Exhibit 99.2

GAUZY LTD.

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

June 30, 2025

TABLE OFCONTENTS

	Page
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS :
Condensed Consolidated Balance Sheets as of June 30, 2025 and December 31, 2024	2-3
Condensed Consolidated Statements of Operations and Comprehensive Loss for Three and Six Months Ended June 30, 2025 and 2024	4
Condensed Consolidated Statements of Changes in Redeemable Convertible Preferred Shares and Shareholders’ Equity (Capital Deficiency) for Three and Six Months Ended June 30, 2025 and 2024	5-8
Condensed Consolidated Statements of Cash Flows for Six Months Ended June 30, 2025 and 2024	9-10
Notes to the Condensed Consolidated Financial Statements	11-22

The amounts are stated in U.S. dollars in thousandsexcept share data

GAUZY LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)

(U.S. dollars in thousands, except share data)

	June 30,		December 31,
	2025		2024
Assets
CURRENT ASSETS:
Cash and cash equivalents	$	1,235	$	5,615
Restricted cash		130		119
Trade receivables, net of allowance for credit losses of $1,566 and $1,262 as of June 30, 2025 and December 31, 2024, respectively		16,991		24,358
Institutions		4,598		4,227
Inventories		17,397		15,876
Other current assets		6,101		4,413
TOTAL CURRENT ASSETS		46,452		54,608

NON-CURRENTASSETS:
Restricted long term bank deposit		151		139
Restricted investment in marketable securities		3,096		3,215
Operating lease right of use assets		10,742		10,515
Property and equipment, net		31,085		27,461
Other non-current assets		2,997		2,707
Intangible assets:
Customer relationships		13,046		12,081
Technology		3,054		3,589
Goodwill		22,854		20,282
Other intangible asset		3,329		3,648
TOTAL NON-CURRENT ASSETS		90,354		83,637
TOTAL ASSETS	$	136,806	$	138,245

GAUZY LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)- (continued)

(U.S. dollars in thousands, except share data)

	June 30,			December 31,
	2025			2024
Liabilities, and shareholder’s equity
CURRENT LIABILITIES:
Short-term borrowing and current maturities of bank loan	$	8,608		$	3,353
Short-term loan relating to factoring arrangements		9,237			13,184
Trade payables		24,441			18,130
Employee related obligations		12,163			8,887
Accrued expenses		8,713			5,805
Deferred revenues		1,246			883
Current maturities of operating lease liabilities		2,601			2,315
Current maturities of finance lease liabilities		25			45
Warrants and phantom warrants to purchase ordinary shares		276			206
Other current liabilities (including $0 and $890 due to related parties as of June 30, 2025 and December 31, 2024, respectively)		3,564			3,920
TOTAL CURRENT LIABILITIES		70,874			56,728
LONG-TERM LIABILITIES:
Long-term debt measured under the fair value option		27,357			17,777
Long-term bank loan		7,820			4,128
Operating lease liabilities		7,593			7,528
Finance lease liabilities		39			43
Long-term employee related obligations		151			1,416
Employee rights upon retirement		1,384			1,347
Other long-term liabilities (including $1,770 and $0 due to related parties as of June 30, 2025 and December 31, 2024, respectively)		3,728			948
TOTAL LONG-TERM LIABILITIES		48,072			33,187
COMMITMENTS AND CONTINGENT LIABILITIES
TOTAL LIABILITIES	$	118,946		$	89,915

SHAREHOLDERS’ EQUITY:
Ordinary shares (No par value per shares, 34,930,909 and NIS 0.23 par value per shares 14,269,282 shares authorized as of June 30, 2025 and December 31, 2024 ; 18,743,137 and 18,720,287 shares issued and outstanding as of June 30, 2025 and December 31, 2024 respectively)		865			865
Additional paid-in capital		276,927			275,390
Other comprehensive loss		(13,406	)		(2,913	)
Accumulated deficit		(246,526	)		(225,012	)
TOTAL SHAREHOLDERS’ EQUITY	$	17,860		$	48,330
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	136,806		$	138,245

(*)	Following the IPO and as of June 30, 2025, the authorizedshare capital of the Company is 49,200,191 ordinary shares with no par value

The accompanying notes are an integral partof these unaudited condensed consolidated financial statements.

GAUZY LTD.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONSAND COMPREHENSIVE LOSS (unaudited)

(U.S. dollars in thousands, except share data)

	Three months ended June 30						Six months ended June 30
	2025			2024			2025			2024

REVENUES	$	20,054		$	24,409		$	42,421		$	49,138
Cost of revenues (exclusive of depreciation and amortization)		15,249			17,323			31,386			35,330
Depreciation and amortization		519			494			1,017			1,001
TOTAL COST OF REVENUES		15,768			17,817			32,403			36,331
GROSS PROFIT		4,286			6,592			10,018			12,807
Research and development expenses (exclusive of depreciation and amortization reflected below)		4,868			4,131			8,325			8,512
General and administrative expenses (exclusive of depreciation and amortization reflected below)		6,076			5,271			11,773			11,400
Sales and marketing expenses (exclusive of depreciation and amortization reflected below)		4,142			4,153			7,811			8,443
Depreciation and amortization		1,710			1,021			3,312			2,042
Other expenses (change in fair value of contingent consideration)		-			(63	)		-			(38	)
TOTAL OPERATING EXPENSES		16,796			14,513			31,221			30,359
OPERATING LOSS		(12,510	)		(7,921	)		(21,203	)		(17,552	)
OTHER INCOME		-			130			-			130
INTEREST EXPENSES		(2,302	)		(3,212	)		(4,182	)		(7,659	)
OTHER FINANCIAL INCOME (EXPENSES)		4,092			(12,062	)		3,942			(11,169	)
FINANCIAL INCOME (EXPENSES), net (including amount reclassified from OCI reserve)		1,790			(15,274	)		(240	)		(18,828	)
LOSS BEFORE INCOME TAX		(10,720	)		(23,065	)		(21,443	)		(36,250	)
INCOME TAX		(16	)		(22	)		(71	)		(84	)
LOSS FOR THE PERIOD	$	(10,736	)	$	(23,087	)	$	(21,514	)	$	(36,334	)
OTHER COMPREHENSIVE LOSS, net of tax
NET ACTUARIAL GAIN (LOSS)		(65	)		(27	)		64			208
FOREIGN CURRENCY TRANSLATION LOSS		(296	)		(401	)		(313	)		(988	)
RECLASSIFICATION OF FAIR VALUE GAIN ON CHANGES OF OWN CREDIT RISK		-			4,873			-			4,317
FAIR VALUE GAIN (LOSS) ON CHANGES OF OWN CREDIT RISK		(10,586	)		(329	)		(10,244	)		(5,394	)
TOTAL OTHER COMPREHENSIVE INCOME (LOSS)		(10,947	)		4,116			(10,493	)		(1,857	)
NET COMPREHENSIVE LOSS	$	(21,683	)	$	(18,971	)	$	(32,007	)	$	(38,191	)
LOSS PER SHARE BASIC AND DILUTED	$	(0.57	)	$	(2.60	)	$	(1.15	)	$	(5.14	)
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING USED IN COMPUTATION OF BASIC AND DILUTED LOSS PER SHARE		18,738,657			8,869,691			18,732,196			7,072,950

The accompanying notes are an integral partof these unaudited condensed consolidated financial statements.

GAUZY LTD.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES INREDEEMABLE CONVERTIBLE PREFERRED SHARES AND SHAREHOLDERS’ EQUITY (CAPITAL DEFICIENCY)

(Unaudited)

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

	Ordinary shares				Additional paid-in		Accumulated other comprehensive			Accumulated			Total shareholders’
	Shares		Amount		capital		Income (loss)			deficit			equity
BALANCE AT JANUARY 1, 2025		18,720,287	$	865	$	275,390	$	(2,913	)	$	(225,012	)	$	48,330
CHANGES DURING THE SIX MONTHS ENDED JUNE 30, 2025
Exercise of options and warrants		22,850				*								*
Other comprehensive loss								(10,493	)					(10,493	)
Share-based compensation						1,537								1,537
Net loss											(21,514	)		(21,514	)
BALANCE AT JUNE 30, 2025		18,743,137	$	865	$	276,927	$	(13,406	)	$	(246,526	)	$	17,860

The accompanying notes are an integral partof these unaudited condensed consolidated financial statements.

GAUZY LTD.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES INREDEEMABLE CONVERTIBLE PREFERRED SHARES AND SHAREHOLDERS’ EQUITY (CAPITAL DEFICIENCY)

(Unaudited) - (continued)

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

	Redeemable Convertible Preferred Shares
	Convertible Preferred Shares A						Convertible Preferred Shares B						Convertible Preferred Shares C						Convertible Preferred Shares D						Ordinary shares				Additional paid-in		Accumulated other comprehensive			Accumulated			Total capital
		Shares			Amount			Shares			Amount			Shares			Amount			Shares			Amount		Shares		Amount		capital		Income (loss)			deficit			deficiency
BALANCE AT JANUARY 1, 2024		2,192,611		$	15,686			333,366		$	2,292			590,059		$	8,967			1,587,881		$	43,592		5,276,184	$	320	$	35,134	$	(515	)	$	(171,830	)	$	(136,891	)
CHANGES DURING THE SIX MONTHS ENDED JUNE 30, 2024
Exercise of options and warrants into Ordinary Shares																									196,851		12		443								455
Conversion of preferred shares to Ordinary Shares prior IPO																				(10,599	)		(296	)	10,599		1		295								296
Issuance of Ordinary Shares following initial public offering, net of offering costs																									4,411,765		-		66,335								66,335
Classification of warrants to equity																													28,225								28,225
Conversion of CLAs to Ordinary Shares																									4,092,330		246		69,324								69,570
Conversion of preferred shares to Ordinary Shares following the IPO		(2,192,611	)		(15,686	)		(333,366	)		(2,292	)		(590,059	)		(8,967	)		(1,577,282	)		(43,296	)	4,693,318		286		69,955								70,241
Share-based compensation																													3,324								3,324
Other comprehensive loss																															(1,857	)					(1,857	)
Net loss																																		(36,334	)		(36,334	)
BALANCE AT JUNE 30, 2024		-		$	-			-		$	-			-		$	-			-		$	-		18,681,047	$	865	$	273,035	$	(2,372	)	$	(208,164	)	$	63,364

The accompanying notes are an integral partof these unaudited condensed consolidated financial statements.

GAUZY LTD.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES INREDEEMABLE CONVERTIBLE PREFERRED SHARES AND SHAREHOLDERS’ EQUITY (CAPITAL DEFICIENCY)

(Unaudited) - (continued)

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

	Ordinary shares				Additional paid-in		Accumulated other comprehensive			Accumulated			Total shareholders’
	Shares		Amount		capital		Income (loss)			deficit			equity
BALANCE AT MARCH 31, 2025		18,733,937	$	865	$	276,288	$	(2,459	)	$	(235,790	)	$	38,904
CHANGES DURING THE THREE MONTHS ENDED JUNE 30, 2025
Exercise of options and warrants		9,200				*								*
Other comprehensive loss								(10,947	)					(10,947	)
Share-based compensation						639								639
Net loss											(10,736	)		(10,736	)
BALANCE AT JUNE 30, 2025		18,743,137	$	865	$	276,927	$	(13,406	)	$	(246,526	)	$	17,860

Less than $1 thousands

The accompanying notes are an integral partof these unaudited condensed consolidated financial statements.

GAUZY LTD.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES INREDEEMABLE CONVERTIBLE PREFERRED SHARES AND SHAREHOLDERS’ EQUITY (CAPITAL DEFICIENCY)

(Unaudited) - (continued)

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

	Redeemable Convertible Preferred Shares
	Convertible Preferred Shares A						Convertible Preferred Shares B						Convertible Preferred Shares C						Convertible Preferred Shares D						Ordinary shares				Additional paid-in		Accumulated other comprehensive			Accumulated			Total capital
	Shares			Amount			Shares			Amount			Shares			Amount			Shares			Amount			Shares		Amount		capital		Income (loss)			deficit			deficiency
BALANCE AT MARCH 31, 2024		2,192,611		$	15,686			333,366		$	2,292			590,059		$	8,967			1,587,881		$	43,592			5,277,268	$	320	$	37,294	$	(6,488	)	$	(185,077	)	$	(153,951	)
CHANGES DURING THE THREE MONTHS ENDED JUNE 30, 2024
Exercise of options and warrants into Ordinary Shares																										195,767		12		443								455
Conversion of preferred shares to Ordinary Shares prior IPO																				(10,599	)		(296	)		10,599		1		295								296
Issuance of Ordinary Shares following initial public offering, net of offering costs																										4,411,765		-		66,335								66,335
Classification of warrants to equity																														28,225								28,225
Conversion of CLAs to Ordinary Shares																										4,092,330		246		69,324								69,570
Conversion of preferred shares to Ordinary Shares following the IPO		(2,192,611	)		(15,686	)		(333,366	)		(2,292	)		(590,059	)		(8,967	)		(1,577,282	)		(43,296	)		4,693,318		286		69,955								70,241
Share-based compensation																														1,164								1,164
Other comprehensive loss																																4,116						4,116
Net loss																																			(23,087	)		(23,087	)
BALANCE AT JUNE 30, 2024		-		$	-			-		$	-			-		$	-			-		$	-			18,681,047	$	865	$	273,035	$	(2,372	)	$	(208,164	)	$	63,364

The accompanying notes are an integral partof these unaudited condensed consolidated financial statements.

