governed by GDPR. Loss of our ability to lawfully transfer personal data out of the United Kingdom and/or EEA to the United States or any other jurisdictions may (1) restrict our activities outside the United Kingdom and/or EEA, (2) limit our ability to work with partners, service providers, contractors and other companies outside the United Kingdom and/or EEA and/or (3) require us to increase our data processing capabilities in the United Kingdom and/or EEA at significant expense or otherwise cause us to change the geographical location or segregation of our relevant systems and operations — any or all of which could adversely affect our financial results.
Additionally, other countries outside of the United Kingdom and EEA in which we operate, including China and Israel, have enacted or are considering enacting similar cross-border data transfer restrictions and laws requiring local data residency, which could increase the cost and complexity of delivering our services and operating our business. The type of challenges we face in the United Kingdom and/or EEA will likely also arise in other jurisdictions that adopt laws similar in construction to the GDPR or regulatory frameworks of equivalent complexity.
Seeking to comply with evolving data protection requirements has caused us to expend significant resources and such expenditures are likely to continue into the near future as we respond to new interpretations, additional guidance and potential enforcement actions and patterns. While we have taken steps to comply with the GDPR, we cannot assure you that our efforts to achieve and remain in compliance have been, and/or will continue to be, fully successful.
Globally, governments and agencies have adopted and could in the future adopt, modify, apply or enforce laws, policies, regulations and standards covering user privacy, data security, technologies such as cookies and tracking technologies that are used to collect, store and/or process data, marketing online, the use of data to inform marketing, the taxation of products and services, unfair and deceptive practices and the collection (including the collection of information), use, processing, transfer, storage and/or disclosure of data associated with unique individual internet users. New regulation or legislative actions regarding data privacy and security (together with applicable industry standards) may increase the costs of doing business and could have a material adverse impact on our operations and cash flows.
30
Table of Contents
We make public statements about our use and disclosure of personal data, including through our privacy policy. Although we endeavor to comply with our public statements and documentation, we may at times fail to do so or be alleged to have failed to do so. Moreover, despite our efforts, we may not be successful in achieving compliance if our employees or vendors fail to comply with our published policies and documentation. The publication of our privacy policy and other statements that provide promises and assurances about data privacy and security can subject us to potential government or legal action if they are found to be deceptive, unfair or misrepresentative of our actual practices.
Any failure or perceived failure (including as a result of deficiencies in our policies, procedures or measures relating to privacy, data protection, marketing or client communications) by us to comply with laws, regulations, policies, legal or contractual obligations, industry standards or regulatory guidance relating to privacy or data security, may result in governmental investigations and enforcement actions, litigation, fines and penalties or adverse publicity and could cause our clients and partners to lose trust in us, which could have an adverse effect on our reputation and business. We expect that there will continue to be new proposed laws, regulations and industry standards relating to privacy, data protection, marketing, consumer communications and information security in the United States, the United Kingdom, the European Economic Area and other jurisdictions, and we cannot determine the impact such future laws, regulations and standards may have on our business. Future laws, regulations, standards and other obligations or any changed interpretation of existing laws or regulations could impair our ability to develop and market new services and maintain and grow our client base and increase revenue.
Any actual or perceived failure to comply with evolving regulatory frameworks around the development and use of AI could adversely affect our business, results of operations, and financial condition.
Our business model uses third-party artificial intelligence models. If we are unable to comply with the increasing number of laws specifically targeting AI—including requirements for explainability, bias mitigation, and human oversight—we may be forced to suspend certain features of our products and services. These technologies, while holding immense potential for improving and adding accuracy to our services, such as for enhancing booking and pricing predictions and facilitating shipment detail requests, may still introduce uncertainties that could negatively impact our business. These uncertainties include potential flaws in AI algorithms or training methodologies, biased information in datasets, and offensive, illegal, or otherwise harmful content generated by AI systems. Furthermore, the increasing use of generative AI models in internal systems may create new attack methods for adversaries, posing additional security risks. Our approach to mitigating these risks involves a combination of vigilant monitoring, implementing internal policies for use of AI tools, and investment in our AI technology. However, it is important to note that our ability to innovate or offer certain features and functionality may be constrained by regulatory developments affecting the collection, use, and disclosure of data.
Use of third-party AI tools may involve various risks, which may include, without limitation: outputs obtained may contain copyrighted content, confidential information may be exposed, some inputs and/or outputs could be subject to data protection laws, and information could be unreliable. The AI regulatory landscape is rapidly evolving, and we are or may become subject to numerous laws, requirements and regulations governing the use of AI. Implementation standards and enforcement practices are likely to remain uncertain for the foreseeable future, and we cannot yet determine the impact future laws, regulations, standards, or perception of their requirements may have on our business.
In the United States and internationally, AI is the subject of evolving review by various governmental and regulatory agencies, including the SEC and the FTC, and changes in laws, rules, directives and regulations governing the use of AI may adversely affect the ability of our business to use or rely on AI. The Colorado AI Act, which has taken effect as of 2026, creates duties for developers and for those that deploy AI and there is a specific focus on bias and discrimination. The California AI Transparency Act, which also has taken effect as of 2026, mandates that “Covered Providers” implement comprehensive transparency measures to disclose (i.e., watermarking) when content has been generated or modified by AI. “Covered Providers” AI systems are publicly accessible within California with more than one million monthly visitors or users.
31
Table of Contents
In Europe, on December 8, 2023, the European Union legislators reached a political agreement on the EU Artificial Intelligence Act (“EU AI Act”), which establishes a comprehensive, risk-based governance framework for artificial intelligence in the EU market. The EU AI Act entered into force on February 2, 2025, with different provisions becoming gradually applicable on different dates. The EU AI Act applies to companies that develop, use and/or provide artificial intelligence in the EU and includes requirements around transparency, conformity assessments and monitoring, risk assessments, human oversight, security, accuracy and, general purpose artificial intelligence models. Furthermore, it includes fines of the higher of €35,000,000 or up to 7% of a company’s total worldwide annual turnover for non-compliance with prohibited AI practices, or the higher of €7,500,000 or up to 1% of a company’s total worldwide annual turnover for the supply of incorrect, incomplete, or misleading information to notified bodies and national competent authorities in certain contexts. The majority of the EU AI Act’s rules come into force and enforcement as of August 2, 2026. Because a substantial portion of our 2025 revenue was generated in Europe, any failure to align our products and services with these requirements could result in catastrophic financial penalties of up to 7% of our total worldwide annual turnover. In addition, on September 28, 2022, the European Commission proposed two Directives seeking to establish a harmonized civil liability regime for artificial intelligence in the EU, in order to facilitate civil claims in respect of harm caused by artificial intelligence and to include artificial intelligence-enabled products within the scope of the EU’s existing strict liability regime. The EU AI Act will have a material impact on the way AI is regulated in the EU, and together with developing guidance and / or decisions in this area, likely to affect our use of artificial intelligence and our ability to provide and to improve our services, require additional compliance measures and changes to our operations and processes, result in increased compliance costs and potential increases in civil claims against us, and could adversely affect our business, operations and financial condition.
Finally, our development of proprietary AI solutions and tools and our use of third party AI solutions and tools could subject us to the risks mentioned above and additional risks to our business deriving from, or associated with, existing or upcoming AI related laws and regulations such as the EU AI Act, enforcement actions related to AI, or court precedents involving AI.
Our use of Anthropic’s AI models in certain parts of our business subjects us to significant regulatory and political risk following Anthropic’s recent designation as a “supply chain risk” by the U.S. Department of Defense and the current US administration’s directive to phase out its use across federal agencies.
We utilize artificial intelligence models developed by Anthropic, PBC (“Anthropic”), including the Claude series of models, within certain of our internal operations and Solutions segment offerings. In February and March 2026, the U.S. executive branch and the Department of Defense (“DoD”) took unprecedented actions against Anthropic, including directing all federal agencies to cease using Anthropic’s technology and designating the company as a “supply chain risk.” These actions were reportedly triggered by a contractual dispute over usage restrictions Anthropic sought to maintain regarding mass domestic surveillance and autonomous weapons systems.
This designation and the broader political controversy surrounding Anthropic pose several material risks to our business:
| ● | Contractual and Partner Risk: The “supply chain risk” designation prohibits any contractor, supplier, or partner that does business with the U.S. military from conducting commercial activity with Anthropic. Because some of our users, carriers, and third-party technology partners may also be government contractors or subcontractors, they may be forced to terminate their use of any of our products or services that integrate Anthropic’s technology to remain in compliance with their own federal obligations. |
| ● | Operational Disruption and Technical Debt: If we are forced to suddenly migrate our AI-driven features from Anthropic to an alternative provider, such as OpenAI or Google Gemini, we may experience significant technical debt, service downtime, or a decrease in the performance of our predictive pricing and routing engines. Such a migration would require substantial engineering resources and could delay our strategic initiatives. |
| ● | Reputational and Political Scrutiny: As our Ordinary shares are listed on Nasdaq, our continued use of technology from a company publicly labeled a national security risk by the U.S. government—rightly or wrongly—could subject us to increased scrutiny from regulators, investors, or customers. This risk is heightened given the ongoing military conflict involving the U.S. and Iran, where AI-driven targeting and intelligence assessment have become highly politicized. |
| ● | Legal Uncertainty: Anthropic has filed lawsuits against the DoD and the US administration challenging these designations as unlawful and a violation of its First Amendment rights. The outcome of this litigation is uncertain. A prolonged legal battle or a final ruling upholding the government’s actions could lead to a permanent “blacklisting” of Anthropic, effectively rendering our investments in their ecosystem obsolete. |
32
Table of Contents
Any of these factors could result in increased costs, loss of customers, and a material adverse effect on our results of operations and financial condition.
The enactment of legislation implementing changes in taxation of international business activities, the adoption of other corporate tax reform policies or changes in tax legislation or policies could impact our future financial position and results of operations.
Corporate tax reform, base-erosion efforts and tax transparency continue to be high priorities in many tax jurisdictions where we have business operations. As a result, policies regarding corporate income and other taxes in numerous jurisdictions are under heightened scrutiny and tax reform legislation is being proposed or enacted in a number of jurisdictions.
In 2015, the Organization for Economic Co-operation and Development (the “OECD”) published final recommendations on base erosion and profit shifting (“BEPS”). These recommendations proposed the development of rules directed at counteracting the effects of tax havens and preferential tax regimes in countries around the world. Several of the areas of tax law on which the BEPS project focused have led or will lead to changes in the domestic law of individual OECD jurisdictions. These changes include (amongst others) restrictions on interest and other deductions for tax purposes, the introduction of broad anti-hybrid regimes and reform of controlled foreign company rules. Changes are also expected to arise in the application of certain double tax treaties, which may restrict the ability of certain members of the Freightos group to rely on the terms of relevant double tax treaties in certain circumstances. Further, recent BEPS developments such as the OECD Inclusive Framework’s global tax reform statements in October 2021 include proposals for new profit allocation and nexus rules and for rules (including Pillar Two model rules released in December 2021) to ensure that the profits of multinational enterprises are subject to a minimum rate of tax. If these are enacted, we would expect our tax costs and operational expenses related to this complex compliance to increase.
Changes of law in individual jurisdictions which may arise as a result of the BEPS project or other tax measures may ultimately increase the tax base of individual members of the Freightos group in certain jurisdictions or the worldwide tax exposure of the Freightos group. Changes of law may also include revisions to the definition of a “permanent establishment” and the rules for attributing profit to a permanent establishment. Other changes may focus on the goal of ensuring that transfer pricing outcomes are in line with value creation. Such changes to tax laws could increase their complexity and the burden and costs of compliance. Additionally, such changes could also result in significant modifications to existing transfer pricing rules and could potentially have an adverse impact on our taxable profits in various jurisdictions. In 2026, the continued global implementation of the OECD’s ‘Pillar Two’ model rules, which aim to ensure a minimum 15% effective tax rate for multinational enterprises, may increase our tax liability and the complexity of our financial reporting. As we expand into new jurisdictions, we face a higher risk of being subject to these rules.
We may have exposure to additional tax liabilities.
As an international business providing global freight booking services around the world, we are subject to income taxes and non-income-based taxes. Although we believe that our tax filing positions are reasonable and comply with applicable law, we regularly review our tax filing positions, especially in light of tax law or business practice changes, and we may change our positions or determine that previous positions should be amended, either of which could result in additional tax liabilities. Significant judgment is required to evaluate applicable tax obligations. In many cases, the ultimate tax determination is uncertain because it is not clear how new and existing statutes might apply to our business, and as a result, amounts recorded may be subject to adjustments by the relevant tax authorities. The final determination of tax audits or tax disputes may be different from what is reflected in our historical income tax provisions and accruals. If current or future audits find that additional taxes are due, we may be subject to incremental tax liabilities, possibly including interest and penalties, which could have a material adverse effect on our results of operations, financial condition and cash flows.
In general, governments are increasingly focused on ways to increase tax revenues, which has contributed to an increase in audit activity, more aggressive positions taken by tax authorities, more time and difficulty to resolve any audits or disputes and an increase in new tax legislation. Any such additional taxes or other assessments may be in excess of our current tax provisions or may require us to modify our business practices in order to reduce our exposure to additional taxes going forward, any of which could have a material adverse effect on our business, results of operations and financial condition.
33
Table of Contents
Certain countries have taken steps to unilaterally introduce a digital services tax to address the issue of multinational businesses carrying on business in their jurisdiction without a physical presence and therefore generally not being subject to income tax in those jurisdictions. These digital services taxes are calculated as a percentage of revenue rather than net income or profits. The interpretation and implementation of the various digital services taxes (especially if there is inconsistency in the application of these taxes across tax jurisdictions) could have a materially adverse impact on our results of operations and cash flows. Due to the global scale of our business activities, any changes in tax law that apply to our activities, such as new definitions of permanent establishment, new nexus and profit allocation rules or the combined effect of tax laws in multiple jurisdictions may increase our worldwide effective tax rate, increase the complexity and costs associated with tax compliance and adversely affect our cash flows and results of operations.
We are also subject to other non-income-based taxes, such as value-added, payroll, sales, use, excise and goods and services taxes. From time to time, we may be under audit or investigation by tax authorities or involved in legal proceedings related to these non-income-based taxes or we may revise or amend our tax positions, which may result in additional non-income-based tax liabilities.
We are subject to a complex regulatory environment, and failure to comply with and adapt to these regulations could result in penalties or otherwise adversely impact our business.
We are affected by ever increasing regulations from a number of sources in the global locations in which we operate. Many of these regulations are complex and require varying degrees of interpretation, including those related to payments transactions, trade compliance, data privacy, environmental, employment, compensation and competition, and may result in unforeseen costs.
In reaction to the continuing global terrorist threat, governments around the world are continuously enacting or updating security regulations. These regulations are multi-layered, increasingly technical in nature and characterized by a lack of harmonization of substantive requirements among various governmental authorities. Furthermore, the implementation of these regulations, including deadlines and substantive requirements, can be driven by regulatory urgencies rather than industry’s realistic ability to comply.
We are and, in the future, may be regulated and licensed by various federal, state, and local transportation agencies in the countries in which we operate. We are subject to regulation as a customs broker under licenses issued by the U.S. Customs and Border Protection (“USCBP”) and the Canada Border Services Agency (“CBSA”). As such, we are required to maintain prescribed records and are subject to periodic audits by the appropriate governmental authority. The regulations are complicated and subject to change. There can be no assurance that we will comply with all of the requirements of the USCBP or CBSA, and our failure to do so would jeopardize our licenses and our ability to continue offering and providing customs brokerage services. Some of the Sellers on our Platform are engaged in activities that require a license, including customs brokerage, U.S. ocean freight forwarding, and providing insurance. Other than Clearit, Freightos is not itself licensed to carry out such activities and while we state on our Platform that we are not acting as a service provider, there can be no assurance that we will not face claims that we are required to comply with such requirements.
On June 16, 2022, President Biden signed the Ocean Shipping Reform Act of 2022 (“OSRA”) into law, which provides, among things, that no person may operate a shipping exchange involving ocean transportation in the foreign commerce of the United States unless the shipping exchange is registered as a national shipping exchange under US law. The OSRA further provides that a person shall register a shipping exchange by filing with the Federal Maritime Commission (“FMC”) an application for registration in such form as the FMC, by rule, may prescribe, containing the rules of the exchange and such other information and documents as the FMC, by rule, may prescribe as necessary or appropriate to complete a shipping exchange’s registration. The OSRA provides that the FMC shall issue regulations no later than three years after the enactment of the law. For purposes of OSRA, the term ‘shipping exchange’ means a platform (digital, over-the-counter, or otherwise) that connects shippers with common carriers for the purpose of entering into underlying agreements or contracts for the transport of cargo, by vessel or other modes of transportation. We do not yet know what regulations the FMC will adopt, nor whether any part of our Platform will be a shipping exchange under the law requiring us to be registered with the FMC.
Failure to consistently and timely comply with these or additional regulations, or the failure, breach or compromise of our policies and procedures or those of our service providers or agents, may result in increased operating costs, damage to our reputation, difficulty in attracting and retaining key personnel, restrictions on operations or fines and penalties.
34
Table of Contents
Failure to comply with anti-corruption, anti-money laundering and sanctions laws, and similar laws associated with our activities in and outside of the United States, could subject us to penalties and other adverse consequences.
We have implemented an anti-money laundering compliance program designed to address the risk of our Platform being used to facilitate money laundering, terrorist financing or other illegal activity. Our program may not be sufficient to prevent our Platform from being used to improperly move money or may be found not to satisfy the expectations of our partners or regulators. In addition, if we or a regulator determines that we are required to comply with specific anti-money laundering laws (such as the U.S. Bank Secrecy Act (BSA), 31 U.S.C. § 5311), we may be required to enhance or alter our anti-money laundering compliance program. We also have some policies, procedures and technology designed to allow us to comply with economic sanctions laws in the countries in which we operate and prevent our Platform from being used to facilitate business in countries, regions or with persons or entities included on designated lists promulgated by the U.S. Department of the Treasury’s Office of Foreign Assets Control, which we refer to as OFAC, and other governmental authorities that enforce equivalent restrictions, including within the European Union and Israel. Our efforts to comply with various sanctions regimes and other regulations may be insufficient or not be effective, including in preventing users from using our services within the sanctioned countries and regions. Our partners or regulators may determine that our compliance efforts are insufficient, or we may be required to comply with new sanctions laws and regulations, which may require us to further revise or expand our compliance program. For example, geopolitical events may result in new sanctions negatively affecting our users and business. Given the technical limitations in developing controls to prevent, among other things, the ability of users to publish on our Platform false or deliberately misleading information or to develop sanctions-evasion methods, it is possible that we may inadvertently and without our knowledge provide services to individuals or entities that have been designated by OFAC or by the corresponding European or Israeli authorities, or are located in a country subject to an embargo by the United States, the E.U., or Israel that may not be in compliance with the economic sanctions regulations administered by OFAC or the European or Israeli authorities.
Consequences for failing to comply with applicable anti-money laundering and sanctions laws and regulations, even unintentional violations, could include fines, criminal and civil lawsuits, forfeiture of significant assets or other enforcement actions. We could also be required to make costly and burdensome changes to our business practices or compliance programs as a result of regulatory scrutiny, voluntary changes we may make to our business strategy or the expansion of our operations. In addition, any perceived or actual breach of compliance by us, our users or payment partners with respect to applicable laws, rules and regulations could have a significant impact on our reputation and could cause us to lose existing users, prevent us from obtaining new users, cause other payment partners to terminate or not renew their agreements with us, negatively impact investor sentiment about our Company, require us to expend significant funds to remedy problems caused by violations and to avert further violations and expose us to legal risk and potential liability, all of which may adversely affect our business, operating results and financial condition and may cause the price of our Ordinary Shares to decline.
We are also subject to the anti-bribery/anti-corruption laws in the jurisdictions in which we conduct business, including the U.S. Foreign Corrupt Practices Act of 1977, as amended (the “FCPA”). These laws generally prohibit companies as well as their employees and agents from improperly influencing government officials or commercial parties in order to, among other things, obtain or retain business, direct business to any person or gain an improper business advantage. Such laws also require companies to maintain accurate books and records and have a system of internal accounting controls sufficient to provide reasonable assurances that transactions are executed and assets are accessed and accounted for in accordance with management’s authorization. We face significant risks if we fail to comply with these laws. In many foreign countries, particularly in countries with developing economies, it may be a local custom that businesses engage in practices that are prohibited by the FCPA or other applicable laws and regulations. We may have direct or indirect interactions with officials and employees of government agencies or state-owned or affiliated entities, and we may be held liable for the corrupt or other illegal activities of our employees, representatives, contractors, partners and agents, even if we prohibit or do not explicitly authorize such activities. While the Company’s compliance program, policies, and other resources are intended to mitigate and manage such risks there is no guarantee that they are or will be fully effective at all times, and our employees, users and agents, as well as those contractors to which we outsource certain of our business operations, may take actions in violation of our policies, procedures, agreements and/or applicable laws, for which we may be ultimately held responsible.
35
Table of Contents
Any violation of the FCPA, other applicable anti-bribery/anti-corruption laws, anti-money laundering or sanctions laws, could result in investigations and actions by federal or state attorneys general or foreign regulators, loss of export privileges, severe criminal or civil fines and penalties or other sanctions, forfeiture of significant assets, whistleblower complaints and adverse media coverage, which could have an adverse effect on our reputation, business, operating results and prospects. In addition, responding to any enforcement action may result in a significant diversion of management’s attention and resources and significant defense costs and other professional fees. Further, even if we maintain proper controls and remain in compliance with applicable anti-corruption, anti-bribery/anti-money laundering and sanctions laws or regulations, should any of our competitors not implement sufficient controls and be found to have violated such laws or regulations, user perception of online freight platforms in general may decrease and our business, brand and reputation may be adversely affected.
We may be subject to governmental export and import controls that could impair our ability to compete in international markets and subject us to liability if we violate such controls.
Since 2018, in particular, there have been political and trade tensions among a number of the world’s major economies. These tensions have resulted in the implementation of tariff and non-tariff trade barriers and sanctions, including the use of export control restrictions and sanctions against certain countries, individuals and companies. Any increase in the use of export control restrictions and sanctions to target certain countries, regions and entities or any expansion of the extraterritorial jurisdiction of export control laws could impact our ability to compete globally. In addition, measures adopted by an affected country to counteract impacts of another country’s actions or regulations could lead to legal liability for multinational companies, including us. For example, in January 2021, China adopted a blocking statute that, among other matters, entitles Chinese entities incurring damages from a multinational’s compliance with foreign laws to seek civil remedies. In February 2022, due to the military conflicts between Russia and Ukraine, several major economies, including the United States, the United Kingdom and the European Union imposed economic sanctions against Russia and certain Russian persons and entities. Since the escalation of Middle Eastern hostilities in early 2026, several jurisdictions have implemented “emergency” export controls on dual-use technologies and logistics software. If our products and services are classified as restricted technology under these new rules, we may be unable to provide our software to users in key growth markets, which would prevent us from achieving the SaaS adoption levels required to drive our Platform revenue.
Our current operations have not been materially, directly affected by the expanded export control regulations or the novel rules or measures adopted to counteract them. Nevertheless, depending on future developments of global trade tensions, such regulations, rules or measures may have an adverse impact on our business and operations and we may incur significant legal liability and financial losses as a result.
Any change in export or import regulations, economic sanctions or related legislation or change in the countries, governments, persons, vessels or technologies targeted by such regulations, could result in decreased use of our Platform by existing or potential users with international operations. Any decreased use of our Platform or limitation on our ability to export or sell our products would likely adversely affect our business, operating results and financial results.
Adverse litigation judgments or settlements resulting from legal or arbitral proceedings in which we may be involved could expose us to monetary damages, equitable restraints or limit our ability to operate our business.
In the future, we may become involved in private actions, collective actions, investigations and various other legal proceedings by users, service providers and government agencies that may have a potential material impact on our business. We may be subject to litigation relating to various matters relating to our business. The results of any such litigation, investigations and legal proceedings are inherently unpredictable and expensive. Any claims against us, whether meritorious or not, could be time consuming, costly and harmful to our reputation, and could require significant amounts of management time and corporate resources. If any of these legal proceedings were to be determined adversely to us, or we were to enter into a settlement arrangement, we could be exposed to monetary damages or be forced to change the way in which we operate our business, which could have an adverse effect on our business, financial condition and operating results.
In addition, arbitration provisions may be included in our terms of service with users. These provisions may be intended to streamline the litigation process for all parties involved, as arbitration can in some cases be faster and less costly than litigating disputes in state or federal court. However, if we choose to include arbitration provisions, arbitration may become more costly for us or the volume of arbitrations may increase and become burdensome. Further, the use of arbitration provisions may subject us to certain risks to our reputation and brand, as these provisions have been the subject of increasing public scrutiny. To minimize these risks, we have in the past and may in the future voluntarily limit our use of arbitration provisions, or we may be required to do so, in any legal or regulatory proceeding, either of which could increase our litigation costs and exposure in respect of such proceedings.
36
Table of Contents
Further, with the potential for conflicting rules regarding the scope and enforceability of arbitration on a jurisdiction-by-jurisdiction basis, as well as conflicting rules between the laws of the various jurisdictions in which we operate, some or all of the arbitration provisions we may choose to include, could be subject to challenge or may need to be revised to exempt certain categories of protection. If our arbitration agreements were found to be unenforceable, in whole or in part, or specific claims were required to be exempted from arbitration, we could experience an increase in our litigation costs and the time involved in resolving such disputes, and we could face increased exposure to potentially costly lawsuits, each of which could adversely affect our business, financial condition, operating results and prospects.
Claims against us may exceed our insurance coverage and/or coverage amounts and may or may not be covered by insurance at all.
We maintain various insurance policies for employee health, worker’s compensation, commercial general liability, director and officers, errors and omissions, cyber, property and excess coverage over the commercial general liability. If any claim falls outside of our coverage or exceeds our coverage, we may be required to record additional expense, which could adversely impact our results of operations.
Ongoing market conditions for obtaining insurance, the rising cost of insurance and coverage expense may have an adverse effect on our business, financial condition, results of operations and cash flows.
Insurance availability and coverage terms continue to vary with market conditions, the market of available insurers is constricting and premium costs have consistently trended upwards. Obtaining insurance and claim expense coverage is becoming increasingly burdensome and expensive and may not be available for some or all of our services offerings on acceptable terms, in sufficient amounts, or at all. A successful claim in excess of our insurance coverage or any material claim for which insurance coverage is denied, limited or is not available could have a material adverse effect on our business, financial condition, results of operations and cash flow.
Changes in, or failure to comply with, competition laws, or customers using our data or tools for anti-competitive purposes, could adversely affect our business, financial condition or operating results.
Governmental agencies and regulators may, among other things, prohibit future acquisitions, divestitures or combinations we plan to make, impose significant fines or penalties, require divestiture of certain of our assets or impose other restrictions that limit or require us to modify our operations, including limitations on our contractual relationships with platform users or restrictions on our pricing models. Such rulings may alter the way in which we do business and, therefore, may increase our costs or liabilities or reduce demand for our products and services, which could adversely affect our business, financial condition or operating results.
Climate change, including measures to address climate change, could adversely impact our business and financial results.
The long-term effects of climate change are difficult to predict and may be widespread. The impacts of climate change may include physical risks (such as rising sea levels, which could affect port operations or frequency and severity of extreme weather conditions, which could disrupt our operations and damage cargo and our service providers’ facilities), compliance costs and transition risks (such as increased regulation and taxation to support carbon emissions’ reduction investments), shifts in customer demands (such as customers requiring more fuel efficient transportation modes or transparency to carbon emissions in their supply chains) and other adverse effects. Our non-asset-based model gives our end customers flexibility and an ability to change locations, modes and carriers based on evolving operating conditions, however, such impacts may disrupt our operations by adversely affecting our ability to procure services that meet regulatory or customer requirements, depending on the availability of sufficient appropriate logistics solutions.
In addition, the increasing concern over climate change has resulted and may continue to result in more regulations relating to climate change, including regulating greenhouse gas emissions, restrictions on modes of transportation, alternative energy policies and sustainability initiatives, such as the FuelEU Maritime initiative. If legislation or regulations are enacted or promulgated in the United States or in any other jurisdictions in which we operate that impose more stringent restrictions and requirements than our current legal or regulatory obligations, we may experience disruptions in, or increases in the costs associated with delivering our services, which may negatively affect our operating our results of operations, cash flows and financial condition.
37
Table of Contents
Risks Related to Our Incorporation in the Cayman Islands
You may face difficulties in protecting your interests, and your ability to protect your rights through U.S. courts may be limited, because we are incorporated under the laws of the Cayman Islands, and we conduct substantially all of our operations, and a majority of our directors and executive officers reside, outside of the United States.
We are an exempted company limited by shares incorporated under the laws of the Cayman Islands and conduct a majority of our operations outside the United States. Substantially all of our assets are located outside the United States. A majority of our officers and directors reside outside the United States and a substantial portion of the assets of those persons are located outside of the United States. As a result, it may be difficult for investors to effect service of process within the United States upon our directors or officers, or to enforce judgments obtained in the United States courts against our directors or officers.
Our corporate affairs are governed by our Amended and Restated Memorandum and Articles of Association (the “Freightos A&R Articles”), the Companies Act (As Revised) of the Cayman Islands, as the same may be amended from time to time (the “Companies Act”), and the common law of the Cayman Islands. The rights of our shareholders to take action against our directors, actions by minority shareholders and the fiduciary duties of our directors to us under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as from the common law of England, the decisions of whose courts are of persuasive authority, but are not binding, on a court in the Cayman Islands. The rights of our shareholders and the fiduciary duties of our directors under Cayman Islands law are different from what they would be under statutes or judicial precedent in some jurisdictions in the United States. In particular, the Cayman Islands has a different body of securities laws than the United States and some U.S. states, such as Delaware, may have more fully developed and judicially interpreted bodies of corporate law than the Cayman Islands. In addition, shareholders of Cayman Islands companies may not have standing to initiate a shareholder derivative action in a federal court of the United States.
The Grand Court of the Cayman Islands (the “Grand Court”) may not (i) recognize or enforce against us judgments of courts of the United States predicated upon the civil liability provisions of the federal securities laws of the United States or any state; and (ii) in original actions brought in the Cayman Islands, impose liabilities against us predicated upon the civil liability provisions of the federal securities laws of the United States or any state, so far as the liabilities imposed by those provisions are penal in nature.
Although there is no statutory enforcement in the Cayman Islands of judgments obtained in the United States, a final and conclusive foreign judgment obtained against us will be recognized by the Grand Court as a cause of action for a debt and may be sued upon without reexamination of the issues if: (a) the foreign court had jurisdiction in the matter; (b) we either submitted to the jurisdiction of the foreign court or was resident and carrying on business in the jurisdiction and was duly served with process; (c) the judgment was not obtained by fraud; (d) the judgment was not in respect of penalties, taxes, fines or similar fiscal or revenue obligations imposed on us; (e) recognition or enforcement of the judgment in the Cayman Islands would not be contrary to public policy; and (f) the proceedings under which the judgment was obtained were not contrary to the principles of natural justice. A Cayman Islands court may stay enforcement proceedings if concurrent proceedings are being brought elsewhere.
Shareholders of Cayman Islands exempted companies like us have no general rights under Cayman Islands law to inspect corporate records (other than the memorandum and articles of association, the register of mortgages and charges, any special resolutions passed by shareholders and a list of the names of the current directors) or to obtain copies of lists of shareholders of these companies. Pursuant to the Freightos A&R Articles, our directors shall from time to time determine whether and to what extent and at what time and places and under what conditions or articles our accounts and books or any of them shall be open to the inspection of our shareholders not being directors, and no shareholder (not being a director) shall have any right of inspection of any account or book or document except as conferred by law or authorized by our directors or by ordinary resolution of our shareholders. This may make it more difficult for you to obtain the information needed to establish any facts necessary for a shareholder motion or to solicit proxies from other shareholders in connection with a proxy contest.
Certain corporate governance practices in the Cayman Islands, which is our home country, differ significantly from requirements for companies incorporated in other jurisdictions such as the United States. As a foreign private issuer whose securities are listed on Nasdaq, we are permitted to follow certain home country corporate governance practices in lieu of the requirements of Nasdaq pursuant to Nasdaq Rule 5615(a)(3), which provides for such exemption to compliance with the Nasdaq Rule 5600 Series, subject to certain exceptions. To the extent we choose to follow home country practice with respect to corporate governance matters, our shareholders may be afforded less protection than they otherwise would under rules and regulations applicable to U.S. domestic issuers.
38
Table of Contents
As a result of all of the above, our shareholders may have more difficulty in protecting their interests in the face of actions taken by management, members of our Board or controlling shareholders than they would as public shareholders of a company incorporated in the United States.
Shareholders’ suits in the form of derivative actions may be brought against our company.
We are not aware of any reported class action having been brought in a Cayman Islands court. Derivative actions have been brought in the Cayman Islands courts, and the Cayman Islands courts have confirmed the availability for such actions. In most cases, we will be the proper plaintiff in any claim based on a breach of duty owed to us, and a claim against (for example) our officers or directors usually may not be brought by a shareholder. However, based both on Cayman Islands authorities and on English authorities, which would in all likelihood be of persuasive authority and be applied by a court in the Cayman Islands, exceptions to the foregoing principle apply in circumstances in which:
| ● | a company is acting, or proposing to act, illegally or beyond the scope of its authority; |
| ● | the act complained of, although not beyond the scope of the authority, could be effected if duly authorized by more than the number of votes which have actually been obtained; or |
| ● | those who control the company are perpetrating a “fraud on the minority.” |
A shareholder may have a direct right of action against us where the individual rights of that shareholder have been infringed or are about to be infringed.
Economic substance legislation of the Cayman Islands may adversely impact us or our operations.
The Cayman Islands, together with several other non-European Union jurisdictions, have introduced legislation aimed at addressing concerns raised by the Organisation for Economic Co-operation and Development’s (OECD) Base Erosion and Profit Shifting (BEPS) initiative as to offshore structures engaged in certain activities which attract profits without real economic activity. The International Tax Co-operation (Economic Substance) Act, (As Revised) (the “Economic Substance Act”) contains certain economic substance requirements for in-scope Cayman Islands entities which are engaged in certain “relevant activities.” As we are a Cayman Islands company, our compliance obligations will include filing an annual notification, which needs to state whether we are carrying out any relevant activities and if so, whether we have satisfied economic substance tests to the extent required under the Economic Substance Act. If the Cayman Islands Tax Information Authority determines that the Company or any of its Cayman Islands subsidiaries has failed to meet the requirements imposed by the Economic Substance Act, the Company may face significant financial penalties, restriction on the regulation of its business activities and/or may be struck off as a registered entity in the Cayman Islands.
As it is still a relatively new regime, it is anticipated that the Economic Substance Act and associated guidance will evolve and may be subject to further clarification and amendments. We may need to allocate additional resources to keep updated with these developments, and may have to make changes to our operations in order to comply with all requirements under the Economic Substance Act. Failure to satisfy these requirements may subject us to penalties under the Economic Substance Act.
Anti-money laundering laws and regulations may restrict our ability to make payments to subscribers or other contractual counter-parties.
In order to comply with legislation, regulations and guidance aimed at the prevention of money laundering, terrorist financing and proliferation financing, and sanctions legislation the Company may be required to adopt and maintain anti-money laundering procedures, and may require subscribers and their beneficial owners, controllers or authorized persons (where applicable) (“Related Persons”) to provide evidence to verify their identity. Where permitted, and subject to certain conditions, the Company may also rely on, or delegate to, a suitable person the maintenance of our anti-money laundering procedures (including the acquisition of due diligence information).
The Company reserves the right to request such information as is necessary to verify the identity of a subscriber or its Related Persons. In the event of delay or failure on the part of the subscriber in producing any information required for verification purposes, we may refuse to accept the application, in which case any funds received will be returned without interest to the account from which they were originally debited.
39
Table of Contents
The Company also reserves the right to refuse to make any redemption payment to a shareholder if directors or officers suspect or are advised that the payment of redemption proceeds to such shareholder might result in a breach of applicable anti-money laundering, sanctions or other laws or regulations by any person in any relevant jurisdiction, or if such refusal is considered necessary or appropriate to ensure compliance with any such laws or regulations in any applicable jurisdiction.
If any person in the Cayman Islands knows or suspects, or has reasonable grounds for knowing or suspecting that another person is engaged in criminal conduct or money laundering, or is involved with terrorism or terrorist financing and property, and the information for that knowledge or suspicion came to their attention in the course of business in the regulated sector, or other trade, profession, business or employment, the person will be required to report such knowledge or suspicion to (i) the Financial Reporting Authority of the Cayman Islands (“FRA”), pursuant to the Proceeds of Crime Act (As Revised) of the Cayman Islands, if the disclosure relates to criminal conduct or money laundering, or (ii) a police officer of the rank of constable or higher, or the FRA, pursuant to the Terrorism Act (As Revised) of the Cayman Islands, if the disclosure relates to involvement with terrorism or terrorist financing and property.
We are an exempted company under Cayman Islands law, which reduces the protections to which our shareholders are entitled.
We are an exempted company with limited liability under the Companies Act. The Companies Act distinguishes between ordinary resident companies and exempted companies. Any company that is registered in the Cayman Islands but conducts business mainly outside of the Cayman Islands may apply to be registered as an exempted company. The requirements for an exempted company are essentially the same as for an ordinary company except for the exemptions and privileges listed below:
| ● | an exempted company does not have to file an annual return of its shareholders with the Registrar of Companies; |
| ● | an exempted company’s register of members is not open to inspection; |
| ● | an exempted company does not have to hold an annual general meeting; |
| ● | an exempted company may issue shares with no par value; |
| ● | an exempted company may obtain an undertaking against the imposition of any future taxation (such undertakings are usually given for 20 years in the first instance); |
| ● | an exempted company may register by way of continuation in another jurisdiction and be deregistered in the Cayman Islands; |
| ● | an exempted company may register as a limited duration company; and |
| ● | an exempted company may register as a segregated portfolio company. |
“Limited liability” means that the liability of each shareholder is limited to the amount unpaid by the shareholder on the shares of the company (except in exceptional circumstances, such as involving fraud, the establishment of an agency relationship or an illegal or improper purpose or other circumstances in which a court may be prepared to pierce or lift the corporate veil).
Failure to maintain our status as tax resident in Israel could adversely affect our financial and operating results.
Because we are incorporated under the laws of the Cayman Islands, we are treated as a tax resident of the Cayman Islands. In addition, according to the tax ruling we received from the Israel Tax Authority (“ITA”), we were required to register with the ITA and be permanently treated as a tax resident of Israel, which we have done. Continued attention must be paid to ensure that we continue to be a tax resident solely in Israel. If we were to be considered as tax resident within another jurisdiction, we may be subject to additional tax in that jurisdiction, which could negatively affect our financial and operating results, and/or our shareholders’ or warrant holders’ investment returns could be subject to additional or increased taxes (including withholding taxes).
40
Table of Contents
Risks Related to Freightos’ Operations in Israel and Certain Other Jurisdictions
Relations between Israel and the other jurisdictions in which we operate, and geopolitical issues in the various jurisdictions in which our employees and users reside, could materially affect our business.
Freightos was founded in Israel. Some of our employees, including members of our management team, operate from our office that is located in Modi’in, Israel. In addition, several of our directors are residents of, or spend significant amounts of time in, Israel. Our intellectual property is held by our Israeli subsidiary and we are taxed as if we were in an Israeli company. Accordingly, political, economic and military conditions in Israel and the surrounding region may directly affect our business and operations. In October 2023, Israel was attacked by Hamas and other Palestinian terrorist organizations operating in the Gaza Strip, and declared war in response, which included a ground operation in the Gaza Strip. As part of the war, a Lebanese terrorist group, Hezbollah, initiated missile attacks against Israel, and Israel responded, including with a ground operation in southern Lebanon. Iran and the Houthi political and military terrorist group in Yemen also attacked Israel with various types of missiles and drones, and Israel responded with air force and other attacks. In June 2025, Israel attacked Iranian nuclear and ballistic missile sites preemptively, and a 12-day war ensued between Israel and Iran (which included a U.S. attack against one of Iran’s hidden nuclear facilities). In October 2025, a ceasefire was reached between Israel and Hamas, which has largely held since that time, although the future of that ceasefire is shaky, given its dependence on Hamas’ willingness to disarm.
On February 28, 2026, the geopolitical situation escalated severely when the United States and Israel launched “Operation Epic Fury,” a massive joint military campaign against Iran. This escalation has resulted in direct retaliatory strikes by Iran against Israel and neighboring Gulf states. The resumption of large-scale missile and drone warfare in early 2026 has significantly increased the physical danger to our employees in Israel and the Palestinian Authority. Iranian retaliatory strikes have reached residential areas in central Israel, demonstrating that even reinforced shelters may be vulnerable to advanced munitions. Our employees face ongoing trauma, potential injury, and the constant threat of mobilization.
The conflict has caused a near-complete “air bridge” collapse across the Middle East. The closure of sovereign airspace over Israel, Iran, Iraq, and Jordan—combined with direct strikes on and subsequent closures of Dubai International (DXB), Abu Dhabi (AUH), and Doha (DOH) airports—has removed approximately 20% of global air cargo capacity. This unprecedented disruption has forced long-haul traffic between Asia and Europe to reroute via Turkey, Egypt, or the Caspian region, significantly increasing transit times and fuel costs. Because our Platform relies on real-time capacity and pricing data from these regional hubs and carriers, the prolonged suspension of their services and the destruction of ground infrastructure could lead to a catastrophic decrease in our transaction volumes and revenue.
The intensity and duration of Israel’s current and future armed conflicts as well as the impact on the Company’s employees and operations, and global geopolitical stability, are difficult to predict. The current and any future hostilities involving Israel, and any interruption or curtailment of trade between Israel and its trading partners, could adversely affect our operations and results of operations.
Many Israeli citizens are obligated to perform annual military reserve duty each year for periods ranging from several days to several weeks until they reach the age of 40 (or older, for reservists who are military officers or who have certain occupations) and, in the event of a military conflict, may be called to active duty. A small group of our employees has been called for military service, and such persons may be unavailable for extended periods of time. Our operations may be disrupted by such absence, which, if involving several senior executives or board members (although not currently the case) may materially affect our operations in an adverse manner. Shelter-in-place and work-from-home measures, government-imposed restrictions on movement and travel and other precautions taken to address the ongoing conflict, which have been imposed, and may be imposed again in the future, may temporarily disrupt our management and employees’ ability to effectively perform their daily tasks. It is also possible that there will be further military reserve duty call-ups in the future, which may affect our business due to a shortage of skilled labor and loss of institutional knowledge, and necessary mitigation measures we may take to respond to a decrease in labor availability may have unintended negative effects and adversely impact our results of operations, liquidity or cash flows.
Many of our employees, including members of our product, research and development and customer support teams, operate from our offices that are located within the West Bank, in Ramallah and Nablus. The 2026 conflict with Iran has impacted people living in the West Bank as well. If the violence intensifies, our teams in Ramallah and Nablus would likely be severely impacted, leading to total operational shutdowns in these critical hubs.
41
Table of Contents
From time to time, there have been violent clashes between Israelis and Palestinians living in the West Bank. The Israeli Defense Forces conducted significant arrests of terrorists in the West Bank during Israel’s recent war against Hamas. If the violence in the West Bank intensifies or a war with Hamas or other Palestinian terrorist groups breaks out in the West Bank, our teams in Ramallah and Nablus would likely be severely impacted. The Palestinian Authority, which governs the areas where our Ramallah and Nablus offices are, called several general strikes during the war, as a result of which our teams did not perform their duties. Should our teams in Ramallah be unable or unwilling to continue to perform their functions, whether due to violence, strikes or otherwise, the Company will suffer significant negative effects that could adversely impact our results of operations, liquidity and cash flows.
Our commercial insurance does not cover losses that may occur as a result of events associated with war and terrorism. Although the Israeli government currently covers certain damages that are caused by terrorist attacks or acts of war, we cannot assure you that this government coverage will be maintained or that it will sufficiently cover our potential damages. Any losses or damages incurred by us could have a material adverse effect on our business. Any armed conflicts or political instability in the region would likely negatively affect business conditions and could harm our results of operations.
Further, the State of Israel and Israeli companies have been, from time to time, subjected to economic boycotts. Several countries still restrict business with the State of Israel and with Israeli companies. These restrictive laws and policies may have an adverse impact on our results of operations, financial condition or the expansion of our business. A campaign of boycotts, divestment, and sanctions has been undertaken against Israel, which could also adversely affect our business. Actual or perceived political instability in Israel or any negative changes in the political environment, may individually or in the aggregate adversely affect the Israeli economy and, in turn, our business, financial condition, results of operations, and prospects.
It is currently not possible to predict the future of conflicts between Israel and Hamas or other regional terrorist groups or their effects on our business, operations and financial conditions. The situation is Gaza is rapidly evolving and developing, and could disrupt our business and operations, interrupt our sources and availability of supply and hamper our ability to raise additional funds or sell our securities, among others. The situation adversely affected the economies in Israel and Ramallah and was the primary factor that led to a deterioration of certain indicators of Israel’s economic standing, for instance, a downgrade in Israel’s credit rating by rating agencies such as Moody’s and S&P Global, which threatened to slow the flow of international investment and thereby negatively impact the infrastructure and business environment in which we operate. After the end of the war, Israel’s economy has seen renewed growth and projected growth for 2026, along with an upgrade of Israel’s credit outlook by Moody’s from negative to stable. If conflicts resume, however, those positive trends could be reversed, which could have an adverse impact on our company.
Our Israeli subsidiary currently maintains a beneficial tax treatment status. Changes in tax laws, tax incentives, benefits or differing interpretations of tax laws or our inability to maintain our Israeli subsidiary’s beneficial tax status may adversely affect our results of operations.
We believe our Israeli subsidiary is eligible for certain tax benefits provided to “Preferred Technological Enterprises” under the Israeli Law for the Encouragement of Capital Investments, 1959 (the “Investment Law”). In 2019, our Israeli subsidiary received a tax ruling from the ITA regarding its entitlement to tax benefits as a Preferred Technological Enterprise subject to compliance with the conditions set forth in such tax ruling and in the Investment Law. The tax ruling was valid from 2018 until the tax year ending in 2022. In order to remain eligible for the tax benefits for Preferred Technological Enterprises, our Israeli subsidiary must apply again and meet certain conditions stipulated in the Investment Law and its regulations, as amended. There is no assurance that our Israeli subsidiary will be eligible for the tax benefits for Preferred Technological Enterprises in the future or that those benefits will be available to it in the future. If these tax benefits are reduced, canceled or discontinued, or if our Israeli subsidiary fails to meet certain conditions, its Israeli taxable income would be subject to regular Israeli corporate tax rates. The standard corporate tax rate for Israeli companies is currently 23%. Furthermore, the reduction, cancellation or discontinuation of the tax benefits for Preferred Technological Enterprises may have adverse tax consequences for our shareholders with respect to tax withholding and the tax rate that would apply on dividends paid by us. For additional information, see “Item 10.E. Additional Information - Certain Material Israeli Tax Considerations” in this Annual Report.
We believe that we are eligible to file consolidated income tax returns in Israel under Israel’s Encouragement of Industry (Taxes) Law, 1969 (the “Tax Law”). We believe that the Company should qualify as a “parent company” under the Tax Law despite being incorporated in the Cayman Islands as it is registered for tax purposes in Israel, controls our Israeli subsidiary and has at least 80% of its assets invested in “industrial companies” (as defined in the Tax Law). While we have obtained an opinion from our tax advisor about filing consolidated tax returns, there is no assurance that the ITA will agree with our position. Should we not be allowed to file consolidated tax returns it means that we would not be able to offset our Israeli subsidiary’s tax losses against gains incurred by the Company. We could face significant tax exposures and/or penalties, fees and interest, which could materially adversely affect our financial condition, results of operations, and prospects.
42
Table of Contents
It may be difficult to enforce a U.S. judgment against us or our officers and directors in Israel or the United States or to assert U.S. securities laws claims in Israel or serve process on our officers and directors.
It may be difficult to enforce a U.S. judgment against us, our officers and directors in Israel or the United States, or to assert U.S. securities laws claims in Israel or serve process on our officers and directors.
Most of our directors or officers are not residents of the United States and most of their and our assets are located outside the United States. Service of process upon us or our non-U.S. resident directors and officers and enforcement of judgments obtained in the United States against us or our non-U.S. directors and executive officers may be difficult to obtain within the United States. We have been informed by our legal counsel in Israel that it may be difficult to assert claims under U.S. securities laws in original actions instituted in Israel or obtain a judgment based on the civil liability provisions of U.S. federal securities laws. Israeli courts may refuse to hear a claim based on an alleged violation of U.S. securities laws against us or our non-U.S. officers and directors, reasoning that Israel may not be the most appropriate forum to bring such a claim. In addition, even if an Israeli court agrees to hear a claim, it may determine that Israeli law and not U.S. law is applicable to the claim. If U.S. law is found to be applicable, the content of applicable U.S. law must be proved as a fact, which can be a time-consuming and costly process. Certain matters of procedure will also be governed by Israeli law. There is little binding case law in Israel addressing the matters described above. Israeli courts might not enforce judgments rendered outside Israel, which may make it difficult to collect on judgments rendered against us or our non-U.S. officers and directors.
Moreover, an Israeli court will not enforce a non-Israeli judgment unless, subject to certain exceptions, certain conditions are met such as the judgment was given in a state whose laws provide for the enforcement of judgments of Israeli courts, its enforcement is not likely to prejudice the sovereignty or security of the State of Israel, it was not obtained by fraud or in the absence of due process, it is not at variance with another valid judgment that was given in the same matter between the same parties, and a suit in the same matter between the same parties was not pending before a court or tribunal in Israel at the time the non-Israeli action was brought.
Provisions of Israeli law may delay, prevent or make undesirable an acquisition of all or a significant portion of our shares or assets.
We are taxed as an Israeli corporation and Israeli tax considerations may make potential transactions undesirable to us or to some of our shareholders whose country of residence does not have a tax treaty with Israel granting tax relief to such shareholders from Israeli tax. With respect to mergers, Israeli tax law allows for tax deferral in certain circumstances but makes the deferral contingent on the fulfillment of numerous conditions, including a holding period of two years from the date of the transaction during which certain sales and dispositions of shares of the participating companies are restricted.
We face various risks related to our operations in the Palestinian Authority which could materially affect our business.
Many of our employees, including members of our product, research and development and customer support teams, operate from our offices that are located within the West Bank, in Ramallah and Nablus.
Under a series of agreements, known as the Oslo Accords, signed between 1993 and 1999, the Palestinian Authority has security and civilian responsibility for many Palestinian-populated areas of the West Bank, including Ramallah and Nablus. Our operations in the Palestinian Authority are subject to political, military, economic and legal risks, and conditions in the Palestinian Authority and the surrounding region may adversely impact our business and results of operations. The Palestinian Authority last held elections in 2006, when Hamas won a majority of seats in the Palestinian Legislative Council. Fatah, the dominant Palestinian political faction in the West Bank, and Hamas failed to maintain a unity government. From time to time, there have been violent clashes between their respective supporters. In addition, tensions are often high between Israel and Palestinians living in the West Bank and from time to time, there is violence within the West Bank between Palestinians and Israelis. As described above, the current Middle East conflict could impact our teams in the West Bank. The Palestinian Authority recently (during the Israel-Hamas war) called several one-day general strikes during which our teams did not perform their duties. Should our teams in Ramallah or Nablus be unable or unwilling to continue to perform their functions, whether due to violence, strikes or otherwise, the Company will suffer significant negative effects that could adversely impact our results of operations, liquidity and cash flows.
The economic outlook in the West Bank is fragile, as security concerns and political friction have led to slow economic growth. Longstanding Israeli restrictions on imports, exports, and movement of goods and people continue to disrupt labor and trade flows, and the territory’s industrial capacity, and constrain private sector development.
43
Table of Contents
Palestinian courts have limited history addressing issues that may impact our operations, including intellectual property and corporate matters. As such, we may lack the ability to enforce legal agreements or assert legal rights in the Palestinian Authority, which could materially impact our business and operations.
Our business is currently concentrated in certain geographies, especially Europe and the United States. Many shipments originate in Asia. Future exposure to local economies, regional downturns or other political, social or economic disruptions or events may materially adversely affect our financial condition and results of operations.
Our business is currently heavily concentrated in Europe. As a result, our business is currently more susceptible to regional and national conditions than the operations of more geographically diversified competitors, as we are more vulnerable to local economies, regional downturns or other more localized political or social disruptions and events. Any unforeseen events or circumstances that negatively affect these areas could materially adversely affect our revenues and profitability. These factors include, among other things, changes in demographics, population, competition, shifts in production, warehousing and distribution sites, consumer preferences and new or revised laws or regulations.
