Company: GAUZ
Filing Date: 2025-03-11
Form Type: 20-F
Source: 0001213900-25-022437
Chunk: 194

Company: Gauzy Ltd.
Filing Date: 2025-03-11
Form: 20-F
Item: Item 19
Chunk 194
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 entitled to elect
to receive the payment under the phantom warrant in listed shares of the Company or the shares of such other entity, in lieu of a cash
payment (and as discharge of the “phantom warrant”).

The Company accounted for the phantom
warrant as a derivative liability, to be measured at fair value through profit or loss. Consideration received in excess of the fair value
of the phantom warrant upon initial recognition was attributed to the Facility Loan.

F-44

GAUZY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(U. S. dollars in thousands, except share and per
share amounts)

NOTE 16 - WARRANTS
AND PHANTOM WARRANTS TO PURCHASE PREFERRED SHARES(continued):

Pursuant to the Waiver and Amendment
Agreement (see Note 9(c)), upon the full repayment of the Facility Loans, each of the credit funds shall be entitled to demand payment
in cash of up to50% of its share in the phantom warrant, in an aggregate amount of $1.5million, on account of the full amount that the
credit funds shall be entitled to under the phantom warrants, as set forth above.

In February 2024, the Company paid $1.5million of the phantom
warrants in relation to the repayment of the Facility Loans (see above) Upon the consummation of the IPO in June 2024, the parties to
the Facility Agreement elected to receive the outstanding balance, totaling to $1.5million in cash. In 2024 the Company paid $1,313and
on January 2025 $187, see note 21(a).

  In connection with the Series D SPA, the Company issued warrants to purchase 1,079,809 Series D-1 preferred shares to various investors. The warrants are exercisable for five years from their d...  

The Company classified the warrants
for the purchase of shares of its convertible Preferred Shares as a liability in its consolidated balance sheets as these warrants were
freestanding financial instruments which underlying shares are contingently redeemable (upon a certain liquidation events) and, therefore,
may obligate the Company to transfer assets at some point in the future. The warrant liability was initially recorded at fair value upon
the date of issuance and was subsequently remeasured at fair value at each reporting date. The Company recorded revaluation expenses amounting
to $323and $619for the years ended 2024 and 2023