GAUZY LTD.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(U.S. dollars in thousands)

	Six months ended June 30,
	2025			2024
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(21,514	)	$	(36,334	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization		4,329			3,043
Gain (loss) from sale and sale of property and equipment, net		-			(16	)
Unrealized losses (gains) on restricted marketable securities		128			(1,525	)
Share-based compensation		1,970			3,324
Earn-out liability Revaluation		-			(38	)
Non-cash financial expenses (income)		(1,252	)		18,075
Changes in operating assets and liabilities:
Trade receivables		9,391			(1,248	)
Other current assets		(1,510	)		(103	)
Institutions		133			(1,408	)
Inventories		225			(1,872	)
Operating lease assets		1,098			1,115
Other non-current assets		39			41
Trade payables		4,196			3,756
Accrued expenses		2,106			11
Payment of Earn-out		-			(2,210	)
Other current liabilities		(6,170	)		(317	)
Other long-term liabilities		2,621			(207	)
Employee related obligations		1,072			1,326
Employee rights upon retirement		69			63
Deferred revenues		302			(101	)
Operating lease liabilities		(1,103	)		(1,038	)
Net cash used in operating activities		(3,870	)		(15,663	)

CASH FLOWS FROM INVESTMENT ACTIVITIES:
Purchases of property and equipment		(3,648	)		(4,342	)
Proceeds from sale of property and equipment		-			124
Net cash used in investing activities		(3,648	)		(4,218	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from initial public offering		-			75,000
Underwriters’ IPO costs		-			(6,750	)
IPO other costs		-			(1,730	)
Proceeds from loans and warrants under the 2025 Loan Agreement		9,900			-
Payments in respect of bank borrowings		(1,513	)		(1,168	)
Proceeds from exercise of options into ordinary shares		-			12
Financial lease payments		(39	)		(130	)
Payments to short-term loan relating to factoring arrangements, net		(5,232	)		(1,059	)
Settlement of Phantom warrants		(188	)		(1,500	)
Proceeds from issuance of convertible loans		-			11,750
Proceeds from long-term debt measured under the fair value option, net		-			29,149
Repayment of long-term debt measured under the fair value option		-			(24,600	)
Net cash (used in) provided by financing activities		2,928			78,974

GAUZY LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited) - (continued)

(U.S. dollars in thousands)

	Six months ended June 30
	2025			2024
INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH		(4,590	)		59,093
TRANSLATION ADJUSTMENT ON CASH AND CASH EQUIVALENTS AND RESTRICTED CASH		221			(13	)
BALANCE OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF THE PERIOD		5,734			4,705
BALANCE OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF THE PERIOD	$	1,365		$	63,785
RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH REPORTED IN THE CONSOLIDATED BALANCE SHEETS:
Cash and cash equivalents	$	1,235		$	63,700
Restricted cash		130			85
TOTAL CASH, CASH EQUIVALENTS AND RESTRICTED CASH SHOWN IN STATEMENT OF CASH FLOWS	$	1,365		$	63,785

SUPPLEMENTARY INFORMATION ON INVESTING AND FINANCING ACTIVITIES NOT INVOLVING CASH FLOWS:

Right-of-use assets obtained in exchange for lease obligations: Operating leases	$	343		$	101
Conversion of preferred share to Ordinary shares	$	-		$	70,537
Conversion of CLAs to Ordinary shares	$	-		$	69,570
Exercise of warrants	$	-		$	443
Reclass of warrants to Additional paid in capital	$	-		$	28,225
IPO costs	$	-		$	185
Sale of property and equipment	$	-		$	67

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Interest paid	$	2,808		$	1,679
Income taxes paid	$	2		$	16

The accompanying notes are an integral partof these unaudited condensed consolidated financial statements.

GAUZY LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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

NOTE 1 -

NATURE OF OPERATIONS:

Gauzy Ltd. (the “Company”) was incorporated in Israel in 2009. The Company is engaged in thedevelopment, manufacturing and supply of technologies for operating and control of complex materials. On June 6, 2024, the Company’sordinary shares began trading on the NASDAQ Global Market under the symbol “GAUZ”, see Note 1(b).

The Company has wholly owned subsidiariesin France (“Vision”), the United States of America (the “U.S. Subsidiary”), in Germany (the “German Subsidiary”)and in China (the “Chinese Subsidiary”), and a branch in South Korea which commenced activity in the fourth quarter of 2024.

The Company, Vision and other subsidiariestogether defined as - “the Group”.

Initial Public Offering and Private Placement:

On June 7, 2024, the Company closed itsinitial public offering (IPO), in which it issued and sold 4,411,765 shares of ordinary shares at an IPO price $17.00 per share, resultingin net proceeds of $68.25 million after deducting $6.75 million of underwriting discounts and commissions.

As of June 30, 2025, the Company had an accumulated deficit of $246,526.During the six months ended June 30, 2025, the Company incurred operating losses of $21,203 and had negative cash flows from operatingactivities of $3,870. The Company has financed its operations mainly through the IPO net proceeds received in June 2024, see Note 1(b)above, debt financing, warrants and Note Purchase Agreements (“NPAs”), refer to Notes 9, 15 and 21 in the 2024 annual financialstatements and Note 9(b) in these financial statements. Group’s management believes that its existing cash and cash equivalents,amounts available under the NPAs, along with the Group’s estimated cash generated from operations provide sufficient resources tofund its planned operations through at least the next 12 months as of the issuance date of these financial statements. If the Group willnot meet its estimated revenues forecast and will not reach sufficient positive cash flows from its operations and will not have sufficientavailable funds under the NPAs, it may be required to obtain further funding through public or private offerings, debt financing or othersources. Adequate additional funding may not be available to the Group on acceptable terms, or at all. If the Group is unable to raisecapital when needed or on attractive terms, it may need to reduce, delay, or adjust its operating expenses. These consolidated financialstatements do not include any adjustments that might result from the outcome of such uncertainty.

In October 2023, Hamas terrorists infiltrated Israel’ssouthern border from the Gaza Strip and conducted a series of attacks on civilian and military targets. Following the attack, Israel’ssecurity cabinet declared war against Hamas and commenced a military campaign against Hamas. In addition, since the commencement of theseevents, there have been continued hostilities along Israel’s northern border with Lebanon (with the Hezbollah terror organization;),Israel’s southern border with the Gaza Strip (with the Hamas terrorist organization) and on other fronts from various extremistgroups in region, such as the Houthis in Yemen and various rebel militia groups in Syria and Iraq. Further, on April 13, 2024, and onOctober 1, 2024, Iran launched a series of drone and missile strikes against Israel. As of June 30, 2025, a ceasefire agreement has beenreached between Israel and Lebanon. In June 2025, Israel launched a preemptive attack on Iran, to which Iran responded with ballisticmissile and drone attacks. On June 23, 2025, Israel and Iran agreed to a ceasefire, although there is no assurance that the ceasefirewill continue. To date the Company’s operations and financial results have not been materially affected. The Company expects thatthe current conflict in the Gaza Strip, Lebanon and the security escalation in Israel will not have a material impact on its businessresults in the short term. However, since this is an event beyond the Company’s control, its continuation or cessation may affectour expectations. The Company continues to monitor its ongoing activities and will make any needed adjustments to ensure continuity ofits business, while supporting the safety and well-being of its employees.

GAUZY LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(continued)

(Unaudited)

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

NOTE 1 -

NATURE OF OPERATIONS (continued):

On April 2, 2025, U.S. President Donald Trump signed an executive order imposing new tariffs on importsfrom all countries, including Israel. Based on the executive order, Israel and France will be subject to elevated tariffs of 17% and 20%respectively. On July 31, 2025, an updated directive imposing a 15% import tariff over goods originated from Israel and France was issued, and became effective onAugust 1, 2025. Since the Group serves its U.S. customers from production facilities in the U.S., the Group is expecting minimal to noimpact from the tariffs imposed by President Trump.

NOTE 2 -

SIGNIFICANT ACCOUNTING POLICIES:

Basis of presentation

The accompanying condensed financialstatements are unaudited. The unaudited condensed financial statements of the Company have been prepared in accordance with generallyaccepted accounting principles in the United States (“U.S. GAAP”), are stated in U.S. dollars and follow the requirementsof the Securities and Exchange Commission (“SEC”) for interim financial reporting. Accordingly, they do not include all ofthe information and disclosures required by U.S. GAAP for complete financial statements as certain footnotes or other financial informationthat are normally required by U.S. GAAP can be condensed or omitted.

The unaudited condensed financial statementshave been prepared on the same basis as the audited financial statements. The unaudited condensed financial statements include the accountsof the Company. Any reference in these notes to applicable guidance is meant to refer to the authoritative U.S. GAAP as found in the AccountingStandards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting StandardsBoard (“FASB”).

In the opinion of management, the unauditedcondensed financial statements include all normal and recurring adjustments that are considered necessary for the fair statement of resultsfor the interim periods. The results for the period ended June 30, 2025 are not necessarily indicative of those expected for the yearending December 31, 2025 or for any future period. The condensed balance sheet as of December 31, 2024 included hereinwas derived from the audited financial statements as of that date but does not include all disclosures required by U.S. GAAP. These unauditedcondensed financial statements should be read in conjunction with the Company’s audited financial statements and the related notesthereto for the year ended December 31, 2024, included in the Company’s Annual Report on Form 20F filed withthe SEC on March 11, 2025.

The significant accounting policiesadopted and used in the preparation of the financial statements are consistent with those of the previous financial year.

Use of estimates

In preparing theCompany’s consolidated financial statements, management is required to make estimates and assumptions that affect the reported amountsof assets, liabilities, equity and disclosure of contingent liabilities and assets at the dates of the financial statements and the reportedamounts of revenues and expenses during the reported years. Actual results could differ from those estimates.

Revenue recognition

As of June 30, 2025,the Company does not have any contracts for the provision of goods that result in the material contract assets and contract liabilities.

As permitted by ASC606, the Company does not disclose information on unearned revenue as it generally enters into binding contracts for a period of one yearor less.

GAUZY LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(continued)

(Unaudited)

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

NOTE 2 -

SIGNIFICANT ACCOUNTING POLICIES (continued):

Concentration of credit risks

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

For the periodsended June 30, 2025, and December 31, 2024, the Company’s largest customer represented 10.2% and 13.5% of accounts receivable, net,respectively.

RecentlyAdopted Accounting Pronouncements:

In June 2022, the FASB issued ASU 2022-03 “Fair Value Measurement of Equity Securities Subject toContractual Sale Restrictions”. The ASU clarifies that a contractual restriction on the sale of an equity security is not consideredpart of the unit of account of the equity security and, therefore, is not considered in measuring its fair value. The ASU also clarifiesthat an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction. The ASU also introduces newdisclosure requirements for equity securities subject to contractual sale restrictions. The Company adopted the ASU on January 1, 2025and it did not have a material impact on its consolidated financial statement.

RecentlyIssued and Not Adopted Accounting Pronouncements:

In December, 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures, which requiresdisclosure of disaggregated income taxes paid, prescribes standard categories for the components of the effective tax rate reconciliation,and modifies other income tax-related disclosures. The ASU will be effective for fiscal years beginning after December 15, 2025, and allowsadoption on a prospective basis, with a retrospective option. The Company is in the process of assessing the impacts and method of adoption.

In November 2024, the FASB issued ASUNo. 2024-03 Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40). The ASUimproves the disclosures about a public business entity’s expenses and provides more detailed information about the types of expensesin commonly presented expense captions. The amendments require that at each interim and annual reporting period an entity will, interalia, disclose amounts of purchases of inventory, employee compensation, depreciation and amortization included in each relevant expensecaption (such as cost of sales, SG&A and research and development). The ASU is effective for fiscal years beginning after December15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is currentlyevaluating this ASU to determine its impact on the Company's disclosures.

In July 2025, theFASB issued ASU 2025-05 “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivableand Contract Assets”. The ASU introduces a practical expedient for all entities when estimating expected credit losses for currentaccounts receivable and current contract assets arising from transactions accounted for under ASC 606. Under the practical expedient,when developing reasonable and supportable forecast as part of estimating expected credit losses, an entity may assume that current conditionsas of the balance sheet date do not change for the remaining life of the asset. The ASU is effective for annual reporting period beginningafter December 15, 2025 and interim reporting within those annual reporting periods. Early adoption is permitted in both interim and annualreporting periods. The Company is evaluating the impact of ASU 2025-05 on its consolidated financial statements if it elects to applythe practical expedient.

GAUZY LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(continued)

(Unaudited)

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

NOTE 3 -

OTHER SIGNIFICANT TRANSACTIONS AND AGREEMENTS DURING THE SIX MONTHS ENDED JUNE 30, 2025:

In January 2025, the Company paid $188 of the phantom warrants (see Note 16(d) in the 2024 annual financialstatements).

In March 2025, warrants issued in connection with a note purchase agreement that the Company entered intoin January 2024 (see note 16(g) of the 2024 annual financial statements) were replaced and the Company issued an amended and restatedwarrant to such note purchasers (hereinafter “amended and restated 2024 Note Purchaser Warrant”). The amended and restated2024 Note Purchaser Warrant is exercisable for up to an additional of 44,164 of the Company’s ordinary shares at an exercise priceof $15.61 per share and may be exercised until November 8, 2028.

Warrants to Ordinary Shares are classifiedas equity. See Note 2(cc) in the 2024 annual financial statements.

On April 24, 2025 the Company entered into a loan agreement with an Israeli bank (the “Bank”)and issued warrants to purchase up to 85,034 ordinary shares, see Note 9(b).

On March 7, 2025, Gauzy GmbH received an approval to a research and development grant relating to itsSuspended Particle Device activity for the years 2020 through 2025. The overall amount expected to be received totaling to $1.5 million(€1.3 million), net of transaction costs. As of June 30, 2025, the Company met the conditions to receive a grant of $1.2 million(€1.1 million), net of transaction costs. The grant was recorded as a reduction of research and development expenses. The Companyreceived $0.8 million (€0.7 million), net of transactions costs, on July 29,2025.