Risks Related to Ownership of Our Securities
The price of Freightos Ordinary Shares and Freightos Warrants may continue to be volatile, and the value of Freightos Ordinary Shares and Freightos Warrants may decline.
We cannot predict the prices at which Freightos Ordinary Shares or Freightos Warrants will continue to trade. The price of Freightos Ordinary Shares and Freightos Warrants may not bear any relation to any established criteria of the value of our business and prospects. In addition, the trading price of Freightos Ordinary Shares and Freightos Warrants is likely to be volatile and could be subject to fluctuations in response to various factors, some of which are beyond our control. Since our Business Combination in January 2023, our Ordinary Shares have experienced significant price volatility, often independent of our fundamental operating performance. These fluctuations could cause you to lose all or part of your investment in Freightos Ordinary Shares and Freightos Warrants, as you might be unable to sell your shares at or above the price you paid.
Factors that could cause fluctuations in the trading price of Freightos Ordinary Shares and Freightos Warrants include the following:
| ● | actual or anticipated fluctuations in our financial condition or results of operations; |
| ● | variance in our financial performance from expectations of securities analysts; |
| ● | changes in the pricing of our Solutions segment offerings or our Platform; |
| ● | the success or failure of our 2026 strategic transition to a “Solutions-led” model and our ability to drive “pull-through” Platform transactions; |
| ● | changes in laws or regulations applicable to our business; |
| ● | announcements by us or our competitors of significant business developments, acquisitions or new offerings; |
| ● | significant data breaches, disruptions to or other incidents involving our Solutions segment offerings or our Platform; |
| ● | our involvement in litigation; |
| ● | conditions or developments affecting the global freight industry; |
| ● | future sales of Freightos Ordinary Shares by us or our shareholders; |
| ● | changes in senior management or key personnel and succession risks and market perception related to the appointment of our new Chief Executive Officer and the search for a new permanent Chief Financial Officer; |
44
Table of Contents
| ● | the trading volume of our securities; |
| ● | changes in the anticipated future size and growth rate of our markets; |
| ● | publication of research reports or news stories about us, our competitors or our industry, or positive or negative recommendations or withdrawal of research coverage by securities analysts; |
| ● | general economic and market conditions; and |
| ● | other events or factors, including those resulting from war, incidents of terrorism, global pandemics or responses to these events. |
Broad market and industry fluctuations, as well as general economic, political, regulatory and market conditions, may also negatively impact the market price of Freightos Ordinary Shares. In the past, companies who have experienced volatility in the market price of their securities have been subject to securities class action litigation. We may be the target of this type of litigation in the future, which could result in substantial expenses and divert our management’s attention.
If the market price of our Ordinary Shares falls below $1.00 per share for a prolonged period, our Ordinary Shares could be delisted from Nasdaq, which would seriously harm the liquidity and market price of our Ordinary Shares and our ability to raise capital.
Our Ordinary Shares are currently listed on Nasdaq. To maintain our listing, we are required to comply with certain continued listing requirements, including a minimum bid price of $1.00 per share. As of early March 2026, the market price of our shares has been volatile and has traded at levels approaching this threshold.
If the closing bid price of our Ordinary Shares falls below $1.00 for 30 consecutive business days, we would receive a deficiency notice from Nasdaq. While we would likely be provided a grace period to regain compliance, there can be no assurance that we would be able to do so. If we fail to regain compliance, we might seek to implement a reverse stock split to increase the per-share market price of our Ordinary Shares; however, a reverse stock split may not be successful in maintaining the price above the required level for the necessary period or at all.
If our Ordinary Shares were delisted from Nasdaq, they would likely be traded on the over-the-counter market. This would likely result in:
| ● | A significant decrease in the liquidity and trading volume of our Ordinary Shares; |
| ● | Reduced interest from institutional investors and a lack of coverage by securities analysts; |
| ● | Increased price volatility; |
| ● | A further decline in the market price of our Ordinary Shares; and |
| ● | Significant difficulty in raising additional capital through the sale of equity or debt securities. |
Any of these factors would have a material adverse effect on our business, financial condition, and results of operations, and could cause the value of your investment in our securities to decline significantly or become worthless.
There can be no assurance that Freightos Warrants will ever be in the money at the time they become exercisable or otherwise, and they may expire worthless.
The exercise price for the Freightos Warrants is $11.50 per ordinary share. There is no guarantee that such Freightos Warrants will ever be in the money prior to their expiration, and as such, the warrants may expire worthless. As of March 2026, the trading price of our Ordinary Shares has consistently remained below the $11.50 exercise price since shortly after the Business Combination. If the market price of our Ordinary Shares does not exceed $11.50 prior to the expiration of the warrants in January 2028, the warrants will expire worthless and your investment in the warrants will be lost.
45
Table of Contents
We may redeem your unexpired Freightos Warrants prior to their exercise at a time that is disadvantageous to you, thereby making your Freightos Warrants worthless.
We have the ability to redeem outstanding Freightos Warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that the last reported sales price of the Freightos Ordinary Shares equals or exceeds $18.00 per share (as adjusted for share splits, share dividends, reorganizations and recapitalizations) for any 20 trading days within a 30 trading-day period commencing at any time after the Freightos Warrants become exercisable and ending on the third business day prior to proper notice of such redemption provided that on the date we give notice of redemption and during the entire period thereafter until the time we redeem the Freightos Warrants, we have an effective registration statement under the Securities Act covering the Freightos Ordinary Shares issuable upon exercise of Freightos Warrants and a current prospectus relating to them is available. If and when the Freightos Warrants become redeemable, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws. Redemption of the outstanding Freightos Warrants could force you (i) to exercise your Freightos Warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so, (ii) to sell your Freightos Warrants at the then-current market price when you might otherwise wish to hold your Freightos Warrants or (iii) to accept the nominal redemption price which, at the time the outstanding Freightos Warrants are called for redemption, is likely to be substantially less than the market value of your Freightos Warrants.
If we do not maintain a current and effective prospectus relating to the Ordinary Shares issuable upon exercise of the Freightos Warrants, holders will only be able to exercise such warrants on a “cashless basis.”
We filed a registration statement on Form F-3 relating to the Freightos Ordinary Shares issuable upon exercise of the Freightos Warrants, which was declared effective by the U.S. Securities and Exchange Commission (the “SEC”) on June 27, 2024. Previously, these securities were registered under a Form F-1, which was declared effective on May 1, 2023, and amended by Post-Effective Amendment No. 1, which was declared effective on September 22, 2023. If we do not maintain a current and effective prospectus as part of that Form F-3 at the time that holders wish to exercise such Freightos Warrants, they will only be able to exercise them on a “cashless basis”, provided that an exemption from registration is available. As a result, the number of Freightos Ordinary Shares that holders will receive upon exercise of the Freightos Warrants will be fewer than it would have been had such holder exercised his Freightos Warrant for cash. Further, if an exemption from registration is not available, holders would not be able to exercise on a cashless basis and would only be able to exercise their warrants for cash if a current and effective prospectus relating to the Freightos Ordinary Shares issuable upon exercise of the Freightos Warrants is available. Under the terms of the warrant agreement dated as of October 12, 2021, between Continental Stock Transfer & Trust Company, as warrant agent, and Gesher, as amended, we have agreed to use our best efforts to meet these conditions and to file and maintain a current and effective prospectus relating to the Freightos Ordinary Shares issuable upon exercise of the Freightos Warrants until the expiration of the Freightos Warrants. However, we cannot assure you that we will be able to do so. If we are unable to do so, the potential “upside” of the holder’s investment in our Company may be reduced or the Freightos Warrants may expire worthless.
An active market for Freightos Ordinary Shares or Freightos Warrants may not develop, which would adversely affect the liquidity and price of Freightos securities.
An active trading market (with significant volume) for Freightos Ordinary Shares or Freightos Warrants may never develop or, if developed, may not be sustained. You may be unable to sell your Freightos Ordinary Shares or Freightos Warrants unless a market can be established and sustained. Since becoming public, the Freightos Ordinary Shares and Freightos Warrants have not experienced significant levels of trading on Nasdaq. As of March 2026, our Ordinary Shares continue to be characterized by a “low float” and relatively low average daily trading volume. Low-float stocks are companies with a relatively small number of shares available for public trading. The float of a stock measures the number of shares of a security available for trading. The measure does not generally include closely held securities, those owned by controlling investors, employees, or company owners. The relative illiquidity of our securities makes it difficult for investors to buy or sell large holdings without causing significant price swings. This lack of liquidity may also discourage institutional investors from initiating or maintaining positions in our shares, further suppressing trading volume and potentially keeping our share price lower than it might be if our shares were more liquid. See below “Concentrated ownership of our shares by a limited number of shareholders may limit your ability to influence corporate matters and adversely impact share liquidity.”
The trading prices of Freightos Ordinary Shares and Freightos Warrants may be volatile and may fluctuate due to a variety of factors, some of which are beyond our control, including, but not limited to:
● | changes in the sectors in which we operate; |
46
Table of Contents
● | changes in our projected operating and financial results; |
● | changes in laws and regulations affecting our business; |
● | changes in our senior management team, our board or key personnel; |
● | our involvement in litigation or investigations; |
● | negative publicity about Freightos or our services; |
● | announcements of significant business developments, acquisitions, or new offerings; |
● | general economic, political, regulatory, industry, and market conditions; and |
● | natural disasters or major catastrophic events. |
These and other factors may cause the market prices and demand for Freightos Ordinary Shares and Freightos Warrants to fluctuate substantially, which may limit or prevent investors from readily selling their securities and may otherwise negatively affect the liquidity of Freightos Ordinary Shares or Freightos Warrants. Following periods of such volatility in the market price of a company’s securities, securities class action litigation has often been brought against that company. Because of the potential volatility of Freightos Ordinary Shares or Freightos Warrants, we may become the target of securities litigation in the future. Securities litigation could result in substantial costs and divert management’s attention and resources from its business.
Concentrated ownership of our shares by a limited number of shareholders may limit your ability to influence corporate matters and adversely impact share liquidity
A significant percentage of the Freightos Ordinary Shares is held by a limited number of shareholders, including our founder and early investors. As of March 1, 2026, these shareholders collectively owned approximately 54% of our outstanding shares. As a result of this concentrated ownership, these shareholders have significant influence over matters that require approval by our shareholders, including the election of directors and approval of significant corporate transactions.
This concentrated control could delay, defer, or prevent a change of control, merger, consolidation, takeover, or other business combination involving our company that other shareholders may support. It could also discourage a potential investor from acquiring our Ordinary Shares if the investor sought to gain significant influence over corporate matters or could otherwise conflict with the interests of our other shareholders. These shareholders may have interests that differ from yours and may vote their Ordinary Shares in a way with which you disagree and which may be adverse to your interests.
The concentrated ownership structure also significantly impacts the liquidity of the Freightos Ordinary Shares in the public market. With a substantial portion of our shares held by a small number of shareholders who may have long-term investment horizons or other reasons to maintain their positions, the free float—the number of shares readily available for trading—is substantially reduced. This limited free float can lead to:
| ● | Lower trading volumes, making it more difficult for shareholders to buy or sell significant positions without affecting the share price; |
| ● | Increased price volatility, as even relatively small trades may cause disproportionate price movements; |
| ● | Wider bid-ask spreads, potentially increasing transaction costs for all shareholders; |
| ● | Challenges in attracting new institutional investors who often require minimum liquidity thresholds; and |
| ● | Potential difficulties in being included in or maintaining positions in certain stock indices, which could further reduce visibility and investor interest in our shares. |
47
Table of Contents
Furthermore, this concentrated ownership may adversely affect the trading price of the Freightos Ordinary Shares because investors may perceive disadvantages in owning shares in a company with significant shareholders who have substantial control over our company. These shareholders may make decisions that prioritize longer-term strategic objectives over short-term financial performance, which may not align with the preferences of other shareholders. As we move further past the initial Business Combination, the expiration of lock-up periods and the potential for these large shareholders to divest their holdings could create significant “overhang” on our share price. Any actual or perceived sale of large blocks of shares by our founder, early investors, or directors could cause the market price of our Ordinary Shares to decline sharply.
If our significant shareholders were to sell large amounts of Freightos Ordinary Shares in the public market, such sales could cause the market price of Freightos Ordinary Shares to decrease. Conversely, the perceived risk that these shareholders might sell large amounts of Freightos Ordinary Shares could depress the market price of the shares. Additionally, the perception by the investment community that these shareholders might sell large amounts of Freightos Ordinary Shares could also impact the market price of our Ordinary Shares.
The interests of these significant shareholders may not always coincide with the interests of our other shareholders, and they could take actions that other shareholders do not view as beneficial, potentially adversely affecting the rights, liquidity, and value of your investment.
We are an “emerging growth company” and the reduced disclosure requirements applicable to us may make our securities less attractive to investors.
We are an “emerging growth company,” as defined in Section 2(a)(19) of the Securities Act, as modified by the JOBS Act. For as long as we continue to be an emerging growth company, we may choose to take advantage of certain exemptions and relief from various reporting requirements that are applicable to other public companies, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 (“Section 404”) of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”). We will remain an emerging growth company until December 31, 2028, though we may cease to be an emerging growth company earlier if (1) we have more than $1.235 billion in annual gross revenue, (2) we qualify as a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act or (3) we issue, in any three-year period, more than $1.0 billion in non-convertible debt securities held by non-affiliates. We currently intend to take advantage of each of the reduced reporting requirements and exemptions described above. As a result, our shareholders may not have access to certain information they may deem important.
Further, the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. We have elected, and expect to continue to elect, not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of our financial statements with another public company, which is neither an emerging growth company nor a company that has opted out of using the extended transition period, difficult because of the potential differences in accounting standards used.
It is difficult to predict whether investors will find our securities less attractive as a result of our taking advantage of these exemptions and the relief granted to emerging growth companies. If some investors find our securities less attractive as a result, the trading prices of our securities may be lower than they otherwise would be, there may be a less active trading market for our securities and the market price of our securities may be more volatile.
When we lose our “emerging growth company” status, we will no longer be able to take advantage of certain exemptions from reporting, and we will also be required to comply with the auditor attestation requirements of Section 404. We will incur additional expenses in connection with such compliance and our management will need to devote additional time and effort to implement and comply with such requirements.
48
Table of Contents
We are a “foreign private issuer” within the meaning of the rules under the Exchange Act, and, as such, we are exempt from certain provisions applicable to U.S. domestic public companies.
Because we are a foreign private issuer under the Exchange Act, we are exempt from certain provisions of the securities rules and regulations in the United States that are applicable to U.S. domestic issuers, including: (i) the rules under the Exchange Act requiring the filing of quarterly reports on Form 10-Q or current reports on Form 8-K with the SEC; (ii) the sections of the Exchange Act regulating the solicitation of proxies, consents, or authorizations in respect of a security registered under the Exchange Act; (iii) the sections of the Exchange Act requiring major shareholders to file public reports of their share ownership and trading activities, imposing liability for insiders (including directors, officers and major shareholders) who profit from trades made in a short period of time, and prohibiting “short sales” by insiders; and (iv) the selective disclosure rules by issuers of material nonpublic information under Regulation FD under the Exchange Act.
We are required to file an annual report on Form 20-F within four months of the end of each fiscal year. In addition, we intend to publish our results on a quarterly basis through press releases, distributed pursuant to the rules and regulations of Nasdaq. Press releases relating to financial results and material events will also be furnished to the SEC on Form 6-K. However, the information we are required to file with or furnish to the SEC is less extensive and less timely compared to that required to be filed with the SEC by U.S. domestic issuers. Accordingly, if you hold our securities, you may receive less or different information about us than you would receive about a U.S. domestic public company.
We may lose our foreign private issuer status in the future, which could result in significant additional costs and expenses.
As discussed above, we are a foreign private issuer and, therefore, are not required to comply with all of the periodic disclosure and current reporting requirements of the Exchange Act. The determination of foreign private issuer status is made annually on the last business day of an issuer’s most recently completed second fiscal quarter. In the future, we would lose our foreign private issuer status if (1) more than 50% of our outstanding voting securities are owned by U.S. residents and (2) a majority of our directors or executive officers are U.S. citizens or residents, or (3) we fail to meet additional requirements necessary to avoid loss of foreign private issuer status. If we lose our foreign private issuer status, we will be required to file with the SEC periodic reports and registration statements on U.S. domestic issuer forms, which are more detailed and extensive than the forms available to a foreign private issuer. We would also have to mandatorily comply with U.S. federal proxy requirements, and our officers, directors and principal shareholders will become subject to the short-swing profit disclosure and recovery provisions of Section 16 of the Exchange Act. In addition, we would lose our ability to rely upon exemptions from certain corporate governance requirements under the listing rules of Nasdaq. As a U.S. listed public company that is not a foreign private issuer, we would incur significant additional legal, accounting and other expenses that it will not incur as a foreign private issuer.
On June 4, 2025, the SEC issued a concept release soliciting comments on potential revisions to the foreign private issuer definition and/or the accommodations accorded to foreign private issuers. The SEC is considering several possible changes, including requiring foreign private issuers to have minimum non-U.S. trading volume or maintain a foreign (non-U.S.) exchange listing (neither of which we currently have), or be incorporated in jurisdictions with robust regulatory frameworks. If the SEC amends the conditions to being a foreign private issuer and we cannot meet the new conditions, we would become subject to the more stringent requirements applicable to U.S. domestic issuers. If the SEC substantially reduces the accommodations accorded to foreign private issuers, then even if we maintain our status as a foreign private issuer, we would still be subject to more stringent requirements. Either of those outcomes could significantly increase our compliance costs and require substantial changes to our practices.
As we are a “foreign private issuer” and follow certain home country (Cayman Islands) corporate governance practices, our shareholders do not have the same protections afforded to shareholders of companies that are subject to all Nasdaq corporate governance requirements.
As a foreign private issuer, we follow certain home country corporate governance practices rather than corresponding requirements of Nasdaq. Specifically, we are not required to: (i) have regularly scheduled executive sessions with only independent directors each year; (ii) solicit proxies and provide proxy statements for all meetings of shareholders; (iii) obtain shareholders’ approval for certain issuances of securities in connection with the acquisition of shares or assets of another company, a change of control, the establishment of or amendments to equity-based compensation plans and private placements; or (iv) have a minimum of three members on our audit committee. As a result, our shareholders may not have the same protections afforded to shareholders of companies that are subject to all Nasdaq corporate governance requirements. For a more detailed description, see “Item 16.G. Corporate Governance.”
49
Table of Contents
The requirements of being a public company may strain our resources, divert our management’s attention and affect our ability to attract and retain qualified board members.
We are subject to the requirements of the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, Nasdaq listing requirements and other applicable securities rules and regulations. As such, we incur additional legal, accounting and other expenses compared to when we were a private company. These expenses may increase even more if and when we no longer qualify as an “emerging growth company.” The Exchange Act requires, among other things, that we file annual reports with respect to our business and operating results. The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting. We have hired more employees and engaged outside consultants to comply with these requirements, which has increased our costs and expenses.
Changing laws, regulations and standards relating to corporate governance and public disclosure are creating uncertainty for public companies, increasing legal and financial compliance costs and making some activities more time-consuming. These laws, regulations and standards are subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. We expect these laws and regulations to increase our legal and financial compliance costs and to render some activities more time-consuming and costly, although we are currently unable to estimate these costs with any degree of certainty.
We expect these rules and regulations to make it more difficult and more expensive for us to obtain director and officer liability insurance, and consequently we may be required to incur substantial costs to maintain the same or similar coverage. These factors could also make it more difficult for us to attract and retain qualified members of our Board of Directors, particularly to serve on our audit committee, and qualified executive officers.
As a result of disclosure of information in this Annual Report and in filings required of a public company, our business and financial condition has become more visible, which we believe may result in threatened or actual litigation, including by competitors and other third parties. If such claims are successful, our business and operating results could be adversely affected, and, even if the claims do not result in litigation or are resolved in our favor, these claims, and the time and resources necessary to resolve them, could cause an adverse effect on our business, financial condition, results of operations, prospects and reputation.
If we are unable to satisfy our obligations as a public company, we could be subject to delisting of our Ordinary Shares, fines, sanctions and other regulatory actions and potentially civil litigation.
If we fail to maintain an effective system of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable laws and regulations could be impaired.
A material weakness is a deficiency or combination of deficiencies in our internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our consolidated financial statements would not be prevented or detected on a timely basis.
If we experience material weaknesses or otherwise fail to maintain an effective system of internal controls in the future, we may not be able to accurately or timely report our financial condition or results of operations or prevent fraud, which may adversely affect investor confidence in us and, as a result, the value of our Ordinary Shares. We cannot assure you that all of our existing material weaknesses have been identified, or that we will not in the future identify additional material weaknesses. Any failure to maintain effective disclosure controls and internal control over financial reporting could have an adverse effect on our business and results of operations and could adversely impact our business, operating results and financial condition.
If we are unable to assert that our internal control over financial reporting is effective, or if our independent registered public accounting firm is unable to express an opinion on the effectiveness of our internal control once it is required to do so (we are currently exempt from that requirement and will remain exempt from it for so long as we remain an emerging growth company), we could lose investor confidence in the accuracy and completeness of our financial reports, which would cause the price of our Ordinary Shares to decline, and we may be subject to investigation or sanctions by the SEC. Furthermore, investor perceptions of our Company may suffer if, in the future, material weaknesses are found, and this could cause the price of our Ordinary Shares to decline. In addition, if we are unable to continue to meet these requirements, we may not be able to remain listed on the Nasdaq stock exchange and may be subjected to regulatory investigations and civil or criminal sanctions.
50
Table of Contents
The issuance of additional share capital in connection with financings, acquisitions, investments, our equity incentive plans or otherwise will dilute all other shareholders.
We expect to issue additional share capital in the future that will result in dilution to all other shareholders. We expect to grant equity awards to employees and directors under our equity incentive plans. We may also raise capital through equity financings in the future. As part of our business strategy, we may acquire, make investments in or engage in strategic partnerships with companies, solutions or technologies and issue equity securities to pay for any such acquisition, investment or partnership. Any such issuances of additional share capital may cause shareholders to experience significant dilution of their ownership interests and the per share value of the Freightos Ordinary Shares (and per warrant value of the Freightos Warrants) to decline.
If securities or industry analysts do not publish research, publish inaccurate or unfavorable research or cease publishing research about Freightos, the price and trading volume of our securities could decline significantly.
The trading market for Freightos Ordinary Shares and Freightos Warrants depends, in part, on the research and reports that securities or industry analysts publish about Freightos or our business. We may be unable to sustain coverage by well-regarded securities and industry analysts. If either none or only a limited number of securities or industry analysts maintain coverage of Freightos, or if these securities or industry analysts are not widely respected within the general investment community, the demand for Freightos Ordinary Shares and Freightos Warrants could decrease, which might cause the price and trading volume of our securities to decline significantly. In the event that we obtain securities or industry analyst coverage, if one or more of the analysts who cover Freightos downgrade their assessment of us or publish inaccurate or unfavorable research about our business, the market price and liquidity for Freightos Ordinary Shares and Freightos Warrants could be negatively impacted.
We do not expect to pay dividends in the foreseeable future.
We expect that we will continue to operate at a loss in the foreseeable future, and will retain most, if not all, of our available funds and any future earnings to fund the development and growth of our business. As a result, we do not expect that we will pay any cash dividends in the foreseeable future.
Our Board has discretion as to whether to distribute dividends. Even if our Board decides to declare and pay dividends, the timing, amount and form of future dividends, if any, will depend on the future results of operations and cash flow, capital requirements and surplus, the amount of distributions, if any, received from our subsidiaries, our financial condition, contractual restrictions and other factors deemed relevant by our Board. Accordingly, you may need to rely on sales of Freightos Ordinary Shares after price appreciation, which may never occur, as the only way to realize any future gains on your investment.
There is no guarantee that the Freightos Ordinary Shares will appreciate in value or that the market price of the Freightos Ordinary Shares will not decline.
We have granted in the past, and will also grant in the future, share incentive awards, which may result in increased share-based compensation expenses.
In 2012, our board adopted and our shareholders approved the Tradeos Ltd. 2012 Global Incentive Option Scheme, as amended and/or restated from time to time (the “2012 Incentive Plan”), for the purpose of granting share-based compensation awards to employees, directors and consultants to incentivize their performance and align their interests with us. In connection with the Business Combination Agreement, on May 31, 2022, the Freightos board approved and adopted the Freightos Limited 2022 Long-Term Incentive Plan (the “2022 LTIP”). Initially, the maximum number of Freightos Ordinary Shares issuable under the 2022 LTIP (for awards through the remainder of 2022) was 1,759,030 Freightos Ordinary Shares (the “Share Pool”). On the first day of each calendar year during the term of the 2022 LTIP, beginning with the calendar year starting January 1, 2023 and continuing for ten calendar years (ending with the calendar year starting January 1, 2032), a number of Freightos Ordinary Shares equal to the lesser of (i) 5% of the number of Freightos Ordinary Shares issued and outstanding on such January 1st date or (ii) an amount determined by our board of directors prior to such date, becomes available for issuance. Any unutilized portion of the Share Pool as of the end of each calendar year is canceled. On January 1, 2024, January 1, 2025, and January 1, 2026, 2,394,734, 2,486,345, and 2,568,845 Freightos Ordinary Shares, respectively, were made available under the Share Pool, which amounts constituted the maximum number of Freightos Ordinary Shares issuable under the 2022 LTIP in those respective years. The 2022 LTIP permits the awards of options, restricted shares, share appreciation rights, restricted share units, or RSUs, performance shares or units, and other share-based awards to employees, directors and consultants of Freightos and its subsidiaries and affiliates. For more information on the share incentive plans, see “Item 6.B. Directors, Senior Management and Employees - Compensation.” We believe the granting of share-based compensation is of significant importance to our ability to attract and retain key personnel and employees, and as such, we will grant share-based compensation and incur share-based compensation expenses. As a result, expenses associated with share-based compensation may increase, which may have an adverse effect on our financial condition and results of operations.
51
Table of Contents
If a U.S. Holder is treated as owning at least 10% by vote or value of our shares, such holder may be subject to adverse U.S. federal income tax consequences.
If a United States person (as defined in Section 7701(a)(30) of the U.S. Internal Revenue Code of 1986, as amended (the “Code”)) is treated as owning (directly, indirectly, or constructively) at least 10% of the total combined voting power of Freightos Ordinary Shares or at least 10% of the total value of Freightos Ordinary Shares, such person may be treated as a “United States shareholder” with respect to each “controlled foreign corporation” (“CFC”) in Freightos’ group (if any), which may subject such person to adverse U.S. federal income tax consequences. Specifically, a United States shareholder of a CFC may be required to annually report and include in its U.S. taxable income its pro rata share of such CFC’s “Subpart F income,” “global intangible low-taxed income” and investments in U.S. property, whether or not we make any distributions of profits or income of such CFC to such United States shareholder. If a U.S. Holder is treated as a United States shareholder of a CFC, failure to comply with applicable reporting obligations may subject such holder to significant monetary penalties and may extend the statute of limitations with respect to such holder’s U.S. federal income tax return for the year for which reporting was due. Additionally United States shareholders of a CFC that are individuals would generally be denied certain tax deductions or foreign tax credits in respect of their income that may otherwise be allowable to a United States shareholder that is a U.S. corporation.
We cannot provide any assurances that we will assist holders of our shares in determining whether we or any of our non-U.S. subsidiaries are treated as CFCs or whether any holder of the Freightos Ordinary Shares is treated as a United States shareholder with respect to any such CFC, nor do we expect to furnish to any United States shareholders information that may be necessary to comply with the aforementioned reporting and tax paying obligations. The IRS has provided limited guidance regarding the circumstances in which investors may rely on publicly available information to comply with their reporting and taxpaying obligations with respect to CFCs. Each U.S. investor should consult its advisors regarding the potential application of these rules to an investment in the Freightos Ordinary Shares.
We may be (or may become) a passive foreign investment company for U.S. federal income tax purposes, which could result in adverse U.S. federal income tax consequences to U.S. Holders of Freightos Ordinary Shares.
The determination of whether or not we are a passive foreign investment company (“PFIC”) is made on an annual basis and will depend on the composition of our and our subsidiaries’ income and assets, and the market value of our and our subsidiaries’ assets, from time to time. Specifically, for any taxable year a non-U.S. corporation will be classified as a PFIC for U.S. federal income tax purposes if either: (1) 75% or more of its gross income in that taxable year is passive income, or (2) 50% or more of the value of its assets (generally based on an average of the quarterly values of the assets) during such year is attributable to assets that produce or are held for the production of passive income. The calculation of the value of Freightos and our subsidiaries’ assets will be based, in part, on the quarterly market value of Freightos Ordinary Shares, which is subject to change.
Based on the composition of our income, assets and operations, we do not believe that we were a PFIC for the taxable year ended December 31, 2025. However, our status as a PFIC requires a factual determination that depends on, among other things, our income, assets and operations in each year. Fluctuations in the market price of Freightos Ordinary Shares may cause our classification as a PFIC for the current or future taxable years to change because the value of our assets for purposes of the asset test, including the value of our goodwill and unbooked intangibles, may be determined by reference to the market price of the Freightos Ordinary Shares from time to time (which may be volatile). Among other matters, if our market capitalization subsequently declines, it may make our classification as a PFIC more likely for the current or future taxable years. The composition of our income and assets may also be affected by how, and how quickly, we use our liquid assets. Because there are uncertainties in the application of the relevant rules and PFIC status is a factual determination made annually after the close of each taxable year, there can be no assurance that we will not be a PFIC for the current taxable year. If we were classified as a PFIC for any year during which a U.S. Holder held Freightos Ordinary Shares, then, with respect to such shareholder, we generally would continue to be treated as a PFIC for all succeeding years during which such holder held Freightos Ordinary Shares.
If we are or are to become a PFIC, such characterization could result in adverse U.S. federal income tax consequences to U.S. Holders of Freightos Ordinary Shares. For example, if we are a PFIC, U.S. Holders of Freightos Ordinary Shares may become subject to increased tax liabilities under U.S. federal income tax laws and regulations and will become subject to burdensome reporting requirements.
U.S. investors should consult their own tax advisors about the circumstances that may cause us to be classified as a PFIC and the consequences if we are classified as a PFIC. For further information, see the section below titled “Certain Material U.S. Federal Income Tax Considerations — Passive Foreign Investment Company Rules.”
52
Table of Contents
ITEM 4. INFORMATION ON THE COMPANY
A. History and Development of the Company
History of Freightos
Freightos Hong Kong Limited, a limited company incorporated and existing under the laws of Hong Kong (“Freightos HK”), was initially incorporated in January 2012 as Tradeos Limited in Hong Kong and shortly thereafter adopted the business name of Freightos, formally changing the company name in 2016 to Freightos Limited, and in February 2023 to Freightos Hong Kong Limited. On May 27, 2022, Freightos HK completed a reorganization pursuant to which shareholders of Freightos HK exchanged shares in Freightos HK for shares in Freightos Limited, and Freightos HK became a subsidiary of Freightos Limited. While incorporated in the Cayman Islands, Freightos Limited is a tax resident in Israel.
Freightos’ Business Combination with Gesher
On January 25, 2023, Freightos consummated the transactions contemplated by the Business Combination Agreement, by and among Freightos, Gesher, Merger Sub I and Merger Sub II (the “Transactions”). Pursuant to the Business Combination Agreement, (a) the First Merger was completed, with Gesher surviving the First Merger as a wholly-owned subsidiary of Freightos and (b) immediately following the First Merger and as part of the same overall transaction as the First Merger, the Second Merger was completed, with Merger Sub II surviving the Second Merger as a wholly-owned subsidiary of Freightos.
The Business Combination and the other Transactions contemplated by the Business Combination Agreement are described in Item 4.A of Freightos’ annual report on Form 20-F for the year ended December 31, 2022, which was filed with the SEC on March 30, 2023. That disclosure, which is incorporated by reference herein, can be found at the following link: https://www.sec.gov/ix?doc=/Archives/edgar/data/0001927719/000141057823000461/crgo-20221231x20f.htm#AHistoryandDevelopmentoftheCompany_80623
As a consequence of the Business Combination, the Freightos Ordinary Shares and Freightos Warrants are registered under the Exchange Act and listed on Nasdaq, which required Freightos to hire additional personnel and implement procedures and processes to address public company regulatory requirements and customary practices. Freightos has been incurring additional annual expenses as a public company for, among other things, directors’ and officers’ liability insurance, director fees and additional internal and external accounting and legal and administrative resources, including increased audit and legal fees.
Additional Information Regarding Freightos
The mailing address of Freightos’ principal executive office is Planta 10, Avda. Diagonal, 211, Barcelona, Spain, +34 933 799 301, 08018. Freightos’ website address is https://www.freightos.com. We do not incorporate the information contained on, or accessible through, Freightos’ website into this Annual Report, and you should not consider it a part of this Annual Report. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. The SEC’s website is http://www.sec.gov. Our agent for service of process in the United States is Cogency Global Inc., 122 East 42nd Street, 18th Floor, New York, New York 10168.
Emerging Growth Company
We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). As such, we will be eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act. If some investors find our securities less attractive as a result, there may be a less active trading market for our securities and the prices of our securities may be more volatile.
We will remain an emerging growth company until the earliest of: (i) the last day of the fiscal year (a) following the fifth anniversary of the date on which Freightos Ordinary Shares were offered in exchange for Gesher Ordinary Shares in connection with the Transactions (which will be December 31, 2028), (b) in which we have total annual gross revenue of at least $1.235 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common equity that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter; and (ii) the date on which we have issued more than $1.00 billion in non-convertible debt securities during the prior three-year period. References herein to “emerging growth company” have the meaning associated with it in the JOBS Act.
53
Table of Contents
Foreign Private Issuer
We qualify as a “foreign private issuer” under U.S. securities laws. Even after we no longer qualify as an emerging growth company, as long as we qualify as a foreign private issuer under the Exchange Act, we will be exempt from compliance with certain laws and regulations of the Exchange Act including, but not limited to, those related to the solicitations of proxies, consents or authorizations under Section 14(a) of the Exchange Act, those related to insider liability for short-swing profit from trading activities under Section 16(b) of the Exchange Act, the prohibition on insider “short sales” under Section 16(c) of the Exchange Act, and those requiring the filing with the SEC of quarterly reports on Form 10-Q or current reports on Form 8-K. As a foreign private issuer, our directors and officers are, nevertheless, subject to reporting obligations under Section 16(a) of the Exchange Act regarding their economic interests in our Ordinary Shares and derivative securities, and our significant shareholders are subject to the obligations to report changes in share ownership under Section 13(d) of the Exchange Act and related SEC rules.
We may utilize the exemptions applicable to a foreign private issuer until such time as we no longer qualify as a foreign private issuer. Under current SEC rules, we would cease to be a foreign private issuer at such time as more than 50% of our outstanding voting securities are directly or indirectly held of record by U.S. holders and any one of the following is true: (i) the majority of our executive officers or directors are U.S. citizens or residents; (ii) more than 50% of our assets are located in the United States; or (iii) our business is administered principally in the United States.
Both foreign private issuers and emerging growth companies are also exempt from certain more stringent executive compensation disclosure rules. Thus, even if we no longer qualify as an emerging growth company but remain a foreign private issuer, we will continue to be exempt from the more stringent compensation disclosures required of companies that are not emerging growth companies and will continue to be permitted to follow our home country practice on such matters.
We intend to take all actions necessary for us to maintain our status as a foreign private issuer under the applicable corporate governance requirements of the Sarbanes-Oxley Act, the rules adopted by the SEC and the Nasdaq corporate governance rules and listing standards.
The SEC has publicized several possible changes to the foreign private issuer definition and/or the accommodations accorded to foreign private issuers., including requiring foreign private issuers to have minimum non-U.S. trading volume or maintain a foreign (non-U.S.) exchange listing (neither of which we currently have), or be incorporated in jurisdictions with robust regulatory frameworks. If the SEC amends the conditions to being a foreign private issuer and we cannot meet the new conditions, we would become subject to the more stringent requirements applicable to U.S. domestic issuers. If the SEC substantially reduces the accommodations accorded to foreign private issuers, then even if we maintain our status as a foreign private issuer, we would still be subject to more stringent requirements. Either of those outcomes could significantly increase our compliance costs and require substantial changes to our practices.
Principal Capital Expenditures and Divestitures
See “Item 5. Operating and Financial Review and Prospects- B. Liquidity and Capital Resources” for information about our capital expenditures.
B. Business Overview
Overview
Our mission is to expand trade between people of the world and make global trade more efficient by streamlining air, ocean and ground shipments across carriers, freight forwarders, importers and exporters on the world’s digital freight pricing, procurement and booking platform, reducing the friction that plagues global supply chains. Our strategy for 2026 is focused on encouraging solution adoption. By embedding our SaaS and software tools into the daily workflows of our customers, we believe we can achieve sustainable revenue growth, with platform bookings following naturally. Our SaaS solutions focus on providing a comprehensive suite of freight rate management, freight quoting and freight booking solutions for freight forwarders, as well as freight procurement and market intelligence solutions used by both enterprise shippers (BCOs) as well as freight forwarders.
54
Table of Contents
These solutions support our leading, vendor-neutral pricing, booking and procurement platform for international freight. Our global freight booking and payment platforms, freightos.com and WebCargo by Freightos Book (collectively, the “Platform”), support supply chain efficiency and agility by enabling real-time procurement of ocean and air shipping across more than ten thousand importers/exporters, thousands of freight forwarders, and dozens of airlines and ocean carriers. According to the United Nations Conference on Trade and Development (“UNCTAD”), the value of goods exported internationally reached $24.4 trillion in 2024, representing approximately 22% of global gross domestic product (“GDP”). International trade is facilitated by the third-party logistics market, which, according to logistics research firm Armstrong & Associates, generated $1.22 trillion dollars in revenue in 2024.1
Despite its size and importance, global freight has not yet undergone a comprehensive digital transformation. Unlike passenger travel, hotels and retail, cross-border freight services remain largely offline, opaque and inefficient. Most international air and ocean shipments involve multiple intermediaries, often with as many as 30 actors and 100 people, communicating across time zones. These manual processes, replicated hundreds of thousands of times each day, typically result in delays, non-binding and inconsistent pricing, and uncertain transit times. Even on major trade lanes, such as Asia to the United States, our research shows that it is common for importers/exporters to wait several days for a spot price quote, and prices often vary by tens of percentage points. Actual prices and transit times are usually not guaranteed and are unpredictable.
The consequences of this dysfunction flow through international freight, supply chains and, ultimately, businesses and consumers everywhere. As a result, consumers pay more for goods, businesses experience reduced margins, and goods remain under or overstocked. The environment also suffers from this lack of efficiency; according to the International Air Transport Association (“IATA”), air cargo holds, for example, are typically about 50% unutilized pre-pandemic, almost doubling greenhouse gas emissions per unit weight of cargo.
These challenges are exacerbated by ongoing and persistent supply chain problems, making global freight pricing more volatile than most stock and commodity markets. Without digitalization, supply chains are unable to respond to stressors in an agile and cost-effective manner. As a result, supply chains have struggled to adjust in an agile and cost-effective manner to stresses, such as wars, pandemics, inclement weather, strikes, blockages of trade routes, such as the Suez Canal, and trade wars.
We believe that global shipping must take inspiration from other industries that have embraced real- time digital connectivity. For example, global passenger air travel benefited from electronic connectivity as early as the 1960s, led by companies such as Sabre and later Amadeus. In the late 1990s, passenger air travel went digital and online, allowing consumers to make reservations from home, booking through dial-up internet connections. Airlines and passengers benefited, with passengers obtaining enhanced transparency and lower prices, and airlines increasing seat utilization and reducing back-office costs.
The efficiencies and potential created by the digital transformations in the travel, retail and B2B sales industries inspired us to create Freightos in 2012 to lead the digital revolution for international freight. Like Booking.com and Expedia, we operate a platform that provides instant, transparent pricing and digital booking and payment. Every search on our Platform relies on layers of industry digitalization and algorithms, often spanning both carriers and forwarders, which we have meticulously developed over ten years. Unlike both platforms, however, the global freight business is a highly process-oriented business-to-business vertical that requires far deeper solutions to support daily workflows. Penetration of these solutions is critical in order to establish critical demand-side mass and a necessary prerequisite to scale transactions.
As such, we operate our business in two segments. In our Platform segment, we connect Buyers and Sellers of freight services to provide digitalized price quoting, booking, payments and basic shipment management. This leans heavily on our success in our Solutions segment, where we provide software tools and data to help industry participants automate their pricing, sales and procurement processes, or improve their efficiency with market intelligence. In addition to driving significant value for companies around the world, our SaaS products encourage adoption of our Platform. Other companies that have successfully deployed SaaS-enabled marketplace strategies include OpenTable, Zenefits and Carta.
1 https://www.logisticsmgmt.com/article/u.s_3pl_market_rebounded_in_2024_says_new_armstrong_associates_report
55
Table of Contents
Given the size, complexity and conservatism of the international freight industry, it took us a decade to achieve direct digital connections with multiple layers of the industry in the air cargo sector: carriers, freight forwarders (who are analogous to sophisticated travel agents for goods) and importers/exporters. Around 2020, we achieved a critical mass of airlines offering digital connections, and our Platform reached an inflection point. In most cases, freight services are purchased by importers/exporters or by freight forwarders (as purchasers of services, “Buyers”) from carriers or freight forwarders (as sellers of services, “Sellers”) who meet, transact and often pay each other on our Platform.
Our growth in the number of transactions is illustrated by the following graphic (in thousands):
After several years of consistent and predictable rapid transaction growth, we believe we are well positioned to maintain our accelerated growth trajectory and establish ourselves as a leading platform in the years to come. We also believe that our deep technology and broad network provided us with a first mover advantage in the industry and allowed us to distinguish ourselves from our competitors, particularly as we seek to replicate the same Solution to Platform playbook that was successful in the air cargo market to the ocean market. The traction we have attained with global freight forwarders and enterprise shippers should also support our increased focus on annual tender Solutions that support all players in our ecosystem. As the only vendor-neutral, end-to-end digital booking platform, connecting carriers, forwarders and importers/exporters for air and ocean freight, we believe we are uniquely positioned to lead the international freight industry through a digital transformation that has already begun to gain momentum.
The Market: World Trade and Global Shipping
International trade plays a key role in our global economy, driving job creation and consumer choice. International trade has grown dramatically since World War II, accelerated by the containerization of shipping in the 1960s. Despite repeated challenges, including trade wars, financial crises, natural disasters, and pandemics, global trade has been resilient. The following graphic illustrates the growth of international trade of goods, which reached $24.4 trillion, or about 22% of global GDP, in 2024.2
2 unctadstat.unctad.org/datacentre/
56
Table of Contents
The global trade of goods is directly dependent on international shipping, including ocean, air and land modes of shipping. Almost all importers/exporters outsource international shipping to third-party logistics services providers, with many relying on services from multiple providers. According to Armstrong & Associates, the third-party logistics market generated nearly $1.2 trillion dollars of revenue in 2024. The key participants in the international shipping industry are described below:
| ● | Airline carriers: According to IATA data, approximately half of all international air cargo is transported in the lower deck of passenger planes, while the other half is transported in dedicated “freighter” planes. The largest non-express cargo airlines in 2024, as measured by freight-tonne kilometers flown and excluding express courier airlines, are Qatar Airways, Emirates, Atlas and Turkish. United Airlines was the largest cargo airline in the United States. The air cargo market generated an estimated $965 billion in revenue in 2024 based on IATA estimates3. Airlines typically work with importers/exporters through freight forwarders who markup and resell air cargo capacity, thereby increasing the market size. |
| ● | Ocean carriers: Maritime research provider Alphaliner ranks MSC, Maersk and CMA-CGM as the largest ocean carriers for containers. The containerized shipping market is less fragmented than other segments. While total ocean cargo revenue is harder to estimate directly, AlixPartners found that 15 major publicly reporting liner companies posted $36 billion in 2024 EBITDA at a 19% margin, implying about $190 billion in revenue across that group.4 Ocean liners often offer services directly to importers/exporters as well as through freight forwarders. |
| ● | Freight forwarders: Freight forwarders arrange and coordinate the transportation of freight. In short, they operate as travel agents for freight; however, the transportation of freight is much more complex than passenger travel as freight does not walk itself on or off a plane or ship, or through customs, like most passengers do. IBISWorld estimated that there are more than 100,000 freight forwarders throughout the world, and Dun & Bradstreet estimated that there are more than 22,000 freight forwarders in the United States. Armstrong & Associates estimated global third-party logistics revenue to be $1.22 trillion dollars in 2024. |
3 https://www.iata.org/en/iata-repository/publications/economic-reports/global-outlook-for-air-transport-december-2024/?utm_source=chatgpt.com
4 https://www.alixpartners.com/media/tzepvuyp/2025-container-shipping-report.pdf?utm_source=chatgpt.com
57
Table of Contents
| ● | Importers/exporters: These are the ultimate customers of the international freight industry. They are often known as “shippers” because they are the customers who are having goods shipped, or as beneficial cargo owners (BCOs). Trade data from multiple nations shows that millions of companies are involved in importing and exporting goods worldwide. Some of the largest importers in the world are Walmart, Target and IKEA. In recent years, the number of small and medium-sized business (“SMB”) importers has increased, in particular niche e-commerce companies, many of whom do not have their own warehouses and use Fulfilled by Amazon and its competitors for their warehousing and last-mile distribution. For example, according to the U.S. Census Bureau, in 2020, the United States had approximately 400,000 small or midsize importers or exporters, responsible for approximately one third of U.S. imports and exports by value. |
There are often two freight forwarding companies involved in a single shipment, one at the origin and one at the destination. Quite often, there are other layers of intermediaries such as general sales agents, master loaders and brokers. Additionally, carriers will sometimes transact with each other (e.g., interlining between airlines), adding further layers of complexity. A typical shipment will involve three or more carriers, such as airlines, ocean liners, trucking carriers and rail.
The Opportunity: Challenges in the Industry
A root cause of the underutilization, unpredictability and mispricing pervasive in the international freight industry is that many carriers are unable to provide instant binding price quotes electronically. Freight forwarders, in turn, who need to quote for door-to-door shipments involving multiple carriers, are delayed while they wait for price quotes from the carriers and ultimately increase prices in order to quote without assuming financial risk. When shipments involve multiple freight forwarders or additional intermediaries, such as master loaders, the problem is compounded. Shipments are delayed and prices are inflated by multiple offline intermediaries. Additionally, the ongoing process of tendering annual or, increasingly, quarterly rates between carriers, forwarders and shippers is cumbersome and prone to extensive, inefficient negotiation periods.
Due to the lack of industry digitalization and integration, importers/exporters face challenges throughout the pricing, booking and shipment management processes. In general, when importers/exporters book spot shipping services with freight forwarders, they often do not know which specific flight or sailing their goods will be carried on, exactly how much they will pay, or when the goods will arrive. Freightos research has found pricing spreads in quotes of 30-100% and 2-3 day average turnaround times for spot quotes. The resulting ambiguity ultimately leads to increased freight costs and reduced shipping efficiencies, in many cases leading to importers/exporters either suffering inventory shortages or compensating for shipping uncertainty by maintaining additional inventory at a high cost. The above challenges all place a significant burden on international supply chains, and extra costs are typically passed on to consumers. Further, as a result of the manual and time-intensive quoting process, importers/exporters often avoid seeking competitive quotes.
Our Solution: Freightos Digital Booking Tools and Platform
We believe that the digitalization of international freight can make shipping cheaper, quicker and more predictable. Our SaaS and software tools provide a comprehensive suite of freight rate management, freight quoting and freight booking solutions for freight forwarders, as well as freight procurement and market intelligence solutions used by both enterprise shippers (BCOs) as well as freight forwarders. These solutions are embedded into the daily workflows of our customers, and we believe we can achieve sustainable revenue growth, with platform bookings following naturally. Our Platform connects Buyers and Sellers of freight services through several means. WebCargo by Freightos and 7LFreight by WebCargo, which connect freight forwarders to carriers, and freightos.com, which connects importers/exporters to logistics service providers. This duality can be understood by rough analogy to passenger travel in which global distribution systems such as Amadeus and Sabre connect travel companies to carriers, while Booking.com, Expedia and others, provide choice of services to the end customer. Unlike passenger travel, international freight effectively did not have a global distribution system before Freightos. For this reason, while travel marketplaces often rely on third-party global distribution systems, we developed and operate both layers of our Platform, WebCargo by Freightos and freightos.com, as illustrated in the following graphic.
58
Table of Contents
Our solutions form the foundation of our Platform, which, in turn, enables Buyers to search, receive instant price quotes (often with binding prices and definite voyage information), compare, book and pay online. This digital booking experience saves time and money, and reduces uncertainty. As shared above, our Platform leans on workflow automation provided to the industry players. When these players use our Solutions for rate management, quoting and annual rate negotiation, it facilitates a far easier and stickier shift to conducting transactions. We also offer access to payment services from financial partners, and provide access to third-party cargo insurance and to in-house and third-party customs brokerage services.
Our Strengths
Network
Our SaaS and software tools are embedded into the daily workflows of our customers. We believe that when our software is integral to customer operations, platform bookings follow naturally. Our Platform benefits from an unmatched network of carriers, freight forwarders and importers/ exporters as active users. For many participants in the international freight market, our products and services form a critical part of their business processes, and some have integrated Freightos deeply into their own IT systems. Our network is broad, spanning leading blue-chip companies to SMBs. It is geographically dispersed with particular strength in Europe and North America. Our Platform benefits from strong network effects where each participant makes the network more valuable for other participants.
The following is an overview of carriers, freight forwarders and importers/exporters who have used our Platform:
| ● | Carriers |
o | Airlines: We have more than 77 individual airlines directly connected to our Platform by API, providing us with real-time rates and enabling electronic bookings. Additionally, we receive static rates directly or indirectly from many other airlines. Historically, we have on average added approximately one airline per month with direct API connections, and we believe that most other airlines are committed to digitalization as soon as they have the IT capability. Some of the notable airlines on our Platform include United Airlines, Qatar Airways, Cathay Pacific, Cargolux, Emirates SkyCargo, American Airlines, Lufthansa, IAG Group Cargo (which includes British Airways and Iberia), Turkish Airlines and Air France-KLM. |
o | Ocean liners (full container load or “FCL”): This market is more consolidated and less digitally mature than air, but we already have connections, live or in active integration, to several top carriers representing a significant share of the global market, and we expect more soon. |
o | Ocean consolidators (less than container load or “LCL”): We are connected directly to two major consolidator networks. |
o | U.S. less than truckload (“LTL”) carriers: We have approximately 150 carriers, including trucking third-party logistics providers, connected directly. |
59
Table of Contents
o | Other land carriers: We receive rates, mostly static Excel sheets, from various LTL trucking companies, container drayage trucking companies, and rail and express carriers. |
| ● | Freight forwarders: Counting subsidiaries of multinational forwarders separately, more than 3,500 freight forwarders across an estimated 10,000 offices subscribe to our software or use our free WebCargo Sky platform to book with airlines. A majority of the freight forwarders connected to our network are paid subscribers. A smaller number of freight forwarders use our software for managing ocean and land rates, and a few dozen act as Sellers on freightos.com. The majority of the top-20 multi-billion-dollar freight forwarders are our customers, including FedEx Logistics, DSV/DB Schenker, CEVA, and Nippon Express. |
| ● | Importers/exporters: In total, since inception, some 21,000 SMB importers/exporters have procured freight services on freightos.com. As our Platform matures, we have also expanded our Solutions stack to support enterprise organizations with market intelligence and tender management. |
Technology and data assets
We are a technology company. Many of our directors, executive officers and product team members bring deep experience from the high-tech sector, and a significant proportion of our team comprises software engineers, software product managers, and software user experience designers. Our technology is built around our multi-modal routing engine, which is able to consider millions of freight services and millions of possible routes to identify optimized door-to-door routes in seconds.
The following statistics reflect our product maturity:
| ● | Rate capabilities: Rate ingestion, tendering, rate refreshes for high-frequency rate updates, dynamic rate markup, rate distribution and interlining. |
| ● | Pricing technology: Quoting tools, eBooking gateway, buy-to-sell markup logic, pricing rules for different modes and geographies. |
| ● | Digital sales: Web sales portals, payment handling and online quoting tools. |
| ● | Market Data: Unique transactional data, daily rate benchmarking and capacity availability. |
| ● | Shipment management: Business logic, vendor communications and exception detection. |
| ● | Customs brokerage: Automation for onboarding and clearance. |
Brand
We also believe that Freightos has built a LogTech brand that is highly recognized and respected within the international freight industry. For example, over 80,000 professionals subscribe to Freightos’ weekly market update, with many hundreds typically attending Freightos’ monthly webinars. Freightos’ data is typically cited in household publications, from Reuters to the New York Times, and has even been cited by governments around the world including the White House.
