Company: GAUZ
Filing Date: 2025-03-11
Form Type: 20-F
Source: 0001213900-25-022437
Chunk: 57

Company: Gauzy Ltd.
Filing Date: 2025-03-11
Form: 20-F
Item: Item 5
Chunk 57
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. The terms of debt securities or borrowings could impose significant
restrictions on our operations. The credit market and financial services industry have in the past, and may in the future, experience
periods of uncertainty that could impact the availability and cost of equity and debt financing.

We have lease obligations and other contractual
obligations and commitments as part of our ordinary course of business. See “Note 9: Operating Leases” to our
consolidated financial statements for information about our lease obligations. We did not have during the periods presented, and we do
not currently have, any off-balance sheet arrangements involving commitments or obligations, including contingent obligations, arising
from arrangements with unconsolidated entities or persons that have or are reasonably likely to have a material current or future effect
on our financial condition, results of operations, liquidity, cash requirements or capital resources.

Capital Expenditures

For the years ended December 31,
2024 and 2023, we made capital expenditures of $11.6 million and $10.4 million, respectively. These capital expenditures mainly include
expenditures related to leasehold improvements, demonstrations and intellectual property.

Government Grants

Our research and development
efforts were financed, in part, through royalty-bearing and non-royalty-bearing grants from the IIA. As of December 31, 2024, we
received IIA royalty-bearing grants totaling approximately $1.3 million of which approximately $0.1 million of such amount
has been repaid. In addition, as of December 31, 2024, we received IIA non-royalty-bearing grants totaling approximately $1.1 million.

We are committed to pay royalties
to the IIA at a rate of approximately 1.0% to 3.5% on sales proceeds from our products (and know-how and related services) that were
developed, in whole or in part, using the IIA royalty-bearing grants we received under IIA programs up to the total amount of royalty-bearing
grants received, linked to the U. S. dollar and bearing annual interest at rates prescribed by the IIA’s rules and guidelines.

We may in the future apply
to receive additional grants from the IIA. However, we cannot predict whether we will be entitled to any future grants, or the amounts
of any such grants.

Under the Innovation Law,
research and development programs that meet specified criteria and are approved by a committee of the IIA are eligible for grants