NOTE 4 -

OPERATING SEGMENTS AND GEOGRAPHICAL INFORMATION:

The Company operates its business andreports its financial results in four operating segments:

Architecture – this segment focuses on sales for both interior and exterior applications for commercial,retail, residential, healthcare and hospitality customers.

Automotive – this segment focuses on sales that enable OEMs to incorporate Company’s technologyinto glass rooftops, side windows and windshields to replace conventional mechanical sun visors and shades.

Safety tech – this segment focuses on sales of advanced driver assistance systems for buses, coaches,recreational vehicles and specific vehicles, such as camera and motion sensor systems, smart mirrors and safety doors.

Aeronautics - this segment focuses on the sale of shading and cabin management systems in private andcommercial aircraft and helicopters.

The Company’s Chief Executive Officer(“CEO”), was identified as the chief operating decision maker (“CODM”). The CODM reviews the financial informationbased on the Group’s disaggregated information about revenues and gross margin, once a quarter, including budget-to-actual variances,to make decisions about resources to be allocated to the segments and assess their performance. Segment revenues, expenses and gross marginexclude intersegment transactions. The CODM does not make operating and investing decisions based on assets, and as such does not reviewasset information per segment.

GAUZY LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(continued)

(Unaudited)

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

NOTE 4 -

OPERATING SEGMENTS AND GEOGRAPHICAL INFORMATION (continued):

Segment Information:

	For the period of six months ended June 30, 2025
	Aeronautics		Architecture		Automotive		Safety tech		Total
Revenues from external customers	$	14,507	$	4,903	$	2,897	$	20,114	$	42,421
Intersegment revenues		25		-		37		-		62
Cost of revenue		9,921		3,163		2,315		15,987		31,386
Depreciation and amortization		422		121		122		352		1,017
Gross profit	$	4,164	$	1,619	$	460	$	3,775	$	10,018

	For the period of six months ended June 30, 2024
	Aeronautics		Architecture		Automotive			Safety tech		Total
Revenues from external customers	$	20,181	$	5,255	$	2,218		$	21,484	$	49,138
Intersegment revenues		1,761		104		-			-		1,865
Cost of revenue		11,465		3,491		2,751			17,623		35,330
Depreciation and amortization		490		88		-			423		1,001
Gross profit (loss)	$	8,226	$	1,676	$	(533	)	$	3,438	$	12,807

	For the period of three months ended June 30, 2025
	Aeronautics		Architecture		Automotive		Safety tech		Total
Revenues from external customers	$	6,862	$	2,489	$	1,406	$	9,297	$	20,054
Intersegment revenues		-		-		-		-		-
Cost of revenue		5,064		1,584		1,123		7,478		15,249
Depreciation and amortization		222		62		63		172		519
Gross profit	$	1,576	$	843	$	220	$	1,647	$	4,286

	For the period of three months ended June 30, 2024
	Aeronautics		Architecture		Automotive			Safety tech		Total
Revenues from external customers	$	10,045	$	2,625	$	912		$	10,827	$	24,409
Intersegment revenues		782		104		-			-		886
Cost of revenue		6,056		1,661		1,060			8,546		17,323
Depreciation and amortization		236		48		-			210		494
Gross profit (loss)	$	3,753	$	916	$	(148	)	$	2,071	$	6,592

	For the three months ended, June 30						For the six months, ended June 30
	2025			2024			2025			2024
Total revenues for reportable segments	$	20,054		$	25,295		$	42,483		$	51,003
Elimination of intersegment revenues		-			(886	)		(62	)		(1,865	)
Total consolidated revenues		20,054			24,409			42,421			49,138

Total reportable segment profit		4,286			6,592			10,018			12,807
Amounts not allocated to segments:
Research and development expenses, net		4,868			4,131			8,325			8,512
General and administrative expenses		6,076			5,271			11,773			11,400
Sales and marketing expenses		4,142			4,153			7,811			8,443
Depreciation and amortization		1,710			1,021			3,312			2,042
Other expenses, net		-			(63	)		-			(38	)
Consolidated operating loss		(12,510	)		(7,921	)		(21,203	)		(17,552	)
Other income		-			130			-			130
Financial expenses, net		1,790			(15,274	)		(240	)		(18,828	)
Consolidated loss before income taxes	$	(10,720	)	$	(23,065	)	$	(21,443	)	$	(36,250	)

GAUZY LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(continued)

(Unaudited)

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

NOTE 4 -

OPERATING SEGMENTS AND GEOGRAPHICAL INFORMATION (continued):

Geographical information:

The following table summarizes revenueby region based on the shipping address of customers:

	For the three months ended June 30				For the six months ended June 30
	2025		2024		2025		2024
United States	$	3,901	$	6,686	$	9,196	$	13,954
Israel		472		171		956		432
France		6,618		7,280		12,003		12,375
United Kingdom		1,870		2,025		5,152		3,760
Rest of Europe		4,551		3,576		9,115		9,766
Asia		2,030		3,779		4,454		6,747
Rest of world		612		892		1,545		2,104
	$	20,054	$	24,409	$	42,421	$	49,138

NOTE 5 -

INVENTORIES:

Inventories consisted of the following:

	June 30,		December 31,
	2025		2024
Finished products	$	730	$	1,345
Raw and packaging materials		15,564		13,563
Products in process		1,103		968
	$	17,397	$	15,876

The Company recorded inventory write-downsin the amount of $27 and $112 for the six months ended on June 30, 2025 and 2024, respectively and in the amount of $0 for the year endedon December 31, 2024. These write-downs are linked to slow-moving inventory.

GAUZY LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(continued)

(Unaudited)

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

NOTE 6 -

FAIR VALUE MEASUREMENTS:

Financial instruments measured at fair value on a recurring basis

The Company’s assets and liabilitiesthat are measured at fair value as of June 30, 2025, and December 31, 2024, are classified in the tables below in one of the six categoriesdescribed in “Note 2bb – Fair value measurement” in the 2024 annual financial statements:

	June 30, 2025
	Level 1		Level 3		Total
Financial Assets
RFI Shares	$	3,016			$	3,016
Financial Liabilities
Warrants			$	276	$	276
NPAs			$	27,357	$	27,357

	December 31, 2024
	Level 1		Level 3		Total
Financial Assets
RFI Shares	$	3,144			$	3,144
Financial Liabilities
Warrants and phantom warrants				206		206
NPA			$	17,777	$	17,777

	Six months ended June 30, 2025
	Warrants*			NPAs
January 1, 2025	$	206		$	17,777
Settlement of Phantom warrants		(188	)		-
Issuance		272			-
Change in fair value		(14	)		9,580
June 30, 2025	$	276		$	27,357

The following is a roll forward of the fair value of liabilities classified under Level 3

	Six months ended June 30, 2024
	Warrants*			CLAs			NPAs		Facility loans			Earn-out liability			Other
January 1, 2024	$	21,566		$	55,940		$	21,976	$	23,151		$	2,997		$	186
Issuance		11,196			11,750			18,704		-			-			-
Payment		(1,500	)		-			-		(24,600	)		(2,210	)		-
Conversion to equity		(445	)		(69,570	)		-		-
Reclassification to equity		(28,225	)		-			-		-			-			-
Change in fair value		(1,061	)		1,880			14,758		1,449			(38	)		14
June 30, 2024	$	1,531		$	-		$	55,438	$	-		$	749		$	200

Including ‘phantom warrants’, see Note 16(d)in the 2024 annual financial statements.

GAUZY LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(continued)

(Unaudited)

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

NOTE 6 -

FAIR VALUE MEASUREMENTS (continued):

Warrants over ordinary shares

Starting from the closing of the IPO,the Company utilized a Black-Scholes Option Pricing model with Level 3 inputs for the valuation of its liability-classified warrants.Inherent in pricing models are assumptions related to expected share-price volatility, expected life, risk-free interest rate and dividendyield. The underlying stock price input is the closing stock price as of each valuation date and the exercise price is the price as statedin the warrant agreement. The volatility input was determined using the historical volatility of comparable publicly traded companieswhich operate in a similar industry or compete directly against the Company.

Volatility for each comparable publiclytraded company is calculated as the annualized standard deviation of daily continuously compounded returns. The Black-Scholes analysisis performed in a risk-neutral framework, which requires a risk-free rate assumption based upon constant-maturity treasury yields, whichare interpolated based on the remaining term of the warrants as of each valuation date.

The following table provides quantitativeinformation regarding Level 3 fair value measurements inputs at their measurement dates:

	June 30,			June 30,
	2025			2024
Exercise price		$14.35-$31.08			$14.35-$31.08
Share price	$	8.44		$	12.02
Volatility		44.57	%		44.09%-44.57	%
Term (years)		3.17-4.33			4.17-5.33
Risk-free interest rate		3.68%-3.69	%		4.44%-4.48	%
Dividend yield		0.00	%		0.00	%

Financial instruments measured not at fair value on a recurring basis

Financial instruments not recordedat fair value on a recurring basis include cash and cash equivalents, restricted cash, bank deposits, trade receivables, trade and otherpayables and short-term borrowings. Due to their nature, their fair value approximates their carrying value.

The fair value of Vision’s bankloans approximates their carrying value.

GAUZY LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(continued)

(Unaudited)

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

NOTE 7 -

SHAREHOLDERS’ EQUITY:

Asof June 30, 2025 and December 31, 2024, the share capital is composed of shares, as follows:

	June 30, 2025
	Authorized		Issued and paid		Carrying Value
Ordinary Shares		49,200,191		18,743,137	$	865

	December 31, 2024
	Authorized		Issuedand paid		Carrying Value
Ordinary Shares		49,200,191		18,720,287	$	865

NOTE 8 -

CONVERTIBLE LOAN AGREEMENTS:

OnNovember 8, 2023 the Group entered a Note Purchase Agreement (the “November 2023 NPA”) among Chutzpah Holdings Ltd. a relatedparty, (the “Purchaser”) as purchaser, administrative agent and collateral agent. Under the November 2023 NPA, the Purchaserextended a credit facility to the Group in an aggregate principal amount of $60.0 million, that may be utilized and drawn down by wayof issuance and sale of senior secured notes to the Purchaser. As of the date of these consolidated financial statements, the Group withdrew$25.0 million. See also note 15(c) to the 2024 annual financial statements.

Following the consummation of the IPO, in July 2024, the Group repaidthe November 2023 NPA to the Purchaser totaling $38.6 million, including minimum return interest.

As of June 30, 2025,$35.0 million balance is still available for withdrawal. A commitment fee of 5.0% per annum is payable by the issuer on the unutilizedamount of the credit facility.

During the six monthsending June 30, 2025, the Company incurred interest expense totaling to $880.

NOTE 9 -

NONCONVERTIBLE LOANS:

In January 2024, the Group entered into a note purchase agreement (hereinafter “2024 NPA”),with OIC Growth Fund I, L.P. and affiliated funds (hereinafter “2024 Note Purchases”) for a total amount of $26.0. See note9(e) in the 2024 annual financial statements.

Under the 2024 NPA, the Company and itssubsidiaries are subject to various negative and affirmative covenants, which include, among others, the following: (i) limitations onincurrence of additional financial indebtedness and on grant of liens (subject to certain permitted incurrence of indebtedness); (ii)limitations on investments in, and formation or acquisition of, additional entities or joint ventures; (iii) limitations on the conductof any material activities other than those related to the development, manufacture and marketing of vision and light control technologiesor incidental thereto; (iv) the Company is required to maintain at all times a cash balance of at least $1.5 million; and (v) additionallimitations on payments to shareholders of dividends or any indebtedness, and other imitations on change in control as specified in the2024 NPA. In addition, the 2024 NPA contains events of default customary in such transactions, including non-payment; breach of covenants;breach of representations; bankruptcy, insolvency proceedings and creditors’ process; occurrence of a material adverse event, ineach case may be subject to grace or cure periods prescribed by the 2024 NPA.

As of June 30, 2025,and the date of the issuance of these condensed consolidated financial statements, the Company meets the conditions above.

On May 4, 2025, theCompany signed an amendment to the 2024 NPA according to which the maturity date of the 2024 NPA was updated to May 1, 2028. Other conditionsof the NPA remain unchanged.

GAUZY LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(continued)

(Unaudited)

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

NOTE 9 -

NONCONVERTIBLE LOANS (continued):

On April 24, 2025, the Company entered into a loan agreement with an Israeli bank (the “Bank”),pursuant to which the Bank agreed to provide the Company with a credit facility in the aggregate amount of $10.0 million, consisting of(i) a short-term credit facility of $5.0 million, and (ii) a long-term loan of $5.0 million (the"2025 Loan Agreement").

The short-term creditfacility bears interest at a rate of Term SOFR (monthly) plus 5% per annum. Interest on the short-term credit facility is payable at theend of the loan period, as will be determined with respect to each drawdown. The principal amounts drawn under the short-term credit facilityare repayable within one to six months from the date of each drawdown, as will be determined with respect to each drawdown. The short-termcredit facility will be available for re-withdrawal at an amount calculated with reference to the Group’s accounts receivables,inventory and cash balances less Short-term loan relating to factoring arrangements.

As of June 30, 2025,and the date of the issuance of these condensed consolidated financial statements, the entire amount of short-term credit facility isavailable for withdrawal based on the conditions above.

The long-term loanbears interest at a rate of Term SOFR (quarterly) plus 7% per annum. Interest on the long-term loan is repayable on a quarterly basis,commencing at the beginning of the calendar quarter following the drawdown date. The principal amount of the long-term loan is repayablein eight quarterly installments, commencing one year after the drawdown date. Notwithstanding, if the Company achieves certain financialconditions, the first principal payment may be deferred by an additional six months at the Company’s request. The 2025 Loan Agreementincludes provisions for early repayment, subject to prepayment fees.

In connection withthe 2025 Loan Agreement, the Company issued to the Bank warrants to purchase up to 85,034 ordinary shares, with an exercise price of $8.82per share, which may be exercised until April 29, 2029. The warrants are not indexed to the Company’s own shares and therefor areliability – classified under ASC 815-40, see Note 6(a) above.

No material transactioncosts were incurred in relation to this loan.

The 2025 Loan Agreementcontains representations, warranties and other provisions customary for transactions of this nature, including various negative and affirmativecovenants.

Key covenants include:not canceling or reducing the 2023 NPA; restrictions on early repayment of the 2024 NPA; and a certain minimum deposit in the bank atall time.

As of June 30, 2025,and the date of the issuance of these condensed consolidated financial statements, the Company meets the conditions above.

In addition, the2025 Loan Agreement contains events of default customary in such transactions, in each case, may be subject to grace or cure periods asprescribed by the 2025 Loan Agreement.

The amounts owingunder the 2025 Loan Agreement, including principal, interest and fees payable to the Bank, are secured by, among other things, a first-rankingfloating charge on all of the company’s assets and first-ranking fixed charges on the Company’s goodwill, fixed assets, intellectualproperty, receivables from the Company’s subsidiaries, Vision Lite SAS, Gauzy USA Inc. and Gauzy GmbH, and its equity interestsin these subsidiaries, and Research Frontiers Incorporated.

During the reportingperiod the Company drew $5.0 million of the short-term credit facility and $5.0 million of the long-term loan.

GAUZY LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(continued)

(Unaudited)

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

NOTE 9 -

NONCONVERTIBLE LOANS (continued):

As of June 30, 2025, the required annual principal payments of long-term debt, starting from July 2025,are as follows:

	June 30, 2025
Year 1	$	8,608
Year 2		4,794
Year 3		30,417
Year 4		129
Year 5 and thereafter		11
Total	$	43,959

NOTE 10 -

NET LOSS PER SHARE ATTRIBUTABLE TO ORDINARY SHAREHOLDERS

The following tablesets forth the computation of basic and diluted net loss per share attributable to ordinary shareholders for the periods presented:

	For the Three Months Ended						For the Six Months Ended
	June 30, 2025			June 30, 2024			June 30, 2025			June 30, 2024
Numerator:
Net loss for the period	$	(10,736	)	$	(23,087	)	$	(21,514	)	$	(36,334	)
Deemed dividend on issuance of warrants		-			-			(81	)		-

Net loss attributable to ordinary shareholders, basic and diluted	$	(10,736	)	$	(23,087	)	$	(21,595	)	$	(36,334	)
Denominator:
Weighted-average shares used in computing net loss per share attributable to ordinary shareholders, basic and diluted		18,738,657			8,869,691			18,732,196			7,072,950
Net loss per share attributable to ordinary shareholders, basic and diluted	$	(0.57	)	$	(2.60	)	$	(1.15	)	$	(5.14	)

The following instruments were not includedin the computation of diluted earnings per share because of their anti-dilutive effect:

For the period endingon June 30, 2025:

Warrants to purchase ordinary shares;

Share-based compensation;

For the period endingon June 30, 2024:

Redeemable convertible preferred shares;

Convertible loan agreements;

Warrants to purchase ordinary shares;

Share-based compensation.

GAUZY LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(continued)

(Unaudited)

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

NOTE 11 -

TRANSACTIONS AND BALANCES WITH RELATED PARTIES:

Transactions with related parties whichare shareholders and directors of the Company:

Transactions:

	Six months ended June 30,
	2025		2024
Interest expenses (See Note 8)	$	880	$	2,937
Share-based compensation to non-executive directors	$	324	$	61

Balances:

	June 30, 2025		December 31, 2024
Short-term liabilities -
Other current liabilities (See Note 8)	$	-	$	890

Long-term liabilities -
Other non-current liabilities (See Note 8)	$	1,770	$	-

Note 12 -

subsequent events:

In July 2025, the Bank provided an additional $5.o million loan under the same commercial terms as theshort-term credit facility of $5.0 million in the 2025 Loan Agreement, see Note 9(b). In July the Company drew down the full amount.

For receipt of grant after the reporting period see Note 3(d).

On July 4, 2025, the United States enacted tax reform legislation through the One Big Beautiful Bill Act,which changes existing U.S. tax laws, including extending or making permanent certain provisions of the Tax Cuts and Jobs Act, repealingcertain clean energy initiatives, in addition to other changes. The Company is still in the process of evaluating the impact of this newlegislation to provision for income taxes, deferred tax assets, deferred tax liabilities, and to income taxes payable in the period ofenactment and will continue to assess the impact the new legislation will have on the consolidated financial statements.

The following discussionand analysis should be read in conjunction with our consolidated interim financial statements and related notes included elsewhere inthis Form 6-K and our consolidated annual financial statements for the fiscal year ended December 31, 2024, included in our Annual Reporton Form 20-F for the fiscal year ended December 31, 2024, filed with the Securities and Exchange Commission, or the SEC, on March 11,2025, or the 2024 Annual Report.

Unlessotherwise indicated or the context otherwise requires, all references in this Form 6-K to the terms “Gauzy,” “the Company,”“our,” “us,” and “we” refer to Gauzy Ltd. and its consolidated subsidiaries. References to “ordinaryshares,” “warrants” and “share capital” refer to the ordinary shares, warrants and share capital, respectively,of Gauzy.

References to “U.S.dollars,” “USD” and “$” are to the currency of the United States of America. References to “ordinaryshares” are to our ordinary shares, no par value. Our consolidated financial statements are prepared and presented in accordancewith generally accepted accounting principles in the United States, or U.S. GAAP. Our historical results do not necessarily indicate ourexpected results for any future periods.

We present our resultsof operations in a way that we believe will be the most meaningful and useful to investors, analysts, rating agencies and others who useour financial information to evaluate our performance. Some of our financial measures are not prepared in accordance with generally acceptedaccounting principles, or non-GAAP, under SEC rules and regulations. For example, in this Form 6-K, we present revenue backlog, EBITDA,Adjusted EBITDA and Free Cash Flow, all of which are non-GAAP financial measures as defined in Item 10(e) of SEC Regulation S-K. Revenuebacklog, EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow and Adjusted Net Loss are non-GAAP financial measures, are presentedfor supplemental informational purposes only, and are not intended to be substitutes for any U.S. GAAP financial measures, including revenueor net income (loss), and, as calculated, may not be comparable to companies in other industries or within the same industry with similarlytitled measures of performance. In addition, these non-GAAP measures should not be construed as an inference that our future results willbe unaffected by unusual or non-recurring items. Therefore, these non-GAAP financial measures should be considered in addition to, notas a substitute for, or in isolation from, measures prepared in accordance with U.S. GAAP. Where appropriate, reconciliations of our non-GAAPfinancial measure to the most comparable U.S. GAAP figures are included. For further discussion, see the section entitled “Key BusinessMetrics and Non-GAAP Financial Measures” below.

Certaininformation included in this discussion may be deemed to be “forward-looking statements” within the meaning of the PrivateSecurities Litigation Reform Act of 1995 and other securities laws. Forward-looking statements are often characterized by the use of forward-lookingterminology such as “may,” “will,” “expect,” “anticipate,” “estimate,” “continue,”“believe,” “should,” “intend,” “project” or other similar words, but are not the onlyway these statements are identified.

Theseforward-looking statements may include, but are not limited to, statements relating to our objectives, plans and strategies, statementsthat contain projections of results of operations or of financial condition, expected capital needs and expenses, statements relatingto the research, development, completion and use of our products, and all statements (other than statements of historical facts) thataddress activities, events or developments that we intend, expect, project, believe or anticipate will or may occur in the future.

Forward-lookingstatements are not guarantees of future performance and are subject to risks and uncertainties. We have based these forward-looking statementson assumptions and assessments made by our management in light of their experience and their perception of historical trends, currentconditions, expected future developments and other factors they believe to be appropriate.

Importantfactors that could cause actual results, developments and business decisions to differ materially from those anticipated in these forward-lookingstatements include, among other things:

Readersare urged to carefully review and consider the various disclosures made throughout the following discussion which are designed to adviseinterested parties of the risks and factors that may affect our business, financial condition, results of operations and prospects.

Youshould not put undue reliance on any forward-looking statements. Any forward-looking statements in the following discussion are made asof the date hereof and are expressly qualified in their entirety by the cautionary statements included herein. We undertake no obligationto publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, exceptas required by law.

We are a fully-integratedlight and vision control company, transforming the way we experience our everyday environments. Our cutting-edge nanotechnology and electronicscapabilities in light control, and our mechatronics and image analysis technologies in vision control, are revolutionizing mobility andarchitectural end-markets. We have established distinct leadership positions across these large and high-growth markets, where our technologiesare replacing traditional mechanical products, such as shades, blinds and mirrors, with advanced and sustainable solutions offering superiorfunctionality. Our key products include suspended particle device, or SPD, and liquid crystal, or LC, materials for smart glass applications,and AI-powered advanced driver assistance systems, or ADAS, solutions including camera monitoring systems, or CMS. We have establishedserial production capabilities, either directly or through sub-contracts, with leading aerospace, automotive and architecture companiesincluding Boeing, General Motors, Honda, Air France-KLM, Mercedes, Ford, Ferrari, MSC and Yutong. We benefit from both secular and regulatorytailwinds that are driving the rapid adoption of light and vision control technologies. In addition to our core markets, we believe thatour products may have a multitude of tangible applications in other areas such as railway, maritime, specialty vehicle, private securityand consumer appliances.

We aim to deliver a full suiteof proprietary technologies that offer superior performance attributes by leveraging our differentiated technical capabilities and marketinsights, a competitive advantage we maintain through our core research and development and innovation organization. We have a comprehensiveproduct offering with multiple complementary light and vision control technologies, enabling us to provide a full range of solutions forlight and vision control across diverse markets, applications and geographies. Our vertically integrated in-house production capabilitiesenable us to offer our products at various stages in the supply chain based on the specific business needs of our customers. For example,we have the capability to simultaneously sell films to glass fabricators, prefabricated stacks to Tier 1 glass manufacturers and, in certaininstances, full window systems to original equipment manufacturers, or OEMs.

In light control, our productofferings include smart glass and films that switch from transparent to opaque, controllable dimmable shading, and transparent displaysfor digital signage and communication. Our light control products allow the user to regulate privacy, solar heat gain, and UV protection.In vision control, we are a leading Tier 1 supplier of ADAS for trucks, buses and coaches, designed to create a safer and more comfortabledriving experience while reducing accidents. Our unique ADAS offerings remove the need for side- and rear-view mirrors, instead providingthe driver with a real-time video display and alerts to reduce blind spots and potential driving hazards.

We enjoy close, collaborativerelationships with many OEMs, Tier 1 suppliers, film processors and glass fabricators who rely on our technologies. During the productdevelopment process, we customize our solutions to ensure they meet our customers’ requirements and are ultimately certified forproduction. In aerospace, we are a leading Tier 1 supplier for the commercial airline, business jet and helicopter segments, providingfull -stack smart glass products and advanced shading solutions directly to our customers. We hold a leading market position in cockpitshading systems for commercial airliners and business jets. We are in serial production for cabin shades, either directly or through sub-contracts,with seven business jet OEMs, including Embraer, HondaJet, Bombardier, Gulfstream, Daher, Air France and Beechcraft. Furthermore, we havesuccessfully leveraged the technology and mechatronics expertise we have developed as a Tier 1 aerospace supplier to provide additionaldifferentiated products and services to the automotive and architecture markets. Our vision control systems are increasingly integratedinto commercial vehicles for fleet efficiency and in public transit fleets of major metropolitan areas, including New York City, Londonand Paris, driven by municipal safety mandates and smart mobility initiatives.

In the automotive and architecturalmarkets, we are a leading Tier 2 supplier of light control technologies. Our unique business model enables automotive and architecturalglass fabricators globally to manufacture smart glass that is integrated with our films and electronics. In the automotive segment, OEMsincorporate our technology in glass rooftops, side windows and windshields to replace conventional mechanical sun visors and shades. Inthe architectural market, we serve all major segments including commercial, retail, residential, healthcare and hospitality for both interiorand exterior applications. In the commercial vehicle segment, we are a Tier 1 supplier and one of the market leaders in vision controltechnologies, including CMS and ADAS systems for the truck, bus and coach market. Our vision control systems are increasingly integratedinto commercial vehicles for fleet efficiency and in public transit fleets of major metropolitan areas, including New York City, Londonand Paris, driven by municipal safety mandates and smart mobility initiatives.

We are strategically locatedin close proximity to our customers. This geographic competitive advantage deepens local customer relationships, enhances commercial innovation,optimizes customer support, shortens supply chains and enables us to deliver our technologies quickly and efficiently around the world.As a result, the typical customer contract length is 15 to over 30 years for customers in our aeronautics segment, approximately eightyears for customers in our automotive segment and five to ten years for customers in our safety tech segment. We operate production facilitiesin Israel, France, Germany and the United States, with sales, marketing and fulfilment centers in 15 locations throughout the globe. Wesell our products in over 60 countries through both direct fulfilment and a network of over 100 expertly trained and certified distributionchannels.

We serve a broad range ofend-markets and geographies, enabling us to benefit from a diversified base of revenues. In 2024, we generated approximately 28.3% ofour revenue in the United States, 20.4% in Europe (excluding France and United Kingdom), 25.6% in France, 8.6% in United Kingdom, 1.3%in Israel, and 11.8% in Asia, with the remaining 4.0% generated in other countries across the world. In the same period, we generatedapproximately 40.0% of our revenue in the aerospace market, 44.1% in safety tech and commercial vehicle market 12.7% in the architecturalmarket and 3.2% in the automotive market. In 2025, through June 30, 2025, we generated approximately 21.7% of our revenue in the UnitedStates, 21.5% in Europe (excluding France and United Kingdom), 28.3% in France, 12.1% in United Kingdom, 2.3% in Israel, and 10.5% inAsia, with the remaining 3.6% generated in other countries across the world. In the same period, we generated approximately 34.2% of ourrevenue in the aerospace market, 47.4% in safety tech and commercial vehicle market 11.6% in the architectural market and 6.8% in theautomotive market. We also enjoy a diverse customer base, with no single customer representing more than 9.3% and 9.5% of our revenuefor the year ended December 31, 2024 and six months ended June 30, 2025, respectively.