Our Strategy
Platform Growth, Driven by Solutions
We operate a platform business and we believe, over time, our most important revenue stream will be Platform revenue. However, as we have shown in the air cargo sector, providing Solutions that are embedded in our users’ daily workflows, whether for tendering, rate management, quoting or sales, is the fastest driver of transaction growth. For example, our experience is that retention of transactions from Solutions’ users is some three times higher than non-Solutions users. In addition, Solution revenue tends to be more predictable and stickier, providing a sustainable foundation for long-term growth.
As such, our strategy focuses on expanding our success in the air cargo spot market in two key directions:
60
Table of Contents
| ● | Expanding to additional modes, namely ocean cargo. In 2025, we relaunched a version of our ocean rate management and quoting platform, with initial uptake from enterprise and midmarket forwarders. |
| ● | Expanding to tendering. Our core Solution and Platform traction are focused on air cargo spot rate management and booking. We also have strong traction in the global freight procurement space. We will seek to expand this across both enterprise shippers and forwarders. We believe that this SaaS penetration will increase revenue and also set the stage for long-term growth in the number of transactions from both spot and contract bookings. |
| ● | Both of these are supported by our market intelligence in a positive feedback loop. As we gain more users of our solutions, we can provide them more value with aggregate data, which makes our solutions even more valuable. |
These software tools help freight forwarders and enterprise shippers utilize our Platform, provide our customers with in-house efficiencies and increase user engagement. Revenue generated from our Solutions segment includes SaaS subscriptions, data subscriptions and services associated with SaaS, such as configuration, customization and data ingestion services.
With time, we believe that this will enable the Business to expand from a dominant air cargo market role to doing the same in ocean cargo, as well as in the annual tender pricing market.
We also believe that - long term - this strategy will maximize transactional growth and our ability to improve pricing power. This strategy is sometimes referred to as a “SaaS-enabled-marketplace” and has been used effectively by many leading platforms and marketplaces to increase engagement with platform participants and to create a deeper competitive moat.
Our Solutions segment generates high margin revenue, most of which is derived from recurring subscriptions.
Our product strategy is to be a three-sided marketplace that connects carriers, freight forwarders and importers/exporters, bringing transparency and efficiency to each.
Marketplaces tend to be winner-take-all (or at least winner-takes-most) opportunities, and our long - term strategy is to prioritize the growth of our network, as measured by #Transactions and the value of the transactions, GBV, through sales, marketing, and research and development. We seek to leverage marketplace network effect dynamics in which new Sellers bring capacity that attracts new Buyers, and new Buyers bring demand that attracts new Sellers.
Alongside our investment in transaction growth, we are committed to financial responsibility, monetization and capital efficiency. We are guided by the following principles:
| ● | Monetization: For 2025, our average take rate, which we define as the quotient of net platform revenue divided by GBV, was approximately 0.8%; but, some categories of transactions have achieved a take rate of over 10% (including total revenue from Buyers and Sellers purchasing ancillary services). |
| ● | Gross margins: Our IFRS gross margin in 2025 was 66.8%, while non-IFRS gross margin was 73.7%. |
| ● | Capital efficiency: Our current plans are for free cash flow burn in 2026 to be less than in 2025. Given the size of the opportunity and our high growth rate, and the amount of cash we have on hand, we consider our current planned level of investment appropriate. We expect to reach breakeven on an Adjusted EBITDA basis by the end of 2026. |
Expansion Across Segments
We intend to expand into new market segments by leveraging the overlap of participants across market segments. For example, we are capitalizing on our Platform’s success connecting freight forwarders to airlines by offering the same freight forwarder connections to ocean liners. Similarly, air carrier services combined with freight forwarder door-to-door services are being offered to importers/exporters. For an overview of the market segments in which we are active, refer to “— Our Strengths — Network.”
We also intend to expand into supporting more annual tender negotiation processes between forwarders and carriers or enterprise shippers and their logistics service providers, who can be either freight forwarders or carriers. Our roadmap includes supporting both demand-side, in which we support the companies that are putting out requests for bids, as well as the supply side, in which we support those responding to requests for bids.
61
Table of Contents
We believe there may be opportunities for future expansion into LTL trucking (outside of the United States), FTL trucking, air cargo charters and bulk shipping. We monitor opportunities for adjacent third-party services that could be accessible through our Platform, including customs brokerage in new markets, warehousing, fulfillment and last-mile distribution and trade finance.
Go-to-Market Sales Approach
We utilize a variety of approaches to engage new customers. The following list sets forth certain aspects of our approach to sales.
| ● | Multinational freight forwarding companies: Direct sales. Depending how centralized the freight forwarder is, this includes either direct sales to headquarters for global rollouts, or “land-and-expand” starting at a country or office level and often supported by marketing efforts. |
| ● | Small/midsize freight forwarding companies: Primarily digital advertising. Many small forwarders start by using our booking portal, which does not require a subscription fee, and then upgrade to paid SaaS. |
| ● | Enterprise shippers: Direct sales, augmented by significant brand marketing, including the marketing benefits of some free data we publish such as the weekly version of the FBX container shipping pricing index. |
| ● | SMB shippers: Inbound marketing, including content marketing, search engine optimization and digital advertising. |
| ● | Carriers: Direct sales. |
We invest in the production of quality content about the digitalization of international shipping (research reports, surveys, blog posts, online tools, and our data indices), which has helped us create a strong brand regularly mentioned in the mainstream business press as well as logistics press.
Revenue – How We Make Money
While we expect to derive most of our income in the future from revenue generated by our Platform, which is linked to the rapid growth of our Transactions and GBV, in the short-term, we believe that our Solutions segment provides the largest opportunity for sustainable growth. Platform revenue is generated from fees associated with specific freight- service transactions booked between Buyers and Sellers on our Platform. Platform revenue includes Buyer platform fees, Seller transaction fees (flat per transaction, or a percentage of transaction value), fees related to payments or payment terms, fees related to sales of ancillary services like third-party insurance and customs brokerage, and Clearit customs brokerage fees.
With respect to the Solutions segment, our SaaS offerings are typically priced per user per month/year or per site per month/year, depending on the exact product. Data subscriptions are priced based on the number of users, granularity of data, number of data points and permitted data usages. Solutions revenue includes recurring subscriptions for SaaS or data, and certain non-recurring revenue, such as data services (that is data ingestion), non-recurring engineering and customization fees.
62
Table of Contents
Revenue – Where We Make Money
The following table sets forth the amount of our revenue for the periods presented by geography:
| Solutions | | Platform | | Total | ||||
(in thousands) | |||||||||
For the year ended December 31, 2025 |
| |
| |
| | |||
Europe | $ | 8,696 | $ | 242 | $ | 8,938 | |||
Hong Kong |
| 309 |
| 4,687 |
| 4,996 | |||
United States |
| 8,270 | 2,748 |
| 11,018 | ||||
Other |
| 2,304 |
| 2,204 |
| 4,508 | |||
Total | $ | 19,579 | $ | 9,881 | $ | 29,460 | |||
| Solutions | | Platform | | Total | ||||
(in thousands) | |||||||||
For the year ended December 31, 2024 | |||||||||
Europe | $ | 6,818 | $ | 58 | $ | 6,876 | |||
Hong Kong |
| 222 |
| 4,284 |
| 4,506 | |||
United States |
| 6,915 | 2,247 |
| 9,162 | ||||
Other |
| 1,443 |
| 1,798 |
| 3,241 | |||
Total | $ | 15,398 | $ | 8,387 | $ | 23,785 | |||
| Solutions | | Platform | | Total | ||||
(in thousands) | |||||||||
For the year ended December 31, 2023 |
| |
| |
| | |||
Europe | $ | 5,184 | $ | — | $ | 5,184 | |||
Hong Kong |
| 437 |
| 3,389 |
| 3,826 | |||
United States |
| 6,642 |
| 2,244 |
| 8,886 | |||
Other |
| 934 |
| 1,451 |
| 2,385 | |||
Total | $ | 13,197 | $ | 7,084 | $ | 20,281 | |||
Revenue from our Solutions segment is categorized based on the location of our customers. Our revenue from the Platform segment is classified to our business in the location of the billing entity. This classification is independent of where the user resides or where the user is physically located while using our services.
Case Study: Enterprise Shipper
A major athletic footwear company with operations spanning over 120 countries faced significant operational bottlenecks in managing its complex global freight procurement. Amidst heightened price volatility and unstable macroeconomic conditions, the enterprise struggled to achieve pricing transparency across 35 distinct global markets. Their reliance on manual, time-consuming processes hindered their agility, making it difficult to bridge the gap between contracted rates and real-time market realities. To address these strategic challenges and overcome global transportation complexity, the company implemented our Freightos Procure platform.
63
Table of Contents
By leveraging the platform’s digital rate engine and autonomous tendering functionality, the customer successfully integrated critical business rules—such as pricing, fuel surcharges, lead times, carrier allocation quotas, and sustainability metrics—directly into their automated procurement workflows. The adoption of Freightos Procure yielded substantial operational efficiencies and cost optimizations for the enterprise shipper. The platform’s ability to autonomously scan the market, validate rates against defined indices, and propose optimal procurement actions enabled the company’s supply chain team to launch and evaluate global tenders in a matter of seconds. Consequently, the customer achieved a 50% optimization in working hours dedicated to freight execution. By centralizing its tender and rate management, the company not only gained unrivaled visibility into its global transportation data but also established a highly responsive, cost-effective procurement infrastructure that allows them to instantly capitalize on market opportunities and strengthen relationships with logistics service providers.
Case Study: Airline eBooking
Successful marketplaces have a strong growth dynamic with new sellers bringing new capacity to attract new buyers, and new buyers creating more demand to attract more sellers. This is the flywheel growth dynamic we are seeking for our Platform; it is the network effect of marketplaces. Airline eBookings are the fastest growing category of bookings on our Platform and so provide a useful case study.
Until 2018, we did not have any airlines with digital APIs for instant pricing and bookings. In 2020, we achieved a “critical mass” of several airline connections, thus becoming a viable marketplace. The following timeline illustrates the growth of carrier connections on our Platform:
| ● | 2018: Lufthansa |
| ● | 2019: Air France KLM, and IAG (IAG includes British Airways, Iberia and other airlines) |
| ● | 2020: Delta, Etihad, AirBridgeCargo, SAS and Condor |
| ● | 2021: Qatar, Turkish, El Al, Fedex, NAC, LATAM, Finnair, and Silkway West |
| ● | 2022: American Airlines, Air Canada, Caribbean Airlines, China Southern, Emirates SkyCargo, and Teleport |
| ● | 2023: AirBaltic, FitsCargo, jetBlue via Aeronex, Norse Cargo, ANA Cargo, Wideroe, EAL Airlines, Egypt Air, CargoJet, Chapman Freeborn, and Virgin Atlantic |
| ● | 2024: Virgin Atlantic Cargo, Delta Cargo, Singapore Airlines, Coyne Airways, Thai Airways, Qantas, Pacific Air Cargo, and HNA Cargo. |
| ● | 2025: Cargolux, China Airlines, CMA CGM Air Cargo, WestJet Cargo, Norwegian Cargo, Air Europa, YTO Cargo Airlines, Garuda Indonesia Cargo, Pattaya Airways, and Jambojet. |
The number of airline Sellers has been growing steadily, and approximately linearly, at an average rate of nearly one per month. The number of individual active Buyer users have been growing at an average of about 25 per weekday. New Buyers and new Sellers create new combinations of possible transactions; so even while Buyers and Sellers are each growing approximately linearly, the number of transactions has consistently shown accelerating quadratic growth.
64
Table of Contents
To date, we have retained 100% of the airlines that have connected with a Buyer via our Platform. Freight forwarder retention is strong, as demonstrated by the graphic below, in which each line tracks the cohort of freight forwarders who first booked in a given calendar month, indicating how many of them are still booking months later. Approximately 70% to 90% of freight forwarders are still actively booking one year after their first booking, representing strong retention characteristics and repeat business.
In addition, we monitor the number of bookings each cohort of freight forwarders is making a few months after they joined the platform. Each line in the graphic below tracks the growth of a cohort of freight forwarder buyers who first booked in a specific calendar quarter, similar to the manner in which retailers track same store sales. The graphic shows that once a cohort of freight forwarders start booking with airlines on our Platform, their number of bookings consistently grows 500% to 1,000% within two years.
Company History
Freightos was founded in January 2012. Here are some key milestones of our growth journey:
| ● | 2013: We offered our first SaaS product for freight forwarders to manage rates and automate quotes, including door-to-door routing. All rates were static from Excel spreadsheets. |
| ● | 2016: We acquired WebCargo, then a database for static air cargo rates and a SaaS quoting tool, but not yet a platform. |
| ● | 2018: We completed our first airline API integration and the very first step towards transforming WebCargo from a software company to a platform model. We acquired Air Freight Bazaar to establish a team and procure freight forwarder customers in the Indian market. Freightos.com was launched as a marketplace for importers/exporters (building on an earlier pilot), providing instant quote comparison, but quotes were for traditional freight forwarding services without definite voyage information or committed transit times. |
| ● | 2020: Airline integrations reached critical mass, and our Platform began to experience rapid growth in airline bookings. |
| ● | 2021: We acquired 7LFreight to expand our footprint with U.S. air and trucking freight forwarders. 7LFreight also gave us access to additional U.S. LTL trucking rates. |
| ● | 2022: We acquired Clearit, a North American customs brokerage, to provide an improved customs brokerage experience to importers/exporters transacting on freightos.com. We also entered into a business combination agreement for purposes of completing a deSPAC transaction to raise approximately $80 million in capital and list on Nasdaq. |
65
Table of Contents
| ● | 2023: We consummated the transactions contemplated by the Business Combination Agreement, pursuant to which we became a publicly traded company and the Freightos Ordinary Shares and Freightos Warrants were listed on Nasdaq under the symbols “CRGO” and “CRGOW”. We also expanded our market intelligence solution, Freightos Terminal, with multimodal data and live event feeds. |
| ● | 2024: We acquired Shipsta, a Luxembourg-based leading freight-tender procurement platform used by enterprise shippers to procure freight services at scale from leading freight forwarders and carriers. |
| ● | 2025: We launched our ocean solution and also added annual freight contract benchmarking support to our market data and market intelligence solution. We also accelerated integration across the ecosystem, including market intelligence in our procurement solution, creating unified air and ocean search for forwarders and more. This also reflected our first use of AI-native features. |
We are now connecting the two components of our Platform, WebCargo by Freightos and freightos.com, into a unique combined three-sided marketplace, connecting carriers, forwarders and importers/exporters, built on top of the connective tissue of our SaaS and software solutions. Over time, this should support a high-retention three-sided marketplace that uses a double flywheel with buyer-brings-seller-brings-buyer in carrier-forwarder interactions and forwarder-importer/exporter interactions.
Our Products and Services
WebCargo by Freightos Platform - Connecting Carriers and Forwarders
Professional logistics service providers, mostly freight forwarders, access our Platform via WebCargo by Freightos. The underlying rate management and quoting solution represents the foundation on which our Platform was built, ensuring long-term retention and deep integration that drives substantial revenue while enabling more Platform usage.
Our WebCargo Platform is only available to professional freight-forwarding companies. Most airlines will only share rates with freight forwarders registered as IATA cargo agents and, accordingly, most buyers on the WebCargo Platform are registered IATA agents. Currently, our WebCargo Platform, including the free Book version, is used by over 3,500 freight forwarders around the world, connecting them to more than 75 operating airlines.
The WebCargo workflow is straightforward but mission-critical for air cargo forwarders, as it eliminates the need for multiple phone calls and emails. The majority of our transactions come from forwarders who are already using our Solutions for rate management and quoting. However, a free offering does exist that enables bookings. We believe that this free offering creates a strong pipeline for Solutions upsell. An outline of the typical WebCargo workflow is as follows:
| ● | Sign up and confirm identity as a freight forwarder. |
| ● | Search: Type in origin airport, destination airport, dimensions and related details. |
| ● | Review instant offerings from airlines including rates and capacity. |
| ● | Choose and book. In most cases, booking is confirmed instantly. |
| ● | In some cases, there is an option for instant payment. |
| ● | Manage bookings, track flights and receive updates. |
66
Table of Contents
The following image is an example of airline rates and availability search results on WebCargo (rates randomized for confidentiality):
Our paid subscription SaaS adds various features, such as enabling freight forwarders to send quotes to their own customers. Freight forwarders and third-party software providers can also embed these booking capabilities into their own portals using the WebCargo Book APIs. For example, Transportation Management System software providers can include the ability to book directly with air carriers while planning a shipment. A similar platform for container ocean bookings is under development.
Freightos.com Platform – Connecting Service Providers to Importers/Exporters
Importers/exporters access our Platform through our freightos.com site. Users are able to enter the details of their shipment with a modern interface and instantly view quotes from freight forwarders qualified to move their goods. These quotes are binding offers, and the user can book and pay online, initiating the movement of its goods.
More than 21,000 importer/exporter Buyers, mostly U.S. importers, have purchased freight services on freightos.com from dozens of Sellers. Some of the Sellers have completed many millions of dollars of orders on freightos.com and, for some, freightos.com is a significant sales channel that accounts for a substantial proportion of their business.
The freightos.com workflow is straightforward and almost entirely automated/no-touch, replacing sales calls, visits, emails and faxes. An outline of the typical freightos.com workflow is as follows:
| ● | Sign up and agree to platform terms. |
| ● | Search: Enter origin and destination addresses or ports. |
| ● | Select load and additional services required (e.g., customs and insurance). |
| ● | Review instant offerings from freight forwarders, with accurate door-to-door prices in seconds. |
| ● | Compare, explore reviews and book. |
67
Table of Contents
| ● | Pay by credit card (or use credit if pre-approved). |
| ● | Track and manage shipments. |
The following screenshots demonstrate the freightos.com workflow:
Enter origin and destination addresses or ports:
Review instant offerings from freight forwarders:
Track and manage shipments:
68
Table of Contents
Software-as-a-Service Solutions
We offer the following key products through our SaaS business:
| ● | WebCargo Rate & Quote (Air): Provides forwarders with efficient price management, negotiation capabilities, improved sales and better margin management. With this solution, forwarders can manage rates across dynamic airline rates, static airline rates and negotiate rates, quote to their customers, and then connect to our WebCargo Book solution. This also has native integration to our Sales Portal Solution. It can also be embedded into Transportation Management Solutions with APIs. |
| ● | WebCargo Rate & Quote (Multimodal): Much like the previous solution, this solution enables efficient forwarder operations and sales with a multi-modal rate repository, sophisticated rate ingestion, multimodal door-to-door routing and quotes, customer management and integrated bookings, as well as a full suite of APIs. |
| ● | Data Services: Digitalizing static carrier rates provided in Excel or other formats to facilitate onboarding and usage of the Rate & Quote solutions. |
| ● | WebCargo Airline: Enables airlines to distribute rates, receive bookings and optimize pricing with real-time booking analytics. This is the supply side of our WebCargo Book Platform service. |
| ● | Freightos Procure: Procure is our flagship enterprise shipper solution, helping enterprise shippers and multinational forwarders stay in line with market prices, improve vendor relationships and procure throughout periods of volatility. It enables customers to manage their ongoing tender procurement process from their logistics service providers including managing their annual bidding process as well as managing smaller bids throughout the year. |
The following graphic is an example of the WebCargo Airline Platform tool that provides insights into digital sales and bookings on the Platform:
69
Table of Contents
WebCargo SaaS products serve 3,500 freight-forwarding companies, with close to 30,000 users leveraging these products and services every month.
Freightos Terminal
We publish industry data, mainly price indices, to strengthen our brand and enhance engagement with current and future customers, and to support industry digitalization. There are approximately 50,000 registered Freightos data services users. Although most subscriptions are unpaid, we believe that our data services provide extensive brand awareness and engagement with current and future customers. Freightos Terminal has also been augmented with contract rate management for more effective benchmarking of rates, real-time feeds of live market events that impact supply chain decisions, the ability to track index-linked contracts, and more.
Freightos Baltic Index
The FBX is published every weekday to provide indicative market prices for shipping a 40-foot container on twelve trade lanes, plus a global average. We act as the data provider and calculating agent for FBX, while the Baltic Exchange in London is the benchmark administrator responsible for IOSCO compliance of the benchmark.
FBX is also available on Bloomberg and Refinitiv screens. Some of the FBX indices have futures contract trading on the Chicago Mercantile Exchange and the Singapore Exchange. These derivative products are relatively new and trading volumes are still minimal. We receive a small, flat license fee per container for every future contract traded.
The following graphic shows FBX01 index with the indicative price for shipping a 40’ container from China/East Asia to North America West Coast:
70
Table of Contents
Freightos Air Index
The FAX is published weekly to provide indicative market prices per kilogram for air cargo on various pairs of over 60 major airports, as well as airport-to-region and region-to-region. The following shows the FAX global average $/kg rate.
Freightos Terminal My Routes
We sell subscriptions for weekly pricing reports customized based on specific customer requirements, that offer real-time port-port or airport-airport pricing data and updates, including live event feeds, transit time updates and more. This product enhances our engagement with importers/exporters, as well as freight forwarders, some of which become customers of our Platform.
Clearit – Customs Brokerage
Clearit is a licensed customs broker for imports to the United States and Canada. It is highly digitalized with many aspects of onboarding customers and customs brokerage services delivered online in a semi-automated manner. Over the past year, it has made significant progress in adopting AI solutions to augment categorization and customer support.
7LFreight by WebCargo - U.S. Air and LTL Rate Management
7LFreight is a neutral and centralized rate management platform, covering:
| ● | Domestic U.S. trucking: First and final mile airport cartage, linehaul, LTL, small package, commercial and air cargo. |
| ● | International freight: Export and import rates, LCL and destination rates. |
| ● | Customer portal: Domestic and air export. |
| ● | Air schedules: Powered by a partner, for global flights. Loading charts and dynamic connections. |
Our WebCargo airline booking experience is now available within 7LFreight, and we expect to merge WebCargo and 7LFreight into a single product for air cargo, while keeping the trucking capabilities of 7LFreight as a separate product.
71
Table of Contents
Intellectual Property
We have a utility patent on our routing engine, which has been granted in Canada. We have a design patent/community design registration on our matrix display for dynamic carrier rates, which is registered in Europe and the United States. The name Freightos® is registered as a trademark in the European Union, the United States, China, India, and Israel; the name WebCargo® is registered in the European Union, the United States and India; and the name Shipsta® is registered in the European Union. In addition to the foregoing registered intellectual property, our proprietary software platform and web-based offerings are covered by a combination of trade secret and copyright protections. We own all of the domain names we use in our business, including freightos.com, webcargo.co, clearit.com, clearitusa.com, and 7lfreight.com.
Competition
Each of our products faces different competitors; however, we do not believe that there is any one competitor competing with the totality of our products and services.
WebCargo by Freightos Platform
We believe that our WebCargo by Freightos Platform for air cargo bookings is, by a considerable margin, the biggest platform of its kind, both in terms of airline supply and in terms of freight forwarder customers booking with it. Notable competitors are Cargo.one, Cargo.Ai, WiseTech, and CargoBooking.aero. Our traction across top twenty global forwarders with our software solutions continues to fuel strong bookings; we believe that this remains a key priority for beating competition.
Freightos.com Platform
Freightos.com competes indirectly with importers/exporters directly interfacing with specific freight forwarders or carriers rather than using a platform. There are also competing online platforms for importers/ exporters, which we believe to be considerably smaller than freightos.com. Our largest competitors tend to be forwarders - including those selling on our Platform - that want to service our customers directly.
Solutions
Different WebCargo by Freightos SaaS products compete with different competitors, including Portrix, Catapult and CargoSphere, and Freightify. Most of the products have some overlap with the product suite of WiseTech. Some overlap with products from Descartes and Magaya and others. 7LFreight for airport cartage rates competes with Air Cargo Inc. For LTL rates, there are several competitors, however, most are integrated with Transportation Management Systems rather than standalone rate repositories.
Freightos Procure (Shipsta) products are available for both shippers and forwarders and compete with Freightender, Tendereasy, Transporeon, and non-freight specific sourcing software such as Keelvar. Freightos Terminal competes with other providers of freight data, including Xeneta, Platts, NYSHEX and Drewery, and TAC and WorldACD for air cargo.
According to U.S. and Canadian government data, Clearit competes with approximately 11,300 U.S. customs brokers and approximately 300 Canadian customs brokers. However, very few of these competitors are able to service SMB importers with a similar level of online service and most have far less automation.
Regulation
Data Privacy
Freightos uses, collects, stores, transmits, transfers, and processes customer and supplier data in the ordinary course of business. As Freightos’ products are designed to assist business customers with shipping management, in the ordinary course of business, when providing its services, only a limited portion of the customer data that Freightos uses, collects, stores, transmits, transfers and processes constitutes personal data, personally identifiable information, personal information, or a similar term (collectively herein “personal data”). In the course of providing its services, Freightos obtains personal data in the form of business contact information of importers/exporters, suppliers, customers, prospects, and other persons. Freightos also obtains personal data from employees, contractors, applicants, whether current, former, or prospective and, as applicable, family members or designees.
72
Table of Contents
Freightos is required to comply with local, state, federal, and foreign laws and regulations pertaining to the collection, storage, transmission, transferring, processing, and security of personal data. Regulators around the globe and in countries in which Freightos operates have promulgated and are continuing to adopt laws, implementing regulations, and offering guidance pertaining to the collection, storage, transmission, transferring, processing, and security of personal data. The applicability of these laws, regulations, and guidance is continually evolving, sometimes uncertain, and in some circumstances, conflicting between and among jurisdictions. Furthermore, the rapid global adoption of artificial intelligence (“AI”) in 2026 has led to new regulatory requirements specifically targeting the use of data in training and deploying machine learning models, including mandates for data provenance transparency and “opt - out” rights for automated decision - making.
Although certain of these laws are not applicable to business contact information or employee data, these laws still remain pertinent to Freightos’ operations. Further, regulators are continuing to propose and adopt new laws and regulations designed to safeguard personal data and to provide additional rights to data subjects. We anticipate that the volume and scope of such laws will increase, and, as a result, Freightos’ costs and efforts to comply with such laws will increase. It may be costly to implement security or other measures designed to comply with these laws. Any actual or perceived failure to safeguard personal data or other information in Freightos’ possession or control, appropriately destroy or redact such data, or otherwise comply with these regulations may subject Freightos to litigation, regulatory investigations, or enforcement actions, thus causing damage to Freightos’ reputation and adversely affect the Company’s ability to attract or retain customers.
Among other laws, the following jurisdictions in which Freightos operates have enacted legislation pertaining to privacy, data protection and cybersecurity. For more information, please see the risk factor titled, “— Regulatory, legislative or self-regulatory/standard developments regarding privacy, data security, and information security matters could adversely affect our ability to conduct our business and cause increased costs of compliance.”
United States
In contrast to other countries around the world, the United States has not implemented a comprehensive data protection law at the federal level. Instead, the United States has taken a sectoral approach to data privacy and security, legislating in areas of specific risk, including, financial privacy, children’s privacy, and healthcare privacy, among others. In addition to the sector-specific laws, the United States regulates privacy through the Federal Trade Commission Act’s restriction on unfair and deceptive trade practices.
In addition to the federal laws, several states have adopted comprehensive data protection laws. As one example, the CCPA includes additional and more stringent requirements on businesses that are subject to the law. Other states including Colorado, Texas, Virginia, Connecticut, Montana, Florida, Oregon, Delaware, Iowa, New Jersey, Nebraska, New Hampshire and Utah have also passed comprehensive data protection laws, none of which are identical. In addition, numerous states have pending data protection or issue-specific privacy laws. Freightos will need to evaluate the scope to which any of the foregoing laws is applicable and take the necessary steps to comply.
The regulatory focus in the United States is pivoting significantly toward the intersection of data privacy and algorithmic accountability. Various states have introduced mandatory bias impact assessments for high - risk systems and strict transparency standards for AI - generated content. As we increasingly utilize AI to drive supply chain efficiencies, we must ensure our data handling practices comply with this patchwork of new mandates.
In addition to the above laws focused on data privacy, federal regulators and some states have adopted laws and guidance aimed at data security in Freightos’ possession and control. Although the state laws vary in scope, certain of the laws may have an impact on our approach to data protection and cybersecurity. At a minimum, these laws may require that we maintain a written information security program and an incident response plan.
Furthermore, on December 27, 2024, the Department of Justice issued a Final Rule to implement the Executive Order (E.O.) 14117 “Preventing Access to Americans’ Bulk Sensitive Personal Data and United States Government-Related Data by Countries of Concern” (the “Final Rule”). This Final Rule came into effect on April 8, 2025, with certain affirmative due diligence, reporting, and auditing requirements taking effect as of October 6, 2025. The Justice Department established and implemented a new regulatory program to address the urgent and extraordinary national security threat posed by the continuing efforts of countries of concern to access and exploit Americans’ bulk sensitive personal data and certain U.S. Government-related data. This presents new risks for companies operating globally. In early 2026, the U.S. government further expanded the list of “countries of concern” and restricted technologies, specifically targeting AI-driven logistics platforms that manage sensitive global trade data. We are continuously monitoring our compliance with these national security directives to ensure that our offerings do not run afoul of these increasingly stringent data-localization and technology-transfer restrictions.
73
Table of Contents
European Union and the United Kingdom
The European Union’s (EU) General Data Protection Regulation (EU) 2016/679 became effective in May 2018, and is generally applicable to companies that process personal data of data subjects in the EU. The United Kingdom has adopted its own version of the EU General Data Protection Regulation. Both versions together are collectively referred to as the “GDPR”. The GDPR contains comprehensive data protection regulations pertaining to the collection, use, retention, disclosure, minimization, and other processing of personal data, with substantial monetary penalties of up to 4% of global turnover for noncompliance. Among other requirements, the GDPR mandates enhanced notice requirements to data subjects regarding the processing of their data, when feasible regulator notification within 72 hours in the event of a data security breach, and stringent processing requirements on data processors.
Legal developments in the EU have also made it more stringent to transfer personal data outside of the EU to countries that the EU has not deemed to have adequate privacy laws, including the United States. The European Commission adopted an adequacy decision for the UK on June 28, 2021, allowing the continued flow of personal data from the EEA to the UK. That decision was renewed on December 19, 2025, ensuring uninterrupted, free flow of personal data between the EU and the UK until December 27, 2031. The renewed decision will be reviewed by the European Commission after four years and may be revoked if the UK diverges from its current data protection laws and the European Commission deems the UK to no longer provide adequate protection of personal data.
On June 19, 2025, the UK enacted the Data (Use and Access) Act 2025 (the “DUAA”), the majority of which came into force on February 5, 2026. The DUAA represents the first significant divergence between the UK and EU regimes, introducing more flexible rules for automated decision-making and a new legal basis for “recognized legitimate interests” that simplifies certain data processing activities. As we expand our Solutions segment in the UK, we must navigate these diverging requirements, particularly the new “stop the clock” provisions for data subject access requests and the modified standards for cookie consents.
Furthermore, we are subject to the EU Artificial Intelligence Act (“EU AI Act”), which entered into force on February 2, 2025. The majority of the Act’s regulatory requirements—including those governing “high-risk” AI systems and transparency for general-purpose AI—are set to become fully enforceable as of August 2, 2026. Because our predictive pricing and routing engines may be subject to these rules, we are currently conducting conformity assessments to ensure our technical documentation and human oversight protocols meet the EU’s stringent 2026 standards. Failure to comply with the EU AI Act could result in penalties of up to 7% of our global annual turnover.
On July 11, 2023, the European Commission brought into effect its adequacy decision for the EU-US Data Privacy Framework (a new framework for transferring personal information from the EEA to the United States), having determined that such framework ensures that the protection of personal information transferred from the EEA to the US will be comparable to the protection offered in the EU. The UK has also approved a UK extension to the EU-US Data Privacy Framework, which was brought to the UK Parliament on September 21, 2023 and came into force on October 12, 2023. However, both the underlying EU-US adequacy decision and the UK extension face legal challenges. While the EU General Court dismissed a major challenge to the underlying EU-US DPF in September 2025, confirming its validity, an appeal to the Court of Justice of the European Union (CJEU) filed in October 2025 remains pending. Privacy advocates and legal experts continue to monitor its long-term resilience against potential legal challenges based on concerns regarding US surveillance laws and data protection standards. Therefore, the Framework may ultimately be invalidated by the Court. We will continue to evaluate the application of these regulations and requirements.
Israel
The Israeli Privacy Protection Law, 1981 (“PPL”), and its regulations, including but not limited to the Israeli Privacy Protection Regulations (Data Security) 2017 (“Security Regulations”) impose obligations regarding processing, transferring and securing of personal data. In addition, in 2023, the Privacy Protection Regulations (Provisions Regarding Information Transferred to Israel from the European Economic Area), 2023 were enacted and consequently provide, in certain cases, additional rights to data subjects from the EEA and Israel. Effective January 1, 2025, these regulations also apply to non-EEA data held in the same database as EEA data, requiring us to maintain unified standards for data accuracy and deletion across those datasets.
A material amendment to the PPL was approved by the Israeli Parliament in August 2024 and took effect on August 14, 2025 (“Amendment 13”). Among other things, Amendment 13 expanded the Privacy Protection Authority (“PPA”) investigation authority and the monetary sanctions that can be imposed for breach of the PPL and its regulations, to substantial amounts that may reach in certain cases millions of NIS.
74
Table of Contents
On January 22, 2026, the Israeli government published the National Cyber Protection Law Draft Bill, 5786-2026. If enacted, this law would designate “digital service providers” and “SaaS providers” that meet certain thresholds as entities subject to binding cybersecurity standards, mandatory incident reporting, and direct supervision by the National Cyber Directorate. We are monitoring the progress of this legislation, as it would introduce significant new enforcement mechanisms, including administrative fines and potential criminal liability for non-compliance with emergency cyber directives.
In February 2026, the PPA published comprehensive new guidance regarding the “Consent Principle” and the use of personal data in AI systems. This guidance clarifies that informed consent must be granular and explicitly obtained for the use of personal data in both the training and operational phases of AI models. It also mandates increased transparency, including the disclosure of algorithmic logic where feasible and explicit notification when users interact with automated systems.
Therefore, significant changes to the PPL and its regulations may necessitate adjustments to our data protection and security practices.
Non-compliance with the PPL and its regulations could result in enforcement actions, litigation (including class actions), fines and penalties. We will continue to evaluate the application of these regulations and requirements.
China
China has continued to adopt issue-specific and comprehensive regulation centered on three foundational “pillars”: the Cybersecurity Law (“CSL”), the Data Security Law (“DSL”), and the Personal Information Protection Law (“PIPL”). While these laws overlap, they serve distinct purposes: the CSL focuses on network infrastructure and security; the DSL governs the security and “important” status of data; and the PIPL protects the privacy rights of natural persons. The CSL forms the backbone of cybersecurity and data privacy protection legislation in the PRC. The DSL is the fundamental law in the data security area that widely covers data security mechanisms, obligations, and liabilities at both state administration and data handler levels. The PIPL represents a comprehensive regime for personal information protection as well as corporate compliance in the PRC. These three pillars are further clarified by the Regulations on Network Data Security Management, which became effective on January 1, 2025, and provide the implementation rules for data classification, incident reporting, and cross-border transfers. These laws, along with laws pertaining to encryption, guidance, and local regulations may be applicable to our operations in China, and we will continue to monitor application of the same.
The first major amendments to the CSL entered into force on January 1, 2026. These 2026 amendments significantly broaden the extraterritorial reach of the CSL, allowing PRC authorities to launch enforcement actions against any “foreign institution, organization, or individual” whose overseas activities are deemed to endanger China’s cybersecurity, including activities that cause serious consequences within the PRC despite occurring abroad. The amended CSL also introduces a supplemental tiered penalty regime for exceptionally grave violations, aligning its liability provisions with the PIPL.
Cayman Islands
We have certain duties under the Data Protection Act (as revised) of the Cayman Islands, or the “DPA”, based on internationally accepted principles of data privacy.
Privacy Notice
This privacy notice puts our shareholders on notice that through your investment in our company you will provide us with certain personal information which constitutes personal data within the meaning of the DPA, or personal data.
Investor Data
We will collect, use, disclose, retain and secure personal data to the extent reasonably required only and within the parameters that could be reasonably expected during the normal course of business. We will only process, disclose, transfer or retain personal data to the extent legitimately required to conduct our activities on an ongoing basis or to comply with legal and regulatory obligations to which we are subject. We will only transfer personal data in accordance with the requirements of the DPA, and will apply appropriate technical and organizational information security measures designed to protect against unauthorized or unlawful processing of the personal data and against the accidental loss, destruction or damage to the personal data.
75
Table of Contents
In our use of this personal data, we will be characterized as a “data controller” for the purposes of the DPA, while our affiliates and service providers who may receive this personal data from us in the conduct of our activities may either act as our “data processors” for the purposes of the DPA or may process personal information for their own lawful purposes in connection with services provided to us.
We may also obtain personal data from other public sources. Personal data includes, without limitation, the following information relating to a shareholder and/or any individuals connected with a shareholder as an investor: name, residential address, email address, contact details, corporate contact information, signature, nationality, place of birth, date of birth, tax identification, credit history, correspondence records, passport number, bank account details, source of funds details and details relating to the shareholder’s investment activity.
Who this Affects
If you are a natural person, this will affect you directly. If you are a corporate investor (including, for these purposes, legal arrangements such as trusts or exempted limited partnerships) that provides us with personal data on individuals connected to you for any reason in relation your investment in us, this will be relevant for those individuals and you should transmit the content of this privacy notice to such individuals or otherwise advise them of its content.
How We May Use a Shareholder’s Personal Data
We may, as the data controller, collect, store and use personal data for lawful purposes, including, in particular: (i) where this is necessary for the performance of our rights and obligations under any agreements; (ii) where this is necessary for compliance with a legal and regulatory obligation to which we are or may be subject (such as compliance with anti-money laundering requirements); and/or (iii) where this is necessary for the purposes of our legitimate interests and such interests are not overridden by your interests, fundamental rights or freedoms.
Should we wish to use personal data for other specific purposes (including, if applicable, any purpose that requires your consent), we will contact you.
Why We May Transfer Your Personal Data
In certain circumstances we may be legally obliged to share personal data and other information with respect to your shareholding with the relevant regulatory authorities such as the Cayman Islands Monetary Authority or the Tax Information Authority. They, in turn, may exchange this information with foreign authorities, including tax authorities.
We anticipate disclosing personal data to persons who provide services to us and their respective affiliates (which may include certain entities located outside the US, the Cayman Islands, Israel or the European Economic Area), who will process your personal data on our behalf.
The Data Protection Measures We Take
Any transfer of personal data by us or our duly authorized affiliates and/or delegates outside of the Cayman Islands shall be in accordance with the requirements of the DPA.
We and our duly authorized affiliates and/or delegates shall apply appropriate technical and organizational information security measures designed to protect against unauthorized or unlawful processing of personal data, and against accidental loss or destruction of, or damage to, personal data.
We shall notify you of any personal data breach that is reasonably likely to result in a risk to your interests, fundamental rights or freedoms or those data subjects to whom the relevant personal data relates.
Contacting the Company
For further information on the collection, use, disclosure, transfer or processing of your personal data or the exercise of any of the rights listed above, please contact us through our website at https://www.freightos.com/freightos-privacy-policy/ or via email at personaldata@freightos.
76
Table of Contents
Financial Services
Although we consider Freightos to be a payments platform, we are not licensed to perform money transmission or to offer payment terms or credit in jurisdictions where these activities are regulated. Instead, we partner with companies that have such licenses and they transmit the funds that Buyers send to Sellers.
Competition Law
Freightos manages private pricing data and publishes price indexes and benchmarks that may be competitively sensitive. These publications are intended to enhance transparency and encourage pro- competitive behaviors, but, in certain situations, there is a risk that such information could be utilized for price fixing, bid rigging and other anti-competitive activities. The antitrust and competition laws in many jurisdictions in which Freightos operates prohibit price fixing, bid rigging, market allocation agreements and other forms of anti-competitive agreements among market participants. Violations of the antitrust and competition laws can have severe consequences, including both criminal and civil liability, for the companies and individuals involved. In some jurisdictions, including the United States, in addition to governmental authorities, private plaintiffs and classes of plaintiffs that are injured by such anti-competitive behaviors can also initiate private litigation to recover damages for antitrust and competition law violations. The air and ocean freight industries have a history of prosecutions for price fixing and other anti-competitive behaviors. The misuse of Freightos’ publications by recipients in violation of the antitrust and competition laws could expose Freightos to the risk of being implicated in enforcement proceedings and potential liability under antitrust and competition laws. In publishing price indexes and benchmarks and similar reports, Freightos obtains and follows expert, written legal advice related to compliance with antitrust and competition laws.
Licenses
Clearit US is licensed as a customs broker by the Department of Homeland Security Customs and Border Service. Clearit Canada is licensed by the Canada Border Services Agency. As licensed customs brokers, our Clearit subsidiaries are required to maintain prescribed records and are subject to periodic audits by the appropriate governmental authority.
Some of the Sellers on our Platform are engaged in activities that require a license, including customs brokerage, US ocean freight forwarding, and providing insurance. Other than Clearit, Freightos is not licensed to carry out such activities.
C. Organizational Structure
We are an exempted company limited by shares incorporated under the laws of the Cayman Islands. Freightos Limited was initially incorporated in January 2012 as Tradeos Limited in Hong Kong and shortly thereafter adopted the business name of Freightos, formally changing the company name in 2016 to Freightos Limited. The group redomiciled to the Cayman Islands in May 2022. While incorporated in the Cayman Islands, Freightos Limited is a tax resident in Israel.
The table below is a list of our active subsidiaries, all of which are directly or indirectly wholly owned:
Subsidiary Name | | Jurisdiction of Incorporation |
|---|---|---|
Freightos Hong Kong Limited | Hong Kong | |
Freightos India Private Limited | India | |
Freightos, S.L.U. | Spain | |
Freightos Ltd | Israel | |
Freightos Software Development and Data Services Ltd.* | Palestinian Authority | |
Freightos Information Technology (Shanghai) Co., Ltd. | China | |
Freightos Inc. | Delaware, USA | |
Clearit Customs Brokers Inc. | Canada | |
9T Technologies LLC (d/b/a 7LFreight) | Oregon, USA | |
Clearit Customs Services, Inc. | Delaware, USA | |
Shipsta S.à r.l. | Luxembourg |
*Some of the shares are held in trust.
77
Table of Contents
D. Property, Plants and Equipment
We currently lease offices in Modi’in (Israel), Barcelona, Ramallah, Nablus, Sandy (Oregon), Montreal, Champlain (New York), Mertert (Luxembourg) and Chennai. We also have a small number of employees or contractors without a dedicated office in Argentina, China, Germany, Japan and the United Kingdom, and, from time to time, elsewhere.
The lease terms for the spaces that we currently occupy are generally one to four years. Based on our current occupancy, we lease the following amount of office space in the following locations (offices over 500 square feet), which constitute our primary locations:
| ● | Modi’in, Israel - approximately 5,000 square feet |
| ● | Barcelona, Spain – approximately 12,000 square feet |
| ● | Palestinian Authority (Ramallah and Nablus) – approximately 17,500 square feet |
| ● | Montreal, Canada - approximately 2,250 square feet |
| ● | Champlain, New York – approximately 2,500 square feet |
| ● | Chennai, India - approximately 1,000 square feet |
| ● | Mertert, Luxembourg - approximately 6,500 square feet |
In 2025, our rental costs totaled $1.1 million, in the aggregate, for all of our leased offices. We believe that our existing facilities are adequate for our current needs.
ITEM 4A. UNRESOLVED STAFF COMMENTS
Not applicable.
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS
The following discussion of our financial condition and results of operations should be read in conjunction with “Item 4. Information on the Company” and our audited consolidated financial statements and the related notes thereto, included elsewhere in this Annual Report.
The following discussion contains forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those discussed in the forward-looking statements as a result of various factors, including those set forth in “Cautionary Statement Regarding Forward-Looking Statements” and “Item 3.A. Key Information – Risk Factors.”
Unless the context otherwise requires, all references in this section to the “Company,” “Freightos,” “we,” “us,” or “our” refer to Freightos Limited, including its subsidiaries, after May 27, 2022, and for periods through May 27, 2022, to the business which belonged to Freightos HK, including its subsidiaries.
A. Operating Results
Overview
Our mission is to expand trade among the people of the world and make global trade more efficient by streamlining air, ocean and ground shipments across carriers, freight forwarders, importers and exporters on the world’s digital freight pricing, procurement and booking platform, reducing the friction that plagues global supply chains.
78
Table of Contents
Our SaaS and software tools provide a comprehensive suite of freight rate management, freight quoting and freight booking solutions for freight forwarders, as well as freight procurement and market intelligence solutions used by both enterprise shippers (BCOs) as well as freight forwarders. These solutions are embedded into the daily workflows of our customers, and we believe we can achieve sustainable revenue growth, with platform bookings following naturally.
These solutions support our leading, vendor-neutral pricing, booking and procurement platform for international freight. Our global freight booking and payment platforms, freightos.com and WebCargo by Freightos Book (collectively, the “Platform”), supports supply chain efficiency and agility by enabling real-time procurement of ocean and air shipping across more than ten thousand importers and exporters, thousands of forwarders, and dozens of airlines and ocean carriers.
Despite its size and importance, global freight has not yet undergone a comprehensive digital transformation. Unlike passenger travel, hotels and retail, cross-border freight services remain largely offline, opaque and inefficient. Most international air and ocean shipments involve multiple intermediaries, often with as many as 30 actors and 100 people, communicating across time zones. These manual processes, replicated hundreds of thousands of times each day, typically result in delays, extra expenses, non-binding and inconsistent pricing, and uncertain transit times. Even on major trade lanes, such as Asia to the United States, our research shows that it is common for importers and exporters to wait several days for a spot price quote, and prices often vary by tens of percentage points. Actual prices and transit times are not guaranteed and are unpredictable, impairing supply chain planning.
The consequences of this dysfunction flow through international freight, supply chains and, ultimately, businesses and consumers everywhere. As a result, consumers pay more for goods, businesses experience reduced margins, and goods remain under or overstocked. The environment also suffers from this lack of efficiency; according to the IATA, air cargo holds, for example, are typically about 50% unutilized, doubling greenhouse gas emissions per unit weight.
These challenges are exacerbated by ongoing and persistent supply chain problems, making global freight pricing more volatile than most stock and commodity markets. Without digitalization, supply chains are unable to respond to stressors in an agile and cost-effective manner. As a result, supply chains have struggled to adjust in an agile and cost-effective manner to stresses, such as wars, pandemics, weather problems, strikes, blockages of trade routes, such as the Suez Canal - Red Sea route (as in the case of the Houthi attacks in the Red Sea), and trade wars.
Our strategy for 2026 is focused on focusing on our freight pricing and procurement solutions, including multimodal solutions (air and ocean) as well as both spot and contract via our procurement tools, embedding our software tools into the daily workflows of our customers, whether forwarders, carriers or BCOs. We believe that when our software is integral to customer operations, platform bookings follow naturally, as validated in our success in converting our air rate management solution success into growth in air cargo bookings. Long-term, we view our SaaS offerings as the critical enabler for our Platform.
79
Table of Contents
This strategy represents a shift in resource allocation toward our Solutions segment. However, we believe long term this will still continue to support our Platform business. This part of the business is measured by metrics like #Transactions and GBV, the latter of which represents the value of transactions consummated between Buyers and Sellers on our Platform. GBV is primarily a trailing indicator of the adoption of our products and services. Our GBV has continuously risen on an annual basis, growing from $671.7 million to $894.0 million to $1.286 billion in the years ended December 31, 2023, 2024 and 2025, respectively.
Our Business Model
Our Platform is a three-sided marketplace, digitally connecting freight carriers (primarily airlines, and also ocean liners and trucking companies), freight forwarders and importers/exporters. The platform participants, for the most part, leverage our software solutions for both internal pricing or procurement automation and in order to interact with other industry players. As more market participants use our Platform, we are able to drive increased efficiencies throughout the highly-fragmented international freight industry.
We derive most of our revenue from (1) transaction fees and service fees through our Platform segment and (2) subscriptions and professional service fees through our Solutions segment, which includes SaaS solutions as well as data offerings such as price indexes. As of the date of this Annual Report, the majority of our revenue is generated from our Solutions segment. As per our strategy, we anticipate that long term, increased usage by forwarders and BCOs of our solutions will drive marketplace growth dynamics and increased monetization across a growing suite of features.
Platform Growth Dynamics
Currently, our primary business objective is shifting from direct attempts to scale booking #Transactions on our Platform to support more sustainable growth in our solutions which we believe will, as we have shown in air cargo, support long term transaction growth. As our Platform grows and matures, expanding across more regions, carriers and modes, we expect Solutions revenue to increase. As a second-order effect, as we increase value to users with our products and services, we expect Buyers and Sellers will be willing to pay higher fees for our services, so that revenue growth will follow GBV growth after some time lag.
Key processes which we use to grow our Platform are:
| ● | Delivering SaaS tools to help Sellers automate price quotes, which increases the supply that is available online, and tools to help Buyers organize and expand their online procurement. |
| ● | Attracting and retaining Buyers and Sellers, thereby increasing supply and demand, respectively. |
| ● | Enabling online payments that are reconciled automatically with actual shipment bookings. |
80
Table of Contents
| ● | Providing benchmark data to increase transparency and optimize pricing for market participants. |
Significant Events and Transactions
Business Combination and Public Company Costs
On January 25, 2023, we consummated the Business Combination with Gesher, Merger Sub I and Merger Sub II, pursuant to which, on the terms and subject to the conditions set forth therein, (i) Merger Sub I merged with and into Gesher, with Gesher surviving the First Merger as a wholly owned subsidiary of Freightos, and (ii) Gesher merged with and into Merger Sub II, with Merger Sub II surviving the Second Merger as a wholly owned subsidiary of Freightos. Immediately prior to the First Merger, Freightos and its shareholders completed a recapitalization pursuant to which the only outstanding equity securities of Freightos are Freightos Ordinary Shares and certain options to acquire Freightos Ordinary Shares that remain outstanding after the Business Combination.
The Business Combination was accounted for as an acquisition of an entity which does not constitute a business. Freightos was treated as the acquirer and Gesher was treated as the acquired company for financial statement reporting purposes. The Business Combination was not within the scope of IFRS 3 (Business Combinations) because Gesher did not meet the definition of a business, and the transaction was therefore accounted for within the scope of IFRS 2 (Share-based Payment) as Freightos issued shares at the Closing in exchange for stock exchange listing services provided by Gesher. Any difference between the fair value of the shares and warrants issued to Gesher’s shareholders and warrant holders and the fair value of Gesher’s net assets as of the closing date was recorded as a listing service expense. The net assets of Freightos and Gesher were stated at historical cost, with no goodwill or other intangible assets recorded.
As a consequence of the Business Combination, Freightos Ordinary Shares were registered under the Exchange Act and listed on Nasdaq, which required Freightos to hire additional personnel and implement procedures and processes to address public company regulatory requirements and customary practices. Freightos has been incurring additional annual expenses as a public company for, among other things, directors’ and officers’ liability insurance, director fees and additional internal and external accounting and legal and administrative resources, including increased audit and legal fees. For more information about the Business Combination, see “Item 4 Information on the Company - History and Development of the Company” in this Annual Report.
Recent Acquisitions
In February 2022, we acquired Customs Services, Inc. and certain assets from its Canadian affiliate, which collectively operate an online customs clearance business known as Clearit. Upon closing of the acquisition, we paid $5.0 million in cash and issued 959,907 Freightos Ordinary Shares to the sellers. In addition, we may pay up to an additional $3.5 million in cash, subject to the Clearit business achieving certain operating and financial milestones over the next three years. Based on Clearit’s actual results thus far, we did not make any additional payments to the sellers of Clearit.
In August 2024, we acquired all of the shares of Shipsta S.àr.l, the operator of a freight tender procurement platform used by enterprises to procure freight at scale from freight forwarders and carriers. Upon closing of the acquisition, we paid $3.5 million in cash and issued 539,966 Freightos Ordinary Shares to the sellers. We retained $0.5 million in cash and have the right to the return of 99,304 Freightos Ordinary Shares that may be used by us to satisfy working capital adjustments and certain indemnification claims that we have made against the sellers. We have reached a tentative settlement with the sellers that will result in us retaining $0.4 million in cash and the return of 83,663 Ordinary Shares.
Segment Reporting
We operate under two segments, Solutions and Platform.
81
Table of Contents
Solutions Segment
In our Solutions segment, we generate revenue through our software-as-a-service offerings, which are typically recurring subscriptions priced per user per month or per site per month, depending on the type of product or based on a negotiated global license. This segment also includes subscriptions to our data products, such as FBX, FAX and custom market pricing data reports, which are priced per unit of time based on the number of users, granularity of data, number of data points and permitted data usage. We also generate some non-recurring revenue, including revenue from professional services such as data ingestion, engineering, customization and setup. SaaS fees are typically collected on a monthly, quarterly or annual basis.
