Company: GAUZ
Filing Date: 2025-03-11
Form Type: 20-F
Source: 0001213900-25-022437
Chunk: 162

Company: Gauzy Ltd.
Filing Date: 2025-03-11
Form: 20-F
Item: Item 19
Chunk 162
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 The Company only applies the five-step model
to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the goods or services
it transfers to the customer. Once the contract is determined to be within the scope of ASC Topic 606, the Company assesses the goods
or services promised within each contract and determines those that are performance obligations and assesses whether each promised good
or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective
performance obligation when such performance obligation is satisfied.

The Company’s
main revenue generating activity is the sale of films (a technology that adjusts the amount of light that goes through glass surfaces)
and glass surfaces combined with films. The Company’s LCG® technologies include a variety of Polymer Dispersed Liquid Crystal
(PDLC) based films and Suspended Particle Device (SPD) based film, both available in rolls or custom cut-to-fit sheets. These goods are
provided with an assurance-type warranty. In some contracts, the Company also provides training services to its customers shortly after
the delivery of the goods, which gives rise to a separate performance obligation.

Vision’s primary
source of revenue is sales of product in the transportation market. Vision provides assurance type warranties for all of its products.
Also, Vision grants limited rights of return for its products. The Company estimates future product returns upon sale, based on Vision’s
historical return trends, by the customer and by product and other relevant information. Estimated returns reduce revenue and cost of
goods sold.

Revenue from the
sale of goods is generally recognized at a point in time, upon transfer of control over the goods. According to the Company’s shipment
terms, control over the Company’s products is generally transferred upon delivery of the goods to the customer’s premise.
Thus, shipping and handling are accounted for as fulfilment activities. For a small number of contracts, revenue is recognized over time
because of the Company’s enforceable right to payment for performance completed to date on customized products for which the Company
has no alternative use.

F-16

GAUZY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES(continued):

According to the
Company’s payment terms, its customers generally pay50% of consideration up-front with the remaining upon delivery while some customers
have different