On February 7, 2021, we enteredinto a share purchase agreement, or the Vision Lite SPA, with the shareholders, or the Sellers, of Vision Lite SAS, a French sociétépar actions simplifiée, or Vision Lite, as amended on July 27, 2021, January 16, 2022 and March 28, 2022, for the acquisition ofVision Lite, or the Business Combination. The Business Combination closed on January 26, 2022 and we became the sole shareholder of VisionLite. The consideration for the Business Combination consisted of $23.7 million (€21.0 million) in cash, the repayment of VisionLite’s loans in an amount of approximately $12.9 million (€11.4 million) and contingent consideration of up to $5.6 million(€5.0 million), contingent on the future revenues of Vision Lite. The Vision Lite SPA also contained certain earn out provisionswhich required us to pay certain amounts to the Sellers upon the occurrence of certain events, such as meeting annual revenue targets.We paid a total of $4.64 million in earn out payments to the Sellers pursuant to the earn out provisions, which was paid in full by July2024.

In June 2025, each of EyalPeso, our Chief Executive Officer and Chutzpha Holdings Ltd., an entity controlled by Alejandro Weinstein, who was recently elected toour Board of Directors (with his term to commence on November 1, 2025), committed to purchase 210,000 shares and 350,000 shares, respectivelyfrom one of large shareholders. The transaction closed in July 2025.

Driving customer adoption.The adoption of light and vision control technologies is still in its early stages with significant runway for further penetration,and as a market leader, we believe that are well positioned to capitalize on the accelerating demand and market adoption by leveragingour best-in-class technologies and recent capacity expansions.

Acquiring new customers.We are a key partner to our large and diversified customer base consisting of glass fabricators, film processors, automobile and aircraftOEMs, airlines and municipalities, among others. As part of our unique business model, we enable the glass industry to manufacture itsown smart glass by providing fabricators with materials and technologies to manufacture locally. We manage a large network of glass fabricatorsworldwide, allowing us to support and grow with our end customers on a global basis and we intend to expand our network to capture furtherdemand and market share over time. We plan to continue to sign new partnerships and win contracts with OEMs and suppliers as they expandtheir own product lines across the mobility and architecture markets and look for innovative technologies to differentiate their products.While we plan to build on our leadership in CMS technologies for the truck, bus and coach market, we are also focused on expanding ourADAS offering for commercial vehicles and believe we have a substantial opportunity with those customers given our ability to adapt ourtechnologies to cater to the additional complexity that such vehicles require. Moreover, we plan to build on our dominant position amongstaircraft OEMs and completion centers to grow our network of airline customers, given the increasing flexibility of airlines to exert moreinfluence on cabin design decision-making.

Expanding our productportfolio and markets. We embrace an entrepreneurial, R&D-centric mindset supported by our well-invested manufacturing platformand dedicated team with significant expertise in material science, mechatronics, image analysis and advanced manufacturing. We will continueto leverage these resources and capitalize on market and customer insights to expand our use cases through new innovative products andvalue-added features to drive growth. In particular, we emphasize engineering for tomorrow and believe that anticipating customer needsand preferences is an integral part of customer adoption. As a result, our business and engineering personnel become closely acquainted,and develop deep relationships, with our customers. These close customer relationships enable us to identify and forecast the needs ofour customers and draw upon our intellectual property portfolio and expertise in technology research and development to create new productsand successfully position our portfolio within the ever-changing business environment.

Leveraging our manufacturingand operational capabilities. In recent years, we have made strategic investments to expand our manufacturing capabilities. Weoperate as a one-stop shop and are deeply involved across our products’ value chain, spanning across product development and nanoparticlesynthesis through lamination and processing, enabling us to more effectively realize opportunities to reduce production costs and reactfaster to fluctuations in market demand. We believe there is an opportunity for significant margin expansion as we continue to scale ourbusiness and benefit from increased capacity utilization and fixed operating leverage. We also expect to benefit from improved purchasingpower for our raw materials and components and continued manufacturing efficiencies and productivity initiatives driven by our researchand development efforts both on the material science and engineering sides. As an example, we have successfully reduced LC film thicknessfrom 25 microns to 20 microns enabling an approximately 20% reduction in material cost for select products and have also successfullydoubled our LC line running speed. We have identified and have begun to implement additional projects that we expect will provide incrementalnet manufacturing productivity and improved margins in the coming years.

Acquisitions. Webelieve we are well-positioned as an acquirer of choice due to our global presence, industry-recognized leadership in innovation, diversemanufacturing network and highly entrepreneurial, multi-cultural team with significant engineering and material science expertise. Asa public company, we expect to have the added flexibility of financing future acquisitions through our public currency in addition toother funding sources. We have a proven track record with our successful acquisition and integration of Vision Lite in January 2022 andintend to target opportunities that strengthen our market position, expand our product portfolio, enhance our technologies and extendour manufacturing capabilities, including through vertical integration. In September 2023, we completed an acquisition of Resonac Corporation’s(formerly Hitachi Chemical Company, Ltd.), or Resonac, full SPD intellectual property portfolio and business, which included obtainingand learning the know-how with respect to Resonac’s technical and business information related to such acquired patents, anothertestament to our acquisition sourcing and execution capabilities.

Geopolitical Environment. In October2023, Hamas terrorists infiltrated Israel’s southern border from the Gaza Strip and conducted a series of attacks on civilian andmilitary targets. Hamas also launched extensive rocket attacks on the Israeli population and industrial centers located alongIsrael’s border with the Gaza Strip and in other areas within the State of Israel. These attacks resulted in thousands of deathsand injuries, and, in addition, Hamas kidnapped many Israeli civilians and soldiers. Following the attack, Israel’s security cabinetdeclared war against Hamas and commenced a military campaign against Hamas in parallel to Hamas’ continued rocket and other terrorattacks. Since the commencement of these events, there have been continued hostilities between Israel and Hezbollah and other extremistgroups in the region, such as the Houthis in Yemen and various rebel militia groups in Syria and Iraq. In addition, Iran launched directattacks on Israel involving hundreds of drones and missiles and has threatened to continue to attack Israel and is widely believed tobe developing nuclear weapons. Iran is also believed to have a strong influence among extremist groups in the region, such as Hamas inGaza, Hezbollah in Lebanon, the Houthi movement in Yemen and various rebel militia groups in Syria and Iraq. In addition to missile attackson Israel, the Houthis launched attacks on global shipping routes in the Red Sea, causing disruptions of supply chains. As of June 30,2025, a ceasefire agreement has been reached between Israel and Lebanon. In June 2025, Israel launched a preemptive attack on Iran, towhich Iran responded with ballistic missile and drone attacks. On June 23, 2025, Israel and Iran agreed to a ceasefire, although thereis no assurance that the ceasefire will continue. To date our operations and financial results have not been materially affected and wedo not expect that the current conflict in the Gaza Strip, Lebanon and the security escalation in Israel resulting from the conflict withIran will have a material impact on our business results in the short term. However, since this is an event beyond the our control, itscontinuation or cessation may affect our expectations. We continue to monitor its ongoing activities and will make any needed adjustmentsto ensure continuity of our business, while supporting the safety and well-being of our employees. .

Economic conditionsand resulting business trends. Our results of operations are impacted by the relative strength of the overall economy and itseffect on business investment, unemployment, consumer spending behavior, and business and consumer demand. Our customers’ underlyingbusiness activities are also linked to the macroeconomic and geopolitical environment. Global supply chain disruptions and high energyprices are expected to continue in 2025. On April 2, 2025, U.S. President Donald Trump signed an executive order imposing new tariffson imports from all countries, including Israel. Based on the executive order, Israel and France will be subject to elevated tariffs of17% and 20% respectively. On July 31, 2025, an updated directive imposing a 15% import tariff over goods originated from Israel and Francewas imposed, which became effective August 1, 2025. Since we serve our U.S. customers from production facilities in the United States,we are expecting minimal to no impact from the tariffs imposed by President Trump. In addition, terrorism or other geopolitical eventsmay increase the likelihood of supply chain interruptions and may impair our ability to compete in current or future markets, or otherwisesubject us to potential material liability. While we do not believe that our business segments, products, lines of service, projects oroperations have been materially impacted by the global supply chain disruptions, we cannot guarantee that we will not be materially impactedby the economic uncertainty and volatility in the markets in the future. We cannot quantify such impact to our business at this moment,as we are an early growth stage company and have not yet commenced the mass production and sale of products. To mitigate supply chainrisks we may face in the future, we aim to focus on Tier 1 suppliers located in close proximity to our production facilities and willseek to negotiate contracts with our suppliers that lock in price and delivery commitments. Since we are strategically located in closeproximity to our customers, we have a geographic competitive advantage that deepens local customer relationships, enhances commercialinnovation, optimizes customer support, shortens supply chains and enables us to deliver our technologies quickly and efficiently aroundthe world.

Impact of supply chaindisruptions on business operations. In connection with the ongoing global supply chain disruption, we continue to work with oursuppliers on (i) mitigating the effects of recent procurement shortages, (ii) negating the impacts on supply chain disruption on costsand (iii) effectively scheduling for key product developments. Mitigation steps undertaken by us include design modifications that utilizeparts and materials that are more readily available and the expansion of our supply chain to form a wider procurement network to sourceproducts in short supply. To date, these mitigation steps have been successful at reducing the impact of supply chain disruptions whilealso maintaining our commitment to product quality and performance reliability. To date, no new material risks have emerged as a resultof these mitigation steps. We anticipate these supply chain challenges will continue to exist over the near term and plan to continuallyemploy mitigation strategies to reduce the impact on future product deliveries.

The period-to-period comparisonsof our results of operations have been prepared using the historical periods included in our consolidated financial statements. The followingdiscussion should be read in conjunction with the consolidated financial statements and related notes included elsewhere in this Form6-K.

We primarily derive revenuefrom the sale of cockpit and cabin shading in our aeronautics segment, the sale of ADAS technology and driver safety doors in our safetytech segment, and the sale of SPD and LC films for smart glass applications in our architecture and automotive segments.

We expect revenue to increaseover time as we expand our customer base. We expect that our revenue will fluctuate from period to period due to new product offerings,varying branding and sales activities, entrance into new end-markets and market segments and evolving policies and regulations in theUnited States and Europe.

Cost of revenues mainly consistsof raw materials used in the production line for our products, shipping and handling costs, salary of headcount related to production,employee-related expenses and overhead expenses of internal assembly line and service costs. Cost of revenues also consists of royaltiesto the Israel Innovation Authority, or the IIA.

Research and development expensesinclude costs directly attributable to the conduct of research and development programs, including employee-related expenses, such assalaries and share-based compensation, lab expenses, consumable equipment and consulting fees, and intellectual property expenses, suchas patent application and maintenance expenses. We have received royalty-bearing and non-royalty-bearing grants, which represent the participationof the IIA and other government agencies in the local jurisdictions in which we operate in approved programs for research and development.These grants are recognized as a reduction of research and development expenses as the related costs are incurred.

Research credit tax grantedby the French Government is recognized when the tax credit becomes receivable, provided there is reasonable assurance that Vision Litewill comply with the conditions attributed to this credit and there is reasonable assurance the credit will be received. The tax creditis deducted from research and development expenses as the applicable costs are incurred.

On March 7, 2025, Gauzy GmbHreceived an approval to a research and development grant relating to its Suspended Particle Device activity for the years 2020 through2025. The overall amount expected to be received totaling to $1.5 million (€1.3 million), net of transaction costs. As of June 30,2025, we met the conditions to receive a grant of $1.2 million (€1.1 million), net of transaction costs. The grant was recorded asa reduction of research and development expenses. The Company received $0.8 million (€0.7 million), net of transactions costs, onJuly 29, 2025.

We expect to continue to investin research and development to enhance our solutions and offerings to our customers, including hiring additional employees and continuingresearch and development projects. As a result, we expect that our research and development expenses will continue to increase in absolutedollars in future periods and vary from period to period as a percentage of revenue.

General and administrativeexpenses consist primarily of personnel costs, including share-based compensation related to directors and employees, facility costs,office space rental costs, external professional service costs, including legal, accounting, audit, finance, business development, investorrelations, and human resource services, and other consulting fees.

We expect that our generaland administrative expenses will continue to increase in absolute dollars in future periods, primarily due to increased headcount to supportanticipated growth in the business and due to incremental costs associated with operating as a public company, including costs to complywith the rules and regulations applicable to companies listed on a securities exchange and costs related to compliance and reporting obligationspursuant to the rules and regulations of the SEC and Nasdaq listing standards, public relations, insurance and professional services.

Sales and marketing expensesinclude employee-related expenses, such as salaries and share-based compensation, expenses relating to outsourced and contracted services,such as subcontractor, advertising and exhibition expenses, public relations and websites costs.

We expect our sales and marketingexpenses to increase in absolute dollars as we expand our commercial sales, marketing and business development teams, increase our presenceglobally; and increase marketing activities to drive awareness and adoption of our products. While these expenses may vary from periodto period as a percentage of revenue, we expect these expenses to increase as a percentage of sales in the short term as we continue togrow our commercial organization to drive anticipated growth in the business.

The finance expenses consistedprimarily of change in fair value of investments, warrants and financial liabilities measured at fair value, interest expenses on loansand exchange rate differences expenses.