We have been steadily expanding the scope of our Solutions segment over the past year. One notable change has been to offer a dedicated ocean freight rate management, quoting and booking solution. This has seen initial uptake from enterprise and midmarket forwarders. We’ve also seen increased demand for our tender procurement and negotiation tool, which supports our long-term effort to extend from spot pricing and booking to annual contract pricing management and, eventually, air and ocean bookings conducted against annually tendered rates.
Platform Segment
In our Platform segment, we generate revenue from facilitating transactions between Buyers and Sellers on our Platform based on flat fees per transaction and/or fees that are a percentage of transaction value. In addition to freight services, certain ancillary services offered by Sellers, such as insurance and customs brokerage, generate additional revenue. These services often have higher margins than freight services allowing us to generate a higher fee for introducing Buyers. In certain Platform transactions, with respect to U.S. and Canadian customs brokerage transactions only, a Freightos company is the Seller, while in all other cases the Seller is a third party. Buyers typically pay for access to, and the ability to compare, prices, shipping options and historical performance across multiple Sellers. Our services save Buyers time and money with instant freight quoting, convenient online payments through our payment processing partners, and online booking and management tools.
Our Platform revenue has evolved as our Platform grows and matures. In certain cases, Sellers may utilize our Platform without charge for a limited period of time or benefit from other special arrangements. Overall, our operational Platform revenue take rate ranges from zero to approximately 10% of booking value, with an average of approximately 0.8% during 2025.
Go-to-Market Strategy
Our go-to-market strategy focuses on:
| ● | Multinational freight forwarding companies: Direct sales. Depending how centralized the freight forwarder is, this includes either direct sales to headquarters for global rollouts, or “land-and-expand” starting at a country or office level and often supported by marketing efforts. |
| ● | Small/midsize freight forwarding companies: Primarily digital advertising. Many small forwarders start by using our booking portal, which does not require a subscription fee, and then upgrade to paid SaaS. |
| ● | Enterprise shippers: Direct sales, augmented by significant brand marketing, including the marketing benefits of some free data we publish such as the weekly version of the FBX container shipping pricing index. |
| ● | SMB shippers: Inbound marketing, including content marketing, search engine optimization and digital advertising. |
| ● | Carriers: Direct sales. |
We believe that our products and services compare favorably to competitors as we provide multi-modal freight pricing and procurement solutions in one unified platform. Our services also benefit from a leading market intelligence suite that enables more actionable insights in our products as well as existing annual tender procurement traction with both enterprise forwarders and enterprise shippers. This is a nascent foothold in the far larger market of annual freight contracts across the demand side of the global freight industry, presenting a one-stop solution for all freight pricing and procurement. In addition, we believe that our Platform compares favorably to the majority of marketplaces in other industries due to large transaction volumes, and high retention of our business-to-business customers.
82
Table of Contents
Geography
Given the nature of international shipping, we are an international business. Our Solutions revenue is strongest in Europe and North America. Importer/exporter bookings on our Platform are strongest in the United States, where we also have a customs brokerage solution. Our airline bookings on our Platform, which are strongest in Europe and the Middle East air hubs, are now growing fast in the United States. While Asian airlines have been slower to digitize than airlines in Europe, the Middle East and North America, we are working to expand both our business segments on a global basis.
Key Financial and Operating Metrics
Solutions Segment
We do not currently utilize supplemental key performance indicators for our Solutions segment, as we believe revenue provides a good indication of this segment’s performance.
Platform Segment
For our Platform segment, which is effectively a marketplace, we believe that certain key performance indicators are important to help understand our business. We monitor the key performance indicators listed in the table below to evaluate our Platform business, measure our performance, identify trends affecting our business, formulate business plans and make strategic decisions.
| Q1 2024 | | Q2 2024 | | Q3 2024 | | Q4 2024 | | Q1 2025 | | Q2 2025 | | Q3 2025 | | Q4 2025 | |||||||||
#Transactions | 295,604 | 316,480 | 339,060 | 350,383 | 370,900 | 397,111 | 429,306 | 445,259 | ||||||||||||||||
GBV (in thousands) | $ | 192,416 | $ | 203,388 | $ | 217,541 | $ | 280,696 | $ | 276,084 | $ | 316,820 | $ | 335,629 | $ | 357,322 | ||||||||
#Unique Buyer Users |
| 17,992 |
| 19,088 |
| 19,749 |
| 20,131 |
| 19,708 |
| 20,191 |
| 20,618 |
| 20,704 | ||||||||
#Carriers |
| 49 |
| 51 |
| 55 |
| 67 |
| 71 |
| 75 |
| 77 |
| 77 | ||||||||
#Transactions
#Transactions represents the number of bookings for freight services, and related services, placed by Buyers across our Platform with third-party Sellers and with Clearit. Sellers of Transactions include Carriers (that is, airlines, ocean liners and LCL consolidators) and also other providers of freight services such as trucking companies, freight forwarders, general sales agents, and air master loaders. The number of Transactions booked on the Freightos platform in any given time period are net of transactions that were canceled prior to the end of the period. Transactions booked on white label portals hosted by Freightos are included if there is a transactional fee associated with them.
Gross Bookings Value
Gross Bookings Value (“GBV”) represents the total value of Transactions on the Freightos Platform, which is the monetary value of freight and related services contracted between Buyers and Sellers on our Platform, plus related fees charged to Buyers and Sellers, and pass-through payments such as duties. GBV is converted to U.S. dollars at the time of each transaction on our Platform. This metric may be similar to what others call gross merchandise value (GMV) or gross services volume (GSV). We believe that this metric reflects the scale of our Platform and our opportunities to generate Platform revenue.
#Unique Buyer Users
#Unique Buyer Users represents the number of individual users placing bookings, typically counted based on unique email logins. The number of Buyers, which counts unique customer businesses, does not reflect the fact that some Buyers are large multinational organizations while others are small or midsize businesses. Therefore, we find it more useful to monitor #Unique Buyer Users than the number of Buyer businesses.
83
Table of Contents
#Carriers
#Carriers represent the number of unique air and ocean carriers, mostly airlines who have been sellers of Transactions. For airlines, we count the booking carrier, which includes separate airlines within the same carrier group. We do not count dozens of other airlines that operate individual segments of air cargo Transactions as we do not have a direct booking relationship with them. Carriers include ocean LCL consolidators. In addition, we only count carriers when more than five bookings were placed with them over the course of a quarter.
Key Factors Affecting Our Performance
We believe our performance and future success depend on several factors, including those discussed below and in “Item 3.D. Risk Factors” of this Annual Report. The core driver of our growth is global freight pricing and procurement digitalization by global forwarders and shippers. As more customers digitalize increasingly broad parts of their technology stack, including rate management, quoting, tendering and booking across air and ocean freight, it drives both more Solutions usage and Platform usage.
Another driver is underlying carrier digitalization. As more ocean liners and airlines provide APIs in order to provide spot and contract pricing or booking, our Solutions and Platforms drive increased usage for our customers.
Carrier Digitalization
Our Platform is highly dependent on the availability of direct digital connections, known as application programming interfaces (“APIs”), to carriers, which enable instant binding price quotes and bookings. To our knowledge, prior to 2018, no air or ocean carriers had APIs for instant quoting and booking against actual capacity, and price quotes were rarely binding. This has changed rapidly in air cargo transportation and, more recently, has begun to change in ocean freight transportation.
To some extent, we are able to digitalize freight bookings even when carriers are offline by offering services from freight forwarding companies, without specifying the voyage, but our Platform provides better service and will grow faster if the digitalization of carriers continues.
Transaction Growth Strategy
Our primary transactional growth strategy is to leverage the growth in usage of our solutions in order to become part of our customers’ daily workflows for quoting and pricing. As the customers, modes and scope of our Solutions usage increases, and as we connect our Solutions to the carriers available on the Platform, we have witnessed persistent growth in Transactions. While we also wield a freemium strategy for increasing usage which has driven growth, our long-term strategy for supporting more Transaction is increasingly leveraging Solutions usage.
We are focused on our long-term Platform potential as measured primarily by Transactions. GBV is a secondary measure of our Platform growth - it shows how much revenue is booked by Buyers with Sellers on our Platform; however it is influenced by fluctuations of freight rates, which are out of our control. We believe that our market opportunity is immense, especially as we expand to new areas like ocean cargo, and we will continue to invest significantly in scaling in order to enhance our growth prospects. Our growth depends, in part, on our users’ experience, and we continue to invest heavily in research and development to create a modern, stable, fast-performing, user-friendly Platform. We have successfully introduced new features and capabilities on our Platform and plan to continue to do so. We intend to continue to invest in sales and marketing. We have also leveraged complementary acquisitions to expand our user base and improve our offerings. The scope of carriers that are available in our platform for bookings is also a key component in our growth strategy. We do this by both adding new carriers and by expanding lanes and services provided by the carriers who have been added in the past.
We intend to implement a responsible expenditure strategy, limiting our spending and therefore our negative free cash flow, while maintaining high gross profit margins and a goal to achieve positive free cash flow with the cash reserves on hand. In particular we seek to moderate the growth in our operating expenses so that such growth is much slower than the growth in our top line and gross profit, which is how we achieve improving profitability.
The success of our efforts to enhance our long-term Transaction potential may be impacted by our competition. For additional information, see “Item 4.B. Information on the Company - Business Overview - Competition.”
84
Table of Contents
Global Disruptions
The global supply chain has been buffeted by a number of crises over the past few years, ranging from shooting wars in the Middle East to trade wars and other geopolitical crises. These have a mixed impact on our platform. For example, the Red Sea Crisis initially created significant disruption to shipping, including a sharp increase in shipping rates, while subsequently, shipping routes settled down to a new normal, mostly avoiding the Suez Canal, and rates have remained higher. We do not yet know the full implications of the Middle East military conflict on air or ocean cargo.
High shipping prices affect our business in a mixed way. While increasing GBV per transaction, and in some cases increasing Platform revenue per Transaction, higher prices likely decrease #Transactions, as some importers/exporters, especially SMBs, are price sensitive.
Operational issues also have a mixed approach on our Platform. On the one hand, any disruption to shipping patterns, due to trade wars, pandemics, strikes, weather, or wars, sends people looking for alternatives, which is good for a marketplace. On the other hand, disruptions negatively impact the overall Buyer experience on our Platform, even if the disruption is totally out of our control.
World Trade and Industry Trends
International freight shipping helps to enable world trade, specifically the exchange of goods between countries. We believe that the size of the total addressable market for our Platform is positively correlated with world trade in goods. Since the early 1940s, world trade has increased dramatically in most decades, but the size of our addressable market could contract if world trade is reduced by recession, trade wars, reshoring/nearshoring and other factors. Historical trends indicate that even following major stressors, such as the 2008 Financial Crisis, global trade has continued to steadily expand, as presented in the following illustration of the global trade of goods by value, which we created from information available from UNCTAD.
Our business is seasonal and as a result, our revenues and profitability fluctuate from quarter to quarter. For example, the third and fourth calendar quarters are typically strong in our industry in the ramp up to the Western peak shopping season, while the first quarter is typically weakest.
Smaller importers/exporters tend to adopt our Platform more readily than larger enterprises. Therefore, our Platform may benefit if niche e-commerce vendors and other SMB importers/exporters continue to flourish, as they have over the past few years, and could potentially be impacted negatively if the industry becomes more consolidated.
We have also observed a trend of more short-term, or spot, bookings for freight services, compared to long-term fixed-price contracts. Our Platform, which focuses on matching Buyers and Sellers for spot transactions, has benefited from this trend.
85
Table of Contents
Components of Our Results of Operations
Revenue
Solutions Revenue
Solutions revenue is primarily subscription-based SaaS and data. It is typically priced per user or per site, per time period, with larger customers such as multinational freight forwarders often negotiating flat all- inclusive subscriptions. Revenue from our Solutions segment includes certain non-recurring revenue from services ancillary to our SaaS products, such as engineering, customization, configuration and data services for digitizing offline data. We also recognize revenue from data subscriptions, including subscriptions to FBX and FAX indexes, and custom data reports.
Platform Revenue
Platform revenue reflects fees charged to Buyers and Sellers in relation to transactions executed on our Platform. For bookings conducted by importers/exporters, our fees are typically structured as a percentage of booking value, depending on the mode and nature of the service. When freight forwarders book with carriers, the Sellers often pay a pre-negotiated flat fee per transaction. When Sellers transact with a Buyer who is a new customer to the Seller, we may charge a percentage of the booking value as a fee. When we handle payments for transactions on our Platform, Buyer and Sellers will typically pay a percentage fee for the payment handling.
Clearit customs brokerage fees are reported in our Platform segment. We charge flat fees for customs brokerage through Clearit, depending on the mode and complexity, and may charge additional fees for ancillary services.
Cost of Revenue
Cost of revenue consists primarily of customer service costs, which include salaries of team members directly involved in supporting our service delivery, cloud hosting costs, and direct financial costs, such as credit card processing fees and collection costs.
Research and Development Expenses
Research and development expenses consist primarily of personnel-related costs, third-party hosting costs and third-party software expenses related to development. Research and development costs are expensed as incurred, except to the extent that such costs are associated with internal-use software and platform development that qualifies for capitalization. We make significant investments in research and development to create new product features and launch new products. We believe continued investments in research and development are important to achieve our strategic goals. As a result, we expect research and development expenses to increase in future periods.
Selling and Marketing Expenses
Selling and marketing expenses consist primarily of expenses related to personnel-related costs, including sales commissions and travel, which we expense as incurred, and advertising and marketing activities, including external public relations, trade shows, content and search engine optimization service providers. We make significant investments in sales and marketing to grow our business, including finding and acquiring new clients and driving brand awareness.
General and Administrative Expenses
General and administrative expenses consist primarily of personnel-related expenses attributable to our finance, legal, human resources and operations functions. General and administrative expenses also include costs related to outside consulting, legal and accounting services, rent and insurance. For the year ended December 31, 2024, general and administrative expenses also included a goodwill impairment loss. We expect to continue to invest in our corporate infrastructure and to incur additional expenses associated with operating as a public company, including legal and accounting costs, investor relations costs, insurance premiums and compliance costs.
86
Table of Contents
Reorganization Expenses
Reorganization expenses consist primarily of expenses related to workforce reduction carried out during the year ended December 31, 2023, such as severance payments to employees.
Share-listing expense
Share-listing expense consists of a one-time, non-cash, share-based expense, calculated based on the excess of the fair value of shares and warrants issued by the Company to public investors over the identifiable net assets of Gesher that were acquired.
Transaction-Related Costs
Transaction Related Costs consist primarily of consulting and professional expenses related to the Business Combination that was signed in May 2022 and closed in January 2023.
Change in fair value of warrants
Change in fair value of warrants consists of changes in the fair value of the Company’s public warrants that were issued as part of the Business Combination and are traded under the symbol “CRGOW”.
Finance Income
Finance income consists primarily of interest income on short-term deposits and investments, changes in the fair value of contingent consideration and certain financial liabilities, and hedging income.
Finance Expenses
Finance expenses consist primarily of bank charges, foreign exchange rate differences, net, interest expense in respect of our lease liabilities, and hedging expense.
Income Taxes (tax benefit), net
Income taxes consist primarily of income taxes attributable to our subsidiaries in the US, Spain and the Palestinian Authority, which have been profitable in recent years, and, to a limited extent, certain other jurisdictions. Tax benefits in the year ended December 31, 2023 consisted mainly of an increase in deferred tax assets attributable to our subsidiaries in the U.S. Our subsidiaries in Hong Kong, Israel, Luxembourg, and Canada, to a lesser extent, have accumulated significant carry-forward losses for tax purposes in past years, for which we do not recognize deferred tax assets because the utilization of such assets in the foreseeable future is not probable. As we expand our international business activities, any changes in the tax regime of the jurisdictions in which we operate may increase our overall provision for income taxes in the future.
Pursuant to a ruling received by us from the ITA, we are required to register for tax purposes in Israel and, accordingly, will be treated as an Israeli resident company for Israeli tax purposes. The current corporate tax rate in Israel is 23%. However, the corporate tax rate applicable to a company’s income that is eligible for certain tax benefits under Israeli government programs may be considerably lower. For additional information see “Item 10.E. Additional Information - Certain Material Israeli Tax Considerations.”
Year ended December 31, 2025, compared with the years ended December 31, 2024 and 2023
The following table summarizes Freightos’ historical results of operations for the years ended December 31, 2025, 2024 and 2023. The data contained in the table has been derived from our audited consolidated financial statements included in this Annual Report. The operating results for the below years should not be considered indicative of results for any future period. This information should be read in conjunction with the audited consolidated financial statements and notes thereto included in this Annual Report.
87
Table of Contents
The below tables provide data for each of the years ended December 31, 2025, 2024 and 2023. However, the below discussion of our results of operations omits a comparison of our results for the years ended December 31, 2024 and 2023. In order to view that discussion, please see “Item 5. Operating and Financial Review and Prospects- A. Operating Results- Year ended December 31, 2024, compared with the year ended December 31, 2023” in our Annual Report on Form 20-F for the year ended December 31, 2024, which we filed with the SEC on March 24, 2025.
Year ended December 31, | |||||||||
(dollars in thousands) | | 2025 | | 2024 | | 2023 | |||
Revenue | $ | 29,460 | $ | 23,785 | $ | 20,281 | |||
Cost of revenue |
| 9,777 |
| 8,285 |
| 8,479 | |||
Gross profit |
| 19,683 |
| 15,500 |
| 11,802 | |||
Operating expenses: |
|
|
| ||||||
Research and development |
| 11,942 |
| 10,275 |
| 11,507 | |||
Selling and marketing |
| 15,203 |
| 13,880 |
| 14,384 | |||
General and administrative |
| 11,694 |
| 14,292 |
| 12,407 | |||
Reorganization |
| — |
| — |
| 884 | |||
Share listing expense | — | — | 46,717 | ||||||
Transaction-related costs |
| — |
| — |
| 3,703 | |||
Total operating expenses |
| 38,839 |
| 38,447 |
| 89,602 | |||
Operating loss |
| (19,156) |
| (22,947) |
| (77,800) | |||
Change in fair value of warrants | 227 | (965) | 9,440 | ||||||
Finance income |
| 1,827 |
| 2,211 |
| 3,189 | |||
Finance expenses |
| (268) |
| (178) |
| (387) | |||
Financing income (expenses), net |
| 1,559 |
| 2,033 |
| 2,802 | |||
Loss before taxes on income |
| (17,370) |
| (21,879) |
| (65,558) | |||
Income taxes (tax benefit), net |
| 146 |
| 612 |
| (85) | |||
Loss | $ | (17,516) | $ | (22,491) | $ | (65,473) | |||
Year ended December 31, |
| ||||||
(as % of revenue) | | 2025 | | 2024 | | 2023 | |
Revenue |
| 100 | % | 100 | % | 100 | % |
Cost of revenue |
| 33 |
| 35 |
| 41 | |
Gross profit |
| 67 |
| 65 |
| 59 | |
Operating expenses: |
|
|
| ||||
Research and development |
| 41 |
| 43 |
| 57 | |
Selling and marketing |
| 52 |
| 58 |
| 71 | |
General and administrative |
| 40 |
| 60 |
| 61 | |
Reorganization |
| — |
| — |
| 4 | |
Transaction-related costs |
| — |
| — |
| 18 | |
Share listing expense | — | — | 230 | ||||
Total operating expenses |
| 132 |
| 161 |
| 441 | |
Operating loss |
| (65) |
| (96) |
| (383) | |
Change in fair value of warrants | 1 | (4) | 47 | ||||
Finance income |
| 6 |
| 9 |
| 16 | |
Finance expenses |
| (1) |
| (1) |
| (2) | |
Financing income (expenses), net |
| 6 |
| 8 |
| 14 | |
Loss before taxes on income |
| (59) |
| (92) |
| (322) | |
Income taxes (tax benefit), net |
| * |
| 3 |
| (*) | |
Loss |
| (59) | % | (95) | % | (322) | % |
*Less than 1%
88
Table of Contents
Comparison of the Years Ended December 31, 2025 and 2024
Revenue
Year ended December 31, | 2025 Vs. 2024 |
| ||||||||||
(in thousands, except for percentage) | | 2025 | | 2024 | | Change $ | | Change % |
| |||
Solutions | $ | 19,579 |
| $ | 15,398 | $ | 4,181 | 27 | % | |||
percentage of total revenue |
| 66 | % | 65 | % | |||||||
Platform | $ | 9,881 |
| $ | 8,387 | $ | 1,494 | 18 | % | |||
percentage of total revenue |
| 34 | % | 35 | % | |||||||
Total revenue | $ | 29,460 |
| $ | 23,785 | $ | 5,675 | 24 | % | |||
Revenue increased by $5.7 million, or 24%, to $29.5 million for the year ended December 31, 2025, compared to $23.8 million for the year ended December 31, 2024.
Solutions revenue increased by $4.2 million, or 27%, to $19.6 million for the year ended December 31, 2025, compared to $15.4 million for the year ended December 31, 2024. The increase was primarily a result of an increase of $1.9 million due to recognizing a full year of Shipsta revenue as well as Shipsta revenue growth, and an increase of $2.1 million generated by certain of our SaaS products.
Platform revenue increased by $1.5 million, or 18%, to $9.9 million for the year ended December 31, 2025, compared to $8.4 million for the year ended December 31, 2024. The increase was primarily a result of an increase in the number of transactions.
Cost of Revenue
Year ended December 31, | 2025 Vs. 2024 |
| |||||||
(in thousands, except for percentage) | | 2025 | | 2024 | | Change $ | | Change % |
|
Cost of revenue |
| 9,777 |
| 8,285 | 1,492 |
| 18 | % | |
Total gross margins |
| 67 | % | 65 | % | |
| | |
Cost of revenue increased by $1.5 million, or 18%, to $9.8 million for the year ended December 31, 2025, compared to $8.3 million for the year ended December 31, 2024. The increase was primarily due to an increase in personnel and related expenses of $1.1 million, an increase in amortization of intangible assets of $0.2 million and an increase in credit cards processing fees of $0.1 million. The increase in labor related cost, as well as some other cost items, included the adverse impact of currency exchange rates on our costs, specifically the average devaluation of the USD against the EUR and ILS currencies during the year ended December 31, 2025.
Research and Development
Year ended December 31, | 2025 Vs. 2024 |
| |||||||||
(in thousands, except for percentage) | | 2025 | | 2024 | | Change $ | | Change % |
| ||
Research and development | $ | 11,942 |
| $ | 10,275 | 1,667 | 16 | % | |||
Percentage of total revenue | 41 | % | 43 | % | |||||||
Research and development expenses increased by $1.7 million, or 16%, to $11.9 million for the year ended December 31, 2025, compared to $10.3 million for the year ended December 31, 2024. The increase was primarily due to an increase in personnel and related expenses of $1.3 million, an increase in share-based compensation expense of $0.3 million and an increase in the cost for software tools of $0.1 million. The increase in labor related cost, as well as some other cost items, included the adverse impact of currency exchange rates on our costs, specifically the average devaluation of the USD against the EUR and ILS currencies during the year ended December 31, 2025.
89
Table of Contents
Selling and Marketing
Year ended December 31, | 2025 Vs. 2024 | ||||||||||
(in thousands, except for percentage) | | 2025 | | 2024 | | Change $ | | Change % | | ||
Selling and marketing | $ | 15,203 | $ | 13,880 |
| 1,323 |
| 10 | % | ||
Percentage of total revenue | 52 | % | 58 | % | |||||||
Selling and marketing expenses increased by $1.3 million, or 10%, to $15.2 million for the year ended December 31, 2025, compared to $13.9 million for the year ended December 31, 2024. The increase was primarily due to an increase in personnel and related expenses of $1.3 million and an increase in amortization of certain intangible assets of $0.2 million, offset, in part, by a decrease in marketing expenses settled by share issuance of $0.3 million. The increase in labor related cost, as well as some other cost items, included the adverse impact of currency exchange rates on our costs, specifically the average devaluation of the USD against the EUR and ILS currencies during the year ended December 31, 2025.
General and Administrative
Year ended December 31, | 2025 Vs. 2024 | ||||||||||
(in thousands, except for percentage) | | 2025 | | 2024 | | Change $ | | Change % | |||
General and administrative | $ | 11,694 | $ | 14,292 |
| (2,598) |
| (18) | % | ||
Percentage of total revenue | 40 | % | 60 | % | |||||||
General and administrative expenses decreased by $2.6 million, or 18%, to $11.7 million for the year ended December 31, 2025, compared to $14.3 million for the year ended December 31, 2024. The decrease was primarily due to a goodwill impairment loss of $3.0 million in the year ended December 31, 2024, a decrease in 2025 in consulting costs of $0.2 million and a decrease in insurance costs of $0.4 million, offset, in part, by an increase in personnel and related expenses of $0.8 million and an increase of share-based compensation of $0.2 million. The increase in labor related cost, as well as some other cost items, included the adverse impact of currency exchange rates on our costs, specifically the average devaluation of the USD against the EUR and ILS currencies during the year ended December 31, 2025.
Change in Fair Value of Warrants
| Year ended December 31, | 2025 Vs. 2024 |
| |||||||||
(in thousands, except for percentage) | | 2025 | | 2024 | | Change $ | | Change % | ||||
Change in fair value of warrants | $ | 227 | $ | (965) | $ | 1,192 |
| 124 | % | |||
Change in fair value of warrants changed by $1.2 million, or 124%, to a gain of $0.2 million for the year ended December 31, 2025, compared to a loss of ($1.0) million in the year ended December 31, 2024. The change was due to fluctuations in the market price of the Freightos Warrants in 2025 as compared to 2024.
Finance Income
Year ended December 31, | 2025 Vs. 2024 | ||||||||||
(in thousands, except for percentage) | | 2025 | | 2024 | | Change $ | | Change % | |||
Finance income | $ | 1,827 | $ | 2,211 |
| (384) |
| (17) | % | ||
Finance income decreased by $0.4 million, or 17%, to $1.8 million for the year ended December 31, 2025 compared to $2.2 million for the year ended December 31, 2024. The decrease was primarily due to a decrease in interest on deposits of $0.9 million offset, in part, by an increase in exchange rate differences, net of $0.3 million and an increase in financial income as a result of change in fair value of certain financial liabilities of $0.2 million.
Finance Expenses
Year ended December 31, | 2025 Vs. 2024 | ||||||||||
(in thousands, except for percentage) | | 2025 | | 2024 | | Change $ | | Change % | |||
Finance expenses | $ | (268) | $ | (178) |
| (90) |
| (51) | % | ||
90
Table of Contents
Finance expenses increased by $0.1 million, or 51%, to $0.3 million for the year ended December 31, 2025, compared to $0.2 million for the year ended December 31 2024, primarily due to a decrease in interest expense recorded on lease liabilities of $0.1 million.
Income Taxes
Year ended December 31, | 2025 Vs. 2024 | ||||||||||
(in thousands, except for percentage) | | 2025 | | 2024 | | Change $ | | Change % | |||
Income taxes | $ | 146 | $ | 612 |
| (466) |
| (76) | % | ||
Income taxes decreased by $0.5 million, or 76%, to 0.1 million for the year ended December 31, 2025, compared to $0.6 million for the year ended December 31, 2024, primarily due to a decrease in deferred tax expense of $0.5 million resulting from certain deferred tax expenses recorded in 2024 due to timing difference in utilizing certain tax benefits and our estimation with respect to future utilization of deferred tax assets by some of the group’s subsidiaries.
Non-IFRS Financial Measures
Our management team uses loss before income taxes (tax benefit), net, finance income, finance expenses, change in fair value of warrants, share-based payment expense, depreciation and amortization, CEO transition-related expenses, impairment of goodwill, share listing expenses, non- recurring expenses, change in fair value of contingent consideration, reorganization, operating expense settled by issuance of shares, acquisition-related costs and transaction related costs (“Adjusted EBITDA”), a non-IFRS financial measure, to evaluate our operating performance and make strategic decisions. We believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results because it provides a supplemental measure of our core operating performance and offers consistency and comparability with both past financial performance and with financial information of peer companies. However, Adjusted EBITDA is presented for supplemental information purposes only, has limitations as an analytical tool, and should not be considered in isolation or as a substitute for financial information presented in accordance with IFRS.
The following table provides a reconciliation of loss (under IFRS) to Adjusted EBITDA:
Year ended December 31, |
| |||||||||
(in thousands) | | 2025 | | 2024 | | 2023 |
| |||
Loss | $ | (17,516) | $ | (22,491) | $ | (65,473) | ||||
Income taxes (tax benefit) |
| 146 |
| 612 |
| (85) | ||||
Finance income |
| (1,827) |
| (2,211) |
| (3,189) | ||||
Finance expenses |
| 268 |
| 178 |
| 387 | ||||
Change in fair value of warrants | (227) | 965 | (9,440) | |||||||
Operating loss |
| (19,156) |
| (22,947) |
| (77,800) | ||||
Share-based compensation |
| 4,306 |
| 3,625 |
| 5,426 | ||||
Depreciation and Amortization |
| 3,449 |
| 3,083 |
| 2,791 | ||||
CEO transition-related costs | 158 | — | — | |||||||
Impairment of goodwill | — | 3,000 | — | |||||||
Share listing expense | — | — | 46,717 | |||||||
Non-recurring expenses | — | — | 499 | |||||||
Changes in the fair value of contingent consideration |
| — |
| — |
| (1,583) | ||||
Acquisition-related costs | — | 283 | — | |||||||
Reorganization |
| — |
| — |
| 884 | ||||
Operating expense settled by issuance of shares |
| — |
| 351 |
| 320 | ||||
Transaction-related costs |
| — |
| — |
| 3,703 | ||||
Adjusted EBITDA | $ | (11,243) | $ | (12,605) | $ | (19,043) | ||||
Loss margin (under IFRS) |
| (59) | % |
| (95) | % |
| (323) | % | |
Adjusted EBITDA margin | (38) | % | (53) | % | (94) | % | ||||
91
Table of Contents
Comparison of the Years Ended December 31, 2025 and 2024
Adjusted EBITDA increased by $1.4 million, to ($11.2) million for the year ended December 31, 2025, compared to ($12.6) million for the year ended December 31, 2024. Adjusted EBITDA increased primarily due to a decrease in loss and an increase in share-based compensation, offset in part by a decrease in impairment of goodwill and the change in fair value of warrants.
B. Liquidity and Capital Resources
Since our inception, we have financed our operations primarily through equity financings.
Our cash, cash equivalents and bank deposits were $27.9 million as of December 31, 2025, compared to $37.3 million as of December 31, 2024. In addition, we had certain restricted deposits to secure payments to airlines, to support currency hedging activity, a bank guarantee, customs payments and credit cards, in an aggregate amount of $1.8 million as of December 31, 2025 and $1.6 million as of December 31, 2024.
The development and commercialization of our Platform and Solutions segments will continue to require substantial expenditures and we are reliant upon continued investments from existing and new shareholders to fund operations.
The primary uses of our liquidity and capital resources are the financing of research and development, and sales and marketing, expenses that drive growth, as well as working capital, capital expenditures, and general corporate purposes. We believe that our sources of liquidity and capital resources will be sufficient to meet our business needs for at least the next 12 months.
Our capital expenditures consist primarily of expenditures for computers, peripheral equipment and leasehold improvements from time to time on our leased offices. Capital expenditures were $0.1 million, $0.0 million, and $0.1 million for the years ended December 31, 2025, 2024 and 2023, respectively.
In January 2023, as part of the Business Combination, we raised $82.4 million of gross proceeds, as described in Note 1d to our audited consolidated financial statements included in Item 18 of this Annual Report. Net of expenses, we raised $67.5 million.
Cash Flows
The following table summarizes our cash flows for the periods presented:
| Year ended December 31, | ||||||||
(in thousands) | | 2025 | | 2024 | | 2023 | |||
Net cash used in operating activities | $ | (8,868) | $ | (12,100) | $ | (27,096) | |||
Net cash provided by (used in) investing activities |
| 11,629 |
| 2,078 |
| (32,161) | |||
Net cash provided by (used in) financing activities |
| (22) |
| 85 |
| 73,177 | |||
Exchange differences on balances of cash and cash equivalents |
| 463 |
| (91) |
| (247) | |||
Gain (loss) from translation of cash and cash equivalents of foreign activity | 27 | (19) | — | ||||||
Increase (decrease) in cash and cash equivalents | $ | 3,229 | $ | (10,047) | $ | 13,673 | |||
Comparison of the Years ended December 31, 2025 and 2024
Net Cash Used In Operating Activities
Net cash used in operating activities was $8.9 million for the year ended December 31, 2025, a decrease of $3.2 million compared to the net cash used in operating activities of $12.1 million for the year ended December 31, 2024. The decrease primarily resulted from a decrease in loss of $5.0 million, adjusted mainly by changes in working capital of $2.3 million and an increase in non-cash share-based compensation expense of $0.7 million, offset in part by the decrease in non-cash impairment of goodwill of $3.0 million and the non-cash change in fair value of warrants of $1.2 million. In addition, the decrease in cash used in operating activities in the year ended December 31, 2025 was offset in part by a decrease in interest received in cash of $0.9 million during that year.
92
Table of Contents
Net Cash Provided By Investing Activities
Net cash provided by investing activities was $11.6 million for the year ended December 31, 2025, an increase of $9.6 million, compared to $2.1 million of cash provided by investing activities in the year ended December 31, 2024. This increase in cash provided by investing activities in the year ended December 31, 2025 primarily resulted from withdrawals of short-term bank deposits, which provided $12.0 million during the year ended December 31, 2025, compared to withdrawal of short-term investments, net of $11.5 million and investment in short-term bank deposits, net of $6.0 million, which provided a net amount of $5.5 million in the year ended December 31, 2024, in addition to a cash outflow as a result of an acquisition of subsidiary for $3.4 million during the year ended December 31, 2024.
Net Cash Provided By (Used In) Financing Activities
Net cash used in financing activities was $0.0 million for the year ended December 31, 2025, a change of $0.1 million compared to $0.1 million provided by financing activity in the year ended December 31, 2024. This change primarily resulted from an increase of $0.1 million in repayment of lease liabilities.
Contractual Obligations and Other Commitments
We have various contractual obligations and commercial commitments that are recorded as liabilities in our financial statements.
As of December 31, 2025, we had contractual, undiscounted lease liabilities that will be due in the upcoming years in the amounts set forth below:
(dollars in thousands) | | | |
2026 | $ | 751 | |
2027 |
| 653 | |
2028 |
| 424 | |
2029 and thereafter | 995 | ||
Total |
| $ | 2,823 |
Off-Balance Sheet Arrangements
As of December 31, 2025, we had outstanding unfulfilled orders placed with our Platform Sellers of approximately $0.5 million (compared to $0.5 million as of December 31, 2024) for which Buyers’ funds were not yet collected and, therefore, no liability was recorded in our financial statements. These amounts will be recorded as liabilities once the shipments are delivered, at which time we will also record receivables from the respective Buyers.
Recently Issued Accounting Pronouncements
For information on recently issued accounting pronouncements, refer to Note 3 to our audited consolidated financial statements included elsewhere in this Annual Report.
C.Research and Development, Patents, and Licenses, Etc.
A significant part of our team across multiple sites is dedicated to our in-house research and development effort to continue to deepen our technology stack and expand the value that our software and platform products provide to customers. Team skills include software engineers, product managers, data analysts, user experience, site reliability engineering and more. We own all our core software, and it is protected by copyright and non-disclosure agreements, although like all software companies we also utilize third party commercial and open-source software. We have one utility patent on a core algorithm granted in Canada and a design patent on one of our core user interfaces granted in several jurisdictions. For a description of our research and development policies and amounts expended thereon during the last three fiscal years, see “Item 5.A. Operating and Financial Review and Prospects - Operating Results” above and the description in the corresponding Item 5.A of our Annual Report on Form 20-F for the year ended December 31, 2024, which we filed with the SEC on March 24, 2025.
93
Table of Contents
D. Trend Information
The international freight market has been extremely volatile over the last few years. Even without trade wars, pandemics and military conflicts, the industry tends to be volatile. Demand varies based on patterns of world trade as well as external factors, such as governmental action and military conflicts. Supply varies based on the availability and safety of routes, the inventory of ships and planes, and is also affected by trucks, trains, port capacity, container availability, and labor, etc. The nature of this infrastructure is that it has to be planned years in advance, meaning that changes in capacity may lag changes in demand by years, creating a cycle where supply and demand are often mismatched. Also, demand tends to be very price-inelastic, meaning that fairly small changes in supply and demand can cause large swings in prices, in either direction, dramatically affecting the revenue and profits of all logistics service providers.
During 2025, a significant increase in tariffs and other protectionist trade policies significantly disrupted U.S. ocean import volumes by inducing a “frontloading” effect early in the year before tariffs went into effect, followed by sharp declines, with U.S. port import volumes projected to have dropped by 0.5% for 2025. Air imports to the US contracted by about 1% in 2025 compared to the previous year as the removal of the U.S.’s $800 de minimis exemption led to a sharp drop in B2C e-commerce imports moving by air. The slower growth rate for trade reduced shipping rates and volumes on some parts of our Platform, thereby slightly adversely impacting use of our Platform.
The trade war did not stifle air cargo volume growth on other lanes, with Asia - Europe volumes increasing 10% for the year and global volumes up 3% in 2025 compared to 2024. But opposition to de minimis is not limited to the US. The EU is taking steps to suspend de minimis with a target date of July 2026, as are many other countries in Europe and Asia, which would be expected to curb the demand growth on these lanes. Despite these shifts, air cargo rates were about level year on year, reflecting carrier agility in shifting capacity as volumes shift lanes, but a broader overall downturn in demand would likely put downward pressure on rates too.
Similarly, in ocean freight, tariff introductions spurring uncertainty, caution and higher costs for US importers drove US ocean import volumes to contract 0.5% in 2025 compared to 2024 according to the National Retail Foundation, with S+P projecting a 2% decrease in volumes for 2026. Global volumes, like in air, grew nonetheless, finishing 4.5% stronger than 2024, with 7% growth for European imports. But economic headwinds from the trade war, and climbing oil prices risk triggering a slowdown in ocean volume growth, just as record container vessel capacity growth is also contributing to downward pressure on container rates.
Other than as disclosed elsewhere in this Annual Report, we are not aware of any trends, uncertainties, demands, commitments or events since January 1, 2025 that are reasonably likely to have a material effect on our net revenue, income, profitability, liquidity or capital resources, or that may cause the disclosed financial information to be not necessarily indicative of future operating results or financial condition.
E. Critical Accounting Estimates
We prepare our audited consolidated financial statements in accordance with the IFRS issued by the International Accounting Standards Board. The preparation of our audited consolidated financial statements requires us to make certain estimates, assumptions, and judgments about the future that affect the reported amounts and related disclosures. All estimates, assumptions, and judgments are based on market information, knowledge, historical experience, and various other factors that we believe are reasonable under the circumstances. Actual experience and results may differ from these estimates, assumptions and judgments. Other companies in similar businesses may use different estimates, assumptions, and judgments which may impact the comparability of our audited consolidated financial statements to those of other companies. The judgements, estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next year are discussed in our audited consolidated financial statements included elsewhere in this Annual Report.
In order to provide an understanding of the manner in which our management forms its judgments about future events, including the variables underlying our judgments, estimates and assumptions, we summarize our critical accounting policies and significant accounting judgements, estimates and assumptions in our audited consolidated financial statements included elsewhere in this Annual Report.
94
Table of Contents
ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
A. Directors and Senior Management
The following persons serve as our executive officers and directors. For biographical information concerning the executive officers and directors, see below.
Name | | Age | | Position |
Pablo Pinillos |
| 49 |
| Chief Executive Officer, Chief Financial Officer and Director |
Enric Alventosa Arbil | 41 | Chief Technology Officer | ||
Ian Arroyo |
| 42 |
| Chief Strategy Officer |
Eytan Buchman |
| 40 |
| Chief Marketing Officer |
Andrea Indave | 34 | Vice President, Human Resources | ||
Michael Oberlander |
| 57 |
| General Counsel |
Udo Lange |
| 54 |
| Chairman of the Board |
Tzvia Broida | 57 | Director | ||
Mark A.P. Drusch | 65 | Director | ||
Ezra M. Gardner |
| 48 |
| Director |
Rotem Hershko | 47 | Director | ||
Inna Kuznetsova |
| 57 |
| Director |
Michael Schaecher |
| 56 |
| Director |
Carl Vine |
| 50 |
| Director |
Pablo Pinillos was appointed to the Board of Directors and as Chief Executive Officer effective March 16, 2026. He joined Freightos in March 2025 as Chief Financial Officer (a position he will continue to hold until we hire a permanent CFO), and on December 17, 2025, he was appointed our Interim Chief Executive Officer. Prior to joining Freightos, Mr. Pinillos served as the CFO of Coincover, a pioneering blockchain protection company, beginning in October 2023. He previously served as the CFO of Bitrise, a leading platform for mobile app development automation, from July 2021 until September 2023. Before that, he served in various positions of increasing responsibility from 2007-2021, including as VP Strategic Growth & Business Transformation, at Qlik, a leading provider of end-to-end, real-time data integration and analytics solutions that help organizations access and transform all their data. He holds a Bachelors of Business Administration from Universidad Complutense de Madrid.
Enric Alventosa Abril has served as Chief Technology Officer (CTO) since 2016. In 2008, Mr. Alventosa Abril founded WebCargo, a digital freight rate management and distribution platform, where he served as Founder and held executive leadership roles from 2008 until WebCargo was acquired by the Company in 2016.
Ian Arroyo has been our Chief Strategy Officer since 2023. Since joining Freightos, Mr. Arroyo has served in various commercial roles, including Director, Enterprise Solutions in 2019, Executive Vice President, Strategy and Demand from December 2019 to March 2020, Executive Vice President, Enterprise Solutions from December 2020 to August 2021, and Chief Commercial Officer, freightos.com from 2021 to 2023. Mr. Arroyo co-founded Mallbox, Inc. in March 2020 and served as its Chief Executive Officer until December 2020. From 2017 to 2019, he was Vice President, Strategy and Business Development at Gimmonix, Ltd., a leading travel aggregation and mapping platform, where he oversaw global sales, channel and commercial strategy. From 2012 to 2019, Mr. Arroyo served as Director, Business Development of QinetiQ North America, a wholly owned subsidiary of QinetiQ Group Plc (LSE:QQ). He was a lecturer in Professional Sales and Communications at the University of Florida from 2016 through 2017 and continues to serve as an advisor to founders of early-stage companies. Mr. Arroyo graduated from the University of Florida with a Bachelor of Science in Marketing and a Master of Business Administration.
Eytan Buchman has been our Chief Marketing Officer since 2019. As Chief Marketing Officer, Mr. Buchman is responsible for corporate marketing, industry research, branding, customer acquisition and sales support across our various business units. From 2017 to 2019, Mr. Buchman served as our Vice President of Marketing and, from 2013 to 2017, he held various roles in our marketing department. Prior to joining Freightos, Mr. Buchman was a career officer in the Israel Defense Forces, serving in various roles, including foreign affairs, strategic planning and as Head of North America for the Spokesperson’s Unit. He is currently a Major in the IDF reserves. Mr. Buchman graduated from Hebrew University with a Bachelor of Arts in Psychology and International Relations.
95
Table of Contents
Andrea Indave has been our Vice President of Human Resources since August 2024, leading the global HR team and operations across nine international sites. She joined Freightos in August 2019 and held HR roles of increasing responsibility since then. Prior to joining Freightos, Ms. Indave held various HR positions at NPAW, a technology start-up specializing in data analytics for video services (2017-2019). Ms. Indave holds a Bachelor’s degree in Psychology with a specialization in Neuropsychology from Complutense University of Madrid and a Master’s degree in Human Resources from IMF School.
Michael Oberlander has been our General Counsel since 2021. Prior to joining Freightos, Mr. Oberlander was a consultant for several established and start-up businesses. From 2016 to 2019, he served as the Chief Philanthropy Officer of the Jewish Federation of St. Louis, a nonprofit dedicated to mobilizing the community’s human and financial resources to enhance Jewish life in St. Louis, in Israel and around the world. Mr. Oberlander served as General Counsel and in various executive management positions at Caleres, Inc., a NYSE-listed global wholesaler and retailer of footwear from 2000 to 2015, where he had responsibility for all legal matters as well as managing the internal audit and risk management departments. He also chaired the company’s charitable trust and investment committee. Prior to joining Caleres, Mr. Oberlander was an attorney at Bryan Cave LLP (now Bryan Cave Leighton Paisner) specializing in M&A, corporate finance and securities and corporate governance matters. Since 2016, Mr. Oberlander has been a limited partner in SixThirty, a fintech accelerator, where he has mentored entrepreneurs and been an advisor to the firm’s investment committee. He received his Juris Doctor from Vanderbilt Law School and earned his Bachelor of Arts in Political Science from the University of Chicago.
Udo Lange has served on our Board of Directors since 2022 and as Chairman of the Board since July 2025. Since September 1, 2023, Dr. Lange has served as the Chief Executive Officer of Stolt-Nielsen Limited (SNI.OL), a provider of transportation and storage for liquids as well as aquaculture. He is also on the board of Avenir LNG, the Institute of International Rural Reconstruction and the Memphis Symphony Orchestra. He was previously President of Healthcare, Logistics and Americas International at Memphis-based FedEx Express, a major American cargo airline delivering freight and packages to over 220 countries. Dr. Lange also served also on the Strategic Management Committee of FedEx Corp., which sets the strategic direction for the FedEx enterprise. Dr. Lange has over 20 years of experience in the international trade industry, with expertise in global freight forwarding, customs brokerage, express, airline catering and logistics. He joined FedEx in 2015, beginning his tenure with the company as the Chief Operations Officer for FedEx Logistics from August 2015 until August 2019. He served as President and Chief Executive Officer of FedEx Trade Networks, a company under FedEx Logistics from March 2018 until March 2023, and as President and CEO, FedEx Logistics from September 2019 until March 2023. He served as a member of the White House Supply Chain Disruptions Task Force. Dr. Lange also served as a Board Member for the German American Chamber of Commerce and is on the Board of Trustees of “Operation Finale,” an exhibition in Germany about the capture of Nazi Adolf Eichmann. Dr. Lange holds a Ph.D. in Economic Science from the University of Duisburg and a Master of Business Administration and Master of Science in Mechanical Engineering from the University of Kaiserslautern.
Tzvia Broida has served on our Board of Directors since April 30, 2024. She has, since 2021, served as a board member, chairperson of the audit committee, and the board’s financial expert of Global-e, a leading platform to enable and accelerate global, direct-to-consumer cross-border e-commerce growth. From 2013 to 2021, she served as a board member, chairperson of the audit committee, and the board’s financial expert of Jacada Ltd., a provider of contact center automation processes. Since 2021, Ms. Broida serves as the chief financial officer of NeuroBlade Ltd, formerly a developer of a solution for data analytics acceleration, where she is currently responsible for the company’s dissolution process. Before joining NeuroBlade, Ms. Broida served as CFO of Sensible Medical Innovations LTD, a market pioneer in medical radar monitoring and imaging technology, from 2011 until 2021. Before that, Ms. Broida served in various positions at Jacada Ltd, including as Chief Financial Officer from 2005 to 2009, and before that she worked as an accountant at several accounting firms. Ms. Broida received a B.A. in Accounting & Economics from the Hebrew University of Jerusalem.
Mark A.P. Drusch has served on our Board of Directors since April 30, 2024. In January 2024, Mr. Drusch was appointed as Chief Cargo Officer of Qatar Airways, the flag carrier of Qatar that is one of the largest air cargo carriers in the world, flying to over 170 international destinations across five continents. He previously served in various capacities at Qatar Airways, including as Senior Vice President Revenue Management, Alliances, Loyalty, and Strategy from December 2019 until this year. Before joining Qatar Airways, Mr. Drusch was Vice President at ICF, a global consulting and technology services company from 2016 until 2019, President of The Brierley Group, an enterprise investing, launching, and incubating companies focused on leveraging loyalty to increase engagement with consumers and drive increased sales and profitability from 2014 until 2016, and held a variety positions at a number of travel and logistics companies. He holds a B.A. in Political Science and International Relations from Northwestern University.
96
Table of Contents
Ezra M. Gardner has served as a member of our Board of Directors since 2023 and was the Chief Executive Officer and a director of Gesher from October 2021 until the consummation of the Business Combination in January 2023. Since 2012, Mr. Gardner has served as a Partner and Portfolio Manager at Varana Capital, LLC, an investment firm he co-founded. Varana Capital is a private investment fund focusing on both private and public security investments. As part of the Varana investment strategy of cooperative engagement, Mr. Gardner sits on or advises the Boards of multiple public and private companies, working with each on strategic planning, operational dynamics, and balance sheet needs/restructuring. From 2009 to 2012, Mr. Gardner served as the Managing Partner and Portfolio Manager of Omnium Capital, LLC, a family office he co-founded in Tel Aviv, Israel. From 2005 to 2009, he was at UBS where he served as a Portfolio Manager and most recently Head of UBS’ US Equity Portfolio for the Fundamental Investment Group where he also sat on the US Trading Committee (Management Board for the US Equities Business). From 2001 to 2005, he served in senior analyst roles at MSD Capital (Michael Dell family fund management office). From 1999 to 2001, he served as an analyst in the Investment Banking Group at JP Morgan. Mr. Gardner currently serves on the board of directors of Galileo Wheel and Neureality, both Israeli- based private businesses. He formerly served on the Board of Fortress Global Enterprises, where he held roles on the governance, compensation, audit and investment committees. Mr. Gardner received a Bachelor of Arts in Economics (with honors) and a Bachelor of Arts in International Relations from Brown University.
Rotem Hershko has served on our Board of Directors since July 2025. Since October 2024, Mr. Hershko has been a Senior Advisor at McKinsey & Co., a global management consulting firm, advising global clients on digital transformation initiatives, leveraging cutting-edge GenAI technologies to accelerate and optimize product and software development, fostering innovation, efficiency, and competitive advantage. He previously served in various roles at A.P. Moller-Maersk, including as EVP, Chief Product Officer - Logistics & Services from January 2023 until October 2024 and as Senior Vice President and Head of Digital Product Management (Business Platforms) from November 2020 until January 2023. Before joining Maersk, Mr. Hershko worked at Amazon in various capacities of increasing responsibility, including as Director of Product Management/Software and Development and GM - Amazon Global from 2017 to 2020. He holds a Master of Business Administration (MBA) from Columbia Business School and earned his Bachelor of Laws (LLB) from The Hebrew University of Jerusalem.
Inna Kuznetsova has served on our Board of Directors since 2022. Ms. Kuznetsova is the Chief Executive Officer of Fishbowl, a market-leading inventory and manufacturing software platform for small and mid-sized businesses, having been appointed in October 2025, From June 2022 until February 2025 Ms. Kuznetsova served as Chief Executive Officer and a member of the board of directors of ToolsGroup, a privately-owned SaaS company with international operations providing supply chain management optimization solutions. In this role, she oversaw strategic growth, planning and daily operations. From June 2020 through May 2022, Ms. Kuznetsova was the Chief Executive Officer and a member of the board of directors of 1010data, a privately-owned data analytics company, responsible for strategic growth, planning and daily operations. From January 2020 through May 2020, Ms. Kuznetsova served as interim Chief Executive Officer and, from July 2019 until January 2020, as Chief Operating Officer of 1010data. From 2014 to 2016, Ms. Kuznetsova served as President of INTTRA, a privately-owned SaaS company focused on maritime logistics. In 2016, she was promoted to President and Chief Operating Officer of INTTRA, overseeing all sales, marketing, software development, IT operations, customer services and operations until INTTRA’s sale to E2Open in November 2018. Ms. Kuznetsova served on the board of directors and as a member of the audit and risk committees of Global Ports Investments Plc (LSE: GPLX) from 2017 to 2022, on the board of directors of Avantida from 2017 to 2018 and on the board of directors and as a member of the audit, remuneration and nomination committees of Sage Plc (LSE: SGE) from 2014 to 2017. She currently serves on the board of directors of SeaCube Container Leasing, a privately-owned refrigerated and intermodal solutions provider.
