Company: GAUZ
Filing Date: 2025-03-11
Form Type: 20-F
Source: 0001213900-25-022437
Chunk: 131

Company: Gauzy Ltd.
Filing Date: 2025-03-11
Form: 20-F
Item: Item 10
Chunk 131
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 quarterly financial information.

I. Subsidiary Information.

Not applicable.

J. Annual Report to Security Holders

Not applicable.

ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK

Quantitative and Qualitative Disclosures about Market Risk

We are exposed to a variety
of financial risks, which result from our financing, operating and investing activities. The objective of financial risk management is
to contain, where appropriate, exposures in these financial risks to limit any negative impact on our financial performance and position.
Our main financial instruments are our cash and other receivables, trade and other payables. The main purpose of these financial instruments
is to raise financing for our operations. We actively measure, monitor and manage our financial risk exposures by various functions pursuant
to the segregation of duties and principals. The risks arising from our financial instruments are mainly credit risk and currency risk.
The risk management policies employed by us to manage these risks are discussed below.

Credit risk

Credit risk arises when a
failure by counterparties to discharge their obligations could reduce the amount of future cash inflows from financial assets on hand
at the balance sheet date. We closely monitor the activities of our counterparties and control the access to our intellectual property
which enables us to ensure the prompt collection. Our main financial assets are cash as well as trade receivables and other receivables
and represent our maximum exposure to credit risk in connection with our financial assets. Wherever possible and commercially practical,
we hold cash with major financial institutions in Israel.

Currency risk

Currency risk is the risk
that the value of financial instruments will fluctuate due to changes in foreign exchange rates. Currency risk arises when future commercial
transactions and recognized assets and liabilities are denominated in a currency that is not our functional currency. We are exposed
to foreign exchange risk arising from currency exposure primarily with respect to NIS, as the majority of our expenses are denominated
in NIS. As most of our revenues are USD derived, the USD is our functional currency. Our current policy is not to enter into any currency
hedging transactions.

Liquidity risks

Liquidity risk is the risk
that arises when the maturity of assets and the maturity of liabilities do not match. An unmatched position potentially enhances profitability,
but it can also increase the risk of loss. We have procedures to minimize such loss by maintaining sufficient cash and other highly liquid
current assets and by having available an adequate amount of committed credit facilities. As