Income taxes primarily consistof income taxes from our subsidiaries in Germany, the United States and China.

We currently conduct our businessand report our financial results through four operating segments: aeronautics, architecture, automotive and safety tech.

The period-to-period comparisonsof our results of operations have been prepared using the historical periods included in our unaudited interim consolidated financialstatements. The following discussion should be read in conjunction with the unaudited interim consolidated financial statements and relatednotes included elsewhere in this document. We have derived this data from our unaudited interim consolidated financial statements includedelsewhere in this Form 6-K.

Three Months Ended June 30, 2025, Comparedto Three Months Ended June 30, 2024

Revenuesdecreased by approximately $4.3 million, or (17.8)%, to $20.1 million for the three months ended June 30, 2025, compared to $24.4 millionfor the three months ended June 30, 2024. The decrease resulted mainly from the timing of deliveriesrelative to full-year purchase orders.

Revenues in our aeronauticssegment decreased by approximately $3.1 million, or (31.7)%, to $6.9 million for the three months ended June 30, 2025, compared to $10.0million for the three months ended June 30, 2024. The decrease resulted mainly from the timing of deliveries relative to full-year purchaseorders.

Revenues in our architecturesegment decreased by approximately $0.1 million, or (5.2)%, to $2.5 million for the three months ended June 30, 2025, compared to $2.6million for the three months ended June 30, 2024. The decrease resulted mainly from the timing of deliveries relative to full-year purchaseorders.

Revenues in our automotivesegment increased by approximately $0.5 million, or 54.1%, to $1.4 million for the three months ended June 30, 2025, compared to $0.9million for the three months ended June 30, 2024. The increase resulted mainly from the start of serial production at the end of the secondquarter of 2023 and its continued ramp to higher expected utilization levels.

Revenues in our safety-techsegment decreased by approximately $1.5 million, or (14.1)%, to $9.3 million for the three months ended June 30, 2025, compared to $10.8million for the three months ended June 30, 2024.The decrease resulted mainly from the timing of deliveries relative to full-year purchaseorders.

Cost of revenues decreasedby approximately $2.0 million, or (11.5)%, to $15.8 million for the three months ended June 30, 2025, compared to $17.8 million for thethree months ended June 30, 2024. The decrease resulted mainly from a decrease of $3.5 million in materials cost, offset by an increaseof $1.5 million in payroll and related expenses.

Gross profit decreased byapproximately $2.3 million, or (35.0)%, to $4.3 million for the three months ended June 30, 2025, compared to $6.6 millionfor the three months ended June 30, 2024. The decrease resulted mainly from the decrease in revenue from the corresponding period.

Gross profit margin representsour gross profit as a percentage of our revenue. Gross profit margin decreased by approximately 5.6% to 21.4% for the three monthsended June 30, 2025, compared to 27.0% for the three months ended June 30, 2024.

For the three months endedJune 30, 2025, our gross profit margin was 23.0%, 33.9%, 15.6% and 17.7% in our aeronautics, architecture, automotive and safety techsegments, respectively. For the three months ended June 30, 2024, our gross profit margin was 37.4%, 34.9%, (16.2)% and 19.1% in our aeronautics,architecture, automotive and safety tech segments, respectively.

Research and development expensesincreased by approximately $0.8 million, or 17.8%, to $4.9 million for the three months ended June 30, 2025, compared to $4.1 millionfor the three months ended June 30, 2024. The increase resulted mainly from an increase in payroll and related expenses in the amountof $0.8 million, which was primarily due to an increase in salaries and an increase in the number of research and development employeesand an increase in materials in the amount of $0.5 million, offset by a decrease in subcontractors and professional services, in the amountof $0.4 million.

General and administrativeexpenses increased by approximately $0.8 million or 15.3%, to $6.1 million for three months ended June 30, 2025, compared to $5.3 millionfor the three months ended June 30, 2024. The increase resulted mainly from an increase in directors’ insurance and compensationexpenses in the amount of $0.4 million, credit losses expense in the amount of $0.2 million and an increase in overall costs related tobeing a public company.

Sales and marketing expensesdecreased by approximately $0.1 million, or (0.3)%, to $4.1 million for the three months ended June 30, 2025, compared to $4.2 millionfor the three months ended June 30, 2024. The decrease resulted mainly from a decrease in payroll and related expenses in the amount of$0.2 million and a decrease in subcontractors expenses in the amount of $0.3 million, offset by an increase in selling and marketing expensesin the amount of $0.4 million..

Depreciation and amortizationexpenses increased by approximately $0.7 million, or 67.5%, to $1.7 million for the three months ended June 30, 2025, compared to $1.0million for the three months ended June 30, 2024, reflecting depreciation and amortization of newly acquired assets, including demonstratorsand intellectual property.

Other expenses uncreased byapproximately $0.1 million, or 100.0%, to $0 million for the three months ended June 30, 2025, compared to $0.1 million for the threemonths ended June 30, 2024, reflecting changes in the fair value of contingent consideration resulting from the Vision Lite acquisition.

Financial expenses, net decreasedby approximately $17.1 million, or (111.7)%, to ($1.8) million for the three months ended June 30, 2025, compared to $15.3 million forthe three months ended June 30, 2024. This decrease was mainly due to a decrease of $13.2 million in the fair value of warrants and financialliabilities measured at fair value, a decrease of $3.3 million in foreign exchange loss, net, and a decrease of $0.9 million in interestexpense on loans, convertible loans and long-term debt.

Net loss decreased by approximately$12.4 million, or (53.5)%, to $10.7 million for the three months ended June 30, 2025, compared to $23.1 million for the three months endedJune 30, 2024. The decrease was mainly due to a decrease gross profit and an increase in operational expenses offset by a decrease infinancial expenses.

Revenues decreased by approximately$6.7 million, or (13.7)%, to $42.4 million for the six months ended June 30, 2025, compared to $49.1 million for the six months endedJune 30, 2024. The decrease resulted mainly from the timing of deliveries relative to full-year purchase orders.

Revenues in our aeronauticssegment decreased by approximately $5.7 million, or (28.1)%, to $14.5 million for the six months ended June 30, 2025, compared to $20.2million for the six months ended June 30, 2024. The decrease resulted mainly from the timing of deliveries relative to full-year purchaseorders.

Revenues in our architecturesegment decreased by approximately $0.4 million, or (6.7)%, to $4.9 million for the six months ended June 30, 2025, compared to $5.3 millionfor the six months ended June 30, 2024. The decrease resulted mainly from the timing of deliveries relative to full-year purchase orders.

Revenues in our automotivesegment increased by approximately $0.7 million, or 30.6%, to $2.9 million for the six months ended June 30, 2025, compared to $2.2 millionfor the six months ended June 30, 2024. The increase resulted mainly from the start of serial production at the end of the second quarterof 2023 and its continued ramp to higher expected utilization levels .

Revenues in our safety-techsegment decreased by approximately $1.4 million, or (6.4)%, to $20.1 million for the six months ended June 30, 2025, compared to $21.5million for the six months ended June 30, 2024. The decrease resulted mainly from the timing of deliveries relative to full-year purchaseorders.

Cost of revenues decreasedby approximately $3.9 million, or (10.8)%, to $32.4 million for the six months ended June 30, 2025, compared to $36.3 million for thesix months ended June 30, 2024. The decrease resulted mainly from a decrease of $5.2 million in materials costs consistent with a decreasein sales activity, offset by an increase of $1.4 million in payroll and related expenses.

Gross profit decreased byapproximately $2.8 million, or (21.8)%, to $10.0 million for the six months ended June 30, 2025, compared to $12.8 million for the sixmonths ended June 30, 2024. The decrease resulted mainly from the decrease in revenue, net of cost of revenues, from the correspondingperiod.

Gross profit margin representsour gross profit as a percentage of our revenue. Gross profit margin decreased by approximately 2.5% to 23.6% for the six months endedJune 30, 2025, compared to 26.1% for the six months ended June 30, 2024.

For the six months ended June30, 2025, our gross profit margin was 28.7%, 33.0%, 15.9%, and 18.8% in our aeronautics, architecture, automotive and safety tech segments,respectively. For the six months ended June 30, 2024, our gross profit margin was 40.8%, 31.9%, (24.0)%, and 16.0% in our aeronautics,architecture, automotive, and safety tech segments, respectively.

Research and development expensesdecreased by approximately $0.2 million, or (2.2)%, to $8.3 million for the six months ended June 30, 2025, compared to $8.5 million forthe six months ended June 30, 2024. The decrease resulted mainly from an increase in participation in research and development expensesand research and development grant in the amount of $1.4 million, decrease in subcontractors expenses in the amount of $0.4 million anddecrease in rent expenses in the amount of $0.2 million, offset by increase in payroll and related expenses in the amount of $1.9 million,which was primarily due to an increase in salaries and an increase in the number of research and development employees.

General and administrativeexpenses increased by approximately $0.4 million, or 3.3%, to $11.8 million for the six months ended June 30, 2025, compared to $11.4million for the six months ended June 30, 2024. The increase resulted mainly from an increase in directors’ insurance and compensationin the amount of $0.5 million.

Sales and marketing expensesdecreased by approximately $0.6 million, or (7.5)%, to $7.8 million for the six months ended June 30, 2025, compared to $8.4 million forthe six months ended June 30, 2024. The decrease resulted from a decrease of $0.3 million in payroll and related expenses, a decreaseof $0.6 million in subcontractors, offset by an increase of $0.4 million in exhibition expenses.

Depreciation and amortizationexpenses increased by approximately $1.3 million, or 62.2%, to $3.3 million for the six months ended June 30, 2025, compared to $2.0 millionfor the six months ended June 30, 2024, reflecting depreciation and amortization of newly acquired assets, including demonstrators andintellectual property.

Other expenses decreased byapproximately $0.04 million, or (100.0)%, to $0 million for the six months ended June 30, 2025, compared to $0.04 million for the sixmonths ended June 30, 2024, reflecting changes in the fair value of contingent consideration resulting from the Vision Lite acquisition.

Financial expenses, net decreasedby approximately $18.6 million, or (98.7)%, to $0.2 million for the six months ended June 30, 2025, compared to $18.8 million for thesix months ended June 30, 2024. This decrease was mainly due to a decrease of $12.5 million in the fair value of warrants and financialliabilities measured at fair value, a decrease of $4.5 million in interest expense on loans and long-term debt and a decrease of $3.5million in foreign exchange loss, net, offset by an increase of $1.7 million in loss from investment.

Net loss decreased by approximately$14.8 million, or (40.8)%, to $21.5 million for the six months ended June 30, 2025, compared to $36.3 million for the six months endedJune 30, 2024. The decrease was mainly due to a decrease in our financial expenses, offset by a decrease in gross profit.

We monitor the key businessmetrics set forth below to help us evaluate growth trends, establish budgets, measure the effectiveness of our sales and marketing efforts,and assess operational efficiencies. Our key business metrics are revenue backlog, EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, FreeCash Flow and Adjusted Net Loss. Increases or decreases in our key performance metrics may not correspond with increases or decreasesin our revenue.

Revenue backlog is a key businessmetric that we define as booked orders based on purchase orders or hard commitments (having a duration of less than one year) that havenot been shipped yet or have been shipped but not yet recognized as revenue. We consider revenue backlog to be a useful metric for managementand investors, because it is not affected by accounting standards, and, while its evaluated independently of our deferred revenue pursuantto our revenue recognition policy, it can be an important indicator of our expected recognized revenue for the periods following the measurementdate. Our revenue backlog as of June 30, 2025 was approximately $42.9 million, compared to revenue backlog of approximately $36.2 millionas of June 30, 2024. The increase was primarily attributable to new bookings in the second quarter of 2025 and annual and strong demandfrom customers.

EBITDA is a non-GAAP financialmetric that we define as our net loss, the most directly comparable financial measure based on GAAP, excluding net financial expense,tax expense and depreciation and amortization.

Our net loss was $21.5 millionand $36.3 million for the six months ended June 30, 2025 and 2024, respectively. Our EBITDA was approximately $(16.9) million and $(14.4)million for the six months ended June 30, 2025 and 2024, respectively. This was primarily driven by gross profit, operating expenses,including our share-based compensation, research and development expenses, general and administrative expenses and sales and marketingexpenses.

Adjusted EBITDA is a non-GAAPfinancial metric that we define as EBITDA (as defined above) excluding acquisition-related costs, one-time expenses and equity-based compensationexpenses.

Our Adjusted EBITDA changedfrom $(8.7) million for the six months ended June 30, 2024 to $(14.1) million for the six months ended June 30, 2025. This decrease wasprimarily driven by a decrease in gross profit, and an increase in operating expenses, research and development expenses, general andadministrative expenses and sales and marketing expenses.

We define Adjusted EBITDAMargin as Adjusted EBITDA (as defined above) for the period divided by revenue for the same period. We consider Net Loss divided by revenueas the most directly comparable U.S. GAAP measure to Adjusted EBITDA Margin. We defined Net Loss Margin as our Net Loss divided by revenue.

Our Net Loss Margin improvedfrom 74% for the six months ended June 30, 2024 to 51% for the six months ended June 30, 2025. Our Adjusted EBITDA Margin decreased from(17.6)% for the six months ended June 30, 2024 to (33.4)% for the six months ended June 30, 2025.

Free Cash Flow is a non-GAAPfinancial metric that we define as net cash used in operating activities, the most directly comparable financial measure based on U.S.GAAP, less capital expenditures.

Our Free Cash Flow increasedfrom $(19.9) million for the six months ended June 30, 2024 to $(7.5) million for the six months ended June 30, 2025. This increase wasprimarily driven by decrease in the net cash used in operating activities.

The following table reconcilesNet Loss to EBITDA and Adjusted EBITDA, Net Loss Margin to Adjusted EBITDA Margin and Free Cash Flow to net cash used in operating activities,the most directly comparable GAAP measures:

The following table showsour capital expenditures for each of the periods presented:

Adjusted Net Loss is a non-GAAPfinancial metric that we define as Net Loss, adjusting for certain financial expenses, the amortization of intangible assets, certainacquisition and debt raising related costs, non-cash fair value adjustments and expenses related to equity-based compensation and doubtfuldebts.

The following table reconcilesNet Loss to Adjusted Net Loss, the most directly comparable GAAP measure:

Our Adjusted Net Loss decreasedfrom $(17.8) million for the six months ended June 30, 2024 to $(21.2) million for the six months ended June 30, 2025. This decrease wasprimarily driven by a decrease in gross profit, offset partially by decrease of operating expenses and a decrease in interest expenses.

We believe that these non-GAAPfinancial measures are useful in evaluating our business as a way of assisting an investor in evaluating future cash flows of the business.

Our capital requirements willdepend on many factors, including sales volume, the timing and extent of spending to expand our production capabilities, support researchand development efforts, investments in information technology systems, the expansion of sales and marketing activities, increased costsas we continue to hire additional personnel, and market adoption of new and enhanced products and features. For the six months ended June30, 2025 and 2024, we had a net loss of $(21.5) million and $(36.3) million, respectively.

To date, our principal sourcesof liquidity have been proceeds from our private offerings of our convertible securities, proceeds from the issuance of SAFEs, proceedsfrom loans and credit facilities and proceeds from our initial public offering in June 2024.

Based on our current businessplan, we believe our current cash and cash equivalents, anticipated cash flow from operations and credit facilities, will be sufficientto meet our anticipated cash requirements over at least the next 12 months. We may need to raise additional capital before we can expectto become profitable from sales of our light and vision control products and may raise additional capital to expand our business, to pursuestrategic investments, to take advantage of financing opportunities or for other reasons.

On April 24, 2025, we enteredinto the 2025 Loan Agreement (as defined below) pursuant to which the Bank agreed to provide us with a credit facility in the aggregateamount of $10.0 million, consisting of (i) a short-term credit facility of $5.0 million, and (ii) a long-term loan of $5.0 million. See“Liquidity and Capital Resources — Indebtedness — 2025 Israeli Bank Loan” below for additional information. Wehave drawn down $5.0 million of the short-term credit facility and $5.0 million of the long-term loan.

If we are required to raiseadditional funds by issuing equity securities, dilution of shareholders may result. Any debt or equity securities issued may also haverights, preferences, and privileges senior to those of holders of our ordinary shares. The terms of debt securities or borrowings couldimpose significant restrictions on our operations. The credit market and financial services industry have in the past, and may in thefuture, experience periods of uncertainty that could impact the availability and cost of equity and debt financing. While we anticipateraising capital through non-dilutive issuances of debt, we cannot be assured that we will be able to obtain such capital on favorableterms, if at all.

We have lease obligationsand other contractual obligations and commitments as part of our ordinary course of business. See “Note 12: Leases”to our audited consolidated financial statements for the year ended December 31, 2024 included in the 2024 Annual Report. We did not haveduring the periods presented, and we do not currently have, any off-balance sheet arrangements involving commitments or obligations, includingcontingent obligations, arising from arrangements with unconsolidated entities or persons that have or are reasonably likely to have amaterial current or future effect on our financial condition, results of operations, liquidity, cash requirements or capital resources.

For the six months ended June30, 2025 and 2024, we made capital expenditures of $3.6 million and $4.3 million, respectively. These capital expenditures mainly includeexpenditures related to leasehold improvements, demonstrations and intellectual property.

Our research and developmentefforts were financed, in part, through royalty-bearing and non-royalty-bearing grants from the IIA. As of December 31, 2024, we receivedIIA royalty-bearing grants totaling approximately $1.3 million of which approximately $0.1 million of such amount has been repaid. Inaddition, as of June 30, 2025, we received IIA non-royalty-bearing grants totaling approximately $0 million.

We are committed to pay royaltiesto 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 grantsreceived, 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 applyto receive additional grants from the IIA. However, we cannot predict whether we will be entitled to any future grants, or the amountsof any such grants.

Under the Encouragement ofResearch, Development and Technological Innovation in the Industry Law, 5744-1984, and the regulations, guidelines, rules, procedures,and benefit tracks thereunder, or, collectively, the Innovation Law, research and development programs that meet specified criteria andare approved by a committee of the IIA are eligible for grants. A company that receives a royalty-bearing grant from the IIA is typicallyrequired to pay royalties to the IIA on income generated from products incorporating IIA-funded know-how (including income derived fromservices associated with such products and from IIA-funded know-how), up to 100% of the U.S. dollar-linked royalty-bearing grant amountplus interest.

The obligation to pay royaltiesis contingent on actual income generated from such products and services. In the absence of such income, no payment of royalties is required.

In general, the InnovationLaw requires that the products developed as part of the programs under which the grants were given be manufactured in Israel, unless priorapproval is attained from the IIA (such approval is not required for the transfer of a portion of the manufacturing capacity which doesnot exceed, in the aggregate, 10% of the manufacturing (in which case only notification is required, however, the IIA has a right to denysuch transfer within 30 days following the receipt of such notice)). In general, the transfer of manufacturing capacity outside of Israelmay be subject to an increase in the amount of royalties payable (depending on the manufacturing volume to be performed outside Israel)and to an increase in the rate of royalties.

The Innovation Law also restrictsthe ability to transfer IIA-funded know outside of Israel. A transfer for the purpose of the Innovation Law is generally interpreted verybroadly and includes, among other things, any sale of the IIA-funded know-how, any license to develop the IIA-funded know-how or the productsresulting from such IIA-funded know-how or any other transaction, which, in essence, constitutes a transfer of IIA-funded know-how. Thislimitation does not restrict the export of products that incorporate IIA-funded know-how. A transfer of IIA-funded know-how outside ofIsrael requires prior approval and may be subject to payment of a redemption fee to the IIA, calculated in accordance with a formula providedunder the Innovation Law. The redemption fee is subject to a cap of six times the total amount of the IIA grants, plus interest.

Subject to prior approvalof the IIA, we may transfer the IIA-funded know-how to another Israeli company. If the IIA-funded know-how is transferred to another Israelientity, the transfer would still require IIA approval but will not be subject to the payment of the redemption fee (however, there maybe an obligation to pay royalties to the IIA from the income of such sale transaction as part of the royalty payment obligation). In suchcase, the acquiring company would have to assume all of the applicable restrictions and obligations towards the IIA (including the restrictionson the transfer of know-how and manufacturing outside of Israel) as a condition to the IIA’s approval.

The restrictions under theInnovation Law, including restrictions on the transfer of IIA-funded know-how and manufacturing outside of Israel, continue to apply evenafter the payment of the full amount of royalties in respect of grants. However, upon payment of the redemption fee on a transfer of IIA-fundedknow-how outside Israel, the obligations towards the IIA (including the obligation to pay royalties) and restrictions under the InnovationLaw cease to apply.

We cannot be certain thatany approval of the IIA will be obtained on terms that are acceptable to us, or at all. We may not receive the required approvals shouldwe wish to transfer IIA-funded know-how and/or manufacture products developed with IIA-funded know-how outside of Israel in the future.Furthermore, in the event that we undertake a transaction involving the transfer to a non-Israeli entity of IIA-funded know-how pursuantto a merger or similar transaction, the consideration available to our shareholders may be reduced by the amounts we are required to payto the IIA. If we fail to satisfy the conditions of the Innovation Law, we may be required to refund the amounts of the grants previouslyreceived, together with interest and penalties, and may become subject to criminal charges.

On April 24, 2025, we enteredinto a loan agreement with an Israeli bank, or the Bank, pursuant to which the Bank agreed to provide us with a credit facility in theaggregate amount of $10.0 million, consisting of (i) a short-term credit facility of $5.0 million, and (ii) a long-term loan of $5.0 million,or the 2025 Loan Agreement.

The short-term credit facilitybears interest at a rate of Term SOFR (monthly) plus 5% per annum. Interest on the short-term credit facility is payable at the end ofthe loan period, as will be determined with respect to each drawdown. The principal amounts drawn under the short-term credit facilityare repayable within one to three months from the date of each drawdown, as will be determined with respect to each drawdown. The short-termcredit facility will be available until April 30, 2026.

The long-term loan bears interestat a rate of Term SOFR (quarterly) plus 7% per annum. Interest on the long-term loan is repayable on a quarterly basis, commencing atthe beginning of the calendar quarter following the drawdown date. The principal amount of the long-term loan is repayable in eight quarterlyinstallments, commencing one year after the drawdown date. Notwithstanding, if we achieve certain financial conditions, the first principalpayment may be deferred by an additional six months at our request. The long-term loan was available for withdraw until June 1, 2025.The 2025 Loan Agreement includes provisions for early repayment, subject to prepayment fees.

In connection with the 2025Loan Agreement, we issued to the Bank a warrant to purchase up to 85,034 ordinary shares, with an exercise price of $8.82 per share, whichmay be exercised until April 29, 2029.

The 2025 Loan Agreement containsrepresentations, warranties and other provisions customary for transactions of this nature, including various negative and affirmativecovenants. In addition, the 2025 Loan Agreement contains events of default customary in such transactions, in each case, may be subjectto grace or cure periods as prescribed by the 2025 Loan Agreement.

The amounts owing under the2025 Loan Agreement, including principal, interest and fees payable to the Bank, are secured by, among other things, a first-ranking floatingcharge on all of our assets and first-ranking fixed charges on our goodwill, fixed assets, intellectual property, receivables from oursubsidiaries, Vision Lite SAS, Gauzy USA Inc. and Gauzy GmbH, and our equity interests in these subsidiaries, and Research Frontiers Incorporated.

During the reporting periodthe Company drew $5.0 million of the short-term credit facility and $5.0 million of the long-term loan.

In July 2025, the Bank providedan additional $5.0 million loan under the same commercial terms as the short-term credit facility of $5.0 million in the 2025 Loan Agreement,during which we drew down the In July the Company drew down the full amount.

During 2020, we entered intoa loan agreement with an Israeli bank in the amount of $0.5 million, or the 2020 Loan. The annual interest rate was Libor + 10.5% andthe loan was to be repaid in 30 monthly payments beginning in March 2021. As part of the terms of the loan, we issued to the bank warrantsto purchase 4,180 series C preferred shares at an exercise price of $14.35 per share and exercisable for eight years commencing from thedate of the loan.

On October 19, 2021,we entered into an additional loan facility agreement with an Israeli bank, pursuant to which we borrowed an aggregate loan amount of$3 million, which bore interest at a rate of 4.2% per annum, or the 2021 Loan. As part of the terms of the 2021 Loan, we issued to thebank warrants to purchase up to 5,791 shares of the most senior class of our shares existing as of a date determined pursuant to the termsthereof (i.e., our series D preferred shares), at an exercise price of $31.08 per share and exercisable for eight years commencing fromthe date of the loan.

In January 2022, the bankloans were repaid in full following the signing of the Facility Agreement described below. Following the signing of the Facility Agreement,inter alia, the commitments under the Company’s loans with the Israeli bank in an amount of $3.7 million were repaid except for:(i) the three outstanding warrants issued to the bank, one of which was exercised on a cashless basis in April 2024 pursuant to whichwe issued 16,350 preferred A-3 shares, which converted into 16,350 ordinary shares in connection with our initial public offering in June2024; (ii) a loan agreement dated May 13, 2020, pursuant to which the Company borrowed an aggregate loan amount of NIS 2.1 million; (iii)a pledge dated January 23, 2018 registered on February 2, 2018 and a pledge dated May 13, 2020 registered on June 8, 2020, and (iv) afee to be paid to the bank in case of an exit event. As of June 30, 2025, warrants to purchase 9,971 ordinary shares that were issuedto the Israeli bank were outstanding.

During the first quarter of2020, we entered into convertible loan agreements, or the 2020 Convertible Loan Agreements, with three lenders, or the CLA Lenders, pursuantto which the CLA Lenders agreed to loan us a sum of $2.55 million, or the Loan Amount. The 2020 Convertible Loan Agreements were issuedwith accompanying warrants to purchase series C shares and bear 10% annual interest and matured on July 31, 2021. If the Loan Amount isrepaid or converted prior to the maturity date, the interest will be calculated as of the maturity date and not the actual repayment orconversion date. During January 2021, one of the CLA Lenders converted its 2020 Convertible Loan Agreement into 15,008 series C preferredshares, for an amount of $230,000 including accrued interest. As a result of the 2020 Convertible Loan Agreement having converted intoseries C preferred shares in January 2021, such CLA Lender’s warrants expired according to their terms.

During March 2020, we enteredinto an additional convertible loan agreement, or the Subsequent 2020 Convertible Loan Agreement, with a lender (pursuant to which thelender agreed to loan us a sum of $3 million). The Subsequent 2020 Convertible Loan Agreement was issued with warrants to purchase preferredC shares and bore 8% annual interest with a maturity date of March 25, 2022. In September 2020, as a result of a Qualified Financing,the lender converted the Subsequent Loan Amount into 217,025 series C preferred shares, out of which 205,539 series C preferred shareswere issued in September 2020 and 11,487 Series C preferred shares, were issued in April 2021. As a result of the Subsequent 2020 ConvertibleLoan Agreement having converted into series C preferred shares in September 2020, its warrants expired according to their terms.

In October 2021, we enteredinto an amendment to the 2020 Convertible Loan Agreements whereby the two remaining CLA Lenders under such 2020 Convertible Loan Agreementsagreed to amend the 2020 Convertible Loan Agreements such that: (i) the maturity date was extended to July 31, 2022, (ii) the intereston the loan should be accrued and be compounded on a quarterly basis commencing August 1, 2021, (iii) repayment of the loan shall onlyoccur upon 60 days’ prior written notice by the Company to the CLA Lenders, (iv) to the extent we are unable to repay the loan bythe amended maturity date, the CLA Lenders shall agree to a further extension, and (v) the amendment shall take effect from July 15, 2021.