Michael Schaecher has served on our Board of Directors since October 2025. Mr. Shaecher has been the CEO and owner of mSc Avia Consulting GmbH in Wiesbaden, Hesse, Germany since February 2013. From July 2021 through July 2023, Mr. Schaecher served as the Advisory Board Chair at LogisEye Solutions, a Dubai-based company offering a cloud-based digital logistics procurement ecosystem. Prior to that time, from September 2019 through July 2021, he served as Chairman of the Supervisory Board at Fliit, a German company seeking to make food logistics easy and efficient for shippers and carriers. From May 2018 through May 2019, Mr. Schaecher served as Chief Executive Officer at ISS Global Forwarding, a Dubai-based provider of logistics services internationally, across industries. Prior to that time, from March 2014 through May 2016, he served as Chief Operating Officer- Freight Management Global at CEVA Logistics, a Swiss provider of supply chain solutions for large and medium-size national and multinational companies across the globe. Mr. Schaecher completed the Orchestrated Winning Performance- Leadership Program at the International Institute for Management Development in Switzerland in 1998, an educational program in Finance for Non-Financial Managers at Columbia University in New York in 2002, and a program covering Logistics, Materials and Supply Chain Management at Cranfield University in the United Kingdom in 2003.
97
Table of Contents
Carl Vine has served as a member of our Board of Directors since January 2024. Mr. Vine is Co-Head of the Asia Pacific Equity Team at M&G Investments, one of the UK’s largest and longest established investment houses. Prior to joining M&G in 2019, he co-founded Port Meadow Capital Management, a boutique Pan-Asian investment firm, in 2014. He has previously worked as a Managing Director and Portfolio Manager for SAC Capital Advisors in Hong Kong and was the Asian-based member of their global investment committee. Before that, Mr. Vine was a Managing Director at UBS in Hong Kong, where he invested proprietary capital across Asia including Japan. He began his career with Prudential Portfolio Managers in London, before relocating to Tokyo to open Prudential’s Japan office. Mr. Vine holds a Bachelor of Arts (Hons) in Politics, Philosophy & Economics from Oxford University.
Family Relationships
There are no family relationships among any of our executive officers and our directors.
B. Compensation
Director and Executive Officer Compensation
In October 2024, the Board of Directors offered to compensate each of our non-employee directors by granting them restricted share units (“RSUs”) that vest over the following four quarters. Directors who do not chair a committee were offered RSUs with an approximate value of $45,000, and directors who chair a committee were offered RSUs with an approximate value of $60,000.
Messrs. Michael Eisenberg (our former director, who resigned effective July 1, 2025) and Carl Vine declined any compensation. Messrs. Drusch, Gardner, and Lange were each granted 30,200 RSUs (with an approximate value of $45,000). As per her agreement with the Board of Directors, Ms. Broida was granted 20,136 RSUs (with an approximate value of $30,000), while also receiving $7,500 in cash each quarter for serving on the Board and as Chair of the Audit Committee. As she had until that point, Ms. Kuznetsova was approved to receive $15,000 in cash for each quarter for serving on the Board and as Chair of the Compensation Committee.
In October 2025, the nominating and corporate governance committee of the Board recommended changing the director compensation based on various benchmarks that were available to the committee from public sources, with adjustments based on our size, complexity of our business, and expected time commitment of directors serving on various committees. The Board decided to structure director compensation to be partially cash and partially equity incentive (except for Ms. Kuznetsova, who will continue to receive $60,000 in cash per year). It is anticipated that the product, AI and technology committee will require from its members, by far, the highest time commitment of all Board committees, and that its members leverage their personal networks for the benefit of the Company. Consequently, the Board decided to compensate the members of that committee differently. One non-employee director, Carl Vine, continued to decline to receive any compensation.
Below is a table that shows the independent/non-employee director compensation that was approved in October 2025 for the annual period beginning October 1, 2025:
Name | | Role | | RSU value | | RSUs(#)1 | | Cash | | Options(#)2 | | Option Value3 | | Total Value | ||||
Udo Lange |
| Chairman | $ | 50,000 |
| 15,432 | $ | 50,000 |
| — |
| — | $ | 100,000 | ||||
Tzvia Broida |
| Chair of Audit Committee | $ | 50,000 |
| 15,432 | $ | 50,000 |
| — |
| — | $ | 100,000 | ||||
Mark Drusch |
| Director | $ | 27,500 |
| 8,488 | $ | 27,500 |
| 20,000 | $ | 33,000 | $ | 88,000 | ||||
Ezra Gardner |
| Director | $ | 27,500 |
| 8,488 | $ | 27,500 |
| 20,000 | $ | 33,000 | $ | 88,000 | ||||
Rotem Hershko |
| Member of product, AI and technology committee | $ | 35,000 |
| 10,802 | $ | 35,000 |
| 20,000 | $ | 33,000 | $ | 103,000 | ||||
Inna Kuznetsova |
| Chair of Compensation Committee | $ | — |
| — | $ | 60,000 |
| — |
| — | $ | 60,000 | ||||
Michael Schaecher |
| Member of product, AI and technology committee | $ | 35,000 |
| 10,802 | $ | 35,000 |
| 20,000 | $ | 33,000 | $ | 103,000 | ||||
Carl Vine |
| Director | $ | — |
| — | $ | — |
| — |
| — | $ | — | ||||
1 Based on the 30-day average closing price of our Ordinary Shares leading up to September 17, 2025: $3.24 per share/RSU.
2 The 20,000 options granted to most non-employee directors are divided into three tranches, consisting of: 6,666 options with a $5.00 exercise price, 6,667 options with a $10.00 exercise price, and 6,667 options with a $15.00 exercise price.
In addition, each of Mr. Hershko and Mr. Schaecher were to receive in January 2026 the following additional equity incentive compensation:
98
Table of Contents
| ● | 37,038 RSUs, which will vest over the course of a four-year period, with one-quarter of the RSUs vesting on each of the first four anniversaries of the October 1, 2025 start date of the year (for purposes of director compensation), on October 1 of 2026, 2027, 2028 and 2029; and |
| ● | 100,000 options to purchase Ordinary Shares, divided into three tranches, with the following exercise prices: 33,333 options - $5.00/share; 33,333 options - $10.00/share; and 33,334 options- $15.00/share, all of which will vest one year following the date of grant and will be exercisable (after vesting) for the shorter of (i) a term of seven years from the initial grant date, or (ii) 90 days after the grantee leaves the Board. |
We expensed an aggregate of $0.5 million for compensation to our non-employee directors for the fiscal year ended December 31, 2025, of which $0.4 million was related to equity compensation.
The aggregate compensation costs incurred by us in connection with compensation for our executive officers for the fiscal year ended December 31, 2025 was approximately $1.1 million. During that same year, we granted equity incentive awards to our executive officers to acquire an aggregate of 1,318,790 Freightos Ordinary Shares (the value of which is included in the foregoing $1.1 million amount). Some of the equity incentive awards granted to our executive officers are subject to the same vesting conditions as those of other Freightos employees, while others are conditioned upon performance targets such as 2025 Revenue and Adjusted EBITDA.
Director Stock Ownership Requirements
As part of the effort to align the Board’s interests with the interests of our shareholders, in October 2025, the Board adopted director stock ownership guidelines. Each independent/non-employee director who receives equity compensation from us will be required to hold a certain amount of equity. The Chairman will be required to hold ordinary shares amounting to six times the value of his annual equity grant, and each other independent/non-employee director will be required to hold ordinary shares amounting to two times the value of his or her annual equity grant. For purposes of calculating the value of the annual equity grant, we will use the value of the annual grant of RSUs that is then vesting, plus the prorated value of any one-time RSU grant expected to vest in that year (running from October 1 through the following September 1). Compliance with the stock ownership requirements will be verified annually on December 31 based on the value of each director’s holdings of ordinary shares (including shares underlying vested or unvested RSUs, but excluding shares underlying options, whether or not vested). Value of ordinary shares held by the director will be based on the 30-day average closing price of our ordinary shares in the period leading up to the December 31 verification date. There will be an initial four-year transition period following adoption of the stock ownership guidelines or (if later) a director’s initial election or appointment to the Board for each director to achieve compliance with the guidelines. If a director’s ownership requirement increases due to an increase in annual compensation or a change in Board position, the director will have three years from the effective date of that change to achieve the incremental ownership requirement. Any director who does not comply with the stock ownership guidelines will not be permitted to sell any shares acquired from vested equity incentives granted to him or her. The Chairman of the Board may consider and grant a hardship exemption from the stock ownership guidelines under extraordinary circumstances. In lieu of complying with the foregoing guidelines, one of our current independent/ non-employee directors, Tzvia Broida, will instead be required to hold ordinary shares issued to her upon vesting of RSU grants for a holding period of nine months following the vesting date before she can sell such shares.
Equity Incentive Plans
We currently maintain the Freightos Limited 2022 Long-Term Incentive Plan (the “2022 LTIP”). The purpose of the 2022 LTIP is to enhance our ability to attract, retain and motivate persons who make (or are expected to make) important contributions by providing these individuals with equity ownership opportunities and/or equity-linked compensatory opportunities. Equity awards and equity-linked compensatory opportunities are intended to motivate high levels of performance and align the interests of directors, employees and individual consultants with those of shareholders by giving directors, employees and individual consultants the perspective of an owner with an equity or equity-linked stake in our Company and providing a means of recognizing their contributions to our success.
99
Table of Contents
2012 Incentive Plan
Prior to May 28, 2022, we issued incentive awards under our 2012 Incentive Plan. Although no additional incentive awards have been, or will be, issued under the 2012 Incentive Plan after that date, all incentive awards previously granted under the 2012 Incentive Plan will remain subject to the terms of the 2012 Incentive Plan, which serves as Exhibit 4.1 to this Annual Report. All awards granted on or after May 31, 2022 have been and will be granted under the 2022 LTIP.
Freightos Ordinary Shares issuable under outstanding awards under the 2012 Incentive Plan for which the underlying shares are not issued will become available once again under the 2022 LTIP, as described below under “2022 LTIP—Share Pool Under the 2022 LTIP”.
2022 LTIP
This section summarizes certain principal features of the 2022 LTIP. The summary is qualified in its entirety by reference to the complete text of the 2022 LTIP, which serves as Exhibit 4.2 to this Annual Report.
Administration
The compensation committee of our Board of Directors is the administrator of the 2022 LTIP. Except as provided otherwise under the 2022 LTIP, the administrator has plenary authority to grant awards pursuant to the terms of the 2022 LTIP to eligible individuals, determine the types of awards and the number of shares covered by the awards, establish the terms and conditions for awards and take all other actions necessary or desirable to carry out the purpose and intent of the 2022 LTIP.
Eligibility and Participation
The administrator selects the individuals who participate in the 2022 LTIP. Eligibility to participate is open to officers, directors and employees of, and other individuals who provide bona fide services to or for, us or any of our subsidiaries. Our Board of Directors may also select as participants prospective officers, employees and individual service providers who have accepted an offer of employment or another service relationship from us or one of our subsidiaries. Any awards granted to such a prospect before the individual’s start date may not become vested or exercisable, and no shares may be issued to such individual, before the date the individual first commences performance of services with us.
Share Pool Under the 2022 LTIP
The initial number of Freightos Ordinary Shares allocated to the 2022 LTIP in 2022 was 1,759,030. The number of Freightos Ordinary Shares available under the 2022 LTIP (the “Share Pool”) has been and will be subject to the following annual allocations and adjustments:
As of 11:59 p.m. Eastern time on December 31 of each calendar year during which the 2022 LTIP is in effect, the portion of the Share Pool that has not been allocated to any grant in that calendar year is canceled and not included in the Share Pool for any calendar year beginning thereafter. Following that annual cancelation, the Share Pool is then re-filled automatically by an increase on January 1 of the following calendar year, beginning on January 1, 2023 and for each of the subsequent nine calendar years, through (and including) January 1, 2032, in an amount equal to the lesser of (i) 5% of the number of Freightos Ordinary Shares issued and outstanding as of that January 1 date, or (ii) an amount determined by our Board of Directors prior to such date. Pursuant to that annual cancelation and refill mechanism, following the cancelation of all Freightos Ordinary Shares that were not allocated to grants at the conclusion of the previous year, on January 1, 2024, January 1, 2025, and January 1, 2026, 2,394,734, 2,486,345 and 2,568,845 Freightos Ordinary Shares, respectively, were added to the Share Pool, thereby constituting the available portion of the Share Pool for those respective years.
The following additional rules apply to the number of Freightos Ordinary Shares available under the Share Pool on an ongoing basis:
| ● | The Share Pool will be reduced by one share for each share made subject to an award granted under the 2022 LTIP; |
100
Table of Contents
| ● | The Share Pool will be increased by the number of unissued shares underlying or used as a reference measure for any award or portion of an award granted under the 2022 LTIP or the 2012 Incentive Plan that is cancelled, forfeited, expired, terminated unearned or settled in cash, in any such case without the issuance of shares; |
| ● | The Share Pool will be increased by the number of shares that are forfeited back to us after issuance due to a failure to meet an award contingency or condition with respect to any award or portion of an award granted under our 2022 LTIP or 2012 Incentive Plan; |
| ● | The Share Pool shall be increased, on the exercise date, by the number of shares withheld by or surrendered (either actually or through attestation) to the Company in payment of the exercise price of any award granted under the 2022 LTIP or the 2012 Incentive Plan; and |
| ● | The Share Pool shall be increased, on the relevant date, by the number of shares withheld by or surrendered (either actually or through attestation) to the Company in payment of any tax withholding obligation that arises in connection with any award granted under the 2022 LTIP or the 2012 Incentive Plan. |
In the event of a merger, consolidation, share rights offering, statutory share exchange or similar event affecting the Company or a share dividend, share split, reverse share split, separation, spinoff, reorganization, extraordinary dividend of cash or other property, share combination or subdivision, or recapitalization or similar event affecting the capital structure of the Company, our Board of Directors will make equitable and appropriate substitutions or proportionate adjustments to the Share Pool to reflect the transaction or event. Similar adjustments will be made to the award limitations described below and to the terms of outstanding awards.
Shares Available Under the 2022 LTIP
As of December 31, 2025, there were 7,388,918 Ordinary Shares underlying outstanding equity awards under the 2022 LTIP. In addition, as of December 31, 2025, there were 166,046 unallocated shares under the Share Pool, which were canceled from the Share Pool pursuant to the above-described annual cancelation mechanism. On January 1, 2026, there were 2,568,845 Freightos Ordinary Shares made available for awards in 2026 via the above-described refresh mechanism for the Share Pool.
ISO Award Limit
The maximum number of Freightos Ordinary Shares that may be issued in connection with awards granted under the 2022 LTIP that are intended to qualify as incentive stock options under Section 422 of the Code is 26,385,450.
Types of Awards
General. The 2022 LTIP enables the grant of share awards, performance shares, restricted share units, cash-based performance units, other share-based awards, share options, share appreciation rights, and share unit awards, each of which may be granted separately or in tandem with other awards. The administrator may establish sub-plans under the 2022 LTIP under which awards that qualify for preferred tax treatment for recipients in jurisdictions outside the U.S. may be granted.
Freightos has adopted a sub-plan for Israeli participants, which provides for granting awards in compliance with Section 102 (“Section 102”) and Section 3(i) of the Israeli Income Tax Ordinance (New Version), 5721-1961, as amended (the “ITO”). Section 102 allows employees, directors and officers who are not controlling shareholders and who are considered Israeli residents for tax purposes to receive favorable tax treatment for compensation in the form of shares, options or certain other types of equity awards, subject to certain terms and conditions. Our non-employee service providers and controlling shareholders who are considered Israeli residents for tax purposes may be granted awards under Section 3(i) of the ITO, which do not provide for similar tax benefits as Section 102.
Out of the three tax tracks that are available under Section 102 ((i) the “ordinary income track” with a trustee, (ii) the “capital gains track” with a trustee and (iii) grants without a trustee and without a trust period), Freightos has elected the “capital gain track” for grants to eligible Israeli grantees as provided above, which may allow favorable tax treatment for such grantees.
101
Table of Contents
Adjustments to Awards for Corporate Transactions and Other Events
Mandatory Adjustments. In the event of a merger, amalgamation, consolidation, share rights offering, share exchange or similar event affecting the Company (a “Corporate Event”) or a share dividend, share split, reverse share split, separation, spinoff, reorganization, extraordinary dividend of cash or other property, share combination or subdivision, or recapitalization, capital reduction distribution or similar event affecting the capital structure of the Company, the administrator will make equitable and appropriate substitutions or proportionate adjustments to:
| ● | the aggregate number and kind of shares or other securities that may be granted to eligible individuals under the 2022 LTIP; |
| ● | the maximum number of shares or other securities that may be issued with respect to incentive share options granted under the 2022 LTIP; |
| ● | the number of shares or other securities covered by each outstanding award and the exercise price, base price or other price per share, if any, and other relevant terms of each outstanding award; and |
| ● | all other numerical limitations relating to awards, whether contained in the 2022 LTIP or in award agreements. |
Notwithstanding the foregoing, any fractional shares resulting from the above mandatory adjustments will be eliminated.
Discretionary Adjustments. In addition to the adjustments specified above, in the case of Corporate Events, the administrator may make such other adjustments to outstanding awards as it determines to be appropriate and desirable, which adjustments may include, without limitation, (i) the cancellation of outstanding awards in exchange for payments of cash, securities or other property or a combination thereof having an aggregate value equal to the value of such awards, (ii) the substitution of securities or other property (including, without limitation, cash or other securities of the Company and securities of entities other than the Company) for the shares subject to outstanding awards, and (iii) the substitution of equivalent awards, as determined in the sole discretion of the administrator, of the surviving or successor entity or a parent thereof. The administrator may, in its discretion, adjust the performance goals applicable to any awards to reflect any unusual or non-recurring events and other extraordinary items, impact of charges for restructurings, discontinued operations and the cumulative effects of accounting or tax changes.
Repricing. The administrator may reprice any share options or share appreciation rights without the approval of the shareholders of the Company. For this purpose, “reprice” means (i) any of the following or any other action that has the same effect: (A) lowering the exercise price or base price of an option or share appreciation right after it is granted other than an adjustment made pursuant to the provisions of the 2022 LTIP, (B) any other action that is treated as a repricing under applicable accounting principles; (C) cancelling a share option or share appreciation right at a time when its exercise price or base price exceeds the fair market value of the underlying share, in exchange for another share option, share appreciation right, restricted share or other equity, unless the cancellation and exchange occurs in connection with a merger, acquisition, spin-off or other similar corporate transaction; and (ii) any other action that is considered to be a repricing under formal or informal guidance issued by the primary securities market or exchange on which the shares are listed or admitted for trading.
Treatment of Awards upon Dissolution or Liquidation or a Change in Control
Dissolution or Liquidation. Unless the administrator determines otherwise, all awards outstanding under the 2022 LTIP will terminate upon the dissolution or liquidation of the Company.
102
Table of Contents
Change in Control. Outstanding awards will terminate upon the effective time of a “Change in Control” unless provision is made in connection with the transaction for the continuation or assumption of such awards by, or for the issuance therefor of substitute awards of, the surviving or successor entity or a parent thereof. Solely with respect to awards that will terminate as a result of the immediately preceding sentence and except as otherwise provided in the applicable award agreement: (i) the outstanding awards of share options and share appreciation rights that will terminate upon the effective time of the change in control will, immediately before the effective time of the change in control, become fully exercisable and the holders of such awards will be permitted, immediately before the change in control, to exercise the awards; (ii) the outstanding restricted shares the vesting or restrictions on which are then solely time-based and not subject to achievement of performance goals will, immediately before the effective time of the change in control, become fully vested, free of all transfer and lapse restrictions and free of all risks of forfeiture; (iii) the outstanding restricted shares for which vesting or restrictions are then subject to, and pending achievement of, performance goals shall, immediately before the effective time of the change in control and unless the award agreement provides for vesting or lapsing of restrictions in a greater amount upon the occurrence of a change in control, become vested, free of transfer and without restrictions and risks of forfeiture in such amounts as if the applicable performance goals for the unexpired performance period had been achieved at the target level set forth in the applicable award agreement; (iv) the outstanding restricted share units, performance shares and performance units for which vesting, earning or settlement is then solely time-based and not subject to or pending achievement of performance goals shall, immediately before the effective time of the change in control, become fully earned and vested and shall be settled in cash or Freightos Ordinary Shares (consistent with the terms of the award agreement after taking into account the effect of the change in control transaction on the shares) as promptly as is practicable, subject to any applicable limitations imposed thereon by Section 409A of the Code; and (v) the outstanding restricted share units, performance shares and performance units for which vesting, earning or settlement is then subject to and pending achievement of performance goals shall, immediately before the effective time of the change in control and unless the award agreement provides for vesting, earning or settlement in a greater amount upon the occurrence of a change in control, become vested and earned in such amounts as if the applicable performance goals for the unexpired performance period had been achieved at the target level set forth in the applicable award agreement and shall be settled in cash or Freightos Ordinary Shares (consistent with the terms of the award agreement after taking into account the effect of the change in control transaction on the shares) as promptly as is practicable, subject to any applicable limitations imposed thereon by Section 409A or Section 457A of the Code.
Under the terms of the 2022 LTIP, a change in control is generally defined as (i) any acquisition by a person or entity, or persons or entities acting as a group, of more than 50% of the total fair market value or voting power of all of the Company’s shares, with certain exceptions, (ii) a contested change in the majority of the members of our Board of Directors within a 12-month period or (iii) acquisition by a person or entity, or persons or entities acting as a group, over a 12-month period of assets from the Company that have a total gross fair market value equal to or more than 50% of the total gross fair market value of all of the assets of the Company immediately prior to such acquisition(s).
Amendment and Termination
Our Board of Directors or the compensation committee may terminate, amend or modify the 2022 LTIP or any portion of it at any time; provided, that, (i) if required to comply with Cayman Islands law and any other applicable laws or marketplace or listing rules of a securities market or securities exchange (other than any requirement from which the Company may opt out based on any available home country exemption), the Company shall obtain shareholder approval of any 2022 LTIP amendment in such a manner and to such a degree as required, and (ii) no such termination or amendment may materially impair the rights of a participant with respect to a previously granted award (other than as required to comply with applicable law or the rules of any securities exchange or market on which the shares are listed or to prevent adverse tax or accounting consequences to the Company or the participant) without such participant’s consent.
The 2022 LTIP is scheduled to expire on May 31, 2032, which is ten years after its adoption by our Board of Directors. After that time, no further grants may be made under the 2022 LTIP, but any then-outstanding grants will remain subject to the terms of the plan.
C.Board Practices
Arrangements for Election of Directors and Members of Management
There are no arrangements or understandings with major shareholders or others pursuant to which any of our executive officers or directors are selected (although some directors were appointed pursuant to such arrangements which existed when we were still a private company).
103
Table of Contents
Corporate Governance Practices
We are a “foreign private issuer,” under the securities laws of the U.S. and the rules of Nasdaq. Under the applicable securities laws of the U.S., “foreign private issuers” are subject to different disclosure requirements than U.S. domiciled issuers. Under Nasdaq’s rules, a “foreign private issuer” is subject to less stringent corporate governance and compliance requirements and subject to certain exceptions, Nasdaq permits a “foreign private issuer” to follow its home country’s practice in lieu of the listing requirements of Nasdaq. Accordingly, our shareholders may not receive the same protections afforded to shareholders of companies that are subject to all of Nasdaq’s corporate governance requirements.
In addition, we are an “emerging growth company” as defined in the JOBS Act and have elected to comply with certain reduced public company reporting requirements.
Independence of Directors
As a result of the Freightos Ordinary Shares and Freightos Warrants being listed on Nasdaq, we comply with the rules of Nasdaq in determining whether a director is independent. Our Board of Directors has consulted, and will consult, with its counsel to ensure that our Board of Directors’ determinations are consistent with those rules and all relevant securities and other laws and regulations regarding the independence of directors. Nasdaq listing standards define an “independent director” as a person, other than an executive officer of a company or any other individual having a relationship which, in the opinion of the Freightos Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. The Nasdaq listing standards furthermore specify certain relationships that would preclude a determination that a particular director is independent. Our Board of Directors has determined that each of our directors, except for Messrs. Pinillos and Schaecher, is independent.
Board Leadership Structure and Role in Risk Oversight
Dr. Udo Lange serves as our Chairman of the Board.
Our Board of Directors determined, prior to appointing Dr. Lange as our independent Chairman of the Board in July 2025, that at this time it prefers to maintain a separation between the roles of Chairman and Chief Executive Officer, with Dr. Lange serving as our independent Chairman and Dr. Zvi Schreiber serving at the time as our Chief Executive Officer (Dr. Schreiber subsequently concluded his service as our Chief Executive Officer and Mr. Pinillos is now the Chief Executive Officer). Our Board believes that this structure is appropriate at this time in order to enhance the Board’s oversight of management, provide independent leadership and governance, and help ensure objectivity in the Board’s evaluation of management’s performance. Dr. Schreiber, as the founder of Freightos, remained at the time a member of the Board of Directors and as our Chief Executive Officer, before concluding his service as our Chief Executive Officer (as of the end of January 2026) and as a Board member (as of the end of February 2026).
With an independent Chairman leading the Board, we have established a governance structure that provides strong, independent oversight while maintaining clear lines of authority and accountability. The Chairman presides at all meetings of the Board, sets meeting agendas in consultation with the CEO and other directors, and serves as the principal liaison between the independent directors and management.
Meetings and Committees of the Board of Directors
We have established separately-standing committees, consisting of the audit committee, compensation committee, and nominating and corporate governance committee, and recently added a product, AI and technology committee of the Board as well.
Audit Committee
We have established an audit committee comprised entirely of independent directors. The audit committee currently consists of Tzvia Broida (chair), Ezra Gardner and Inna Kuznetsova. Each of the members of the audit committee is independent under the applicable Nasdaq listing rules and Rule 10A-3 under the Securities Exchange of 1934, as amended (the “Exchange Act”). The audit committee has a written charter. The purpose of the audit committee is, among other things, to appoint, retain, set compensation of, and supervise our independent accountants, review the results and scope of the audit and other accounting related services and review our accounting practices and systems of internal accounting and disclosure controls.
104
Table of Contents
Financial Experts on Audit Committee
The audit committee will at all times be composed exclusively of “independent directors,” as defined for audit committee members under Nasdaq listing standards and the rules and regulations of the SEC, who are “financially literate,” as defined under Nasdaq’s listing standards. Nasdaq’s listing standards define “financially literate” as being able to read and understand fundamental financial statements, including a company’s balance sheet, income statement and cash flow statement. In addition, we are required to certify to Nasdaq that the committee has, and will continue to have, at least one member who has past employment experience in finance or accounting, requisite professional certification in accounting, or other comparable experience or background that results in the individual’s financial sophistication.
Tzvia Broida serves as the financial expert on the audit committee.
Compensation Committee
We have established a compensation committee. The compensation committee currently consists of Inna Kuznetsova (chair), Ezra Gardner and Carl Vine. Each of the members of the compensation committee is independent under the applicable Nasdaq listing rules and Exchange Act Rule 10C-1. The compensation committee has a written charter. The purpose of the compensation committee is to review and approve compensation paid to our officers and directors and to administer our incentive compensation plans, if any, including authority to make and modify awards under such plans.
The compensation committee assists the Board in determining its responsibilities in relation to remuneration, including, amongst other matters, making recommendations to the Board on the Company’s policy on executive compensation, determining the individual remuneration and benefits package of each of the executive directors and recommending and monitoring the remuneration of senior management.
Nominating and Corporate Governance Committee
We have established a nominating and corporate governance committee. The nominating and corporate governance committee currently consists of Udo Lange (chair) and Carl Vine. Each of the members of the nominating and corporate governance committee is independent under the applicable Nasdaq listing rules. The nominating and corporate governance committee has a written charter. The purpose of the committee is to identify and recommend to the Board individuals it determines to be well-qualified, willing and available to serve as directors of the Company and on committees of the Board; to advise the Board with respect to the Board composition, procedures and committees; to review periodically the size of the Board and recommend to the Board any appropriate changes; and to develop and recommend to the Board a set of corporate governance principles applicable to the Company.
Product, AI and Technology Committee
We have established a product, AI and technology committee. The product, AI and technology committee currently consists of Rotem Hershko and Michael Schaecher. The product, AI and technology committee has a written charter. The purpose of the committee is to enhance collaboration between the Board and our executive leadership team by providing oversight, strategic guidance, and risk awareness in the areas of products and technology, specifically in evolving technologies. It supports the Board in making data-driven decisions and shaping the Company’s long-term strategic direction, identifying strategic opportunities, maintaining a competitive edge in product and technology, and supporting the evaluation of strategic investment and acquisition opportunities.
D. Employees
The following is a summary of our full-time equivalent headcount, by category of activity, and geographic location, as of December 31, 2025, 2024 and 2023:
105
Table of Contents
| Research & | | Sales & | | | General & | | |||
Development | Marketing | Operations | Administrative | Total | ||||||
Full-time equivalent headcount as of: |
|
|
|
|
| |||||
December 31, 2025 | 136 | 86 | 115 | 45 | 382 | |||||
December 31, 2024 | 143 | 84 | 106 | 46 | 378 | |||||
December 31, 2023 | 132 | 74 | 102 | 42 | 350 |
North | ||||||||||
| Middle East | | America | | Europe | | Asia | | Total | |
Full-time equivalent headcount as of: | ||||||||||
December 31, 2025 | 117 | 76 | 151 | 38 | 382 | |||||
December 31, 2024 | 122 | 71 | 146 | 39 | 378 | |||||
December 31, 2023 | 134 | 63 | 122 | 31 | 350 |
We are pleased to have a diverse team with 46% of our employees being women, which is well above average for technology companies. We are one of the largest and best-known high-tech employers in the developing Palestinian economy, and we invest in bringing more people into the still small circle of highly skilled tech jobs in that location.
We have a hybrid model where team members may work from home some days of the week or a certain number of days per month. Employees who live far from any office may work entirely remotely. The exact nature of our office/work-from-home hybrid is adjusted based on local customs and regulations in each country and revised from time to time.
E. Share Ownership
Ownership of the Company’s shares by its directors and executive officers upon consummation of the Business Combination is set forth in Item 7.A of this Annual Report.
F. Disclosure of a Registrant’s Action to Recover Erroneously Award Compensation
Not applicable.
ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
A. Major Shareholders
The following table sets forth information regarding the beneficial ownership of Freightos Ordinary Shares as of March 1, 2026 by:
| ● | each person who is the beneficial owner of more than 5% of the outstanding shares of any series of our voting ordinary shares; |
| ● | each of our directors and executive officers; and |
| ● | all executive officers and directors of the Company, as a group. |
The beneficial ownership of Ordinary Shares of the Company is based on 51,683,498 Ordinary Shares issued and outstanding as of March 1, 2026.
Beneficial ownership is determined in accordance with the rules of the SEC and includes voting or investment power with respect to, or the power to receive the economic benefit of ownership of, the securities. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, shares that the person has the right to acquire within 60 days are included, including through the exercise of any option or other right or the conversion of any other security. However, these shares are not included in the computation of the percentage ownership of any other person.
106
Table of Contents
Unless otherwise indicated, we believe that all persons named in the table have sole voting and investment power with respect to all of our Ordinary Shares beneficially owned by them.
| Number of Shares | | Percentage of |
| |
Name of Beneficial Owner | Beneficially Owned | Outstanding Shares |
| ||
Directors and executive officers | |||||
Pablo Pinillos |
| 55,333 | (1) | * | % |
Enric Alventosa Arbil | 138,932 | (2) | * | % | |
Ian Arroyo |
| 324,664 | (3) | * | % |
Eytan Buchman |
| 356,614 | (4) | * | % |
Andrea Indave | 26,440 | (5) | * | % | |
Michael Oberlander |
| 245,585 | (6) | * | % |
Udo Lange | 55,800 | (7) | * | % | |
Tzvia Broida |
| 12,750 | (8) | * | % |
Mark A.P. Drusch |
| 4,538,600 | (9) | 8.8 | % |
Ezra Gardner |
| 57,612 | (10) | * | % |
Rotem Hershko | 12,951 | (11) | * | % | |
Inna Kuznetsova |
| — | — | ||
Michael Schaecher | 5,401 | (12) | * | % | |
Carl Vine | 9,866,094 | (13) | 18.0 | % | |
All directors and executive officers as a group (fourteen individuals) |
| 15,696,776 | 28.2 | % | |
Five Percent or More Holders (other than directors and executive officers) |
| ||||
Zvi Schreiber |
| 3,771,421 | (14) | 7.2 | % |
Aleph, L.P. |
| 3,544,394 | (15) | 6.9 | % |
Alshaffafia Trading W.L.L. |
| 4,495,468 | (16) | 8.7 | % |
Asian Gateway Investments Pte. Ltd. |
| 4,749,856 | 9.2 | % | |
M&G Investment Management Limited |
| 9,866,094 | (13) | 18.0 | % |
* | Less than 1% |
| (1) | Includes 13,333 Freightos Ordinary Shares issuable within 60 days of March 1, 2026 upon the vesting of RSUs. |
| (2) | Includes 135,693 Freightos Ordinary Shares issuable within 60 days of March 1, 2026, of which 130,168 are issuable upon the exercise of options (35,181 at an exercise price of $4.17, with an expiration date of April 27, 2031; 58,048 at an exercise price of $4.17, with an expiration date of February 17, 2032; and 36,939 at an exercise price of $8.44, with an expiration date of November 2, 2032), and 5,525 are issuable upon the vesting of RSUs. |
| (3) | Includes 299,865 Freightos Ordinary Shares issuable within 60 days of March 1, 2026, of which 290,461 are issuable upon the exercise of options (49,473 at an exercise price of $1.07, with an expiration date of December 16, 2030; 12,314 at an exercise price of $4.17, with an expiration date of July 19, 2031; and 228,674 at an exercise price of $4.17, with an expiration date of February 17, 2032), and 9,404 are issuable upon the vesting of RSUs. |
| (4) | Includes 310,692 Freightos Ordinary Shares issuable within 60 days of March 1, 2026, of which 305,108 are issuable upon the exercise of options (590 at an exercise price of $0.85, with an expiration date of January 23, 2027; 14,073 at an exercise price of $0.85, with an expiration date of July 14, 2027; 34,681 at an exercise price of $1.07, with an expiration date of January 21, 2029; 35,181 at an exercise price of $1.07, with an expiration date of January 12, 2030; 125,595 at an exercise price of $1.44, with an expiration date of July 14, 2030; and 94,988 at an exercise price of $4.17, with an expiration date of February 17, 2032), and 5,584 are issuable upon the vesting of RSUs. |
| (5) | Includes 15,246 Freightos Ordinary Shares issuable within 60 days of March 1, 2026, of which 13,105 are issuable upon the exercise of options (7,476 at an exercise price of $1.45, with an expiration date of November 6, 2029, and 5,629 at an exercise price of $4.17, with an expiration date of February 17, 2032), and 2,141 are issuable upon the vesting of RSUs. |
| (6) | Includes 173,782 Freightos Ordinary Shares issuable within 60 days of March 1, 2026, of which 168,692 are issuable upon the exercise of options (49,253 at an exercise price of $4.17, with an expiration date of April 27, 2031; 27,090 at an exercise price of $4.17, with an expiration date of February 17, 2032; and 92,349 at an exercise price of $8.44, with an expiration date of November 2, 2032), and 5,090 are issuable upon the vesting of RSUs. |
107
Table of Contents
| (7) | Includes 3,858 Freightos Ordinary Shares issuable within 60 days of March 1, 2026 upon the vesting of RSUs. |
| (8) | Includes 3,858 Freightos Ordinary Shares issuable within 60 days of March 1, 2026 upon the vesting of RSUs. |
| (9) | Includes 2,122 Freightos Ordinary Shares issuable within 60 days of March 1, 2026 upon the vesting of RSUs held by Mr. Drusch, and 4,495,468 Freightos Ordinary Shares held by Qatar Airways Group Q.C.S.C. and Alshaffafia Trading W.L.L., a wholly owned subsidiary of Qatar Airways Group Q.C.S.C. Mr. Drusch is the Chief Officer Cargo of Qatar Airways Group Q.C.S.C. The business address of Mr. Drusch is Qatar Airways Tower 1, P.O. Box. 22550, Doha, State of Qatar. |
| (10) | Includes 2,122 Freightos Ordinary Shares issuable within 60 days of March 1, 2026 upon the vesting of RSUs. |
| (11) | Includes 2,701 Freightos Ordinary Shares issuable within 60 days of March 1, 2026 upon the vesting of RSUs. |
| (12) | Includes 2,701 Freightos Ordinary Shares issuable within 60 days of March 1, 2026 upon the vesting of RSUs. |
| (13) | Consists of 6,871,094 Freightos Ordinary Shares and 2,995,000 Freightos Ordinary Shares underlying the Freightos Warrants owned by M&G Investment Management Limited (where Mr. Vine is Co-Head of the Asia Pacific Equity Team), an affiliate of The Prudential Assurance Company Limited, all of which are currently exercisable. |
| (14) | Includes 396,987 Freightos Ordinary Shares issuable within 60 days of March 1, 2026 upon the exercise of options, vesting of RSUs and payout of performance share units related to performance in 2025. Excludes 400,000 Freightos Ordinary Shares that Dr. Schreiber donated to donor-advised funds, and over which he may be considered to have some advisory dispositive power. |
| (15) | Represents Freightos Ordinary Shares held by Aleph, L.P. and its affiliated entity Aleph-Aleph, L.P. Aleph Equity Partners, L.P. is the general partner of Aleph, L.P. and Aleph-Aleph, L.P., and Aleph EP, Ltd is the general partner of the Aleph Equity Partners, L.P. Aleph Equity Partners, L.P. and Aleph EP, Ltd may be deemed to have sole power to vote and dispose of the shares held through Aleph, L.P. and Aleph-Aleph, L.P. Michael Eisenberg is a director of Aleph EP, Ltd. and may be deemed to have shared power to vote and dispose of the shares held by each of these entities. Mr. Eisenberg disclaims beneficial ownership of any Freightos shares other than to the extent of his direct or indirect pecuniary interest therein. |
| (16) | Consists of 4,495,468 Freightos Ordinary Shares held by Qatar Airways Group Q.C.S.C. and Alshaffafia Trading W.L.L., a wholly owned subsidiary of Qatar Airways Group Q.C.S.C. The business address of each of the foregoing entities is Qatar Airways Tower 1, P.O. Box. 22550, Doha, State of Qatar. |
Significant changes in holdings of major shareholders
Throughout 2024 and 2025, Gesher I Sponsor LLC distributed its holdings of our ordinary shares and warrants to its members, following the expiration of the lock-up period under the Sponsor Lock-Up Agreement to which it was party (as defined and described in Item 7.B below), thereby causing its holdings of our ordinary shares to drop below 5%. That decrease in beneficial ownership is also reflected in the holdings of our director, Ezra Gardner, who had been deemed to beneficially own all of the securities held by the Sponsor.
Other than as described above, there were no significant changes in the percentage ownership of any of our major shareholders during the year ended December 31, 2025 relative to the percentage ownership for each such major shareholder disclosed in our annual report on Form 20-F for the year ended December 31, 2024 filed on March 24, 2025.
Voting rights of major shareholders
Our major shareholders do not have different voting rights than other shareholders with respect to the Freightos Ordinary Shares that they hold.
108
Table of Contents
Holders of record
As of March 1, 2026, there were 65 holders of record of the Freightos Ordinary Shares, including 15 holders of record with addresses in the United States who held a total of 38,274,515 Freightos Ordinary Shares (out of which 35,187,674 Freightos Ordinary Shares are held of record by CEDE & Co), representing approximately 74% of our issued and outstanding Freightos Ordinary Shares. The number of record holders in the United States is not representative of the number of beneficial holders, nor is it representative of where such beneficial holders are resident, because many of these shares were held of record by nominees (including CEDE & Co., as nominee for a large number of banks, brokers, institutions and underlying beneficial holders of our Freightos Ordinary Shares). In particular, we are aware that several of our significant shareholders that hold shares as underlying beneficial holders (via CEDE & Co as the record holder) are not United States entities.
Change of Control of the Company
Based on the significant holdings of Freightos Ordinary Shares by several unrelated entities, no individual shareholder or group may be deemed to control the Company. We are furthermore unaware of any arrangements the operation of which may at a subsequent date result in a change of control of the Company.
B. Related-Party Transactions
The following is a description of certain related party transactions in effect at any time since January 1, 2025 until the date of this Annual Report with any of our executive officers, directors or their affiliates, and holders of more than 10% of any class of our voting securities in the aggregate, which we refer to as related parties, other than compensation arrangements, which are described in “Item 6.B. Directors, Senior Management and Employees - Compensation.”
Lock-Up Agreements
Sponsor Holders
Simultaneously with the execution and delivery of the Business Combination Agreement, certain members of the Sponsor entered into lock-up agreements (the “Sponsor Lock-Up Agreements”). Pursuant to the Sponsor Lock-Up Agreements, each Sponsor Holder agreed not to sell, hypothecate, pledge, hedge, grant any option to purchase or otherwise dispose of, directly or indirectly, establish or increase certain derivative provisions with respect to Restricted Securities, or transfer economic ownership of Restricted Securities, or make a public announcement of the intention to effect any such transaction, for the duration of the Sponsor Lock-Up Period (i.e., until the 36-month anniversary of the Closing, or January 25, 2026) (the “Sponsor Lock-Up Restrictions”). However, (i) at each nine-month anniversary of the closing date, 25% of the Restricted Securities attributable to each Sponsor Holder ceased to be deemed Restricted Securities and (ii) if prior to the end of the Sponsor Lock-Up Period, a change of control of Freightos occurs, then all of the then Restricted Securities would have ceased to be deemed Restricted Securities. When Restricted Securities ceased to be Restricted Securities, such released securities may be transferred without regard to the Sponsor Lock-Up Restrictions.
Freightos Shareholders
Simultaneously with the execution and delivery of the Business Combination Agreement, certain shareholders of Freightos entered into lock-up agreements (the “Freightos Lock-Up Agreements” and, collectively with the Sponsor Lock-Up Agreements, the “Lock-Up Agreements”). The Freightos Lock-Up Agreements are substantially similar to the Sponsor Lock-Up Agreements, except that (i) Restricted Securities included only Freightos Ordinary Shares and Freightos Ordinary Shares underlying options to acquire Freightos Ordinary Shares and (ii) the Freightos Holders were prohibited from transferring Restricted Securities for the duration of the Freightos Lock-Up Period (i.e., until the 24-month anniversary of the Closing, or January 25, 2025); provided, however, that (a) at each six month anniversary of the date on which closing occurs, 25% of Restricted Securities attributable to each Freightos Holder ceased to be deemed Restricted Securities and (b) if at any time after the closing but prior to the end of the Freightos Lock-Up Period, a change of control was to occur, then all of the then Restricted Securities were to cease to be deemed Restricted Securities. The Freightos Lock-Up Agreement with Asian Gateway Investments Pte. Ltd. permitted Asian Gateway Investments Pte. Ltd. to make certain transfers that are not conducted on Nasdaq, subject to certain conditions.
109
Table of Contents
In addition, Freightos imposed a lock-up on its employees and former employees who may acquire or have acquired Freightos Ordinary Shares pursuant to the 2012 Incentive Plan. Such holders were also prohibited from transferring their Restricted Securities during the Freightos Lock-Up Period; provided, however, that (a) at each six-month anniversary of the date on which the Closing occurs, 25% of the Restricted Securities attributable to each such holder ceased to be deemed Restricted Securities. Freightos imposed a blackout period prohibiting the resale of Freightos Ordinary Shares issued pursuant to grants made under the 2022 LTIP, which expired on July 26, 2023.
Registration Rights Agreements
Pursuant to a certain PIPE Agreement (described below under “Relationship with Qatar Airways—PIPE Agreement”), Forward Purchase Agreement and Backstop Agreement, each of which provided us with certain financing arrangements in connection with the Business Combination, Freightos agreed to file a registration statement within 30 days after the consummation of the Business Combination registering the resale of up to 7,000,000 Freightos Ordinary Shares by certain investors in our company who provided us with that financing and who acquired those shares at the time of the Business Combination.
At the time of the Closing of the Business Combination, we furthermore entered into a registration rights agreement with certain pre-Business Combination shareholders of Freightos, as required under the Business Combination Agreement.
We are also required to provide registration rights to the Sponsor and EarlyBird Capital, Inc. (“EarlyBird”) under a registration rights agreement that Gesher had entered into with the Sponsor and EarlyBird at the time of Gesher’s IPO and which was amended at the Closing of the Business Combination to, among other things, have Freightos assume the obligations of Gesher under the agreement.
Pursuant to the two registration rights agreements (the “Registration Rights Agreements”), Freightos agreed to file a registration statement on behalf of the parties to the agreements, and granted the holders customary demand and piggyback rights. Additionally, pursuant to the Registration Rights Agreements, the parties thereto may demand to sell their registrable securities in an underwritten takedown provided that Freightos shall only be obligated to effect an underwritten takedown if such underwritten offering shall include registrable securities proposed to be sold by the holders making the demand with a total offering price reasonably expected to exceed, in the aggregate, $40,000,000; provided further that Freightos shall not be obligated to effect more than two underwritten takedowns within any 12 month under each Registration Rights Agreement. Freightos will bear all costs and expenses incurred in connection with the filing of any such registration statements, other than all incremental selling expenses relating to the sale of registrable securities, such as underwriters’ commissions and discounts, brokerage fees, underwriter marketing costs and all reasonable fees and expenses of any legal counsel representing the Holders.
Our registration statement on Form F-1, filed with the SEC on February 22, 2023 and declared effective by the SEC on May 1, 2023, and which was amended by Post-Effective Amendment No. 1 to Form F-1, which was declared effective by the SEC on September 22, 2023, initially fulfilled our registration obligations to each of the above-described parties. On June 18, 2024, we filed, and on June 27, 2024, the SEC declared effective, a shelf registration statement on Form F-3 that replaced the foregoing Form F-1 in fulfilling our above-described registration obligations to our shareholders.
Agreements with Directors and Officers
Employment Agreements
We have entered into written employment agreements with each of our executive officers. The agreements provide the terms of each individual’s employment with Freightos. Each employment agreement contains provisions regarding non-competition, non-solicitation, confidentiality of information and assignment of inventions. The enforceability of the non-competition covenants is subject to limitations. Either we or the executive officer may terminate the applicable executive officer’s employment by giving advance written notice to the other party. We may also terminate an executive officer’s employment agreement for cause (as defined in the applicable employment agreement).
Equity Awards
We have granted equity awards in the form of share options and RSUs to our employees, including our executive officers, under our equity incentive plans. For more information about our equity incentive plans, please refer to the section of this Annual Report titled, “Item 6.B. Directors, Senior Management and Employees - Compensation.”
110
Table of Contents
Indemnification and Insurance
We have entered into indemnification agreements with each of our directors and officers and purchased directors’ and officers’ liability insurance. The indemnification agreements and the Freightos A&R Articles contain provisions limiting the liability of directors and officers, require us to indemnify each of our directors and officers to the fullest extent permitted under applicable law, and permit us to purchase and maintain directors’ and officers’ liability insurance.
Relationship with Qatar Airways
Strategic Agreement
Freightos and Qatar Airways (which, together with the PIPE Investor, as described below, holds in excess of 5% of the currently outstanding Freightos Ordinary Shares), entered into a strategic agreement, dated March 17, 2021, pursuant to which, among other things, we agreed to provide certain electronic booking services at discounted rates, as well as to offer certain SaaS license discounts, to Qatar Airways. In connection with the execution of the PIPE Agreement (described under “PIPE Agreement” below), Freightos and Qatar Airways entered into an amended and restated strategic agreement, dated May 31, 2022, pursuant to which, among other adjustments, the term of the arrangement between us and Qatar Airways was extended for five years following the Closing, subject to early termination based on the ownership level of Qatar Airways, together with its affiliates, in Freightos.
PIPE Agreement
Concurrently with the execution of the Business Combination Agreement, Gesher, Freightos and Alshaffafia Trading W.L.L an affiliate of Qatar Airways (the “PIPE Investor”), entered into a PIPE Subscription Agreement (the “PIPE Agreement”), pursuant to which the PIPE Investor committed to a PIPE financing for our company. The PIPE Investor and Qatar Airways together hold currently in excess of 5% of the outstanding Freightos Ordinary Shares. The PIPE Agreement provides certain resale registration rights to the PIPE Investor with respect to the Freightos Ordinary Shares held by the PIPE Investor and Qatar Airways and acquired in connection with the PIPE Financing and the recapitalization effected at the time of the Business Combination. Our registration statement on Form F-1, filed with the SEC on February 22, 2023 and declared effective by the SEC on May 1, 2023, and which was amended by Post-Effective Amendment No. 1 to Form F-1, which was declared effective by the SEC on September 22, 2023, was filed pursuant to (among other shareholders’ registration rights) those registration rights. That registration statement was replaced by our registration statement on Form F-3, filed on June 18, 2024, and declared effective on June 27, 2024, in fulfilling those registration obligations.
DACC
We established a Digital Air Cargo Council (the “DACC”) with the intent of bringing together cargo airline groups committed to pioneering digital air cargo and driving industry digitalization efforts to improve airline cargo efficiency and air cargo customer experience for forwarders and end-customers. As of the date of this Annual Report, three airline groups, including Qatar Airways, had joined the DACC. We issued 94,988 Freightos Ordinary Shares to each airline group upon establishment of the DACC. We issued a total of 815,711 Freightos Ordinary Shares to the three airline groups, including 328,897 Freightos Ordinary Shares to Qatar Airways for attaining certain eBooking targets. Each of those airline groups negotiated and entered into a rates and eBookings transmission agreement with us, which established fees charged which, in some cases, are more favorable than terms generally available to a third-party under the same or similar circumstances.
Commercial Agreements
We are currently party to certain commercial agreements with subsidiaries of Singapore Exchange Limited (“SGX”) in connection with certain ocean cargo indexes. The Baltic Exchange, a subsidiary of SGX, serves as benchmark administrator for the indexes, and Freightos serves as the calculating agent of these indexes. In addition, the parties share the revenue from the sale of certain data used in calculating the indexes. Asian Gateway Investments Pte. Ltd. is a subsidiary of SGX and a holder of in excess of 5% of the currently outstanding Freightos Ordinary Shares.
111
Table of Contents
Procedures for Related Person Transactions
Our Board of Directors has adopted a written code of business conduct and policy with respect to related person transactions. Under the code of business conduct and policy, our employees, officers and directors are discouraged from entering into any transaction that may cause a conflict of interest for Freightos, unless such transaction has been specifically authorized by the appropriate persons within Freightos. In addition, the policy requires that potential conflicts of interest, including related person transactions, be reported to the appropriate persons within Freightos for review. Pursuant to the policy, our audit committee is required to approve any related person transactions (as defined in the policy), including those transactions involving our directors or officers. In approving or rejecting such proposed transactions, the audit committee is required to consider the relevant facts and circumstances available and deemed relevant to the audit committee, including the material terms of the transactions, benefits, costs, availability of other comparable services or products and, if applicable, the impact on a director’s independence. The audit committee will approve only those transactions that, in light of known circumstances, are in, or are not inconsistent with, Freightos’ best interests, as the audit committee determines in the good faith exercise of its discretion.
C. Interests of Experts and Counsel
Not applicable.
ITEM 8. FINANCIAL INFORMATION
A. Consolidated Statements and Other Financial Information
Financial Statements
Consolidated financial statements have been filed as part of this Annual Report. See “Item 18 Financial Statements.”
Legal Proceedings
From time to time, we may become involved in legal proceedings arising in the ordinary course of our business. We are not presently a party to any legal proceedings that, in the opinion of our management, may have, or have had in the recent past, a significant effect on our financial position or profitability. Regardless of the outcome, litigation can have an adverse impact on us due to defense and settlement costs, diversion of management resources, negative publicity, reputational harm and other factors.
Dividend Policy
We have not paid any dividends on the Freightos Ordinary Shares to our shareholders and do not intend to pay cash dividends to our shareholders in the foreseeable future.
B. Significant Changes
Not applicable.
ITEM 9. THE OFFER AND LISTING
A. Offer and Listing Details
Freightos Ordinary Shares and Freightos Warrants are listed on Nasdaq under the symbols “CRGO” and “CRGOW”, respectively. Holders of Freightos Ordinary Shares and Freightos Warrants should obtain current market quotations for their securities.
B. Plan of Distribution
Not applicable.
C. Markets
See “Item 9.A. Offer and Listing Details” for more information.
112
Table of Contents
D. Selling Shareholders
Not applicable.
E. Dilution
Not applicable.
F. Expenses of the Issue
Not applicable.
ITEM 10. ADDITIONAL INFORMATION
A. Share Capital
Not applicable.
B. Memorandum and Articles of Association
The Amended and Restated Memorandum and Articles of Association of the Company (the “Freightos A&R Articles”), which became effective as of January 25, 2023, serve as Exhibit 1.1 to this Annual Report. Please refer to Exhibit 1.1 to this Annual Report for more information. The description of the Freightos A&R Articles is included in Exhibit 2.1 to this Annual Report under the heading “Description of Freightos Share Capital,” which information is incorporated herein by reference.
C. Material Contracts
We are not party to any material contract since January 1, 2024, other than contracts entered into in the ordinary course of business, or as otherwise described in this Item 10.C.
