Company: GAUZ
Filing Date: 2025-03-11
Form Type: 20-F
Source: 0001213900-25-022437
Chunk: 190

Company: Gauzy Ltd.
Filing Date: 2025-03-11
Form: 20-F
Item: Item 19
Chunk 190
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  the Company. The CLA were issued with warrants to purchase the most senior class of shares of the Company existing immediately prior to  
  the conversion. The exercise period under the accompanying warrants commencing on the date of conversion or repayment of the applicable  
  CLA Lender ’ s Loan Amount and ending on the fifth (5th) anniversary                                                                     
  of the date thereof.                                                                                                                     
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For existing investors not participating
in the 2023 CLA round, their existing Preferred Shares were converted to ordinary shares, see Note 14(c).

As the instruments contain multiple
embedded features, the Company elected to account for the CLAs and Subsequent CLA under the fair value option in accordance with ASC 825.
Under the fair value option, changes in fair value are recorded in earnings. The Company recorded financial expense (income) amounting
to $(1,105) and $24,906for the years ended December 31, 2024 and 2023, respectively.

Upon consummation of the IPO, the remaining
balance of the 2023 CLA (including the accrued interest) converted into3,769,855ordinary shares based upon the IPO price of $17.00as
well as warrants for1,964,989ordinary shares with an exercise price of $12.75. The conversion of interest is subject to withholding
tax, the Company recorded an asset and a liability to reflect such requirement.

  On November 8, 2023 the Group entered a Note Purchase Agreement (the “ NPA”) among Chutzpah                                                
  Holdings Ltd. a related party, (“ Purchaser”) as purchaser, administrative agent and collateral agent. Under the NPA, Purchaser            
  extended a credit facility to the Group in an aggregate principal amount of $ 60.0 million, that may be utilized and drawn down by way     
  of issuance and sale of senior secured notes (“ Notes”) to Purchaser. The Group withdrew $ 25.0 million until January 2024 and             
  repaid that amount plus minimum return in July 2024. As of the date of these consolidated financial statements the Group did not withdrew  
  any additional amount.                                                                                                                     
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F-41

GAUZY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATE