Company: GAUZ
Filing Date: 2025-03-11
Form Type: 20-F
Source: 0001213900-25-022437
Chunk: 158

Company: Gauzy Ltd.
Filing Date: 2025-03-11
Form: 20-F
Item: Item 19
Chunk 158
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 Company. Therefore, the Company bears the risk of non-payment by the customer for any reason.

The factoring is
not treated as a sale in accordance with ASC 860 “ Transfers and Servicing” but as a secured borrowing. Such borrowings are
presented as short-term loans.

The Company reports
the cash flows attributable to the sale of receivables to third parties and the cash receipts from collections made on behalf of and paid
to third parties, on a gross basis as trade accounts receivables in cash flows from operating activities and payment of loans in cash
flow from financing activities in the Company’s consolidated statement of cash flows.

As of December 31,
2024, Vision has balance of factoring arrangement against approximately $13,184of accounts receivable.

F-13

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):

  Concentration of credit risks  

Financial instruments
that potentially subject the Company to concentration of credit risk consist principally of cash and cash equivalents, restricted cash,
bank deposits, marketable securities and accounts receivables. The Company deposits cash and cash equivalents mostly with a single highly
rated financial institution. The Company has not experienced any material credit losses in these accounts and does not believe it is exposed
to significant credit risk on these instruments.

For the year ended
December 31, 2024, and 2023, the Company’s largest customer represented9.3% and9.3% of product revenue and13.5% and6.9% of accounts
receivable, net, respectively. Most of the Company’s revenues from these customers were in the Aeronautics segment.

  Leases  

Accounting Standard
Update (“ ASU”) No. 2016-02, Leases (Topic 842), requires lessees to record assets and liabilities on the balance
sheet for all leases. Leases are classified as either finance or operating, with classification affecting the pattern of expense recognition
in the income statement.

Under Topic 842,
the Company determines if an arrangement is a lease at inception. Upon initial recognition, the Company recognized a liability at the
present value of the lease payments to be made over the lease term, and concurrently recognized a right of use (“ ROU”) asset
at the same amount of the liability, adjusted for any