Material Contracts Relating to Freightos’ Operations and Share Capital
The description of material contracts related to Freightos’ operations and Freightos’ share capital (including registration rights agreements entered into as of the time of the Business Combination, and related registration rights undertakings) that is set forth in “Item 7.B. - Major Shareholders and Related Party Transactions - Related Party Transactions” is incorporated by reference in this Item 10.C.
Material Contracts Relating to the Business Combination
Ancillary Agreements Related to Business Combination
Certain agreements were entered into in connection with the Business Combination, including the Lock-Up Agreements, and the Registration Rights Agreements, which have remained in effect past January 1, 2024. See the section of this Annual Report titled “Item 7.B. - Major Shareholders and Related Party Transactions- Related Party Transactions” for more information.
Please see “Item 4.A History and Development of the Company” in this Annual Report for additional information concerning the Business Combination Agreement and related agreements.
D. Exchange Controls
There are no governmental laws, decrees, regulations or other legislation in the Cayman Islands that may affect the import or export of capital, including the availability of cash and cash equivalents for use by Freightos, or that may affect the remittance of dividends, interest, or other payments by Freightos to non-resident holders of Freightos Ordinary Shares. There is no limitation imposed by laws of Cayman Islands or in the Freightos A&R Articles on the right of non-residents to hold or vote Freightos Ordinary Shares.
113
Table of Contents
E. Taxation
The following is a summary of the material U.S., Israeli, and Cayman Islands tax consequences for acquiring, owning, and disposing of securities.
Certain Material U.S. Federal Income Tax Considerations
The following discussion is a summary of certain material U.S. federal income tax considerations of the ownership and disposition of Freightos Ordinary Shares and Freightos Warrants. This discussion applies only to U.S. Holders of Freightos Ordinary Shares and/or Freightos Warrants, as the case may be, that are held as “capital assets” (generally, property held for investment) within the meaning of Section 1221 of the Code.
The following does not purport to be a complete analysis of all potential tax considerations arising in connection with the ownership and disposition of Freightos Ordinary Shares and Freightos Warrants. The effects and considerations of other U.S. federal tax laws, such as estate and gift tax laws, alternative minimum tax, the Net Investment Income Tax, or Medicare contribution tax considerations and any applicable state, local or non-U.S. tax laws are not discussed. This discussion is based on the Code, regulations promulgated by the U.S. Department of the Treasury thereunder (“Treasury Regulations”), judicial decisions and published rulings and administrative pronouncements of the IRS, in each case in effect as of the date hereof. These authorities include the One Big Beautiful Bill Act (the “OBBBA”), enacted on July 4, 2025, which permanently extended and modified numerous provisions of the Tax Cuts and Jobs Act of 2017. These authorities may change or be subject to differing interpretations. Any such change or differing interpretation may be applied retroactively in a manner that could adversely affect the tax consequences discussed below. Freightos has not sought nor will seek any rulings from the IRS regarding the matters discussed below. There can be no assurance the IRS will not take, or a court will not sustain, a contrary position regarding the tax considerations discussed below.
This discussion does not address all U.S. federal income tax considerations relevant to a holder’s particular circumstances. In addition, it does not address considerations relevant to holders subject to special rules, including, without limitation:
| ● | persons that are not U.S. Holders; |
| ● | the Sponsor and its direct and indirect owners, and officers or directors of Gesher; |
| ● | banks, insurance companies, and certain other financial institutions; |
| ● | regulated investment companies and real estate investment trusts; |
| ● | brokers, dealers or traders in securities; |
| ● | traders in securities that elect to mark to market; |
| ● | tax-exempt organizations or governmental organizations; |
| ● | U.S. expatriates and former citizens or long-term residents of the United States; |
| ● | persons holding Freightos Ordinary Shares and/or Freightos Warrants, as the case may be, as part of a hedge, straddle, constructive sale, or other risk reduction strategy or as part of a conversion transaction or other integrated investment; |
| ● | persons subject to special tax accounting rules as a result of any item of gross income with respect to Freightos Ordinary Shares and/or Freightos Warrants, as the case may be, being taken into account in an applicable financial statement; |
| ● | persons that actually or constructively own 5% or more (by vote or value) of the outstanding Freightos Ordinary Shares; |
| ● | “controlled foreign corporations,” PFICs and corporations that accumulate earnings to avoid U.S. federal income tax; |
| ● | S corporations, partnerships or other entities or arrangements treated as partnerships or other flow- through entities for U.S. federal income tax purposes (and investors therein); |
114
Table of Contents
| ● | U.S. Holders having a functional currency other than the U.S. dollar; |
| ● | persons subject to the “base erosion and anti-abuse” tax; |
| ● | persons who hold or received Freightos Ordinary Shares and/or Freightos Warrants, as the case may be, pursuant to the exercise of any employee share option or otherwise as compensation; and |
| ● | pension plans and tax-qualified retirement plans. |
For purposes of this discussion, a “U.S. Holder” is any beneficial owner of shares of Freightos Ordinary Shares and/or Freightos Warrants, as the case may be, that is for U.S. federal income tax purposes:
| ● | an individual who is a citizen or resident of the United States; |
| ● | a corporation (or other entity taxable as a corporation) created or organized under the laws of the United States, any state thereof, or the District of Columbia; |
| ● | an estate, the income of which is subject to U.S. federal income tax regardless of its source; or |
| ● | a trust that (1) is subject to the primary supervision of a U.S. court and the control of one or more “United States persons” (within the meaning of Section 7701(a)(30) of the Code), or (2) has a valid election in effect to be treated as a “United States person” (within the meaning of Section 7701(a)(30) of the Code) for U.S. federal income tax purposes. |
If an entity or arrangement treated as a partnership for U.S. federal income tax purposes holds Freightos Ordinary Shares and/or Freightos Warrants, the tax treatment of an owner of such entity will depend on the status of the owners, the activities of the entity or arrangement and certain determinations made at the owner level. Accordingly, entities or arrangements treated as partnerships for U.S. federal income tax purposes and the partners in such partnerships should consult their tax advisors regarding the U.S. federal income tax consequences to them.
THE U.S. FEDERAL INCOME TAX TREATMENT OF OWNING FREIGHTOS ORDINARY SHARES AND FREIGHTOS WARRANTS TO ANY PARTICULAR U.S. HOLDER WILL DEPEND ON THE U.S. HOLDER’S PARTICULAR TAX CIRCUMSTANCES. YOU ARE URGED TO CONSULT YOUR TAX ADVISOR REGARDING THE U.S. FEDERAL, STATE, AND LOCAL, AND NON-U.S. INCOME AND OTHER TAX CONSEQUENCES TO YOU, IN LIGHT OF YOUR PARTICULAR INVESTMENT OR TAX CIRCUMSTANCES, OF ACQUIRING, HOLDING, AND DISPOSING OF FREIGHTOS ORDINARY SHARES AND FREIGHTOS WARRANTS.
U.S. Federal Income Tax Considerations of Ownership and Disposition of Freightos Ordinary Shares and Freightos Warrants
Distributions on Freightos Ordinary Shares
Subject to the discussion below under the subsection titled “— Passive Foreign Investment Company Rules”, if Freightos makes distributions of cash or property on the Freightos Ordinary Shares, such distributions will be treated for U.S. federal income tax purposes first as a dividend to the extent of Freightos’ current and accumulated earnings and profits (as determined for U.S. federal income tax purposes), and then as a tax-free return of capital to the extent of the U.S. Holder’s tax basis, with any excess treated as capital gain from the sale or exchange of the shares. If Freightos does not provide calculations of its earnings and profits under U.S. federal income tax principles, a U.S. Holder should expect all cash distributions to be reported as dividends for U.S. federal income tax purposes. Any dividend will not be eligible for the dividends received deduction allowed to corporations in respect of dividends received from U.S. corporations.
Subject to the discussion below under the subsection titled “— Passive Foreign Investment Company Rules,” dividends received by certain non-corporate U.S. Holders (including individuals) may be “qualified dividend income,” which is taxed at the lower applicable capital gains rate, provided that:
| ● | either (a) the shares are readily tradable on an established securities market in the United States, or (b) Freightos is eligible for the benefits of a qualifying income tax treaty with the United States that includes an exchange of information program; |
115
Table of Contents
| ● | Freightos is neither a PFIC (as discussed below under below under the subsection titled “— Passive Foreign Investment Company Rules”) nor treated as such with respect to the U.S. Holder for Freightos’ taxable year in which the dividend is paid or the preceding taxable year; |
| ● | the U.S. Holder satisfies certain holding period requirements; and |
| ● | the U.S. Holder is not under an obligation to make related payments with respect to positions in substantially similar or related property. |
Pursuant to the OBBBA, the individual income tax rates and brackets originally established under the Tax Cuts and Jobs Act of 2017, including the top marginal rate of 37%, have been made permanent for tax years beginning after December 31, 2025. Additionally, for tax year 2025, the OBBBA provides a temporary deduction for “qualified tips” and “qualified overtime” income for certain eligible workers, which may impact the effective tax rate for a subset of U.S. Holders.
It is not expected that Freightos will be eligible for benefits of an applicable comprehensive income tax treaty with the United States. In addition, the Freightos Ordinary Shares are listed on Nasdaq (which is an established securities market in the United States), but there can be no assurance that they will be “regularly traded” for purposes of these rules. Furthermore, Freightos will not constitute a “qualified foreign corporation” for purposes of these rules if it is a PFIC for the taxable year in which it pays a dividend or for the preceding taxable year. See the subsection titled “— Passive Foreign Investment Company Rules.” U.S. Holders should consult their own tax advisors regarding the availability of the lower rate for dividends paid with respect to Freightos Ordinary Shares.
Subject to certain exceptions, dividends on Freightos Ordinary Shares will constitute foreign source income for foreign tax credit limitation purposes. If such dividends are qualified dividend income (as discussed above), the amount of the dividend taken into account for purposes of calculating the foreign tax credit limitation will be limited to the gross amount of the dividend, multiplied by a fraction, the numerator of which is the reduced rate applicable to qualified dividend income and the denominator of which is the highest rate of tax normally applicable to dividends. The limitation on foreign taxes eligible for credit is calculated separately with respect to specific classes of income. For this purpose, dividends distributed by Freightos with respect to the Freightos Ordinary Shares generally will constitute “passive category income” but could, in the case of certain U.S. Holders, constitute “general category income.”
Sale, Exchange, Redemption or Other Taxable Disposition of Freightos Ordinary Shares and Freightos Warrants.
Subject to the discussion below under the subsection titled “- Passive Foreign Investment Company Rules,” a U.S. Holder generally will recognize gain or loss on any sale, exchange, redemption or other taxable disposition of Freightos Ordinary Shares or Freightos Warrants in an amount equal to the difference between (i) the amount realized on the disposition and (ii) such U.S. Holder’s adjusted tax basis in such Freightos Ordinary Shares and/or Freightos Warrants. Any gain or loss recognized by a U.S. Holder on a taxable disposition of Freightos Ordinary Shares or Freightos Warrants generally will be capital gain or loss. A non-corporate U.S. Holder, including an individual, who has held the Freightos Ordinary Shares and/or Freightos Warrants for more than one year generally will be eligible for reduced tax rates for such long-term capital gains. Following the enactment of the OBBBA, these preferential rates and the associated income thresholds are no longer subject to the previously scheduled 2025 sunset. The deductibility of capital losses is subject to limitations.
Any such gain or loss recognized generally will be treated as U.S. source gain or loss. Accordingly, in the event any non-U.S. tax (including withholding tax) is imposed upon such sale or other disposition, a U.S. Holder may not be able to utilize foreign tax credits unless such U.S. Holder has foreign source income or gain in the same category from other sources. U.S. Holders are urged to consult their own tax advisor regarding the ability to claim a foreign tax credit and the potential application of a U.S. tax treaty to such U.S. Holder’s particular circumstances.
116
Table of Contents
Exercise or Lapse of a Freightos Warrant
A U.S. Holder generally will not recognize gain or loss upon the acquisition of a Freightos Ordinary Share on the exercise of a Freightos Warrant for cash. A U.S. Holder’s initial tax basis in its Freightos Ordinary Shares received upon exercise of the Freightos Warrant generally should equal the sum of (X) the amount paid for the Freightos Warrant and (Y) the exercise price. The U.S. Holder’s holding period for a Freightos Ordinary Share received upon exercise of the Freightos Warrant will begin on the date following the date of exercise (or possibly the date of exercise) of the Freightos Warrant and will not include the period during which the U.S. Holder held the Freightos Warrant. If a Freightos Warrant is allowed to lapse unexercised, a U.S. Holder generally will recognize a capital loss equal to such U.S. Holder’s tax basis in the Freightos Warrant.
A U.S. Holder that acquired its Freightos Warrants in exchange for Gesher Warrants which were then exercised in exchange for Freightos Ordinary Shares should generally have an initial tax basis in such Freightos Ordinary Shares equal to the sum of (X) its tax basis in the Gesher Warrant exchange for the Freightos Warrant and (Y) the exercise price.
The tax consequences of a cashless exercise of a Freightos Warrant are unclear under current tax law. Subject to the PFIC rules discussed under “— Passive Foreign Investment Company Rules” below, a cashless exercise may be tax-deferred, either because the exercise is not a gain realization event or because the exercise is treated as a recapitalization for U.S. federal income tax purposes. In either situation, a U.S. Holder’s basis in the Freightos Ordinary Shares received generally would equal the U.S. Holder’s basis in the Freightos Warrants exercised therefor. If the cashless exercise is not treated as a gain realization event, a U.S. Holder’s holding period in the Freightos Ordinary Shares would be treated as commencing on the date following the date of exercise (or possibly the date of exercise) of the Freightos Warrants and will not include the period during which the U.S. Holder held the Freightos Warrants. If the cashless exercise were treated as a recapitalization, the holding period of the Freightos Ordinary Shares would include the holding period of the Freightos Warrants exercised therefor.
It is also possible that a cashless exercise of a Freightos Warrant should be treated in part as a taxable exchange in which gain or loss would be recognized in the manner set forth above under “— Sale, Exchange, Redemption or Other Taxable Disposition of Freightos Ordinary Shares and Freightos Warrants.” In such event, a U.S. Holder could be deemed to have surrendered warrants having an aggregate fair market value equal to the aggregate exercise price for the total number of warrants to be exercised. Subject to the discussion below under “— Passive Foreign Investment Company Rules,” the U.S. Holder would recognize capital gain or loss with respect to the Freightos Warrants deemed surrendered in an amount generally equal to the difference between (i) the fair market value of the Freightos Ordinary Shares that would have been received in a regular exercise of the Freightos Warrants deemed surrendered, net of the aggregate exercise price of such Freightos Warrants and (ii) the U.S. Holder’s tax basis in such Freightos Warrants. In this case, a U.S. Holder’s aggregate tax basis in the Freightos Ordinary Shares received would equal the sum of (i) the U.S. Holder’s tax basis in the Freightos Warrants deemed exercised and (ii) any gain recognized by such U.S. Holder in the exchange. A U.S. Holder’s holding period for the Freightos Ordinary Shares received in such case generally would commence on the date following the date of exercise (or possibly the date of exercise) of the Freightos Warrants and would not include the period during which the U.S. Holder held the Freightos Warrants.
Due to the absence of authority on the U.S. federal income tax treatment of a cashless exercise of warrants, including when a U.S. Holder’s holding period would commence with respect to any Freightos Ordinary Shares received, there can be no assurance regarding which, if any, of the alternative tax consequences and holding periods described above would be adopted by the IRS or a court of law. Accordingly, U.S. Holders should consult their own tax advisors regarding the tax consequences of a cashless exercise of Freightos Warrants.
Possible Constructive Distributions
The terms of each Freightos Warrant provide for an adjustment to the number of Freightos Ordinary Shares for which the Freightos Warrant may be exercised or to the exercise price of the Freightos Warrant in certain events, as discussed in Exhibit 2.1 to this Annual Report under “Description of Freightos Share Capital— Warrants.” An adjustment which has the effect of preventing dilution generally is not taxable. A U.S. Holder of a Freightos Warrant would, however, be treated as receiving a constructive distribution from Freightos if, for example, the adjustment increases the holder’s proportionate interest in Freightos’ assets or earnings and profits (for instance, through an increase in the number of Freightos Ordinary Shares that would be obtained upon exercise of such warrant), which is taxable to the U.S. Holders of such shares as described under the subsection titled “- Distributions on Freightos Ordinary Shares” above. Such constructive distribution would be subject to tax as described under that section in the same manner as if the U.S. Holder of such Freightos Warrant received a cash distribution from Freightos equal to the fair market value of such increased interest.
117
Table of Contents
Passive Foreign Investment Company Rules
The treatment of U.S. Holders of Freightos Ordinary Shares could be materially different from that described above, if Freightos is treated as a PFIC for U.S. federal income tax purposes. A non-U.S. entity treated as a corporation for U.S. federal income tax purposes generally will be a PFIC for U.S. federal income tax purposes for any taxable year if either:
| ● | at least 75% of its gross income for such year is passive income; or |
| ● | at least 50% of the value of its assets (generally based on an average of the quarterly values of the assets) during such year is attributable to assets that produce passive income or are held for the production of passive income. |
For this purpose, Freightos will be treated as owning its proportionate share of the assets and earning its proportionate share of the income of any other entity treated as a corporation for U.S. federal income tax purposes in which Freightos owns, directly or indirectly, 25% or more (by value) of the stock.
Freightos believes it is not currently, and has never been, a PFIC. However, there can be no assurances in this regard, nor can there be any assurances that Freightos will not be treated as a PFIC in any future taxable year. Moreover, the application of the PFIC rules is subject to uncertainty in several respects, and Freightos can make no assurances that the IRS will not take a contrary position or that a court will not sustain such a challenge by the IRS.
Whether Freightos or any of its respective subsidiaries are treated as a PFIC is determined on an annual basis. The determination of whether Freightos or any of its respective subsidiaries is a PFIC is a factual determination that depends on, among other things, the composition of Freightos’ income and assets, and the market value of it and its subsidiaries’ shares and assets. Changes in the composition of Freightos’ or any of its subsidiaries’ income or composition of Freightos’ or any of its subsidiaries’ assets may cause it to be or become a PFIC for the current or subsequent taxable years. Under the PFIC rules, if Freightos were considered a PFIC at any time that a U.S. Holder owns Freightos Ordinary Shares or Freightos Warrants, Freightos would continue to be treated as a PFIC with respect to such U.S. Holder unless (i) it ceased to be a PFIC and (ii) the U.S. Holder made a “deemed sale” election under the PFIC rules. If such election is made, a U.S. Holder will be deemed to have sold its Freightos Ordinary Shares or Freightos Warrants at their fair market value on the last day of the last taxable year in which Freightos is classified as a PFIC, and any gain from such deemed sale would be subject to the consequences described below. After the deemed sale election, the Freightos Ordinary Shares or Freightos Warrants with respect to which the deemed sale election was made will not be treated as shares in a PFIC unless Freightos subsequently becomes a PFIC.
PFIC Rules — Ownership and Disposition of Freightos Ordinary Shares and Freightos Warrants by U.S. Holders
For any taxable year that Freightos is treated as a PFIC with respect to a U.S. Holder’s Freightos Ordinary Shares or Freightos Warrants, the U.S. Holder will be subject to special tax rules with respect to any “excess distribution” (as defined below) received and any gain realized from a sale or disposition (including a pledge) of its Freightos Ordinary Shares or Freightos Warrants (collectively, the “Excess Distribution Rules”), unless the U.S. Holder makes a valid QEF election or mark-to-market election as discussed below. Distributions received by a U.S. Holder in a taxable year that are greater than 125% of the average annual distributions received during the shorter of the three preceding taxable years or the U.S. Holder’s holding period for the Freightos Ordinary Shares or Freightos Warrants will be treated as excess distributions. Under these special tax rules:
| ● | the excess distribution or gain will be allocated ratably over the U.S. Holder’s holding period for the Freightos Ordinary Shares and/or Freightos Warrants; |
| ● | the amount allocated to the current taxable year, and any taxable years in the U.S. Holder’s holding period prior to the first taxable year in which Freightos is a PFIC, will be treated as ordinary income; and |
| ● | the amount allocated to each other taxable year will be subject to the highest tax rate in effect for individuals or corporations, as applicable, for each such year and the interest charge generally applicable to underpayments of tax will be imposed on the resulting tax attributable to each such year. |
Under the Excess Distribution Rules, the tax liability for amounts allocated to taxable years prior to the year of disposition or excess distribution cannot be offset by any net operating losses, and gains (but not losses) realized on the sale of the Freightos Ordinary Shares or Freightos Warrants cannot be treated as capital gains, even though the U.S. Holder holds the Freightos Ordinary Shares or Freightos Warrants as capital assets.
118
Table of Contents
Certain of the PFIC rules may impact U.S. Holders with respect to equity interests in subsidiaries and other entities which Freightos may hold, directly or indirectly, that are PFICs (collectively, “Lower-Tier PFICs”). There can be no assurance that Freightos does not own, or will not in the future acquire, an interest in a subsidiary or other entity that is or would be treated as a Lower-Tier PFIC. U.S. Holders should consult their own tax advisors regarding the application of the PFIC rules to any of Freightos’ subsidiaries.
If Freightos is a PFIC, a U.S. Holder of Freightos Ordinary Shares (but not Freightos Warrants) may avoid taxation under the Excess Distribution Rules described above by making a QEF election. However, a U.S. Holder may make a QEF election with respect to its Freightos Ordinary Shares only if Freightos provides U.S. Holders on an annual basis certain financial information specified under applicable U.S. Treasury Regulations. Freightos will endeavor to provide U.S. Holders with the required information on an annual basis to allow U.S. Holders to make a QEF election with respect to the Freightos Ordinary Shares in the event Freightos is treated as a PFIC for any taxable year. There can be no assurance, however, that Freightos will timely provide such information for the current year or subsequent years. The failure to provide such information on an annual basis could prevent a U.S. Holder from making a QEF election or result in the invalidation or termination of a U.S. Holder’s prior QEF election. In addition, U.S. Holders of Freightos Warrants will not be able to make a QEF election with respect to their warrants.
In the event Freightos is a PFIC, a U.S. Holder that makes a QEF election with respect to its Freightos Ordinary Shares would generally be required to include in income for each year that Freightos is treated as a PFIC the U.S. Holder’s pro rata share of Freightos’ ordinary earnings for the year (which would be subject to tax as ordinary income) and net capital gains for the year (which would be subject to tax at the rates applicable to long-term capital gains), without regard to the amount of any distributions made in respect of the Freightos Ordinary Shares. Any net deficits or net capital losses of Freightos for a taxable year would not be passed through and included on the tax return of the U.S. Holder. However, a U.S. Holder’s basis in its Freightos Ordinary Shares would be increased by the amount of income inclusions under the QEF rules. Dividends actually paid on its Freightos Ordinary Shares generally would not be subject to U.S. federal income tax to the extent of prior income inclusions and would reduce the U.S. Holder’s basis in its Freightos Ordinary Shares by a corresponding amount.
If Freightos owns any interests in a Lower-Tier PFIC, a U.S. Holder generally must make a separate QEF election for each Lower-Tier PFIC, subject to Freightos providing the relevant tax information for each Lower-Tier PFIC on an annual basis.
U.S. Holders should consult their own tax advisors as to the availability and desirability of a QEF election.
A U.S. Holder of Freightos Ordinary Shares (but not Freightos Warrants) may also avoid taxation under the Excess Distribution Rules by making a mark-to-market election. The mark-to-market election is available only for “marketable stock,” which is stock that is regularly traded on a qualified exchange or other market, as defined in applicable U.S. Treasury Regulations. The Freightos Ordinary Shares, which are listed on Nasdaq, are expected to qualify as marketable stock for purposes of the PFIC rules, but there can be no assurance that they will be “regularly traded” for purposes of these rules. Because a mark-to-market election cannot be made for equity interests in any Lower-Tier PFICs, a U.S. Holder generally will continue to be subject to the Excess Distribution Rules with respect to its indirect interest in any Lower-Tier PFICs as described above, even if a mark-to-market election is made for Freightos.
If a U.S. Holder makes a valid mark-to-market election with respect to its Freightos Ordinary Shares, such U.S. Holder will include in income for each year that Freightos is treated as a PFIC with respect to such Freightos Ordinary Shares an amount equal to the excess, if any, of the fair market value of the Freightos Ordinary Shares as of the close of the U.S. Holder’s taxable year over the adjusted basis in the Freightos Ordinary Shares. A U.S. Holder will be allowed a deduction for the excess, if any, of the adjusted basis of the Freightos Ordinary Shares over their fair market value as of the close of the taxable year. However, deductions will be allowed only to the extent of any net mark-to-market gains on the Freightos Ordinary Shares included in the U.S. Holder’s income for prior taxable years. Amounts included in income under a mark-to-market election, as well as gain on the actual sale or other disposition of the Freightos Ordinary Shares, will be treated as ordinary income. Ordinary loss treatment will also apply to the deductible portion of any mark-to-market loss on the Freightos Ordinary Shares, as well as to any loss realized on the actual sale or disposition of the Freightos Ordinary Shares, to the extent the amount of such loss does not exceed the net mark-to-market gains for such Freightos Ordinary Shares previously included in income. A U.S. Holder’s basis in the Freightos Ordinary Shares will be adjusted to reflect any mark-to-market income or loss. If a U.S. Holder makes a mark-to-market election, any distributions Freightos makes generally would be subject to the rules discussed above under “— Distributions on Freightos Ordinary Shares,” except the lower rates applicable to qualified dividend income would not apply. U.S. Holders of Freightos Warrants will not be able to make a mark-to-market election with respect to their Freightos Warrants. Because a mark-to- market election cannot be made for equity interests in any Lower-Tier PFICs, a U.S. Holder that does not make the applicable QEF elections generally will continue to be subject to the Excess Distribution Rules with respect to its indirect interest in any Lower-Tier PFICs as described above, even if a mark-to-market election is made for Freightos.
119
Table of Contents
A U.S. Holder that is eligible to make a mark-to-market election with respect to its Freightos Ordinary Shares may do so by providing the appropriate information on IRS Form 8621 and timely filing that form with the U.S. Holder’s tax return for the year in which the election becomes effective. U.S. Holders should consult their own tax advisors as to the availability and desirability of a mark-to-market election, as well as the impact of such election on interests in any Lower-Tier PFICs.
A U.S. Holder of a PFIC generally is required to file an IRS Form 8621 on an annual basis. U.S. Holders are strongly encouraged to consult their own tax advisors regarding the application of the PFIC rules and the associated reporting requirements to their particular circumstances.
Information Reporting and Backup Withholding
Information reporting requirements may apply to cash received in dividends received by U.S. Holders of Freightos Ordinary Shares, and the proceeds received on sale or other taxable disposition of Freightos Ordinary Shares or Freightos Warrants effected within the United States (and, in certain cases, outside the United States), in each case other than U.S. Holders that are exempt recipients (such as corporations). Backup withholding (made permanent by the OBBBA at a rate of 24%) may apply to such amounts if the U.S. Holder fails to provide an accurate taxpayer identification number (generally on an IRS Form W-9 provided to the paying agent of the U.S. Holder’s broker) or is otherwise subject to backup withholding. Any proceeds from the sale, exchange, redemption or other disposition of Freightos Ordinary Shares or Freightos Warrants may be subject to information reporting to the IRS and possible U.S. backup withholding. U.S. Holders should consult their own tax advisors regarding the application of the U.S. information reporting and backup withholding rules.
Backup withholding is not an additional tax. Amounts withheld as backup withholding generally may be credited against the taxpayer’s U.S. federal income tax liability, and a taxpayer may obtain a refund of any excess amounts withheld under the backup withholding rules by timely filing the appropriate claim for a refund with the IRS and furnishing any required information.
The preceding discussion of certain material U.S. federal tax considerations is for general information purposes only. It is not tax advice to holders of Freightos Ordinary Shares or Freightos Warrants. Each such holder should consult its own tax advisor regarding the particular U.S. federal, state and local, and non-U.S. tax considerations of purchasing, holding, and disposing of Freightos Ordinary Shares or Freightos Warrants, including the consequences of any proposed change in applicable law.
Certain Material Israeli Tax Considerations
Since Freightos is treated as an Israeli resident company for tax purposes pursuant to a tax ruling we received from the ITA, Freightos is subject to Israeli tax as if it is an Israeli company and holders of our Ordinary Shares and warrants may be subject to Israeli tax. In addition, our subsidiary, Freightos Ltd, is incorporated in Israel. The following is a brief summary of certain material Israeli tax laws applicable to us, and certain Israeli government programs that may benefit us. This section also contains a discussion of material Israeli tax consequences concerning the purchase, ownership and disposition of our Ordinary Shares and warrants purchased by investors. This summary does not discuss all the aspects of Israeli tax law that may be relevant to a particular investor or particular investment circumstances or to certain types of investors subject to special treatment under Israeli law. Examples of such investors include Israeli residents, partnerships, trusts or traders in securities who are subject to special tax regimes not covered in this discussion. To the extent that this discussion is based on tax legislation that has not yet been subject to judicial or administrative interpretation, we cannot assure you that the ITA or the courts will accept the views expressed in this discussion. The discussion below is not intended, and should not be construed, as legal or professional tax advice and is not exhaustive of all possible tax considerations. The discussion is subject to change, including due to amendments under Israeli law or changes to the applicable judicial or administrative interpretations of Israeli law, which change could affect the tax consequences described below, possibly with a retroactive effect. This summary incorporates the provisions of the Economic Efficiency Law (Legislative Amendments for Achieving Budgetary Objectives for the 2025 and 2026 Budget Years), 5785-2025, and the Minimum Corporate Tax on Multinational Groups Law, 2025.
THEREFORE, YOU ARE URGED TO CONSULT YOUR OWN TAX ADVISORS AS TO THE ISRAELI OR OTHER TAX CONSEQUENCES OF THE MERGER AND OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF OUR ORDINARY SHARES OR WARRANTS, INCLUDING, IN PARTICULAR, THE EFFECT OF ANY FOREIGN, STATE OR LOCAL TAXES.
120
Table of Contents
Taxation of our Company
Corporate Tax
Israeli companies are generally subject to corporate tax. The current corporate tax rate is 23%. However, the corporate tax rate applicable to a company that derives income from an Approved Enterprise, a Preferred Enterprise, a Beneficiary Enterprise or a Preferred Technological Enterprise (as discussed below) may be considerably lower. Real Capital Gains (as defined below) derived by an Israeli resident company are generally subject to the prevailing corporate tax rate. Under the Israeli Income Tax Ordinance (New Version), 5721-1961 (the “Ordinance”), a company will be considered as an “Israeli resident” if: (a) it was incorporated in Israel; or (b) the control and management of its business are operated from Israel.
The State of Israel has recently enacted the Law for the Taxation of Multinational Enterprise Groups – 2025, entered into force as of January 1, 2026, implementing key aspects of the OECD’s Pillar Two framework. In particular, the legislation introduces a domestic minimum top-up tax (Qualified Domestic Minimum Top-Up Tax, or QDMTT) generally applicable to Israeli entities that are part of multinational enterprise groups with consolidated annual revenues of at least €750 million, with the objective of ensuring a minimum effective tax rate of 15% on profits attributable to activities in Israel and preventing the allocation of taxing rights to foreign jurisdictions under the Income Inclusion Rule or the Undertaxed Profits Rule under the Pillar Two framework.
It is noted that the Israeli Ministry of Finance has recently published draft legislation as part of the country’s 2026 Economic Plan, proposing a revised incentive regime for research and development activities in Israel, structured primarily as refundable or credit-based tax incentives designed to qualify under the OECD’s “qualified” incentive criteria in a Pillar Two environment.
Law for the Encouragement of Industry (Taxes), 5729-1969
The Law for the Encouragement of Industry (Taxes), 5729-1969 (the “Industry Encouragement Law”), provides several tax benefits for “Industrial Companies.” The Industry Encouragement Law and the regulations promulgated thereunder provide that an “Industrial Company” is an Israeli resident-company incorporated in Israel, of which 90% or more of its income in any tax year, other than income from certain government loans, capital gains, dividends and interest and linkage differentials, is derived from an “Industrial Enterprise” owned by it and located in Israel or in the “Area,” as defined in the Ordinance. An “Industrial Enterprise” is defined as an enterprise whose principal activity in a given tax year is industrial production.
The following corporate tax benefits, among others, are available to Industrial Companies:
| ● | amortization of the cost of purchased patents, rights to use a patent, and know-how, which are used for the development or advancement of the Industrial Enterprise, over an eight-year period, commencing with the year in which the Industrial Company began to use them; |
| ● | under limited conditions, an election to file consolidated tax returns with related Israeli Industrial Companies; and |
| ● | expenses related to a public offering are deductible in equal amounts over three years commencing in the year of the offering. |
Eligibility for benefits under the Industry Encouragement Law is not contingent upon approval of any governmental authority. There can be no assurance that our Israeli subsidiary has qualified or will continue to qualify as an Industrial Company or that the benefits described above will be available in the future.
Tax Benefits and Grants for Research and Development
Israeli tax law allows, under certain conditions, a tax deduction for expenditures, including capital expenditures, related to scientific research and development for the year in which they are incurred.
Expenditures are deemed related to scientific research and development projects if:
| ● | the expenditures are approved by the relevant Israeli government ministry, determined by the field of research; |
| ● | the research and development are for the benefit of the company; and |
| ● | the research and development are carried out by or on behalf of the company. |
121
Table of Contents
The amount of such deductible expenses is reduced by the sum of any funds received through government grants for the finance of such scientific research and development projects. Under these research and development deduction rules, no deduction is allowed for any expense invested in an asset depreciable under the general depreciation rules of the Ordinance. Expenditures that do not qualify for this special deduction are deductible in equal amounts over three years.
From time to time, our Israeli subsidiary may apply to the Israel Innovation Authority (“IIA”) for approval to allow a tax deduction for research and development expenses during the year incurred. There can be no assurance that such request will be granted.
Law for the Encouragement of Capital Investments, 5719-1959
The Law for the Encouragement of Capital Investments, 5719-1959 (the “Investment Law”) provides certain incentives for capital investments in production facilities (or other eligible assets) by “Industrial Enterprises” (as defined under the Investment Law). Generally, an investment program that is implemented in accordance with the provisions of the Investment Law, referred to as an Approved Enterprise, a Beneficiary Enterprise, a Preferred Enterprise, a Special Preferred Enterprise, a Preferred Technological Enterprise, or a Special Preferred Technological Enterprise, is entitled to benefits as discussed below. These benefits may include cash grants from the Israeli government and tax benefits based upon, among other things, the geographic location in Israel of the facility in which the investment is made. To qualify for these incentives, we have to comply with the requirements of the Investment Law.
The Investment Law was significantly amended effective as of April 1, 2005, as of January 1, 2011 (the “2011 Amendment”), and as of January 1, 2017 (the “2017 Amendment”). The 2011 Amendment introduced new benefits to replace those granted in accordance with the provisions of the Investment Law in effect prior to the 2011 Amendment. The 2017 Amendment introduced new benefits for Technological Enterprises, alongside the existing tax benefits.
The Preferred Enterprise Incentives Regime — the 2011 Amendment
The 2011 Amendment introduced new benefits for income generated by a “Preferred Company” through its “Preferred Enterprise” (as such terms are defined in the Investment Law). The definition of a Preferred Company includes a company incorporated in Israel that is not wholly owned by a governmental entity, and that has, among other things, Preferred Enterprise status and is controlled and managed from Israel. Pursuant to the 2011 Amendment, a Preferred Company is entitled to a reduced corporate tax rate of 16% with respect to its Preferred Income derived by its Preferred Enterprise, unless the Preferred Enterprise is located in a specified development zone, in which case the rate will be 7.5%. Income derived by a Preferred Company from a “Special Preferred Enterprise” (as such term is defined in the Investment Law) would be entitled, during a benefits period of 10 years, to further reduced tax rates of 8%, or 5% if the Special Preferred Enterprise is located in a specified development zone. Dividends distributed from income which is attributed to a “Preferred Enterprise” will be subject to Israeli tax at the following rates: (i) Israeli resident corporations — 0% (although, if such dividends are subsequently distributed to individuals or a non-Israeli company, a tax rate of 20% or such lower rate as may be provided in an applicable tax treaty will apply), (ii) Israeli resident individuals — 20%, (iii) non-Israeli residents (individuals and corporations) — 20%, subject to a reduced tax rate as may be provided under the provisions of an applicable tax treaty (in each case, subject to the receipt in advance of a valid certificate from the ITA allowing for such 20% rate or such lower treaty tax rate).
The Technological Enterprise Incentives Regime — the 2017 Amendment
The 2017 Amendment provides new tax benefits for two types of “Technological Enterprises,” as described below, and is in addition to the other existing tax beneficial programs under the Investment Law.
The 2017 Amendment applies to “Preferred Technological Enterprises” that meet certain conditions, including: (1) the research and development, or R&D, expenses in the three years preceding the relevant tax year were at least 7% on average of the company’s annual turnover or exceeded NIS 75 million in each such year, and (2) one of the following: (a) at least 20% of the workforce (or at least 200 employees) are employees whose full salary has been paid and reported in the company’s financial statements as R&D expenses; (b) a venture capital investment approximately equivalent to at least NIS 8 million was previously made in the company and the company did not change its line of business; (c) growth in sales by an average of 25% or more over the three years preceding the relevant tax year, provided that the turnover was at least NIS 10 million in the relevant tax year and in each of the preceding three years; or (d) growth in workforce by an average of 25% or more over the three years preceding the relevant tax year, provided that the company employed at least 50 employees in the relevant tax year and in each of the preceding three years. A “Special Preferred Technological Enterprise” is an enterprise that meets conditions 1 and 2 above, and in addition belongs to a “Group” with annual consolidated revenues above NIS 10 billion.
122
Table of Contents
Preferred Technological Enterprises enjoy a reduced corporate tax rate of 12% on income that qualifies as “Preferred Technological Income,” as defined in the Investment Law. The tax rate is further reduced to 7.5% for a Preferred Technological Enterprise located in development zone “A.” In addition, a Preferred Technological Enterprise will enjoy a reduced corporate tax rate of 12% on capital gain derived from the sale of certain “Benefited Intangible Assets” (as defined in the Investment Law) to a related foreign company if the Benefited Intangible Assets were acquired from a foreign company on or after January 1, 2017, for at least NIS 200 million, and the sale received prior approval from the IIA.
“Special Preferred Technological Enterprises” enjoy a reduced corporate tax rate of 6% on “Preferred Technological Income” regardless of the company’s geographic location within Israel. In addition, Special Preferred Technological Enterprises enjoy a reduced corporate tax rate of 6% on capital gain derived from the sale of certain “Benefited Intangible Assets” to a related foreign company if the Benefited Intangible Assets were either developed by the Special Preferred Technological Enterprise or acquired from a foreign company on or after January 1, 2017, and the sale received prior approval from the IIA. A Special Preferred Technological Enterprise that acquires Benefited Intangible Assets from a foreign company for more than NIS 500 million should be eligible for these benefits for at least 10 years, subject to certain approvals as specified in the Investment Law.
Dividends distributed out of Preferred Technological Income to individuals or non-Israeli shareholders by a Preferred Technological Enterprise or a Special Preferred Technological Enterprise, paid out of Preferred Technological Income, are generally subject to tax at the rate of 20% or such lower rate as may be provided in an applicable tax treaty, which, in each case, will be withheld at source (non-Israeli shareholders are required to present, in advance of payment, a valid certificate from the ITA allowing for such 20% rate or lower treaty rate). However, dividends distributed to an Israeli company are not subject to tax (although, if such dividends are subsequently distributed to individuals or non-Israeli shareholders, withholding tax at a rate of 20% or such lower rate as may be provided in an applicable tax treaty, would apply). If such dividends are distributed to a foreign company that holds solely or together with other foreign companies 90% or more in the Israeli company and other conditions are met, the tax rate will be 4% or such lower rate as may be provided in an applicable tax treaty (in either case, subject to the receipt in advance of a valid certificate from the ITA allowing for such 4% rate or lower treaty tax rate).
We believe that our Israeli subsidiary is eligible for the tax benefits under the 2017 Amendment as a Preferred Technological Enterprise. In January 2019, our Israeli subsidiary received a tax ruling from the ITA regarding its entitlement to tax benefits as a Preferred Technological Enterprise subject to compliance with the conditions set forth in such tax ruling and in the Investment Law. The tax ruling was valid from 2018 until the tax year ending in 2022. There is no assurance that our Israeli subsidiary will meet all the terms and conditions required under the tax ruling and the Investment Law that will allow it to enjoy any tax benefits under the Investment Law.
Taxation of Holders of our Shares and Warrants — General
Capital Gains Tax Applicable to Non-Israeli Resident Holders
Israeli capital gains tax is imposed on the disposition of capital assets by a non-Israeli resident if those assets (i) are located in Israel, (ii) are shares or a right to shares in an Israeli resident corporation, or (iii) represent, directly or indirectly, rights to assets located in Israel, unless a specific exemption is available under Israeli domestic law or under an applicable tax treaty between Israel and the seller’s country of residence. The Ordinance distinguishes between “Real Capital Gain” and “Inflationary Surplus.” The Inflationary Surplus is a portion of the total capital gain equivalent to the increase of the relevant asset’s purchase price attributable to an increase in the Israeli consumer price index, or, in certain circumstances, a foreign currency exchange rate, between the date of purchase and the date of sale. Inflationary Surplus is currently not subject to tax in Israel. The Real Capital Gain is the excess of the total capital gain over the Inflationary Surplus. Generally, Real Capital Gain accrued by individuals on the sale of our Ordinary Shares or warrants will be taxed at the rate of 25%. However, if the holder is a “substantial shareholder” at the time of sale or at any time during the preceding 12-month period, such gain will be taxed at the rate of 30%. A “substantial shareholder” is generally a person who alone or together with such person’s relatives or another person who collaborates with such person on a permanent basis, holds, directly or indirectly, at least 10% of any of the “means of control” of the corporation. “Means of control” generally include the right to vote, receive profits, nominate a director or an executive officer, receive assets upon liquidation, or the power to direct the actions of someone who holds any of the aforesaid rights, regardless of the source of such right. Real Capital Gain derived by corporations generally is subject to tax at the prevailing corporate tax rate, which is currently 23%.
123
Table of Contents
A non-Israeli resident that derives capital gains from the sale of shares or warrants of an Israeli resident company that were purchased after the company was listed for trading on a stock exchange outside of Israel will be exempt from such Israeli capital gains tax if, among other conditions, the shares or warrants were not held through or attributable to a permanent establishment that the non-resident maintains in Israel (and certain other conditions are met). However, a non-Israeli “Body of Persons” (as defined in the Ordinance, and includes corporate entities, partnerships, and other entities) will not be entitled to the foregoing exemption if Israeli residents: (i) have, directly or indirectly, alone or together with such person’s relatives or another person who, according to an agreement, collaborates with such person on a permanent basis regarding material affairs of the company, or with another Israeli tax resident, a controlling interest of more than 25% in any of the means of control of such non-Israeli Body of Persons or (ii) are the beneficiaries of, or are entitled to, 25% or more of the revenues or profits of such non-Israeli Body of Persons, whether directly or indirectly. In addition, such exemption is not applicable to a person whose gains from selling or otherwise disposing of the shares or warrants are deemed to be business income.
Additionally, a sale of securities by a non-Israeli resident may be exempt from such Israeli capital gains tax under the provisions of an applicable tax treaty. For example, under the Convention Between the Government of the United States of America and the Government of the State of Israel with respect to Taxes on Income, as amended (the “U.S.-Israel Tax Treaty”), the sale, exchange or other disposition of shares by a shareholder who is a U.S. resident (for purposes of the treaty) holding the shares as a capital asset and who is entitled to claim the benefits afforded to such a resident by the U.S.-Israel Tax Treaty (a “Treaty U.S. Resident”) is generally exempt from such Israeli capital gains tax unless: (i) the capital gain arising from such sale, exchange or disposition is attributed to real estate located in Israel; (ii) the capital gain arising from such sale, exchange or disposition is attributed to royalties; (iii) the capital gain arising from such sale, exchange or disposition is attributable (as determined under the U.S.-Israel Tax Treaty) to a permanent establishment that such Treaty U.S. Resident has in Israel; (iv) such Treaty U.S. Resident holds, directly or indirectly, shares representing 10% or more of the voting capital of such company during any part of the 12-month period preceding the sale, exchange or disposition, subject to certain conditions; or (v) such Treaty U.S. Resident is an individual and was present in Israel for 183 days or more during the relevant taxable year. In any such case, the sale, exchange or disposition of such shares by the Treaty U.S. Resident would be subject to Israeli taxes (unless exempt under Israeli domestic law as described above).
Regardless of whether or not non-Israeli holders may be liable for Israeli capital gains tax on the sale of our Ordinary Shares or warrants, the payment of the consideration may be subject to the withholding of Israeli tax at source. Holders may be required to demonstrate that they are exempt from tax on their capital gains in order to avoid withholding at source at the time of sale. Specifically, the ITA may require holders who are not liable for Israeli capital gains tax on such a sale to sign declarations in forms prescribed by the ITA, provide documents (including, for example, a certificate of residency) or obtain a specific exemption from the ITA to confirm their status as non-Israeli residents (and, in the absence of such declarations or exemptions, the ITA may require the purchaser of the shares to withhold tax at source).
Capital Gains Tax Applicable to Israeli Resident Holders
Generally, an Israeli resident corporation that derives capital gains from the sale of shares or warrants of an Israeli resident company that were purchased after the company was listed for trading on a stock exchange outside of Israel will be subject to tax on the Real Capital Gains generated on such sale at the corporate tax rate (currently 23%). An Israeli resident individual will generally be subject to capital gains tax at the rate of 25%. However, if the individual holder is claiming a deduction of interest expenditures or is a “substantial shareholder” (as defined above) at the time of the sale or at any time during the preceding 12-month period, such gain will be taxed at the rate of 30%.
Individual holders dealing in securities in Israel for whom the income from the sale of shares or warrants is considered “business income” as referred to in section 2(1) of the Ordinance will be taxed at the marginal tax rates applicable to business income (up to 47% in 2025). Certain Israeli institutions that are exempt from tax under section 9(2) or section 129C(a)(1) of the Ordinance (such as exempt trust funds and pension funds) may be exempt from capital gains tax from the sale of the shares or warrants.
124
Table of Contents
Taxation of Non-Israeli Shareholders on Dividends
Non-Israeli residents (whether individuals or corporations) are generally subject to Israeli income tax on the receipt of dividends paid on our Ordinary Shares at the rate of 25%, which tax will be withheld at source unless relief is provided in an applicable tax treaty between Israel and the shareholder’s country of residence. With respect to a person who is a “substantial shareholder” (as defined above) at the time of receiving the dividend or at any time during the preceding 12 months, the applicable tax rate is 30%. Dividends paid on publicly traded shares, like our Ordinary Shares, are generally subject to Israeli withholding tax at a rate of 25% so long as the shares are registered with a nominee company (whether or not the recipient is a “substantial shareholder”), and 20% if the dividend is distributed from income attributed to a Preferred Enterprise or Preferred Technological Enterprise, or such lower rate as may be provided under an applicable tax treaty (provided that a certificate from the ITA allowing for such 20% withholding tax rate or lower treaty rate is obtained in advance).
For example, under the U.S.-Israel Tax Treaty, the maximum rate of tax withheld at source in Israel on dividends paid to a holder of our Ordinary Shares who is a Treaty U.S. Resident is 25%. However, generally, the maximum rate of 12.5% applies to withholding tax on dividends that are paid by an Israeli corporation to a United States corporation holding 10% or more of the outstanding voting capital of an Israeli corporation throughout the tax year in which the dividend is distributed as well as during the previous tax year, provided that not more than 25% of the gross income of the Israeli corporation for such preceding year consists of certain types of dividends and interest. Notwithstanding the foregoing, dividends distributed from income attributed to a Preferred Enterprise are not entitled to such reduction under the U.S.-Israel Tax Treaty but are subject to a withholding tax rate of 15% for a shareholder that is a U.S. corporation, provided that the condition related to the company’s gross income for the previous year (as discussed in the previous sentence) is met. If the dividend is attributable partly to income derived from a Preferred Enterprise or Preferred Technological Enterprise, and partly to other sources of income, the withholding rate will be a blended rate reflecting the relative portions of the two types of income. We cannot assure you that we will designate the profits that we may distribute in a way that will reduce shareholders’ tax liability.
A non-Israeli resident that receives dividends from an Israeli resident from which the full tax was deducted will generally be exempt from filing a tax return in Israel with respect to such income, provided that (i) such income was not generated from a business conducted in Israel by the non-Israeli resident; (ii) the non-Israeli resident has no other taxable sources of income in Israel; and (iii) the non-Israeli resident is not subject to surtax (as explained below).
Taxation of Israeli Shareholders on Dividends
An Israeli resident individual is generally subject to Israeli income tax on the receipt of dividends paid from ordinary income at the rate of 25%. With respect to a person who is a “substantial shareholder” (as defined above) at the time of receiving the dividend or at any time during the preceding 12 months, the applicable tax rate is 30%. Dividends paid on publicly traded shares, like our Ordinary Shares, are generally subject to Israeli withholding tax at a rate of 25% so long as the shares are registered with a nominee company (whether or not the recipient is a “substantial shareholder”), and 20% if the dividend is distributed from income attributed to a Preferred Enterprise or Preferred Technological Enterprise. If the recipient of the dividend is an Israeli resident corporation, such dividend income will be exempt from tax provided that the income from which such dividend is distributed was derived or accrued within Israel and was received directly or indirectly from another corporation that is liable to Israeli corporate tax. An exempt trust fund, pension fund or other entity that is exempt from tax under section 9(2) or section 129C(a)(1) of the Ordinance is generally exempt from tax on such dividend.
Surtax
Subject to the provisions of an applicable tax treaty, individuals who are subject to income tax in Israel (whether such individual is an Israeli resident or non-Israeli resident) are subject to an additional tax at a rate of 3% on annual income (including, but not limited to, income derived from dividends, interest and capital gains) exceeding NIS 721,560 for 2025 (approximately $226,194, based on an exchange rate of NIS 3.19 per U.S. dollar as of December 31, 2025), which amount is generally linked to the annual change in the Israeli consumer price index, (with the exception that based on Israeli new legislation such amount, and certain other statutory amounts will not be linked to the Israeli consumer price index for the years 2025-2027), including, but not limited to, dividends, interest and capital gain. According to new legislation, in effect as of January 1, 2025, an additional 2% excess tax is imposed on Capital-Sourced Income (defined as income from any source other than employment income, business income or income from “personal effort”), to the extent that an individual’s Capital Sourced Income exceeds the specified threshold of NIS 721,560 (and regardless of the employment/business income amount of such individual). This new excess tax applies, among other things, to income from capital gains, dividends, interest, rental income, or the sale of real property.
125
Table of Contents
Estate and Gift Tax
Israeli law currently does not impose estate or gift taxes.
Certain Material Cayman Islands Tax Considerations
The following description is not intended to constitute a complete analysis of all tax consequences relating to the acquisition, ownership and disposition of the Freightos Ordinary Shares and Freightos Warrants and should not be construed as legal or professional tax advice. You should consult your own tax advisor concerning the tax consequences of your particular situation, as well as any tax consequences that may arise under the laws of any state, local, foreign or other taxing jurisdiction.
Prospective investors should consult their advisors on the possible tax consequences of investing in our securities under the laws of their country of citizenship, residence or domicile.
Cayman Islands Tax Considerations
The following is a discussion on certain Cayman Islands income tax consequences of an investment in the securities of Freightos. The discussion is a general summary of present law, which is subject to prospective and retroactive change. It is not intended as tax advice, does not consider any investor’s particular circumstances, and does not consider tax consequences other than those arising under Cayman Islands law.
Under Existing Cayman Islands Laws
Payments of dividends and capital in respect of our securities will not be subject to taxation in the Cayman Islands and no withholding will be required on the payment of a dividend or capital to any holder of the securities nor will gains derived from the disposal of the securities be subject to Cayman Islands income or corporate tax. The Cayman Islands currently has no income, corporate or capital gains tax and no estate duty, inheritance tax or gift tax.
No stamp duty is payable in respect of the issue of the warrants. An instrument of transfer in respect of a warrant is stampable if executed in or brought into the Cayman Islands.
No stamp duty is payable in respect of the issue of Freightos Ordinary Shares or on an instrument of transfer in respect of such shares.
The Company has been incorporated under the laws of the Cayman Islands as an exempted company with limited liability and, as such, has received an undertaking from the Financial Secretary of the Cayman Islands in the following form:
The Tax Concessions Act
(As Revised)
Undertaking as to Tax Concessions
In accordance with the provision of Section 6 of The Tax Concessions Act (As Revised), the Financial Secretary undertakes with Freightos Limited (the “Company”):
| 1. | That no law which is hereafter enacted in the Islands imposing any tax to be levied on profits, income, gains or appreciations shall apply to the Company or its operations; and |
| 2. | In addition, that no tax to be levied on profits, income, gains or appreciations or which is in the nature of estate duty or inheritance tax shall be payable: |
2.1. | on or in respect of the shares, debentures or other obligations of the Company; or |
2.2. | by way of the withholding in whole or part, of any relevant payment as defined in Section 6(3) of the Tax Concessions Act (As Revised). |
These concessions shall be for a period of 20 years from the date hereof.
126
Table of Contents
F. Dividends and Paying Agents
Not applicable.
G. Statements by Experts
Not applicable.
H. Documents on Display
The SEC maintains a website at www.sec.report that contains reports, proxy and information statements and other information regarding registrants that make electronic filings through its Electronic Data Gathering, Analysis, and Retrieval (“EDGAR”) system. All our Exchange Act reports and other SEC filings will be available through the EDGAR system. You may also access information about Freightos through our corporate website https://www.freightos.com. The information contained in each such website is not incorporated by reference into this Annual Report.
I. Subsidiary Information
Not applicable.
J. Annual Report to Security Holders
Not applicable.
ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
Foreign Currency Risk
The U.S. dollar is our functional currency. Our revenue was denominated primarily in U.S. dollars, Euros and Canadian Dollars for the years ended December 31, 2025 and 2024, respectively, and certain components of our cost of revenue and operating expenses, primarily payroll and rent, were denominated in NIS and Euros. We incur expenses in other currencies, such as the Canadian Dollar, Indian Rupee and Chinese Yuan, although to a much lesser extent.
A decrease of three percent in the U.S. dollar/NIS exchange rate would have increased our cost of revenue plus operating expenses by approximately 1% during each of the years ended December 31, 2025 and 2024. A decrease of three percent in the U.S. dollar/Euro exchange rate would have increased our revenue by approximately 1% and increased our cost of revenue plus operating expenses by approximately 1%, during each of the years ended December 31, 2025 and 2024. During the years ended December 31, 2025 and 2024, we entered into forward contracts to hedge certain forecasted payments denominated in NIS, mainly payroll and rent, against exchange rate fluctuations of the U.S. dollar for a period of up to twelve months.
We had outstanding forward contracts that were not qualified as hedging instruments in a cash flow hedge, in aggregate notional amounts of $1.4 million and $1.9 million as of December 31, 2025 and December 31, 2024, respectively. The fair value of the outstanding forward contracts as of December 31, 2025 and December 31, 2024 was $0.1 million and $0.0 million, respectively. For further details, see Note 6 to our audited consolidated financial statements contained in this Annual Report.
127
Table of Contents
Market Price Risk
We have market price risk with respect to changes in freight shipping costs. Our GBV is directly impacted when market rates of air and ocean shipping change. There may also be an impact on the demand for shipping and as a result the demand for our services. In addition, some of our Platform revenue is directly linked as a percentage of GBV and may be impacted when the price levels change.
Credit Risk
Credit risk is a risk of financial loss if a customer fails to meet its contractual obligations. We are exposed to credit risk primarily as a result of our receivables from our customers. Under our systems and procedures, each new customer requesting credit is analyzed individually for creditworthiness before our standard payment and terms and conditions are offered. The exposure to credit risk is monitored on an ongoing basis. The review includes external ratings, when available.
ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
A., C., D. Debt Securities, Other Securities, American Depositary Shares
Not applicable.
B. Warrants
Upon the completion of the Business Combination, there were 5,750,000 public warrants (the “Public Warrants”) outstanding. The Public Warrants, which entitle the holder to purchase one ordinary share at an exercise price of $11.50 per share, became exercisable on February 24, 2023. The Public Warrants will expire on January 25, 2028 (i.e., five years after the completion of the Business Combination) or earlier upon redemption or liquidation in accordance with their terms. Upon the completion of the Business Combination, there were also 5,000,000 private warrants (the “Private Warrants”) held by the Sponsor, EarlyBird, and its designees (before the distribution from the Sponsor to its members in connection with the Closing). The Private Warrants are identical to the Public Warrants in all material respects, except that the Private Warrants, so long as they are held by the Sponsor or its permitted transferees, (i) are not redeemable by the Company, (ii) may be exercised by the holders on a cashless basis, and (iii) are entitled to registration rights.
128
Table of Contents
PART II
ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
Not applicable.
ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
Not applicable.
ITEM 15. CONTROLS AND PROCEDURES
A.Disclosure Controls and Procedures
We maintain disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed in the Company’s reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures. Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2025. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2025, our disclosure controls and procedures were effective to accomplish their objectives at the reasonable assurance level.
B.Management’s Annual Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act. Our management, including our Chief Executive Officer and our Chief Financial Officer, conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework and criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) as of the end of the period covered by this report.
Based on that evaluation, our management has concluded that our internal control over financial reporting was effective as of December 31, 2025. Notwithstanding the foregoing, there can be no assurance that our internal control over financial reporting will detect or uncover all failures of persons within the Company to comply with our internal procedures, as all internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective may not prevent or detect misstatements.
C.Attestation Report of the Registered Public Accounting Firm
This Annual Report does not include an attestation report of the Company’s registered public accounting firm on management’s assessment of the Company’s internal control over financial reporting since we are an emerging growth company.
D.Changes in Internal Control Over Financial Reporting
There were no changes in our internal controls over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act) that occurred during the period covered by this Annual Report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
129
Table of Contents
ITEM 16. [RESERVED]
ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT
The Board of Directors has determined that Tzvia Broida qualifies as an “audit committee financial expert” as defined under rules and regulations of the SEC and satisfies the “independence” requirements set forth in Rule 10A-3 under the Exchange Act.
ITEM 16B. CODE OF ETHICS
We have adopted a code of business conduct applicable to our directors, officers and employees. This includes our principal executive officer, principal financial officer, and principal accounting officer or controller, or persons performing similar functions. Our code of business conduct is intended to meet the definition of “code of ethics” under Item 16B of 20-F under the Exchange Act. We will disclose on our website any amendment to, or waiver from, a provision of our code of business conduct that applies to our directors or executive officers to the extent required under the rules of the SEC or Nasdaq. The code of ethics is available on our website at: https://www.freightos.com/wp-content/uploads/2023/01/Freightos-Code-of-Conduct.pdf. The information contained on our website is not incorporated by reference in this Annual Report.
ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Policies and Procedures
Our audit committee of the Board of Directors is required to pre-approve the audit and non-audit services to be performed by our independent registered public accounting firm and associated fees prior to the engagement with respect to such services. Pursuant to this policy, which is designed to assure that such engagements do not impair the independence of our auditors, the audit committee pre-approves annually a catalogue of specific audit and non-audit services that may be performed by our independent registered public accounting firm.
Fees Paid to Independent Auditors
Fees billed by Kost Forer Gabbay & Kasierer, a member of EY Global, and other members of EY Global, for professional services rendered to us for each of the last two fiscal years were as follows:
Year ended | ||||||
December 31, | ||||||
| 2025 | | 2024 | |||
(in thousands) | ||||||
Audit Fees (1) | $ | 435 |
| $ | 480 | |
Audit-Related Fees |
| $ | — |
| $ | — |
Tax Fees (2) |
| $ | 36 |
| $ | 43 |
All Other Fees (3) |
| $ | — |
| $ | — |
Total |
| $ | 471 |
| $ | 523 |
| (1) | Audit fees consist of fees billed for the annual audit and the quarterly reviews of the Company’s consolidated financial statements and consist of services that would normally be provided in connection with statutory and regulatory filings or engagements, including services that generally only the independent auditors can reasonably provide, such as services provided in connection with the Business Combination. |
| (2) | Tax fees are for professional services rendered by our independent auditors for tax compliance, and tax advice on actual or contemplated transactions. |
| (3) | All other fees are fees for all other services provided to us by our independent auditors with respect to the subject years, other than those described above. |
130
Table of Contents
ITEM 16D. EXEMPTION FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
Not applicable.
ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASER
Not applicable.
ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT
Not applicable.
ITEM 16G. CORPORATE GOVERNANCE
Corporate Governance Practices
As a foreign private issuer, we may generally follow home country practice with respect to certain matters of corporate governance in lieu of the comparable governance provisions of Nasdaq listing rules, except for certain matters including the composition and responsibilities of the audit committee and the independence of its members within the meaning of the rules and regulations of the SEC.
We follow home country practice in lieu of Nasdaq corporate governance requirements with respect to the following Nasdaq requirements:
| ● | Proxy Statements. We are not required to, and, in reliance on home country practice, we may not, comply with certain Nasdaq rules regarding the solicitation proxies and the provision of proxy statements for all meetings of shareholders. We will follow Cayman Islands practice, which does not impose a regulatory regime for the solicitation of proxies and the provision of proxy statements. |
| ● | Shareholder Approval. We are not required to, and, in reliance on home country practice, we do not intend to, comply with Nasdaq Rule 5635 regarding shareholder approval for certain issuances of securities in connection with the acquisition of shares or assets of another company under certain circumstances, a change of control, the establishment of or amendments to equity- based compensation plans and private placements. In accordance with the provisions of the Freightos A&R Articles, our Board of Directors is authorized to issue securities, including Ordinary Shares, warrants and convertible notes on such terms as it considers appropriate. |
| ● | Audit Committee Composition. We are not required to, and, in reliance on home country practice, from time to time, we may not always have a minimum of three members on our audit committee. We follow Cayman Islands practice, which does not impose a minimum number of audit committee members. Our audit committee currently consists of three members. |
In addition, we are an “emerging growth company” as defined in the JOBS Act and have elected to comply with certain reduced public company reporting requirements.
ITEM 16H. MINE SAFETY DISCLOSURE
Not applicable.
ITEM 16I. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
ITEM 16J. INSIDER TRADING POLICIES
131
Table of Contents
ITEM 16K. CYBERSECURITY
Risk management and strategy
We regularly assess risks from cybersecurity and technology threats and monitor our information systems for potential vulnerabilities. We believe we follow industry best practices by collaborating closely with our cloud providers, who continuously assess our infrastructure security and assist in mitigating any risks according to market standards. We conduct regular reviews and tests of our information security program.
Our systems periodically experience directed attacks intended to lead to interruptions and delays in our service and operations as well as loss, misuse or theft of personal information (of third parties, employees, and our customers) and other data, confidential information or intellectual property, and we have experienced an unauthorized release of certain digital content assets. However, to date
Governance
We have engaged a
PART III
ITEM 17. FINANCIAL STATEMENTS
We have elected to provide financial statements pursuant to Item 18.
ITEM 18. FINANCIAL STATEMENTS
Our audited consolidated financial statements are included at the end of this Annual Report.
132
Table of Contents
ITEM 19. EXHIBITS
The following exhibits are filed as part of this Annual Report:
Exhibit | | Description of Document |
1.1 | Amended and Restated Memorandum and Articles of Association of Freightos (incorporated by reference to Exhibit 3.1 to Freightos’ registration statement on Form F-1 filed with the SEC on February 22, 2023). | |
2.1* | Description of the Registrant’s securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended. | |
2.2 | Warrant Agreement, dated as of October 12, 2021, between Continental Stock Transfer & Trust Company and Gesher (incorporated by reference to Exhibit 4.1 to Gesher’s current report on Form 8-K filed with the SEC on October 14, 2021). | |
2.3 | Amendment to Warrant Agreement, dated as of January 25, 2023, by and among Gesher, Freightos and Continental Stock Transfer & Trust Company (incorporated by reference to Exhibit 10.1 to Gesher’s current report on Form 8-K filed with the SEC on January 25, 2023). | |
2.4 | Specimen Ordinary Share Certificate of Freightos Limited (incorporated by reference to Exhibit 4.6 to Freightos’ registration statement on Form F-4 filed with the SEC on December 9, 2022, as amended). | |
2.5 | Specimen Warrant Certificate of Freightos Limited (incorporated by reference to Exhibit 4.7 to Freightos’ registration statement on Form F-4 filed with the SEC on December 9, 2022, as amended). | |
2.6 | Registration Rights Agreement, dated as of October 12, 2021, by and among Gesher, the Sponsor and EarlyBird (incorporated by reference to Exhibit 4.8 to Freightos’ registration statement on Form F-4 filed with the SEC on December 9, 2022, as amended). | |
2.7 | Form of First Amendment to Registration Rights Agreement, dated as of January 25, 2023, by and among Gesher, Freightos, the Sponsor and EarlyBird (incorporated by reference to Exhibit 10.6 to Freightos’ registration statement on Form F-4 filed with the SEC on December 9, 2022, as amended). | |
2.8 | Registration Rights Agreement, dated as of January 25, 2023, by and among Freightos and the shareholders of Freightos party thereto (incorporated by reference to Exhibit 4.7 to Freightos’ registration statement on Form F-1 filed with the SEC on February 22, 2023). | |
4.1 | Tradeos Ltd. 2012 Global Incentive Option Scheme (incorporated by reference to Exhibit 10.1 to Freightos’ registration statement on Form F-1 filed with the SEC on February 22, 2023). | |
4.2 | Freightos Limited 2022 Long-Term Incentive Plan, including sub-plan for Israeli participants (incorporated by reference to Exhibit 10.2 to Freightos’ registration statement on Form F-1 filed with the SEC on February 22, 2023). | |
4.3 | Form of Freightos Limited Incentive Stock Option Notice under the Freightos Limited 2022 Long-Term Incentive Plan. (incorporated by reference to Exhibit 4.4 to Freightos’ annual report on Form 20-F for the year ended December 31, 2022, filed with the SEC on March 30, 2023). | |
4.4 | Form of Freightos Limited Nonstatutory Stock Option Notice under the Freightos Limited 2022 Long-Term Incentive Plan. (incorporated by reference to Exhibit 4.5 to Freightos’ annual report on Form 20-F for the year ended December 31, 2022, filed with the SEC on March 30, 2023) | |
4.5† | Form of Notice of Award Grant under the Freightos Limited 2022 Long-Term Incentive Plan for Israeli Participants (incorporated by reference to Exhibit 4.6 to Freightos’ annual report on Form 20-F for the year ended December 31, 2022, filed with the SEC on March 30, 2023). | |
4.6 | Form of Notice Of Restricted Share Unit Grant under the Freightos Limited 2022 Long-Term Incentive Plan. (incorporated by reference to Exhibit 4.6 to Freightos’ annual report on Form 20-F for the year ended December 31, 2023, filed with the SEC on March 21, 2024). | |
4.7† | Form of Notice Of Restricted Share Unit Grant under the Freightos Limited 2022 Long-Term Incentive Plan for Israeli Participants (incorporated by reference to Exhibit 4.7 to Freightos’ annual report on Form 20-F for the year ended December 31, 2023, filed with the SEC on March 21, 2024). | |
4.8† | Form of Notice of Long-Term Incentive Award Grant (RSUs and Performance Shares) for Israeli Participants under the Freightos Limited 2022 Long-Term Incentive Plan (incorporated by reference to Exhibit 4.8 to Freightos’ annual report on Form 20-F for the year ended December 31, 2024, filed with the SEC on March 24, 2025). | |
4.9† | Form of Notice of Long-Term Incentive Award Grant (Performance Shares) for Israeli Participants under the Freightos Limited 2022 Long-Term Incentive Plan (incorporated by reference to Exhibit 4.9 to Freightos’ annual report on Form 20-F for the year ended December 31, 2024, filed with the SEC on March 24, 2025). | |
4.10 | Form of Sponsor Holder Lock-Up Agreement, dated as of May 31, 2022, by and between Gesher, Freightos, the Sponsor and the shareholders of Gesher party thereto (incorporated by reference to Exhibit 10.7 to Gesher’s current report on Form 8-K filed with the SEC on June 6, 2022). |
133
Table of Contents
4.11 | Form of Indemnification Agreement between Freightos and each of the directors and executive officers of Freightos (incorporated by reference to Exhibit 10.8 to Freightos’ registration statement on Form F-4 filed with the SEC on December 9, 2022, as amended). | |
4.12 | Assignment and Assumption of Indemnification Obligations, dated as of January 25, 2023, by and between Gesher and Freightos (incorporated by reference to Exhibit 10.6 to Freightos’ registration statement on Form F-1 filed with the SEC on February 22, 2023). | |
4.13† | Amended and Restated Strategic Agreement, dated as of May 31, 2022, by and between Freightos and Qatar Airways Group Q.C.S.C. (incorporated by reference to Exhibit 10.19 to Freightos’ registration statement on Form F-4 filed with the SEC on December 9, 2022, as amended). | |
8.1* | List of subsidiaries of Freightos Limited. | |
11.1* | Insider Trading Policy of Freightos Limited. | |
12.1* | Certification by the Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
12.2* | Certification by the Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
13.1** | Certification by the Principal Executive Officer and Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
15.1* | Consent of Kost Forer Gabbay & Kasierer, independent registered accounting firm for Freightos. | |
97.1 | Freightos Limited Policy For Recovery Of Incentive Compensation (incorporated by reference to Exhibit 97.1 to Freightos’ annual report on Form 20-F for the year ended December 31, 2023, filed with the SEC on March 21, 2024). | |
101.INS* | Inline XBRL Instance Document | |
101.SCH* | Inline XBRL Taxonomy Extension Schema Document | |
101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
104 | Cover Page Interactive Data File (formatted in Inline XBRL and included as Exhibit 101). |
* | Filed herewith. |
** | Furnished herewith. |
† | Schedules and exhibits to this Exhibit have been omitted in accordance with the instructions to Item 19 of Form 20-F. Freightos agrees to furnish supplementally a copy of any omitted schedule or exhibit to the SEC upon request. |
134
Table of Contents
SIGNATURES
The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this Annual Report on its behalf.
FREIGHTOS LIMITED | ||
By: | /s/ Pablo Pinillos | |
Name: | Pablo Pinillos | |
Title: | Chief Executive Officer and Chief Financial Officer | |
(Principal Executive Officer) | ||
Date: March 26, 2026 | ||
135
Table of Contents
FREIGHTOS LIMITED AND ITS SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2025
IN U.S. DOLLARS
INDEX
Page | |
Report of Independent Registered Public Accounting Firm (PCAOB ID: | F-2 |
Consolidated Statements of Financial Position | F-3 |
Consolidated Statements of Profit or Loss and Other Comprehensive Income (Loss) | F-4 |
Consolidated Statements of Changes in Equity | F-5 |
Consolidated Statements of Cash Flows | F-6 – F-7 |
Notes to Consolidated Financial Statements | F-8 – F-44 |
F-1
Table of Contents
| Kost Forer Gabbay & Kasierer 2 Pal-Yam Ave, Haifa 3309502, Israel | Tel: +972-3-6232525 Fax: +972-3-5622555 ey.com |
Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of
FREIGHTOS LIMITED
Opinion on the Financial Statements
We have audited the accompanying consolidated statements of financial position of Freightos Limited and its subsidiaries (the Company) as of December 31, 2025 and 2024, the related consolidated statements of profit or loss and other comprehensive income (loss), changes in equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/
A Member of EY Global
We have served as the Company’s auditors since 2012.
March 26, 2026
F-2
Table of Contents
FREIGHTOS LIMITED AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
U.S. dollars in thousands
| December 31, | |||||
| 2025 | | 2024 | |||
ASSETS | ||||||
CURRENT ASSETS: | ||||||
Cash and cash equivalents | $ | | $ | | ||
User funds | | | ||||
Trade receivables, net (Note 7) | | | ||||
Short-term bank deposit | | | ||||
Other receivables and prepaid expenses (Note 8) | | | ||||
| | |||||
NON-CURRENT ASSETS: | ||||||
Property and equipment, net (Note 9) | | | ||||
Right-of-use assets, net (Note 10) | | | ||||
Intangible assets, net (Note 11) | | | ||||
Goodwill (Note 11) | | | ||||
Deferred taxes (Note 22) | | | ||||
Other long-term assets (Note 12) | | | ||||
| | |||||
Total assets | $ | | $ | | ||
LIABILITIES AND EQUITY | ||||||
CURRENT LIABILITIES: | ||||||
Current maturity of lease liabilities (Note 10) | | | ||||
Trade payables | | | ||||
User accounts | | | ||||
Warrants liabilities (Note 15) | | | ||||
Accrued expenses and other payables (Note 13) | | | ||||
| | |||||
LONG TERM LIABILITIES: | ||||||
Lease liabilities (Note 10) | | | ||||
Employee benefit liabilities, net (Note 14) | | | ||||
| | |||||
EQUITY: (Note 16) | ||||||
Share capital | | |||||
Share premium | | | ||||
Foreign currency translation reserve | | ( | ||||
Reserve from remeasurement of defined benefit plans | | | ||||
Accumulated deficit | ( | ( | ||||
Total equity | | | ||||
Total liabilities and equity | $ | | $ | | ||
*) | Represents an amount lower than $1. |
The accompanying notes are an integral part of the consolidated financial statements.
F-3
Table of Contents
FREIGHTOS LIMITED AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME (LOSS)
U.S. dollars in thousands, except share and per share data
Year ended December 31, | |||||||||
| 2025 | | 2024 | | 2023 | ||||
Revenue | $ | | $ | |
| $ | | ||
Cost of revenue (Note 20) |
| | |
| | ||||
Gross profit |
| | |
| | ||||
Operating expenses: | |||||||||
Research and development (Note 20) |
| | |
| | ||||
Selling and marketing (Note 20) |
| | |
| | ||||
General and administrative (Note 20) |
| | |
| | ||||
Reorganization (Note 21) |
| — | — |
| | ||||
Share listing expense (Note 1d) | — | — | | ||||||
Transaction-related costs (Note 1d) | — | — | | ||||||
Total operating expenses |
| | |
| | ||||
Operating loss |
| ( | ( |
| ( | ||||
Change in fair value of warrants | | ( | | ||||||
Finance income |
| | |
| | ||||
Finance expenses |
| ( | ( |
| ( | ||||
Finance income, net |
| | |
| | ||||
Loss before income taxes |
| ( | ( |
| ( | ||||
Income taxes (tax benefit) (Note 22) |
| | |
| ( | ||||
Loss | $ | ( | $ | ( | $ | ( | |||
Other comprehensive income (loss) (net of tax effect): | |||||||||
Amounts that will not be reclassified subsequently to profit or loss: | |||||||||
Remeasurement gain (loss) from defined benefit plans |
| | |
| ( | ||||
Amounts that will be or that have been reclassified to profit or loss when specific conditions are met: | |||||||||
Adjustments arising from translating financial statements of foreign operations | | ( | — | ||||||
Total comprehensive loss |
| $ | ( | $ | ( |
| $ | ( | |
Basic and diluted loss per Ordinary share (Note 23) | $ | ( | $ | ( | $ | ( | |||
Weighted average number of shares outstanding used to compute basic and diluted loss per share |
| | |
| | ||||
The accompanying notes are an integral part of the consolidated financial statements.
F-4
Table of Contents
FREIGHTOS LIMITED AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
U.S. dollars in thousands
| | | Reserve from | Foreign | | | ||||||||||||
remeasurement | currency |
| ||||||||||||||||
Share | Share | of defined | translation | Accumulated |
| |||||||||||||
| capital | | premium | | benefit plans | | reserve | | deficit | Total | ||||||||
Balance as of January 1, 2023 | $ | $ | | $ | | $ | — | $ | ( | $ | | |||||||
Loss | — | — | — | — | ( | ( | ||||||||||||
other comprehensive income (loss) | — | — | ( | — | — | ( | ||||||||||||
Total comprehensive loss | — | — | ( | — | ( | ( | ||||||||||||
Issuance of Ordinary shares | | — | — | — | | |||||||||||||
Issuance of Ordinary shares, net in connection with the closing of the BCA (see Note 1d) | | — | — | — | | |||||||||||||
Exercise of options | | — | — | — | | |||||||||||||
Share-based compensation | — | | — | — | — | | ||||||||||||
Share listing expense | — | | — | — | — | | ||||||||||||
Balance as of December 31, 2023 | $ | $ | | $ | | $ | — | $ | ( | $ | | |||||||
Loss | — | — | — | — | ( | ( | ||||||||||||
Total other comprehensive income (loss) | — | — | | ( | — | ( | ||||||||||||
Total comprehensive income (loss) | — | — | | ( | ( | ( | ||||||||||||
Issuance of Ordinary shares | | — | — | — | | |||||||||||||
Exercise of options and vesting of restricted shares | | — | — | — | | |||||||||||||
Share-based compensation | — | | — | — | — | | ||||||||||||
Balance as of December 31, 2024 | $ | $ | | $ | | $ | ( | $ | ( | $ | | |||||||
Loss | — | — | — | — | ( | ( | ||||||||||||
Total other comprehensive income | — | — | | | — | | ||||||||||||
Total comprehensive income (loss) | — | — | | | ( | ( | ||||||||||||
Exercise of options and vesting of restricted shares | | — | — | — | | |||||||||||||
Share-based compensation | — | | — | — | — | | ||||||||||||
Balance as of December 31, 2025 | $ | | $ | | $ | | $ | | $ | ( | $ | | ||||||
*)
The accompanying notes are an integral part of the consolidated financial statements.
F-5
Table of Contents
FREIGHTOS LIMITED AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
Year ended December 31, | |||||||||
| 2025 | | 2024 | | 2023 | ||||
Cash flows from operating activities: | |||||||||
Loss | $ | ( | $ | ( | $ | ( | |||
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||
Adjustments to profit or loss items: | |||||||||
Depreciation and amortization | | | | ||||||
Impairment of goodwill | — | | — | ||||||
Share listing expense | — | — | | ||||||
Change in fair value of warrants | ( | | ( | ||||||
Changes in the fair value of contingent consideration | — | ( | ( | ||||||
Share-based compensation | | | | ||||||
Operating expense settled by issuance of shares (see Note 16c.1) | — | | | ||||||
Finance income, net | ( | ( | ( | ||||||
Taxes on income (tax benefit) | | | ( | ||||||
| | | |||||||
Changes in asset and liability items: | |||||||||
Decrease (increase) in user funds | | ( | ( | ||||||
Increase (decrease) in user accounts | ( | | | ||||||
Decrease in other receivables and prepaid expenses | | | | ||||||
Decrease (increase) in trade receivables | ( | ( | | ||||||
Increase (decrease) in trade payables | | ( | ( | ||||||
Increase (decrease) in accrued severance pay, net | | ( | ( | ||||||
Increase (decrease) in accrued expenses and other payables | ( | | ( | ||||||
| ( | ( | |||||||
Cash paid during the year for: | |||||||||
Interest received, net | | | | ||||||
Taxes paid, net | ( | ( | ( | ||||||
| | | |||||||
Net cash used in operating activities | ( | ( | ( | ||||||
Cash flows from investing activities: | |||||||||
Purchase of property and equipment | ( | ( | ( | ||||||
Proceeds from sale of property and equipment | | | | ||||||
Acquisition of a subsidiary, net of cash acquired (a) | — | ( | — | ||||||
Payment of payables for an acquisition of a subsidiary | — | — | ( | ||||||
Withdrawal of (investment in) short-term investments, net | — | | ( | ||||||
Investment in short-term bank deposits | ( | ( | ( | ||||||
Withdrawal of short-term bank deposits | | | — | ||||||
Withdrawal of long-term deposits | | | | ||||||
Investment in long-term deposits | ( | ( | ( | ||||||
Net cash provided by (used in) investing activities | $ | | $ | | $ | ( | |||
F-6
Table of Contents
FREIGHTOS LIMITED AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Cont.)
U.S. dollars in thousands
Year ended December 31, | |||||||||
| 2025 | | 2024 | | 2023 | ||||
Cash flows from financing activities: | |||||||||
Proceeds from the issuance of share capital and warrants net of transaction costs | $ | — | $ | — | $ | | |||
Repayment of lease liabilities | ( | ( | ( | ||||||
Repayment of short-term bank loan and credit | — | — | ( | ||||||
Exercise of options | | | | ||||||
Net cash provided by (used in) financing activities | ( | | | ||||||
Exchange differences on balances of cash and cash equivalents | | ( | ( | ||||||
Loss from translation of cash and cash equivalents of foreign activity | | ( | — | ||||||
Increase (decrease) in cash and cash equivalents | |
| ( |
| | ||||
Cash and cash equivalents at the beginning of the period | |
| |
| | ||||
Cash and cash equivalents at the end of the period | $ | | $ | | $ | | |||
(a) Acquisition of an initially consolidated subsidiary: |
|
| |||||||
Working capital (excluding cash and cash equivalents) | $ | — | $ | ( | $ | — | |||
Property and equipment |
| — |
| |
| — | |||
Right of use assets | — | | — | ||||||
Intangible assets |
| — |
| |
| — | |||
Goodwill |
| ( |
| |
| — | |||
Other payables |
| |
| ( |
| — | |||
Shares issued |
| — |
| ( |
| — | |||
Lease liabilities | — | ( | — | ||||||
Acquisition of a subsidiary, net of cash acquired | $ | — | $ | | $ | — | |||
(b) Significant non-cash transactions: |
|
| | ||||||
Right-of-use asset recognized with corresponding lease liability (see Note 10) | $ | | $ | | $ | | |||
Issuance of shares for previous acquisition of a subsidiary | $ | — | $ | — | $ | | |||
The accompanying notes are an integral part of the consolidated financial statements.
F-7
Table of Contents
FREIGHTOS LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 1: — GENERAL
| a. | Freightos Limited (the “Company” or “Freightos Cayman”, and together with its subsidiaries — “Freightos” or the “Group”) was incorporated on April 12, 2022 under the laws of the Cayman Islands. The Company is an exempted company limited by shares. |
| b. | Freightos operates a leading, vendor-neutral booking and payment platform for international freight (the “Platform”). Freightos’ Platform supports supply chain efficiency and agility by enabling real-time procurement of ocean and air shipping across more than importers/exporters, thousands of forwarders, and dozens of airlines and ocean carriers. |
Freightos operates its business through
| c. | The Group has the following subsidiaries as of December 31, 2025: |
Freightos Hong Kong Limited (“Freightos-HK”), a wholly-owned subsidiary of the Company, was incorporated in Hong-Kong on January 10, 2012. Through September 30, 2022 Freightos-HK served as the holding company of the rest of the group entities and on that date distributed the shares of several of its subsidiaries to the Company. Freightos-HK is principally engaged in the provision of business interface and fronting services to its Israeli affiliate.
Freightos Ltd, a wholly-owned subsidiary of the Company, was incorporated in Israel on August 8, 2012 and started its operation on that date (the “Israeli subsidiary”). Currently, the Israeli subsidiary owns most of the technology and intellectual property of the Group.
Freightos Software Development and Data Services Ltd., a wholly-owned subsidiary of the Company (whose shares are partially held in trust for the Company), was registered on January 18, 2012 in Ramallah, within the Palestinian Authority (the “Palestinian subsidiary”). The Palestinian subsidiary’s main activity is the development of certain software and know-how related to the Group’s offering of software and services, and customer and technical support.
Freightos Inc., a wholly-owned subsidiary of the Company, was incorporated in Delaware in the United States on May 28, 2015 (the “US subsidiary”). The US subsidiary is engaged in rendering billing services and holds the membership interests of 9T Technologies, LLC and the shares of Clearit Customs Services, Inc. (see below).
Freightos S.L.U. (formerly: Web Cargo, S.L.U.), a wholly-owned Spanish subsidiary of the Company, was acquired in August 2016 (“WebCargo”). WebCargo is a software company that seeks to provide a competitive edge to air freight forwarders by optimizing rate management tasks. Currently, WebCargo operates as a low-risk distributor for certain of the Group’s products and services, as well as a contracted research and development service provider for the Israeli subsidiary.
Freightos Information Technology (Shanghai) Co., Ltd., a wholly-owned subsidiary of Freightos-HK, was established on January 17, 2018, in the People’s Republic of China (the “China subsidiary”). The China subsidiary engages in providing certain customer and technical support services to the Group.
F-8
Table of Contents
FREIGHTOS LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 1: — GENERAL (Cont.)
Freightos India Private Limited, a wholly-owned subsidiary of Freightos-HK, was established on March 13, 2019, in India, to act as a low-risk distributor of certain of the Group’s products and services in India.
9T Technologies LLC (“7LFreight”), a wholly-owned subsidiary of the US subsidiary, incorporated in the US, was acquired through a business combination closed on December 30, 2021. 7LFreight acts as a low-risk distributor of certain of the Group’s products and services in the U.S. and is a software company that seeks to provide a competitive edge to freight forwarders by optimizing rate management tasks.
Clearit Customs Brokers Inc. (“Clearit-CA”), a wholly-owned subsidiary of the Company, was established in June 2021 in Canada to acquire certain assets as part of a business combination completed on February 16, 2022 (the “Clearit Acquisition”). Clearit-CA is engaged in the business of providing online customs clearance and brokerage services in Canada.
Clearit Customs Services Inc. (“Clearit-US”), a wholly-owned subsidiary of the US subsidiary, incorporated in the US, was acquired through the Clearit Acquisition. Clearit-US is engaged in the business of providing online customs clearance and brokerage services in the US.
Shipsta S.àr.l. (“Shipsta”), a wholly-owned subsidiary of the Israeli subsidiary, incorporated in Luxembourg, was acquired through a business combination closed on August 16, 2024 (see also Note 5). Shipsta is a leading freight tender procurement platform used to procure freight at scale from leading freight forwarders and carriers.
| d. | Business Combination Agreement |
On May 31, 2022, the Company entered into a business combination agreement (the “BCA”) with Gesher I Acquisition Corp., a Cayman Islands exempted company limited by shares (“Gesher”), Freightos Merger Sub I, a Cayman Islands exempted company limited by shares and a direct, wholly-owned subsidiary of the Company (“Merger Sub I”), and Freightos Merger Sub II, a Cayman Islands exempted company limited by shares and a direct, wholly-owned subsidiary of Freightos (“Merger Sub II”). The BCA was closed on January 25, 2023 (the “Closing Date”).
Pursuant to the BCA, on the Closing Date Merger Sub I merged with and into Gesher, with Gesher being the surviving entity. Then, Gesher merged with and into Merger Sub II with Merger Sub II surviving as a wholly-owned subsidiary of the Company (collectively, the “Transactions”). Upon consummation of the Transactions, the Company became a publicly traded company listed on the Nasdaq Capital Market under the symbols “CRGO” and “CRGOW” and the former equity holders of Gesher became equity holders of the Company.
F-9
Table of Contents
FREIGHTOS LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 1: — GENERAL (Cont.)
On the Closing Date, in connection with the closing of the Transactions Freightos also consummated private placements contemplated by a forward purchase agreement and a backstop agreement, each assigned from Gesher to the Company. Pursuant to these agreements a Forward Purchaser, as defined in the forward purchase agreement, purchased
On the Closing Date, in connection with the closing of the Transactions the Company and its shareholders recapitalized the Company’s equity securities whereby each share of the Company’s Preferred shares was converted into
The Transactions were accounted for as a reverse recapitalization, in accordance with the relevant International Financial Reporting Standards (“IFRS”) and the Group was deemed to be the accounting acquirer. Gesher did not meet the definition of a business in accordance with IFRS 3 - “Business Combinations”, and the Transactions were instead accounted for within the scope of IFRS 2 - “Share based payment” (“IFRS 2”), as a share-based payment transaction in exchange for a public listing service. In accordance with IFRS 2 the Company recorded a one-time share-based Share listing expense of $
| Amount | | Number of Shares | ||
Shares issued to Gesher shareholders |
| |
| | |
Opening price of the Company’s shares on Nasdaq as of January 25, 2023 ($) |
| |
| | |
(A) Fair value of the Company’s shares issued to Gesher shareholders |
| |
| | |
Warrants issued to Gesher shareholders |
| |
| | |
Opening price of the Company’s warrants on Nasdaq as of January 25, 2023 ($) |
| |
| | |
(B) Fair value of the Company’s warrants issued to Gesher shareholders |
| |
| | |
Gesher’s cash in trust |
| |
| | |
Gesher’s liabilities |
| ( |
| | |
(C) Net assets of Gesher |
| |
| | |
IFRS 2 Listing expenses (A+B-C) |
| $ | |
| |
| e. | These consolidated financial statements have been prepared on a going concern basis, which contemplates that the Company will continue in operation for the foreseeable future and be able to realize its assets and discharge its liabilities and commitments in the normal course of business. As of December 31, 2025, the Company had an accumulated deficit of $ |
F-10
Table of Contents
FREIGHTOS LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 2: — MATERIAL ACCOUNTING POLICIES
The following accounting policies have been applied consistently in the consolidated financial statements for all periods presented, unless otherwise stated.
a. | Basis of presentation of the financial statements: |
These financial statements have been prepared in accordance with IFRS as issued by the International Accounting Standards Board (“IASB”).
These financial statements have been prepared on a cost basis, except for certain financial instruments presented at fair value through profit or loss and certain employee benefit liabilities, net.
The Company has elected to present the profit or loss items using the function of expense method.
b. | Consolidated financial statements: |
The consolidated financial statements comprise the financial statements of companies that are controlled by the Company (subsidiaries). Control is achieved when the Company is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Potential voting rights are considered when assessing whether an entity has control. The consolidation of the financial statements commences on the date on which control is obtained and ends when such control ceases.
The financial statements of the Company and of the subsidiaries are prepared on the same dates and for the same periods. The consolidated financial statements are prepared using uniform accounting policies by all companies in the Group. Intragroup balances and transactions and gains or losses resulting from intragroup transactions are eliminated in full in the consolidated financial statements.
c. | Functional currency, presentation currency and foreign currency: |
| 1. | Functional currency and presentation currency: |
The consolidated financial statements are presented in U.S. dollar (“USD”), which is the Company’s functional currency. For each subsidiary, the Group determines the functional currency and items included in the financial statements of each subsidiary are measured using that functional currency. The functional currency of all the Group’s subsidiaries is the USD, except for Shipsta’s functional currency, which is the Euro (“EUR”).
| 2. | Transactions, assets and liabilities in foreign currency: |
Transactions denominated in foreign currency are recorded upon initial recognition at the exchange rate at the date of the transaction. After initial recognition, monetary assets and liabilities denominated in foreign currency are translated at each reporting date into the functional currency at the exchange rate at that date. Non-monetary assets and liabilities denominated in foreign currency are translated using exchange rates at the date of the transaction. Exchange rate differences are recognized in profit or loss.
Assets and liabilities of a subsidiary for which the functional currency is other than the USD, are translated at the closing rate at each reporting date. Profit or loss items are translated at average exchange rates for all periods presented. The resulting translation differences are recognized in other comprehensive income (loss) (“OCI”).
F-11
Table of Contents
FREIGHTOS LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 2: — MATERIAL ACCOUNTING POLICIES (Cont.)
d. | Cash equivalents: |
Cash equivalents are considered as highly liquid investments, including unrestricted short-term bank deposits with an original maturity of three months or less from the date of investment or with a maturity of more than three months, but which are redeemable on demand without penalty and which form part of Freightos’ cash management. The balance of cash equivalents also includes certain cash amounts held in accounts with third party payment service providers which are already earned and available for disbursement by the Company.
e. | User funds and User accounts: |
Freightos has entered into arrangements with third party payment service providers to hold funds on behalf of buyers and sellers (“users”) on its Freightos.com and WebCargo eBooking platforms (See Note 2j).
User funds consist of buyers’ prepayments, including the Freightos transaction and service fees that would be earned when an order is completed, credits issued upon cancellations and seller fees that have not yet been withdrawn. User accounts represent the corresponding liability to the users.
Freightos does not have ownership over these funds and does not have the right to direct these funds to be used at will or for its own benefit other than those funds related to transaction and service fees owed to the Group after control has been obtained by the customers.
f. | Property and equipment: |
Property and equipment are measured at cost, including directly attributable costs, less accumulated depreciation, accumulated impairment losses and excluding day-to-day servicing expenses, if any.
Depreciation is calculated on a straight-line basis over the useful life of the assets at annual rates as follows:
| % | |
Computers and hardware |
| |
Office furniture and equipment |
| |
Leasehold improvements |
| See below |
Leasehold improvements are depreciated on a straight-line basis over the shorter of the lease term (including reasonably certain options periods) and the estimated useful life of the improvements.
The useful life, depreciation method and residual value of an asset are reviewed at least each year-end and any changes are accounted for prospectively as a change in accounting estimate.
An item of property and equipment is derecognized upon disposal or when no future economic benefits are expected from its use or disposal.
g. | Business combinations and goodwill: |
The cost of the acquisition is measured at the fair value of the consideration transferred on the acquisition date.
Direct acquisition costs are carried to the statement of profit or loss as incurred.
F-12
Table of Contents
FREIGHTOS LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 2: — MATERIAL ACCOUNTING POLICIES (Cont.)
Contingent consideration is recognized at fair value on the acquisition date. If the contingent consideration is classified as a financial asset or liability in accordance with IFRS 9, subsequent changes in the fair value of the contingent consideration are recognized in profit or loss. If the contingent consideration is classified as an equity instrument, it is measured at fair value on the acquisition date without subsequent remeasurement.
The Company allocates the fair value of purchase consideration to the tangible assets acquired, liabilities assumed and intangible assets acquired based on their estimated fair values.
Goodwill is initially measured at cost which represents the excess of the acquisition consideration over the net identifiable assets acquired and liabilities assumed.
h. | Leases: |
At inception of a contract, the Company assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
The Company recognizes a right-of-use asset and a lease liability at the lease commencement date, excluding leases whose term is up to 12 months and leases for which the underlying asset is of low value. For these excluded leases, the Company has elected to recognize the lease payments as an expense in profit or loss on a straight-line basis over the lease term. In measuring the lease liability, the Company has elected to apply the practical expedient in IFRS 16 and does not separate the lease components from the non-lease components included in a single contract.
The Group has contracts that are, or contain, leases, for the buildings and offices used for its operations. Leases which entitle employees to a company car as part of their employment terms are accounted for as employee benefits in accordance with the provisions of International Accounting Standards (“IAS”) 19 and not as subleases.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group’s incremental borrowing rate. After the commencement date, the Company measures the lease liability using the effective interest rate method.
On the commencement date, the right-of-use asset is recognized in an amount equal to the lease liability plus lease payments already made on or before the commencement date and initial direct costs incurred. The right-of-use asset is measured applying the cost model and depreciated over the shorter of its useful life and the lease term.
The periods of depreciation of the right-of-use buildings and offices assets are
The Company tests for impairment of the right-of-use asset whenever there are indications of impairment pursuant to the provisions of IAS 36.
Lease liability is re-measured when there is a change in future lease payments arising from a change in an index or rate, or if the Company changes its assessment of whether it will exercise a purchase, extension or termination option.
When the lease liability is re-measured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
Lease extension and termination options:
A non-cancelable lease term includes both the periods covered by an option to extend the lease when it is reasonably certain that the extension option will be exercised and the periods covered by a lease termination option when it is reasonably certain that the termination option will not be exercised.
F-13
Table of Contents
FREIGHTOS LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 2: — MATERIAL ACCOUNTING POLICIES (Cont.)
In the event of any change in the expected exercise of the lease extension option or in the expected non-exercise of the lease termination option, the Company re-measures the lease liability based on the revised lease term using a revised discount rate as of the date of the change in expectations. The total change is recognized in the carrying amount of the right-of-use asset until it is reduced to zero, and any further reductions are recognized in profit or loss.
i. | Impairment of non-financial assets: |
The Company evaluates the need to record an impairment of non-financial assets whenever events or changes in circumstances indicate that the carrying amount is not recoverable. If the carrying amount of non-financial assets exceeds their recoverable amount, the assets are reduced to their recoverable amount. The recoverable amount is the higher of fair value less costs of sale and value in use. In measuring value in use, the expected future cash flows are discounted using a pre-tax discount rate that reflects the risks specific to the asset. The recoverable amount of an asset that does not generate independent cash flows is determined for the cash-generating unit to which the asset belongs. Impairment losses are recognized in profit or loss.
Goodwill in respect of subsidiaries:
The Company reviews goodwill for impairment once a year, on December 31, or more frequently if events or changes in circumstances indicate that there is an impairment.
Goodwill is tested for impairment by assessing the recoverable amount of the cash-generating unit (or group of cash-generating units) to which the goodwill has been allocated. An impairment loss is recognized if the recoverable amount of the cash-generating unit (or group of cash-generating units) to which goodwill has been allocated is less than the carrying amount of the cash-generating unit (or group of cash-generating units). Any impairment loss is allocated first to goodwill. Impairment losses recognized for goodwill cannot be reversed in subsequent periods.
j. | Revenue: |
Revenue from contracts with customers is recognized when the control over the goods or services is transferred to the customer. The transaction price is the amount of the consideration that is expected to be received based on the contract terms, excluding amounts collected on behalf of third parties (such as taxes).
In determining the amount of revenue from contracts with customers, the Company evaluates whether it or another member of the Group is a principal or an agent in the arrangement. A member of the Group is a principal when it controls the promised goods or services before transferring them to the customer. In these circumstances, the Company recognizes revenue for the gross amount of the consideration. When a member of the Group is an agent, the Company recognizes revenue for the net amount of the consideration, after deducting the amount due to the principal.
The Company’s revenue is derived from several sources:
| ● | Transaction fees and ancillary services fees on its global freight booking and payments (transactional) platforms - Freightos.com and WebCargo eBooking (the “Platform”), as well as fees for providing customs brokerage services. |
| ● | Subscriptions and professional services fees from its Solutions offerings. |
F-14
Table of Contents
FREIGHTOS LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 2: — MATERIAL ACCOUNTING POLICIES (Cont.)
Platform offerings:
In its Platform, Freightos provides digitalized price quoting, booking and payments while considering actual capacity among global freight participants. Platform revenue is generated from specific freight-service transactions booked between buyers and sellers on the Platform. Platform revenue includes buyer platform fees, seller transaction fees (flat or a percentage of transaction value), fees related to payments or payment terms, and fees related to sales of ancillary services like third party insurance and customs brokerage. Freightos’ customers are users of its platform, such as international shippers, freight forwarders, third-party ancillary services providers and air and ocean carriers.
Fees are mainly remitted from a third-party payment provider who collects up-front from users and facilitates the payments from buyers to sellers, or are collected directly from carriers. Any prepaid amounts from buyers are recorded simultaneously as an asset under “user funds” and as a corresponding liability to users under “user accounts”. Revenue recognition is deferred until the order is completed.
In some cases, Freightos offers credit payment terms to certain buyers on the Platform.
The Company has elected to apply the practical expedient such that it does not evaluate payment terms of one year or less for the existence of a significant financing component.
Freightos’ revenue generated by the Platform is primarily related to facilitating and enabling sellers and buyers to contract for international freight. Freightos only has one distinct performance obligation in connection with its Platform. Freightos earns the transaction fees and service fees, and recognizes revenue, once the user obtains control of the service, which occurs at a point in time upon completion of each order.
The Company recognizes revenue on a net basis since Freightos acts as an agent on its Platform. Freightos does not take responsibility for the sellers’ services, and therefore Freightos does not obtain control on the services before they are transferred to the customer.
Solutions offerings:
Freightos provides software tools and data to help industry participants automate their pricing, sales and procurement processes. Freightos generates revenue from recurring subscriptions for Software as a Service (“SaaS”) and data and recognizes revenue ratably over the contract period when the service is rendered to the customer. Freightos also receives revenue from certain non-recurring engineering and customization services associated with SaaS so the Company recognizes this revenue over the subscription period.
F-15
Table of Contents
FREIGHTOS LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 2: — MATERIAL ACCOUNTING POLICIES (Cont.)
Costs of obtaining a contract:
In order to obtain certain contracts with customers, Freightos incurs incremental costs in obtaining the contract (such as sales commissions which are contingent on making binding sales). Costs incurred in obtaining the contract with the customer which would not have been incurred if the contract had not been obtained and which the Company expects to recover are recognized as an asset and amortized on a systematic basis that is consistent with the provision of the services under the specific contract.
The Company has elected to apply the practical expedient allowed by IFRS 15 according to which incremental costs of obtaining a contract are recognized as an expense when incurred if the amortization period of the asset is one year or less.
k. | Employee benefit liabilities: |
Freightos has several employee benefit plans:
| 1. | Short-term employee benefits: |
Short-term employee benefits are benefits that are expected to be settled before twelve months after the end of the annual reporting period in which the employees render the related services. These benefits include salaries, paid annual leave, paid sick leave, recreation and social security contributions and are recognized as expenses as the services are rendered. A liability for a cash bonus is recognized when Freightos has a legal or constructive obligation to make such payment as a result of past service rendered by an employee and a reliable estimate of the amount can be made.
| 2. | Post-employment benefits: |
The Israeli subsidiary has defined contribution plans for almost all of the employees of the Israeli subsidiary that elected to be included under Section 14 of the Israeli Severance Compensation Act, 1963 (“Section 14”). According to Section 14, the Israeli subsidiary makes monthly deposits to pension funds or insurance policies in the name of each employee. Once deposits are made, the Israeli subsidiary is released from future severance obligation with respect to these employees, and hence
The Group also operates a defined benefit plan for one employee of the Israeli subsidiary that did not elect to be included under Section 14, and for employees of other subsidiaries that are entitled according to their respective domicile’s laws to severance pay upon dismissal or retirement. The Company measured this liability for termination of employment using the projected unit credit method. The actuarial assumptions include expected salary increases and rates of employee turnover based on the estimated timing of payment. The amounts are presented based on discounted expected future cash flows using a discount rate determined by reference to market yields at the reporting date on high quality corporate bonds with a term that is consistent with the estimated term of the severance pay obligation.
In respect of its severance pay obligation to certain of its employees, the Group makes current deposits in pension funds and insurance companies (the “plan assets”). Plan assets comprise assets held by a long-term employee benefit fund or qualifying insurance policies. Plan assets are not available to the Group’s creditors and cannot be returned directly to the Group. The liability for employee benefits shown in the statement of financial position reflects the present value of the defined benefit obligation less the fair value of the plan assets. Remeasurements of the net liability are recognized in other comprehensive income (loss) in the period in which they occur.
F-16
Table of Contents
FREIGHTOS LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 2: — MATERIAL ACCOUNTING POLICIES (Cont.)
| 3. | Termination benefits: |
Termination benefits are created as a result of the Group’s decision to dismiss employees before the normal retirement age or as a result of the employee decision to accept early retirement. A liability for a termination benefit is recognized at the earlier of when the entity can no longer withdraw the offer of the termination benefit and when the entity recognizes any related restructuring costs.
l. | Intangible assets: |
Intangible assets acquired separately are measured on initial recognition at cost. Intangible assets acquired in a business combination are measured at fair value at the acquisition date. Following initial recognition, intangible assets are carried at cost less any accumulated amortization and accumulated impairment losses.
A summary of the useful economic lives of the intangible assets purchased by the Group is as follows:
| Years | |
Technology |
| |
Customer relationships |
|
Intangible assets with finite lives are amortized on a straight-line basis over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and the amortization method for an intangible asset with a finite useful life are reviewed at least at each year end.
Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are considered to modify the amortization period or method, as appropriate, and are treated as changes in accounting estimates. The amortization expense on intangible assets with finite lives is recognized in the statement of profit or loss in the expense category that is consistent with the function of the intangible assets.
Research and development expenditures:
Research expenditures are recognized in profit or loss when incurred.
Costs incurred in an internal development project are recognized as an intangible asset only if the Company can demonstrate the technical feasibility of completing the intangible asset so that it will be available for use or sale; the Company’s intention to complete the intangible asset and use or sell it; the ability to use or sell the intangible asset; how the intangible asset will generate future economic benefits; the availability of adequate technical, financial and other resources to complete the intangible asset; and the ability to measure reliably the expenditures attributable to the intangible asset during its development.
For all the reporting periods, the above criteria have not been met and therefore all development costs have been recognized as an expense in profit or loss.
m. | Taxes on income: |
Current or deferred taxes are recognized in profit or loss, except to the extent that they relate to items which are recognized in other comprehensive income (loss) or equity.
| 1. | Current taxes: |
The current tax liability is measured using the tax rates and tax laws that have been enacted or substantively enacted by the reporting date as well as adjustments required in connection with the tax liability in respect of previous years.
F-17
Table of Contents
FREIGHTOS LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 2: — MATERIAL ACCOUNTING POLICIES (Cont.)
| 2. | Deferred taxes: |
Deferred taxes are computed in respect of temporary differences between the carrying amounts in the financial statements and the amounts attributed for tax purposes. Deferred taxes are measured at the tax rate that is expected to apply when the asset is realized or the liability is settled, based on tax laws that have been enacted or substantively enacted by the reporting date.
Deferred tax assets are reviewed at each reporting date and reduced to the extent that it is not probable that they will be utilized. Deductible carryforward losses and temporary differences for which deferred tax assets had not been recognized are reviewed at each reporting date and a respective deferred tax asset is recognized to the extent that their utilization is probable.
The taxes that would apply in the event that the investments in subsidiaries were realized were not taken into account in the calculation of the deferred taxes, since the Group intends to hold and develop these investments. In addition, the deferred taxes on the distribution of earnings by subsidiaries as dividends were not taken into account, since the dividends are not taxable or since a decision has been made not to distribute taxable dividends in the foreseeable future.
Deferred taxes are offset if there is a legally enforceable right to offset a current tax asset against a current tax liability and the deferred taxes relate to the same taxpayer and the same taxation authority.
| 3. | Uncertain tax positions: |
Uncertain tax positions arise from tax treatments applied by the Group which may be challenged by the tax authorities due to the complexity of the transaction or different interpretation of the tax laws, a claim for rectification brought by the Group, an appeal for a refund claimed from the tax authorities related to additional assessments or a tax investigation by the tax authorities. The Company recognizes its uncertain tax positions in the consolidated financial statements in accordance with IAS 12, “Income Taxes”. The income tax asset is recognized if a tax refund is probable for taxes paid and levied by the tax authority, and the amount to be paid as a result of the tax investigation and others is recognized as a current tax payable.
n.Financial instruments:
| 1. | Financial assets: |
Financial assets are measured upon initial recognition at fair value plus transaction costs that are directly attributable to the acquisition of the financial assets, except for financial assets measured at fair value through profit or loss in respect of which transaction costs are recorded in profit or loss.
2. | Impairment of financial assets: |
The Group has short-term financial assets such as trade receivables in respect of which the Company applies the simplified approach in IFRS 9 and measures the loss allowance in an amount equal to the lifetime expected credit losses.
| 3. | Derecognition of financial assets: |
A financial asset is derecognized only when:
| - | The contractual rights to the cash flows from the financial asset have expired; or |
| - | The Group has transferred substantially all the risks and rewards deriving from the contractual rights to receive cash flows from the financial asset or has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset; or |
F-18
Table of Contents
FREIGHTOS LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 2: — MATERIAL ACCOUNTING POLICIES (Cont.)
| - | The Group has retained its contractual rights to receive cash flows from the financial asset but has assumed a contractual obligation to pay the cash flows in full without material delay to a third party. |
4. | Financial liabilities: |
a) | Financial liabilities measured at amortized cost: |
Financial liabilities are initially recognized at fair value less transaction costs that are directly attributable to the issue of the financial liability.
After initial recognition, the Company measures all financial liabilities at amortized cost using the effective interest rate method, except for:
| - | Financial liabilities measured at fair value through profit or loss; |
| - | Financial liabilities that arise when a transfer of a financial asset does not qualify for derecognition or when the continuing involvement approach applies; |
| - | Contingent consideration recognized by an acquirer in a business combination to which IFRS 3 applies. |
b) | Financial liabilities measured at fair value through profit or loss: |
At initial recognition, the Company designates a financial liability in respect of contingent consideration in a business combination as measured at fair value through profit or loss.
At initial recognition, the Company measures these financial liabilities at fair value. Transaction costs are recognized in profit or loss. After initial recognition, changes in fair value are recognized in profit or loss.
| 5. | Derecognition of financial liabilities: |
A financial liability is derecognized only when it is extinguished, that is when the obligation specified in the contract is discharged or canceled or expires. A financial liability is extinguished when the debtor discharges the liability by paying in cash, other financial assets, goods or services; or is legally released from the liability.
| 6. | Extinguishing financial liabilities with equity instruments: |
Equity instruments issued to replace a debt are measured at the fair value of the equity instruments issued if their fair value can be reliably measured. If their fair value cannot be reliably measured, the equity instruments are measured based on the fair value of the financial liability extinguished on the date of extinguishment. The difference between the carrying amount of the financial liability extinguished and the fair value of the equity instruments issued is recognized in profit or loss.
| 7. | Warrants: |
According to IAS 32, “Financial Instruments: Presentation”, derivatives which will be settled only by the issuer exchanging fixed amounts of cash to fixed numbers of the Company’s Ordinary shares will be classified as equity. Otherwise, the instrument should be classified as a financial liability. Therefore, the Company has classified all Warrants as a financial liability. The warrant instrument is initially recognized at fair value, and subsequently measured at fair value. Changes in fair value are recognized in profit or loss.
F-19
Table of Contents
FREIGHTOS LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 2: — MATERIAL ACCOUNTING POLICIES (Cont.)
o.Fair value measurement:
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
Fair value measurement is based on the assumption that the transaction will take place in the asset’s or the liability’s principal market, or in the absence of a principal market, in the most advantageous market.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.
Fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.
All assets and liabilities measured at fair value or for which fair value is disclosed are categorized into levels within the fair value hierarchy based on the lowest level input that is significant to the entire fair value measurement:
Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 - inputs other than quoted prices included within Level 1 that are observable directly or indirectly.
Level 3 - inputs that are not based on observable market data (valuation techniques which use inputs that are not based on observable market data).
p.Loss per share:
Loss per share is calculated by dividing the loss attributable to the Company’s shareholders by the weighted number of Ordinary shares outstanding during the period.
Potential Ordinary shares are only included in the computation of diluted loss per share when their conversion increases loss per share or decreases income per share. Potential Ordinary shares that are converted during the period are included in diluted loss per share only until the conversion date.
q.Share-based payment transactions:
From time to time, the Company grants to the Group’s employees and service providers remuneration in the form of equity-settled share-based instruments, including restricted share units (“RSUs”), performance shares that are only issued if certain performance metrics are achieved, and options to purchase Ordinary shares. In addition, the Company settled certain transactions, such as an acquisition of a certain technology asset, by transferring shares.
Equity-settled transactions:
The cost of equity-settled transactions with employees is measured at the fair value of the equity instruments granted at grant date. Service and performance conditions are not taken into account when determining the grant date fair value of the awards, but the likelihood of the conditions being met is assessed as part of the Company’s best estimate of the number of equity instruments that will ultimately vest. The fair value is determined using an acceptable option pricing model.
F-20
Table of Contents
FREIGHTOS LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 2: — MATERIAL ACCOUNTING POLICIES (Cont.)
With respect to other service providers, the cost of the transactions is measured at the fair value of the goods or services received as consideration for equity instruments. In cases where the fair value of the goods or services received as consideration of equity instruments cannot be measured, they are measured by reference to the fair value of the equity instruments granted.
The cost of equity-settled transactions is recognized in profit or loss, together with a corresponding increase in equity, during the period in which the performance or service conditions are to be satisfied, ending on the date on which the relevant employees become fully entitled to the award (“the vesting period”).
No expense is recognized for awards that do not ultimately vest because service or performance conditions have not been met.
With respect to acquisition of assets settled by issuing and transferring of equity instruments the cost of the transactions is measured at the fair value of the equity instruments transferred and is recognized as the cost basis of the acquired assets.
NOTE 3: — DISCLOSURE OF NEW STANDARDS IN THE PERIOD PRIOR TO THEIR ADOPTION
On May 30, 2024, the IASB issued “Amendments to the Classification and Measurement of Financial Instruments - Amendments to IFRS 9 and IFRS 7” (“the Amendments”). The Amendments clarify certain aspects of the classification and measurement of financial instruments.
The Amendments address the following:
| ● | Derecognition of a financial liability settled through an electronic transfer system - an entity is permitted to make an accounting policy election to derecognize a financial liability (or part of it) that is settled in cash using an electronic payment system before the settlement date if certain conditions are met. An entity that makes this accounting policy election is required to apply it to all financial liabilities settled using the same electronic payment system. |
| ● | Assessing contractual cash flow characteristics for the classification of financial assets - the Amendments clarify how to assess the characteristics of contractual cash flows of financial assets with features linked to environmental, social and corporate governance (ESG) targets and other similar contingent features. The Amendments also enhance the description of the term ‘non-recourse’ and clarify the characteristics of contractually linked instruments (CLIs). |
| ● | Disclosures – the Amendments to IFRS 7 introduce new disclosure requirements for financial assets and liabilities with contractual terms that include contingent features (including ESG-related) and new disclosures for investments in equity instruments measured at fair value through other comprehensive income (FVTOCI). |
The Amendments are to be applied retrospectively commencing from annual reporting periods beginning on or after January 1, 2026. Earlier application is permitted subject to disclosure. An entity is permitted to early adopt only the Amendments that relate to the classification of financial assets and the related disclosures. An entity is not required to restate prior periods, but may do so if, and only if, it is possible to do so without the use of hindsight.
The Amendments are not expected to have a material effect on the Company’s consolidated financial statements.
F-21
Table of Contents
FREIGHTOS LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 3: — DISCLOSURE OF NEW STANDARDS IN THE PERIOD PRIOR TO THEIR ADOPTION (Cont.)
In April 2024, the IASB issued IFRS 18, “Presentation and Disclosure in Financial Statements” (“IFRS 18”) which replaces IAS 1, “Presentation of Financial Statements”.
IFRS 18 is aimed at improving comparability and transparency of communication in financial statements.
IFRS 18 retains certain existing requirements of IAS 1 and introduces new requirements on presentation within the statement of profit or loss, including specified totals and subtotals. It also requires disclosure of management-defined performance measures and includes new requirements for aggregation and disaggregation of financial information.
IFRS 18 does not modify the recognition and measurement provisions of items in the financial statements. However, since items within the statement of profit or loss must be classified into one of five categories (operating, investing, financing, taxes on income and discontinued operations), it may change the entity’s operating profit. Moreover, the publication of IFRS 18 resulted in consequential narrow scope amendments to other accounting standards, including IAS 7, “Statement of Cash Flows” and IAS 34, “Interim Financial Reporting”.
IFRS 18 is effective for annual reporting periods beginning on or after January 1, 2027, and is to be applied retrospectively. Early adoption is permitted, subject to disclosure.
The Company is evaluating the effects of IFRS 18, including the effects of the consequential amendments to other accounting standards, on its consolidated financial statements.
NOTE 4: — SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS USED IN THE PREPARATION OF THE FINANCIAL STATEMENTS
In the process of applying the significant accounting policies, the Company has made the following judgments which have the most significant effect on the amounts recognized in the financial statements:
| - | Determining the fair value of share-based payment transactions: |
The fair value of share-based payment transactions is determined upon initial recognition by an acceptable option pricing model. The inputs to the model include share price, exercise price and assumptions regarding expected volatility, expected life of share option and expected dividend yield.
| - | Discount rate for a lease liability: |
When the Company is unable to readily determine the discount rate implicit in a lease in order to measure the lease liability, the Company uses an incremental borrowing rate. That rate represents the rate of interest that the Company would have to pay to borrow over a similar term and with similar security, the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment. When there are no financing transactions that can serve as a basis, the Company determines the incremental borrowing rate based on its credit risk, the lease term and other economic variables deriving from the lease contract’s conditions and restrictions.
F-22
Table of Contents
FREIGHTOS LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 4: — SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS USED IN THE PREPARATION OF THE FINANCIAL STATEMENTS (Cont.)
The preparation of the financial statements requires management to make estimates and assumptions that have an effect on the application of the accounting policies and on the reported amounts of assets, liabilities, revenue and expenses. Changes in accounting estimates are reported in the period of the change in estimate.
The key assumptions made in the financial statements concerning uncertainties at the reporting date and the critical estimates determined by the Company that may result in a material adjustment to the carrying amounts of assets and liabilities are discussed below.
| - | Impairment of goodwill: |
The Company reviews goodwill for impairment at least once a year. This requires management to make an estimate of the projected future cash flows from the continuing use of the cash-generating unit (or a group of cash-generating units) to which the goodwill is allocated and also to choose a suitable discount rate for those cash flows.
| - | Deferred tax assets: |
Deferred tax assets are recognized for unused carryforward tax losses and deductible temporary differences to the extent that it is probable that taxable profit will be available against which the losses can be utilized. Significant management judgment is required to determine the amount of deferred tax assets that can be recognized, based upon the timing and level of future taxable profits, its source and the tax planning strategy.
| - | Post-employment benefits: |
The liability in respect of post-employment defined benefit plans is determined using actuarial valuations. The actuarial valuation involves making assumptions about, among others, the discount rate, rate of salary increase and employee turnover rate. The carrying amount of the liability may be significantly affected by changes in these estimates.
| - | Lease extension and/or termination options: |
In evaluating whether it is reasonably certain that the Group will exercise an option to extend a lease, the Company considers all relevant facts and circumstances that create an economic incentive for the Group to exercise the option to extend such as: significant amounts invested in leasehold improvements, the significance of the underlying asset to the Group’s operation and whether it is a specialized asset, the Group’s past experience with similar leases, etc.
After the commencement date, the Company reassesses the term of the lease upon the occurrence of a significant event or a significant change in circumstances that affects whether the Company is reasonably certain to exercise an option to previously included in the determination of the lease term, such as significant leasehold improvements that had not been anticipated on the lease commencement date, sublease of the underlying asset for a period that exceeds the end of the previously determined lease period, etc.
| - | Uncertain tax positions: |
The assessment of amounts of current and deferred taxes requires the Company’s management to take into consideration uncertainties that its tax position will be accepted and of incurring any additional tax expenses. This assessment is based on estimates and assumptions based on interpretation of tax laws and regulations, and the Group’s past experience. It is possible that new information will become known in future periods that will cause the final tax outcome to be different from the amounts that were initially recorded, such differences will impact the current and deferred income tax assets and liabilities in the period in which such determination is made.
F-23
Table of Contents
FREIGHTOS LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 4: — SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS USED IN THE PREPARATION OF THE FINANCIAL STATEMENTS (Cont.)
| - | Intangible assets acquired in a business combination - estimating the fair value: |
The fair value of intangible assets purchased is determined upon initial recognition by an acceptable valuation model and a purchase price allocation model. The fair value of share-based, and future contingent, consideration, as well as the allocation of the purchase price to the different assets acquired, are estimated based on models that include various inputs and assumptions.
NOTE 5: -BUSINESS COMBINATIONS
In August 2024, Freightos acquired all of the shares of Shipsta, a leading freight-tender procurement platform used by enterprises to procure freight at scale from leading freight forwarders and carriers. In consideration, Freightos agreed to pay the sellers, after giving effect to customary net working capital adjustments, a total amount of $
The consideration, after giving effect to customary net working capital adjustment, comprised a cash payment at closing of $
The following table summarizes the fair value at closing of the consideration and the decrease to the total consideration in the amount of $
Cash paid | | $ | |
Shares issued |
| | |
Payable for acquisition recorded at closing |
| | |
A decrease in the payable to sellers | ( | ||
$ | |
The following table summarizes the fair value of the acquired assets and assumed liabilities and the resulting goodwill as of the acquisition date after giving effect to the decrease in total consideration:
Cash | | $ | |
Current assets |
| | |
Right-of-use assets |
| | |
Property and equipment |
| | |
Customer relations |
| | |
Technology |
| | |
Goodwill |
| | |
Current liabilities |
| ( | |
Lease liabilities |
| ( | |
$ | |
Goodwill represents the purchase price consideration paid in excess of the net tangible and intangible assets acquired, and is attributable primarily to expected synergies and the assembled workforce.
F-24
Table of Contents
FREIGHTOS LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 6: — FINANCIAL INSTRUMENTS
The Group’s operations are exposed to various financial risks, such as market risk (mainly foreign currency risk), credit risk and liquidity risk.
| 1. | Foreign currency risk: |
Transactional foreign currency exposures represent risks associated with financial assets or liabilities denominated in currencies other than the functional currency of the transacting entity.
The Group operates primarily in Spain, the Palestinian Authority, the US, Luxembourg, Israel, and Canada and has an exchange rate risk as it earns revenue in EUR or in Canadian Dollar (“CAD”) and incurs fixed expenses in New Israeli Shekel (“NIS”), CAD and EUR, which differs from its functional currency.
As of December 31, 2025, the Group had excess financial and lease liabilities over financial assets denominated in currencies other than USD in total amount of $
The Company monitors transactional foreign currency risks, including currency position and future expected exposures. The Group uses non-designated hedges to mitigate the risks, mainly associated with foreign currency risk of changes in NIS for the Israeli Subsidiary.
The impact on the Company’s loss before taxes on income due to changes in the carrying amount of monetary assets and liabilities resulting from reasonably possible changes in NIS and EUR exchange rates, with all other variables held constant, is not material.
| 2. | Credit risk: |
The Group holds cash and cash equivalents, short-term bank deposit, short-term investments and user funds with various financial institutions and third-party payment service providers. Its policy is to spread its investments among various institutions. In accordance with this policy, the Group invests its funds with stable financial institutions.
The Company consistently monitors trade balances that are past due, and accordingly has recognized specifically allocated provision for doubtful accounts in an amount equal to the lifetime expected credit loss associated with each outstanding past due balance.
| 3. | Liquidity risk: |
Liquidity risk is the risk that the Group will encounter difficulty in meeting obligations arising from its financial liabilities that are settled by delivering cash or other financial assets.
Liquidity risk is managed on a group-wide basis. The Company’s approach to managing liquidity is to ensure it will have sufficient liquidity to meet its financial liabilities when due, including obtaining additional capital from investors and credit lines from banks and financial institutions.
The table below summarizes the maturity profile of the Group’s financial liabilities based on contractual undiscounted payments (including interest payments):
F-25
Table of Contents
FREIGHTOS LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 6: — FINANCIAL INSTRUMENTS (Cont.)
December 31, 2025:
| Less than one year | | 1 to 2 years | | 2 to 3 years | | more than 3 years | | Total | ||||||
Trade payables | $ | | $ | — | $ | — | $ | — | $ | | |||||
User accounts |
| |
| — |
| — | — |
| | ||||||
Accrued expenses and other payables |
| |
| — |
| — | — |
| | ||||||
Lease liabilities |
| |
| |
| | |
| | ||||||
$ | | $ | | $ | | $ | | $ | | ||||||
December 31, 2024:
| Less than one year | | 1 to 2 years | | 2 to 3 years | | more than 3 years | | Total | ||||||
Trade payables | $ | | $ | — | $ | — | $ | — | $ | | |||||
User accounts |
| |
| — |
| — | — |
| | ||||||
Accrued expenses and other payables |
| |
| — |
| — | — |
| | ||||||
Lease liabilities |
| |
| |
| | — |
| | ||||||
$ | | $ | | $ | | $ | — | $ | | ||||||
Changes in liabilities arising from financing activities:
| | | | Total | |||||||||||
liabilities | |||||||||||||||
arising | |||||||||||||||
Payable for | from | ||||||||||||||
Warrants | Lease | Contingent | acquisition of | financing | |||||||||||
| liabilities | | liabilities | | consideration | | subsidiary | | activities | ||||||
Balance as of January 1, 2024 | $ | | $ | | $ | | $ | — | $ | | |||||
Business combination |
| — |
| | — |
| |
| | ||||||
Lease termination |
| — |
| ( | — |
| — |
| ( | ||||||
Modification |
| — |
| | — |
| — |
| | ||||||
Changes in fair value | | — | ( | | | ||||||||||
Cash flows |
| — |
| ( | — |
| — |
| ( | ||||||
Revaluation recognized in OCI | — | ( | — | — | ( | ||||||||||
Currency revaluations | — | ( | — | ( | ( | ||||||||||
Balance as of December 31, 2024 | | | — | | | ||||||||||
New lease | — | | — | — | | ||||||||||
Lease termination |
| — |
| ( | — |
| — |
| ( | ||||||
Modification |
| — |
| | — |
| — |
| | ||||||
A decrease in acquisition-related payable (see Note 5) | — | — | — | ( | ( | ||||||||||
Changes in fair value | ( | — | — | ( | ( | ||||||||||
Cash flows |
| — |
| ( | — |
| — |
| ( | ||||||
Revaluation recognized in OCI | — | | — | — | | ||||||||||
Currency revaluations | — | | — | | | ||||||||||
Balance as of December 31, 2025 | $ | | $ | | $ | — | $ | | $ | | |||||
b.Fair value:
The carrying amounts of cash and cash equivalents, user funds, trade receivables, short-term bank deposit, short-term investments, other receivables, trade payables, user accounts and other payables approximate their fair values due to the short-term maturities of such instruments.
F-26
Table of Contents
FREIGHTOS LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 6: — FINANCIAL INSTRUMENTS (Cont.)
The fair value of the contingent payments recorded as part of business combinations was estimated using a valuation method based mainly on the current fair value and standard deviation of the Company’s Ordinary share, as well as on certain other management estimations of the probability of meeting certain performance indicators.
The following table presents the fair value measurement hierarchy for the Company’s financial instruments assets and liabilities carried at fair value:
As of December 31, 2025:
Fair value hierarchy | ||||||||||||
| Level 1 | | Level 2 | | Level 3 | | Total | |||||
Assets measured at fair value: |
| |
| |
| |
| | ||||
Other current receivables - hedge instruments | $ | — | $ | | $ | — | $ | | ||||
Liabilities measured at fair value: |
| |
| |
| |
| |||||
Other current payables- shares payable | $ | ( | $ | — | $ | — | $ | ( | ||||
Warrants liabilities | $ | ( | $ | — | $ | — | $ | ( | ||||
As of December 31, 2024:
Fair value hierarchy | ||||||||||||
| Level 1 | | Level 2 | | Level 3 | | Total | |||||
Assets measured at fair value: |
| |
| |
| |
| | ||||
Other current receivables - hedge instruments | $ | — | $ | | $ | — | $ | | ||||
Liabilities measured at fair value: |
| |
| |
| |
| | ||||
Other current payables - hedge instruments | $ | — | $ | ( | $ | — | $ | ( | ||||
Other current payables- shares payable | $ | ( | $ | — | $ | — | $ | ( | ||||
Warrants liabilities | $ | ( | $ | — | $ | — | $ | ( | ||||
There were no transfers from Level 1 to Level 2 during the reporting periods.
NOTE 7: — TRADE RECEIVABLES, NET
| a. | Trade receivables, net: |
December 31, | ||||||
| 2025 | | 2024 | |||
Open accounts | $ | | $ | | ||
Less - allowance for expected credit loss |
| ( |
| ( | ||
Trade receivables, net | $ | | $ | | ||
| b. | Movement in allowance for expected credit losses: |
| 2025 | 2024 | ||||
Balance as of January 1, | | $ | | $ | | |
Provision for the year |
| |
| | ||
Derecognition of bad debts |
| ( |
| ( | ||
Reversal in respect of collected accounts |
| ( |
| ( | ||
Initially consolidated subsidiary |
| — |
| | ||
Currency translation |
| |
| ( | ||
Balance as of December 31, | $ | | $ | | ||
F-27
Table of Contents
FREIGHTOS LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 7: — TRADE RECEIVABLES, NET (Cont)
| c. | Following is information about the credit risk exposure of the Company’s trade receivables: |
December 31, 2025:
Past due trade receivables | |||||||||||||||||||||
| Not | | < 30 | | 31 – 60 | | 61 – 90 | | 91 – 120 | | >120 | | |||||||||
past due | Days | days | days | days | days | Total | |||||||||||||||
$ in thousands | |||||||||||||||||||||
Gross carrying amount | $ | | $ | | $ | | $ | | $ | | $ | |
| $ | | ||||||
Allowance for expected credit losses | $ | | $ | | $ | | $ | | $ | | $ | |
| $ | | ||||||
December 31, 2024:
Past due trade receivables | |||||||||||||||||||||
| Not | | < 30 | | 31 – 60 | | 61 – 90 | | 91 – 120 | | >120 | | |||||||||
past due | Days | days | days | days | days | Total | |||||||||||||||
$ in thousands | |||||||||||||||||||||
Gross carrying amount | $ | | $ | | $ | | $ | | $ | | $ | |
| $ | | ||||||
Allowance for expected credit losses | $ | | $ | | $ | | $ | | $ | | $ | |
| $ | | ||||||
NOTE 8: — OTHER RECEIVABLES AND PREPAID EXPENSES
December 31, | ||||||
| 2025 | | 2024 | |||
Prepaid expenses | $ | | $ | | ||
Government authorities | | | ||||
Accrued interest | | | ||||
Other | | | ||||
$ | | $ | | |||
F-28
Table of Contents
FREIGHTOS LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 9: — PROPERTY AND EQUIPMENT, NET
December 31, 2025:
Office | ||||||||||||
Computer | furniture | Leasehold | ||||||||||
| equipment | | and equipment | | Improvements | | Total | |||||
Cost: | ||||||||||||
Balance at January 1, 2025 | $ | | $ | | $ | | $ | | ||||
Additions | | | | | ||||||||
Deductions | ( | ( | ( | ( | ||||||||
Revaluation recognized in OCI | | | | | ||||||||
Balance at December 31, 2025 | | | | | ||||||||
Accumulated depreciation: | ||||||||||||
Balance at January 1, 2025 | | |||||||||||
Depreciation | | |||||||||||
Deductions | ( | ( | ( | ( | ||||||||
Revaluation recognized in OCI | | |||||||||||
Balance at December 31, 2025 | | |||||||||||
Depreciated cost at December 31, 2025 | $ | $ | $ | $ | |
December 31, 2024:
Office | ||||||||||||
Computer | furniture | Leasehold | ||||||||||
| equipment | | and equipment | | Improvements | | Total | |||||
Cost: | ||||||||||||
Balance at January 1, 2024 | $ | | $ | | $ | | $ | | ||||
Initially consolidated subsidiary | | | | | ||||||||
Additions | | | | | ||||||||
Deductions | ( | — | — | ( | ||||||||
Revaluation recognized in OCI | — | — | ( | ( | ||||||||
Balance at December 31, 2024 | | | | | ||||||||
Accumulated depreciation: | ||||||||||||
Balance at January 1, 2024 | | | | | ||||||||
Depreciation | | | | | ||||||||
Deductions | ( | — | — | ( | ||||||||
Revaluation recognized in OCI | — | — | ( | ( | ||||||||
Balance at December 31, 2024 | | | | | ||||||||
Depreciated cost at December 31, 2024 | $ | | $ | | $ | | $ | | ||||
F-29
Table of Contents
FREIGHTOS LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 10: — LEASES
| a. | Information on leases: |
The Group has lease agreements that include leases of buildings, offices or cars that are used to maintain the Group’s ongoing operations. The weighted average lease term as of December 31, 2025 and 2024 is
December 31, | |||||||||
2025 | | 2024 | | 2023 | |||||
Interest expense on lease liabilities | $ | | $ | $ | | ||||
Total cash outflow for leases | $ | | $ | $ | | ||||
The Group has leases that include extension options. These options provide flexibility in managing the leased assets and align with the Group’s business needs.
The Company exercises significant judgment in deciding whether it is reasonably certain that the extension options will be exercised.
| b. | Disclosures in respect of right-of-use assets: |
December 31, 2025
| Offices | | Cars | | Total | ||||
Cost: | |||||||||
Balance at January 1, 2025 | $ | | $ | | $ | | |||
Addition | | — | | ||||||
Modification | | — | | ||||||
Termination | ( | ( | ( | ||||||
Revaluation recognized in OCI | | | | ||||||
Balance at December 31, 2025 | | | | ||||||
Accumulated depreciation: | |||||||||
Balance at January 1, 2025 | | | | ||||||
Depreciation | | | | ||||||
Termination | ( | ( | ( | ||||||
Revaluation recognized in OCI | | | | ||||||
Balance at December 31, 2025 | | | | ||||||
Depreciated cost at December 31, 2025 | $ | | $ | | $ | | |||
F-30
Table of Contents
FREIGHTOS LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 10: — LEASES (Cont.)
December 31, 2024
Offices | | Cars | Total | ||||||
Cost: |
| ||||||||
Balance at January 1, 2024 | $ | | $ | — | $ | | |||
Initially consolidated subsidiary | | | | ||||||
Modification | | — | | ||||||
Termination | — | ( | ( | ||||||
Revaluation recognized in OCI | ( | ( | ( | ||||||
Other | ( | — | ( | ||||||
Balance at December 31, 2024 | | | | ||||||
Accumulated depreciation: | |||||||||
Balance at January 1, 2024 | | — | | ||||||
Depreciation | | | | ||||||
Termination | — | ( | ( | ||||||
Revaluation recognized in OCI | ( | ( | ( | ||||||
Balance at December 31, 2024 | | | | ||||||
Depreciated cost at December 31, 2024 | $ | | $ | | $ | | |||
The discount rates used at inception of new leases are based on the estimated rate of the Group’s incremental borrowing in each lease, depending on the amount of the lease, its average life and the quality of the leased property. The discount rates range between
| c. | For an analysis of maturity dates of lease liabilities, see Note 6. |
NOTE 11: — GOODWILL AND INTANGIBLE ASSETS, NET
| a. | Composition and changes: |
2025:
Trade | Customer | Customer | ||||||||||||||||
| Goodwill | | Technology | | Name | | relationships | | database | | Total | |||||||
Cost: | ||||||||||||||||||
Balance as of January 1, 2025 | $ | | $ | | $ | | $ | | $ | | $ | | ||||||
Revaluation recognized in OCI | | | — | | — | | ||||||||||||
Adjustment (*) | ( | — | — | — | — | ( | ||||||||||||
Balance as of December 31, 2025 | | | | | | | ||||||||||||
Accumulated amortization and impairment: | ||||||||||||||||||
Balance as of January 1, 2025 | | | | | | | ||||||||||||
Amortization recognized in the year | — | | — | | — | | ||||||||||||
Revaluation recognized in OCI | | | — | | — | | ||||||||||||
Balance as of December 31, 2025 | | | | | | | ||||||||||||
Amortized cost at December 31, 2025 | $ | | $ | | $ | — | $ | | $ | — | $ | | ||||||
(*) | A reduction to the goodwill acquired in 2024 as part of the acquisition of Shipsta resulting from an expected reduction in the total acquisition consideration (see Note 5). |
F-31
Table of Contents
FREIGHTOS LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 11: — GOODWILL AND INTANGIBLE ASSETS, NET (Cont.)
2024:
Trade | Customer | Customer | ||||||||||||||||
| Goodwill | | Technology | | Name | | relationships | | database | | Total | |||||||
Cost: | ||||||||||||||||||
Balance as of January 1, 2024 | $ | | $ | | $ | | $ | | $ | | $ | | ||||||
Initially consolidated subsidiary | | | — | | — | | ||||||||||||
Revaluation recognized in OCI | ( | ( | — | ( | — | ( | ||||||||||||
Balance as of December 31, 2024 | | | | | | | ||||||||||||
Accumulated amortization and impairment: | ||||||||||||||||||
Balance as of January 1, 2024 | — | | | | | | ||||||||||||
Amortization recognized in the year | — | | — | | — | | ||||||||||||
Impairment | | — | — | — | — | | ||||||||||||
Revaluation recognized in OCI | — | ( | — | ( | — | ( | ||||||||||||
Balance as of December 31, 2024 | | | | | | | ||||||||||||
Amortized cost at December 31, 2024 | $ | | $ | | $ | — | $ | | $ | — | $ | | ||||||
| b. | The goodwill acquired in 2016 as part of the acquisition of WebCargo, in the amount of $ |
| c. | The goodwill acquired in 2022 as part of the Clearit Acquisition, in the amount of $ |
The recoverable amount of the Clearit CGU as of December 31, 2024 had been determined based on a value in use calculation using cash flow projections from financial budgets approved by management covering a multi-year period. The pre-tax discount rate applied to the cash flow projections was
| d. | Amortization expenses of technology assets for the year ended December 31, 2025, 2024 and 2023 in the amounts of $ |
NOTE 12: — OTHER LONG-TERM ASSETS
December 31, | ||||||
| 2025 | | 2024 | |||
Deposits (*) | $ | | $ | | ||
(*)Deposits mainly to secure payments to airlines and to support currency hedging activity, a bank guarantee, customs payments and credit cards.
F-32
Table of Contents
FREIGHTOS LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 13: — ACCRUED EXPENSES AND OTHER PAYABLES
December 31, | ||||||
| 2025 | | 2024 | |||
Employees and payroll accruals | $ | | $ | | ||
Accrued expenses | | | ||||
Deferred revenues | | | ||||
Consideration payable in connection with a business combination | | | ||||
Other | | | ||||
$ | | $ | | |||
NOTE 14: — EMPLOYEE BENEFIT LIABILITIES, NET
Post-employment benefits:
According to the labor laws and Severance Pay Law in Israel, the Israeli subsidiary is required to pay compensation to an employee upon dismissal or retirement or to make current contributions in defined contribution plans pursuant to Section 14. According to laws in some of the other countries the Group employs in, the Group is required to pay compensation to an employee upon dismissal or the employee leaving at his or her own will.
The Group’s liability is accounted for as a post-employment benefit. The computation of the Company’s employee benefit liability is made according to the current employment contract based on the employee’s salary and employment term which establish the entitlement to receive the compensation.
In Israel, the post-employment employee benefits are normally financed by contributions classified as defined benefit plan or as defined contribution plan, as detailed below.
| a. | Defined contribution plans: |
Almost all of the employees in Israel are subject to Section 14 pursuant to which the fixed contributions paid by the Group into pension funds and/or policies of insurance companies release the Group from any additional liability to employees for whom said contributions were made. These contributions and contributions for benefits represent defined contribution plans.
Year ended December 31, | |||||||||
| 2025 | | 2024 | | 2023 | ||||
Expenses – defined contribution plan | $ | | $ | | $ | | |||
| b. | Defined benefit plans: |
The Group has defined benefit plans for employees in Israel that were previously not under Section 14, and for employees in other countries that are entitled, according to their respective domiciles’ laws, to severance pay upon dismissal or retirement. For defined benefit plans an employee benefit liability is recognized, and for employees of the Israeli subsidiary the Group also deposits amounts in pension funds and qualifying insurance policies.
F-33
Table of Contents
FREIGHTOS LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 14: — EMPLOYEE BENEFIT LIABILITIES, NET (Cont.)
Changes in the defined benefit obligation and fair value of plan assets:
| 2025 | | 2024 | |||
Defined benefit obligation: | ||||||
Balance as of January 1, | $ | | $ | | ||
Current service cost | | | ||||
Net interest expense | | | ||||
Total expenses recognized in profit or loss for the period | | | ||||
Profit from remeasurement in other comprehensive income (loss) – actuarial loss, net | ( | ( | ||||
Payments | ( | ( | ||||
Effect of changes in foreign exchange rates | | ( | ||||
Balance as of December 31, | | | ||||
Fair value of plan assets: | ||||||
Balance as of January 1, | ( | ( | ||||
Net interest income | ( | ( | ||||
Effect of changes in foreign exchange rates | ( | — | ||||
Loss from remeasurement in other comprehensive income (loss), net | ( | ( | ||||
Balance as of December 31, | ( | ( | ||||
Net defined liability: | ||||||
Balance as of January 1, | | | ||||
Current service cost | | | ||||
Net interest expense | | | ||||
Total expenses recognized in profit or loss for the period | | | ||||
Gain from remeasurement in other comprehensive income (loss) - actuarial loss, net | ( | ( | ||||
Payments | ( | ( | ||||
Effect of changes in foreign exchange rates | | ( | ||||
Balance as of December 31, | $ | | $ | | ||
The principal assumptions underlying the defined benefit plan:
| 2025 | | 2024 | |
% | ||||
Discount rate (*) | ||||
Expected rate of salary increase | | |||
Number of years | ||||
Life expectation at the age of 65 | | | ||
(*) | The discount rate is based on high-quality CPI-linked corporate bonds for the defined benefit obligation in Israel or high-quality USD corporate bonds for other countries. |
F-34
Table of Contents
FREIGHTOS LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 15: - WARRANTS LIABILITIES
| 2025 | 2024 | ||||
Balance as of January 1, | $ | | $ | | ||
Loss (gain) from revaluation to fair value through profit or loss | ( |
| | |||
Balance as of December 31, | $ | | $ | | ||
The Company issued public warrants (the “Warrants”) as part of the closing of the business combination pursuant to the BCA. Each Warrant entitles the holder to purchase
A Warrant may be exercised during the period commencing on the date that is thirty (
Not less than all of the outstanding Warrants may be redeemed, at the option of the Company, at any time during the Exercise Period at the price of $
The Company has classified all Warrants as a financial liability (see Note 2n.7).
NOTE 16: — EQUITY
| a. | Composition of share capital: |
| | Issued and | | | Issued and | |||
Authorized | outstanding | Authorized | outstanding | |||||
December 31, 2025 | December 31, 2024 | |||||||
Ordinary shares of $ |
| | | |
| | ||
Preferred shares of $ |
| | — | |
| — | ||
| b. | Movement in issued and outstanding share capital: |
| Number of shares | |
Balance as of January 1, 2024 | | |
Issuance of Ordinary shares (see Notes 16c.1 and 16c.2) | | |
Vested RSUs | | |
Exercise of employees’ options into Ordinary shares | | |
Balance as of December 31, 2024 | | |
Vested RSUs | | |
Exercise of employees’ options into Ordinary shares | | |
Balance as of December 31, 2025 | |
F-35
Table of Contents
FREIGHTOS LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 16: — EQUITY (Cont.)
| c. | Issuance of Ordinary shares: |
| 1. | In December 2021, Freightos launched the Digital Air Cargo Council (“DACC”) with three founding airline group members. |
In January 2024 and in May 2024 the Company issued an additional
| 2. | In August 2024, as part of the Shipsta acquisition, the Company issued |
d.Rights attached to shares:
The holders of Ordinary shares are entitled to receive dividends only when, as and if declared by the Board of Directors (“Board”) and are entitled to
NOTE 17: — SHARE-BASED COMPENSATION
In May 2022, the Company established the Freightos 2022 Long-Term Incentive Plan.
The fair value of options, granted in 2025, 2024 and 2023, was estimated using the Black-Scholes option-pricing model with the following assumptions:
Year ended December 31 | |||||||
| 2025 | | 2024 | | 2023 | ||
Weighted average expected term (years) | |||||||
Interest rate | % | % | % | ||||
Volatility | % | % | % | ||||
Dividend yield | — | — | — | ||||
The expected life of the share options is based on the midpoints between the available exercise dates (the end of the vesting periods) and the last available exercise date (the contracted expiry date), as adequate historical experience is still not available to provide a reasonable estimate.
The Company measures the grant date fair value of its RSUs based on the closing market price of the Ordinary shares on the date of grant.
The share-based compensation expense was recorded in the statement of profit or loss and other comprehensive income (loss) as follows:
Year ended December 31, | |||||||||
| 2025 | | 2024 | | 2023 | ||||
Cost of revenue | $ | | $ | | $ | | |||
Research and development | | | | ||||||
Selling and marketing | | | | ||||||
General and administrative | | | | ||||||
$ | | $ | | $ | | ||||
F-36
Table of Contents
FREIGHTOS LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 17: — SHARE-BASED COMPENSATION (Cont.)
The changes in outstanding share options were as follows:
Year ended December 31, | ||||||||||||
2025 | 2024 | 2023 | ||||||||||
Weighted | Weighted | Weighted | ||||||||||
Number | average | Number | average | Number | average | |||||||
| of options | | exercise price | | of options | | exercise price | | of options | | exercise price | |
$ | $ | $ | ||||||||||
Options at beginning of year | | | | | | | ||||||
Granted | | | | | | | ||||||
Exercised | ( | | ( | | ( | | ||||||
Forfeited | ( | | ( | | ( | | ||||||
Options outstanding at end of year | | | | | | | ||||||
Options exercisable at end of year | | | | | | | ||||||
Based on the above inputs, the weighted average fair value of the share options granted in the years ended December 31, 2025 and 2024, was determined at $
The weighted average remaining contractual life for the share options outstanding as of December 31, 2025 was
The range of exercise prices for share options outstanding as of December 31, 2025 was $
The changes in outstanding RSUs and performance shares were as follows:
Year ended December 31, | ||||||||
2025 | 2024 | |||||||
Weighted- | Weighted- | |||||||
Number | average fair | Number | average fair | |||||
of Units | value | of Units | value | |||||
$ | $ | |||||||
Units at beginning of the period | | |
| | | |||
Granted | | |
| | | |||
Vested | ( | |
| ( | | |||
Cancelled | ( | |
| ( | | |||
Units outstanding at end of year | | |
| | | |||
As of December 31, 2025 and 2024 there was $
NOTE 18: — CONTINGENT LIABILITIES, GUARANTEES, COMMITMENTS AND CHARGES
As of December 31, 2025 the Group issued
F-37
Table of Contents
FREIGHTOS LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 19: — OPERATING SEGMENTS
| a. | General: |
The operating segments are identified on the basis of information that is reviewed by the chief operating decision maker (“CODM”) to make decisions about resources to be allocated and assess its performance. Accordingly, for management purposes, the Group is organized into
| 1. | Solutions segment. Freightos provides software tools and data to help the industry participants automate their pricing, sales and procurement processes. Revenue includes recurring subscriptions for SaaS or data and certain non-recurring revenue from professional services that enable a user to implement and use the SaaS solution. |
| 2. | Platform segment. Freightos provides digitalized price quoting, booking and payments while considering actual capacity among global freight participants (the users). The transactional platforms enable freight forwarding companies to procure capacity from carriers, and enable importers and exporters to procure services from freight forwarders, or occasionally, directly from carriers. Revenue is transactional type fees generated from specific freight-service transactions booked between buyers and sellers on Freightos’ Platform. The Platform segment revenue includes also the transactional type revenue from digital customs brokerage services provided by Clearit. |
Each segment’s performance is determined based on operating profit (loss) reported in the financial statements. The results of a segment reported to the CODM include items attributed directly to a segment, as well as other items, which are indirectly attributed using reasonable assumptions and exclude share-based compensation charges as they are not considered in the internal operating plans and measurement of the segment’s financial performance.
| Solutions | | Platform | | Unallocated | | Total | |||||
For the year ended December 31, 2025 | ||||||||||||
Subscriptions | $ | | $ | — | $ | — | $ | | ||||
SaaS related professional services | | — | — | | ||||||||
Transactional Platforms fees | — | | — | | ||||||||
Total revenue | $ | | $ | | $ | — | $ | | ||||
Depreciation and amortization | $ | | $ | | $ | — | $ | | ||||
Selling and Marketing | $ | | $ | | $ | | $ | | ||||
Operating loss | $ | ( | $ | ( | $ | ( | $ | ( | ||||
For the year ended December 31, 2024 | | | | | ||||||||
Subscriptions | | $ | | $ | — | $ | — | $ | | |||
SaaS related professional services |
| | — | — | | |||||||
Transactional Platforms fees |
| — | | — | | |||||||
Total revenue | $ | | $ | | $ | — | $ | | ||||
Depreciation and amortization | $ | | $ | | $ | — | $ | | ||||
Selling and Marketing | $ | | $ | | $ | | $ | | ||||
Operating loss | $ | ( | $ | ( | $ | ( | $ | ( |
F-38
Table of Contents
FREIGHTOS LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 19: — OPERATING SEGMENTS (Cont.)
| Solutions | | Platform | | Unallocated | | Total | |||||
For the year ended December 31, 2023 |
|
| |
| |
| | |||||
Subscriptions |
| $ | | $ | — | $ | — | $ | | |||
SaaS related professional services |
|
| |
| — |
| — |
| | |||
Transactional Platforms fees |
|
| — |
| |
| — |
| | |||
Total revenue |
| $ | | $ | | $ | — | $ | | |||
Depreciation and amortization | $ | | $ | | $ | | $ | | ||||
Selling and Marketing | $ | | $ | | $ | | $ | | ||||
Operating profit (loss) |
| $ | | $ | ( | $ | ( | $ | ( | |||
Unallocated includes corporate expenses and share-based compensation (in 2023 in addition it included share-listing expenses and transaction-related costs).
For the years ended December 31, 2025, 2024 and 2023, no single Solutions customer or Platform user accounted for 10% or more of the Group’s consolidated income.
c.The Group’s geographic information on revenue is as follows:
| Solutions | | Platform | | Total | ||||
For the year ended December 31, 2025 | |||||||||
Europe | $ | | $ | | $ | | |||
Hong Kong |
| |
| |
| | |||
United States |
| |
| |
| | |||
Other |
| |
| |
| | |||
$ | | $ | | $ | | ||||
| | | |||||||
For the year ended December 31, 2024 |
|
| |
| | ||||
Europe |
| $ | | $ | | $ | | ||
Hong Kong |
|
| |
| |
| | ||
United States |
|
| |
| |
| | ||
Other |
|
| |
| |
| | ||
| $ | | $ | | $ | |
| | | |||||||
For the year ended December 31, 2023 |
|
|
| ||||||
Europe |
| $ | | $ | — | $ | | ||
Hong Kong |
|
| |
| |
| | ||
United States |
|
| |
| |
| | ||
Other |
|
| |
| |
| | ||
| $ | | $ | | $ | |
The Group’s revenue from its Solutions segment is classified based on the location of the customers.
The Group’s revenue from its Platform segment is classified to its business in the location of the billing entity. This classification is independent of where the user resides or where the user is physically located while using the Group’s services.
As of December 31, 2025 and 2024, the carrying amounts of non-current assets (property and equipment, right-of-use assets, and intangible assets) are mainly in Canada, US and Luxembourg due to acquisitions and also in Israel, Hong Kong and Spain.
F-39
Table of Contents
FREIGHTOS LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 20: — SELECTED STATEMENTS OF PROFIT OR LOSS DATA
| a. | Cost of revenue: |
Year ended December 31, | |||||||||
| 2025 | | 2024 | | 2023 | ||||
Labor |
| $ | | $ | |
| $ | | |
Credit card fees |
| |
| |
|
| | ||
Servers |
| |
| |
|
| | ||
Services and tools |
| |
| |
|
| | ||
Depreciation and amortization |
| |
| |
|
| | ||
Share- based compensation |
| |
| |
|
| | ||
Other |
| |
| |
|
| | ||
| $ | | $ | |
| $ | | ||
| b. | Research and development: |
Labor | | $ | | | $ | | | $ | |
Servers | | |
| | |||||
Software | | |
| | |||||
Depreciation and amortization | | |
| | |||||
Share- based compensation | | |
| | |||||
Other | | |
| | |||||
$ | | $ | | $ | |
| c. | Selling and marketing: |
Labor | | $ | | | $ | | | $ | |
Marketing and Promotion (*) | — | |
| | |||||
Digital Advertising | | |
| | |||||
Software tools | | |
| | |||||
Depreciation and amortization | | | | ||||||
Share- based compensation | | | | ||||||
Trade shows | | | | ||||||
Web site | | |
| | |||||
Other | | |
| | |||||
$ | | $ | |
| $ | |
(*)expense related to share issuance for the DACC (see Note 16c.1).
F-40
Table of Contents
FREIGHTOS LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 20: - SELECTED STATEMENTS OF PROFIT OR LOSS DATA (Cont.)
| d. | General and administrative: |
Year ended December 31, | |||||||||
| 2025 | | 2024 | | 2023 | ||||
Labor | $ | | $ | | $ | | |||
D&O insurance |
| |
| |
| | |||
Rent and related |
| |
| |
| | |||
Consulting |
| |
| |
| | |||
Office expenses |
| |
| |
| | |||
Software tools |
| |
| |
| | |||
Depreciation & Amortization |
| |
| |
| | |||
Goodwill impairment | — | | — | ||||||
Share- based compensation |
| |
| |
| | |||
Changes in the fair value of contingent consideration | — | — | ( | ||||||
Other |
| |
| |
| | |||
$ | | $ | | $ | | ||||
NOTE 21: — REORGANIZATION
In July 2023 the Company announced and implemented an operational efficiency and cost reduction restructuring plan. These cost-savings initiatives and efficiencies included reducing headcount by approximately
NOTE 22: - INCOME TAXES (TAX BENEFIT), NET
| a. | Tax rates: |
There is no corporate income tax in the Cayman Islands. As part of a tax ruling obtained from the Israel Tax Authority with respect to a Group restructuring that took place in 2022, the Company registered for tax purposes in Israel. The statutory corporate income tax rate for the years 2025, 2024 and 2023 in Israel was
The statutory Israeli corporate income tax rate is applicable to the Israeli subsidiary. A Preferred Technological Enterprise, as defined in the Law for the Encouragement of Capital Investments, 1959 (the “Encouragement Law”) in Israel, will be subject to tax at a rate of
Any dividends distributed to “foreign companies”, as defined in the Encouragement Law, deriving from income from the technological enterprise is subject to reduced Israeli withholding tax rate of
Other Group’s subsidiaries are separately taxed under the domestic tax laws and rates of the jurisdiction of incorporation of each entity.
F-41
Table of Contents
FREIGHTOS LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 22: - INCOME TAXES (TAX BENEFIT), NET (Cont.)
| b. | Tax assessments: |
Other than the Israeli subsidiary, none of the Group companies received final assessments since their incorporation.
The Israeli subsidiary received final tax assessments or assessments that are deemed final due to lapse of statute of limitation through the 2020 tax year.
| c. | Carryforward losses for tax purposes and other temporary differences: |
As of December 31, 2025, the Group had carryforward operating tax losses and carryforward capital tax losses of $
Deferred tax assets of approximately $
| d. | Deferred income taxes: |
Statements of financial | Statements of | ||||||||||||||
position | profit or loss | ||||||||||||||
December 31, | Year ended December 31, | ||||||||||||||
| 2025 | | 2024 | | 2025 | | 2024 | | 2023 | ||||||
Deferred tax assets: | | | | | | | | ||||||||
Carryforward tax losses | $ | — | $ | — | $ | — | $ | ( | $ | | |||||
Employee benefits and other liabilities |
| — |
| — | — | ( |
| | |||||||
Share-based compensation |
| |
| |
| |
| ( |
| | |||||
Intangible assets | — | — | — | ( | | ||||||||||
Deferred tax liabilities: | |||||||||||||||
Intangible assets | ( | ( | ( | ( | — | ||||||||||
Deferred tax benefit (expenses) |
|
| $ | | $ | ( | $ | | |||||||
Deferred tax assets, net | $ | | $ | | |||||||||||
| e. | Taxes on income (tax benefit) included in profit or loss: |
Year ended | |||||||||
December 31, | |||||||||
| 2025 | | 2024 | | 2023 | ||||
Current taxes | | $ | | $ | | | $ | | |
Deferred taxes, see also Note 22d above |
| ( |
| |
| ( | |||
Taxes in respect of previous years |
| ( |
| ( |
| | |||
$ | | $ | | $ | ( | ||||
| f. | Theoretical tax: |
As the Israeli subsidiary incurred operating losses during the years ended December 31, 2025, 2024 and 2023 for which deferred income taxes were not recorded, as mentioned in Note 22c, the reconciliation between the tax expense, assuming that all the income and expenses, gains and losses in the statement of income were taxed at the statutory tax rate, and the taxes on income recorded in profit or loss, does not provide significant information and therefore is not presented.
F-42
Table of Contents
FREIGHTOS LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 23: — LOSS PER ORDINARY SHARE
Details of the number of shares and loss used in the computation of basic and diluted loss per share:
Number of shares | ||||||
| 2025 | 2024 | | 2023 | ||
Weighted number of Ordinary shares(*) |
| | | | | |
Year ended December 31, | |||||||||
| 2025 | | 2024 | | 2023 | ||||
Loss | $ | | $ | | $ | | |||
Preferred shares dividend (**) |
| — |
| — |
| | |||
For the computation of basic and diluted loss per share | $ | | $ | | $ | | |||
(*) | The computation of diluted loss per share did not take into account potential Ordinary shares (detailed below) due to their anti-dilutive effect: |
| a. |
| b. |
| c. |
| d. |
(**) | In January 2023 the Company converted all of its Preferred shares to Ordinary shares as part of the Transactions - see Note 1d. |
F-43
Table of Contents
FREIGHTOS LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 24: — RELATED PARTIES
| a. | Related parties consist of |
| b. | Benefits to directors: |
| Year ended December 31, | ||||||||
| 2025 | | 2024 | | 2023 | ||||
Compensation to directors not employed by the Company or on its behalf | $ | | $ | | $ | | |||
Share-based payments to directors not employed by the Company or on its behalf | | | | ||||||
$ | | $ | | $ | | ||||
Number of directors that received the above compensation by the Company |
| |
| |
| | |||
| c. | Compensation of key management personnel of the Group recognized as an expense during the reporting period: |
Year ended December 31, | |||||||||
| 2025 | | 2024 | | 2023 | ||||
Short-term employee benefits | $ | | $ | | $ | | |||
Share-based payments |
| |
| |
| | |||
Post-employment benefits |
| |
| |
| — | |||
$ | | $ | | $ | | ||||
Number of key officers |
| |
| |
| | |||
| d. | In December 2025, the Company announced that its former CEO would be terminating his employment with the Group as of January 31, 2026. As a result of termination of his employment, the Group agreed to pay him certain benefits in an aggregated amount of $ |
F-44
FAQ
How did Freightos (CRGO) perform financially in 2025?
What growth did Freightos (CRGO) achieve in gross bookings value in 2025?
How many Freightos (CRGO) shares were outstanding at year-end 2025?
What is Freightos’ 2026 strategy and why is it important?
How are geopolitical and supply chain disruptions affecting Freightos (CRGO)?
What concentration and competitive risks does Freightos (CRGO) face?
What currency and tax attributes are highlighted for Freightos (CRGO)?