In January 2022, the two remainingCLA Lenders agreed with the lenders under the Facility Agreement that the rights of the CLA Lenders are subordinated in favor of the lendersunder the Facility Agreement, including not having any rights to receive or to demand any amounts payable to them under the 2020 ConvertibleLoan Agreements (other than conversion into shares) until the obligations under the Facility Agreement have been discharged in full.

In July 2022, the 2020 ConvertibleLoan Agreement and the accompanying warrants were further amended in order to extend the term of the underlying loan, or the July 2022CLA Amendment. Under the July 2022 CLA Amendment, the final date for repayment was amended and extended for an additional 12 months toJuly 31, 2023. In addition, as of August 1, 2022, the interest was amended to reflect a net interest rate of twelve percent (12%) perannum, compounded on a quarterly basis, which shall be due and payable upon either repayment or conversion of the loan in accordance withthe terms of the 2020 Convertible Loan Agreement, by way of the conversion of the interest into our series C preferred shares at a priceper share equal to $10.72, or repayment of the interest, as shall be determined by the CLA Lenders. The July 2022 CLA Amendment furtherprovided a mandatory conversion of the Loan Amount into our series C preferred shares immediately prior, and subject to, the closing ofan IPO or SPAC Transaction (as defined in our amended and restated articles of association immediately in effect prior to our initialpublic offering). Under the July 2022 CLA Amendment, the exercise period under the accompanying warrants was amended to a period commencingon the date of the July 2022 CLA Amendment and ending on the earlier of (i) the second anniversary of the repayment of the Loan Amountor the conversion thereof in accordance with the terms of the 2020 Convertible Loan Agreement (whichever occurs first); and (ii) immediatelyprior to, and subject to the closing of, an IPO or a SPAC Transaction (as defined in our amended and restated articles of associationimmediately in effect prior to our initial public offering). In connection with the July 2022 CLA Amendment, each CLA Lender receivedadditional warrants to purchase our series D preferred shares in an amount equal to eighteen percent (18%) of the total outstanding amountunder the 2020 Convertible Loan Agreement as of July 31, 2022, equal to an aggregate of 17,102 series D preferred shares, exercisableat a price per share equal to $31.08. These additional warrants expired unexercised upon the closing of our initial public offering inJune 2024.

Upon the consummation of ourinitial public offering, the remaining balance of the 2020 Convertible Loan Agreements (including the accrued interest) converted into322,476 ordinary shares based upon the initial public offering price of $17.00 and we issued an additional 8,087 ordinary shares followingthe cashless exercise of warrants to purchase series C preferred shares.

In March 2023, we enteredinto an additional convertible loan agreement, or the 2023 Convertible Loan Agreement, with several lenders pursuant to which the lendersloaned us a sum of $38.9 million. The 2023 Convertible Loan Agreement was issued with warrants to purchase shares of the most senior classof our shares existing immediately prior to the exercise of such warrant and bear 12% annual interest, which shall be due and payableupon repayment or upon the conversion of the lender’s loan amount into a number of shares, or the 2023 CLA Shares, upon the occurrenceof the following events: (i) an IPO (as defined in the 2023 Convertible Loan Agreement), (ii) a Deemed Liquidation (as defined in the2023 Convertible Loan Agreement), (iii) a Qualified Financing (as defined in the 2023 Convertible Loan Agreement), (iv) an optional conversion,including in the event of a repayment of the loan amount, at the lender’s election or (v) at the lender’s election if notearlier converted prior to the third anniversary of the disbursement date of the loan proceeds with respect to such lender. The 2023 CLAShares shall be a newly created series of our preferred equity having such rights and privileges as our then most recently authorizedseries of preferred equity with the additional rights as set forth in the 2023 Convertible Loan Agreement. As of June 30, 2025, warrantsto purchase 1,863,029 ordinary shares that were issued in connection with the 2023 Convertible Loan Agreement were outstanding.

In July 2023, we entered intoa further amendment to the outstanding 2020 Convertible Loan Agreements and the accompanying warrants, which we refer to as the CLA Amendment,such that: (i) as of August 1, 2023, the interest was amended to reflect a net interest rate of 12% per annum, compounded on a yearlybasis, with the total interest not being less than 24%, and (ii) the loan under the 2020 Convertible Loan Agreements is subject to a mandatoryconversion into our most senior class of security, upon and subject to, the closing of an IPO or SPAC Transaction (as defined in our amendedand restated articles of association immediately in effect prior to our initial public offering). Upon the consummation of our initialpublic offering in June 2024, we issued 3,769,855 ordinary shares upon the conversion of the principal and interest of the 2023 ConvertibleLoan Agreement, based upon the initial public offering price of $17.00 per share.

In March 2024, we enteredinto an amendment to the 2023 Convertible Loan Agreement pursuant to which the maximum loan amount was raised to $40,000,000 and the Boardwas given authority under certain circumstances to determine that certain lenders qualify as Significant Lenders and/or OverallotmentLenders (as such terms are defined in the 2023 Convertible Loan Agreement and the warrants issued thereunder).

Upon consummation of our initialpublic offering, the remaining balance of the 2023 Convertible Loan Agreement (including the accrued interest) converted into 3,769,854ordinary shares based upon the initial public offering price of $17.00.

In January 2024, we enteredinto a note purchase agreement, or the 2024 Note Purchase Agreement, with Vision Lite, as the issuer, Gauzy Ltd., Gauzy USA, Inc. andGauzy GmbH, as the guarantors and OIC Growth Fund I, L.P., OIC Growth Fund I PV, L.P., OIC Growth Fund I AUS, L.P. and OIC Growth FundI GPFA, L.P., as purchasers, or the 2024 Note Purchasers, and OIC Investment Agent, LLC as administrative agent and collateral agent.

Under the 2024 Note PurchaseAgreement, the 2024 Note Purchasers extended financing to Vision Lite in the principal amount of $23.5 million, which was utilized anddrawn down in full by way of issuance and sale of senior secured notes, or the 2024 Notes, by Vision Lite to the 2024 Note Purchasers.In connection with the closing of the 2024 Note Purchase Agreement, we repaid the amounts owed under the Facility Agreement, other thanwith respect to certain amounts under the “phantom warrant.” See “Liquidity and Capital Resources — Indebtedness— Credit Facility” below for additional information. In addition, in January 2024, we amended the 2024 Note Purchase Agreement,or the 2024 NPA Amendment, pursuant to which the 2024 Note Purchasers made available to us an additional commitment in the principal amountof up to $2.5 million that may be utilized and drawn down by way of issuance and sale of additional senior secured notes by Vision Liteto the 2024 Note Purchasers. In April 2024, the $2.5 million additional commitment under the 2024 Note Purchase Agreement (as amendedby the 2024 NPA Amendment) was utilized by way of issuance and sale of additional 2024 Notes.

In addition, under the 2024Note Purchase Agreement, the 2024 Note Purchasers extended a commitment to purchase additional notes in an amount of up to $15.0 million(which commitment was reduced in full on a dollar-for-dollar basis by amounts invested by the 2024 Note Purchasers in our initial publicoffering in June 2024).

The 2024 Notes bear annualinterest, payable quarterly, and , further to an amendment signed in April 2025, are due on May 1, 2028, provided that 2024 Notes maybe subject to partial prepayment following the date the annual financial statements of the Company are due to be delivered in accordancewith the 2024 Note Purchase Agreement, in an amount equal to 25% of the excess cash flow calculated in accordance with the terms of the2024 Note Purchase Agreement. Subject to certain conditions specified therein, the 2024 Notes may be voluntarily prepaid at any time.

Amounts owing under the 2024Note Purchase Agreement, including the principal, interest and fees payable on any issued 2024 Notes, are secured by first-ranking lienson our and certain of our subsidiaries’ assets.

In connection with the 2024Note Purchase Agreement and the 2024 NPA Amendment, we issued to the 2024 Note Purchasers warrants, or the 2024 Note Purchaser Warrants,to purchase up to 682,282 series D-5 preferred shares of the Company with an exercise price of $15.61 per share. Following the closingof our initial public offering in June 2024, the 2024 Note Purchaser Warrants were exercisable into ordinary shares of the Company. The2024 Note Purchaser Warrants are exercisable until November 8, 2028. In addition, in connection with our initial public offering in June2024, the number of our ordinary shares purchasable under the 2024 Note Purchaser Warrants increased by 137,040. In March 2025, the 2024Note Purchaser Warrants were replaced and we issued an amended and restated warrant to the 2024 Note Purchasers, or the A&R 2024 NotePurchaser Warrant. The A&R Note Purchaser Warrant is exercisable for up to 863,486 of our ordinary shares at an exercise price of$15.61 per share and may be exercised until November 8, 2028.

In November 2023, we enteredinto a note purchase agreement, or the Note Purchase Agreement, with Vision Lite, as the issuer, Gauzy Ltd., Gauzy USA Inc. and GauzyGmbH, as the guarantors and Chutzpah Holdings Ltd., or the 2023 Note Purchaser, as purchaser, administrative agent and collateral agent.Under the Note Purchase Agreement, the 2023 Note Purchaser extended a credit facility to Vision Lite in an aggregate principal amountof $60.0 million, or the Commitment, that may be utilized and drawn down by way of issuance and sale of senior secured notes, or the 2023Notes, by an issuer to the Note Purchaser. As of the date of this Form 6-K, Vision Lite is the sole issuer, although Vision Lite may designateadditional issuers pursuant to the Note Purchase Agreement. As of the date of this Form 6-K, $25.0 million of the Commitment has beenutilized and drawn down and which has subsequently been repaid in full. Such amounts, once repaid, cannot be re-utilized. We havecurrently available remaining $35 million that can be drawn under the Note Purchase Agreement.

The principal amount of 2023Notes issued to the 2023 Note Purchaser under the Note Purchase Agreement bore interest of 16.0% per annum, or the Interest Rate. In addition,a commitment fee of 5.0% per annum was payable by the 2023 Notes issuer (or issuers in the event that we designate additional issuerspursuant to the Note Purchase Agreement) on the unutilized amount of the Commitment.

Upon repayment or prepaymentof any 2023 Notes, the issuer of such 2023 Notes was required to pay the Note Purchaser an exit fee equal to (A) the product of (i) theprincipal amount of the 2023 Notes being repaid or prepaid, multiplied by (ii) 4.0%, plus (B) an amount equal to the Interest Rate accruingon the amount calculated under (A) during a period from and including the date on which such 2023 Notes were issued and settled to butexcluding the date of repayment or prepayment thereof. In addition, the 2023 Note Purchaser is entitled, upon the final repayment or prepaymentof the 2023 Notes (including following acceleration of the amounts outstanding under the 2023 Notes and repayment by way of conversion),to payment of a make-whole amount equal to the positive difference (if any) of (i) the product of (A) the aggregate principal amount ofthe 2023 Notes multiplied by (B) the Minimum Return less (ii) the sum of (A) the aggregate principal amount of the 2023 Notes plus (B)the aggregate amount of interest on such prepaid principal amount paid or to be paid in cash or in kind to the 2023 Note Purchaser onthe aggregate principal amount of the 2023 Notes on or prior to the date of such repayment or prepayment, plus (C) the amount of commitmentfees paid or to be paid in cash to the 2023 Note Purchaser on or prior to the date of such repayment or prepayment, plus (D) the amountof Exit Fee paid or to be paid in cash to the 2023 Note Purchaser on or prior to the date of such repayment or prepayment. For the purposeshereof, (i) Minimum Return means an amount (if any) necessary for the 2023 Note Purchasers to achieve a 1.50 to 1.00 return on the aggregateoriginal principal amount of all 2023 Notes issued and (ii) Exit Fee means (A) the product of (i) the principal amount of the 2023 Notesbeing repaid or prepaid, multiplied by (ii) four percent, plus (B) an amount equal to the interest rate accruing on the amount calculatedunder (A) during a period from and including the closing date on which such 2023 Notes were issued to but excluding the date of repaymentor prepayment thereof. On July 1, 2024, we repaid the 2023 Notes in full, in the amount of $38.6 million.

The amounts owing under theNote Purchase Agreement, including the principal, interest and fees payable on any issued 2023 Notes, are secured by liens on the assetsof Vision Lite, including a pledge of 100% of the equity interests in Gauzy SAS, and liens on all of our assets (including intellectualproperty), including a pledge of 100% of the equity interests in Vision Lite, Gauzy USA Inc. and Gauzy GmbH, which liens are second rankingand subject to the first ranking liens granted to the 2024 Note Purchasers and the obligations under the Note Purchase Agreement shallbe junior and subordinated to the obligations under the 2024 Note Purchase Agreement.

In connection with the NotePurchase Agreement, we entered into (i) a debenture pursuant to which we granted, as security for amounts owing by us under the Note PurchaseAgreement and any guarantee, a second ranking floating charge, over all of our rights and property currently existing and/or to be existingin the future and a second ranking fixed charge, over, inter alia, our authorized share capital and our reputation, rights under a certainshareholder loan agreement between us and Vision Lite, our fixed assets, our intellectual property, and shares held by us in certain subsidiaries;(ii) pledge agreements, pursuant to which we granted the 2023 Note Purchaser a second ranking pledge and security interest over the shareswe hold in Vision Lite and over receivables owed to us by Vision Lite; and (iii) a pledge agreement, pursuant to which we granted to the2023 Note Purchaser a second ranking pledge and security interest over the shares we hold in Gauzy GmbH. The security that we and VisionLite granted to the 2023 Note Purchaser under the debenture and the various pledge agreements was junior and subordinate to the securitythat we and Vision Lite granted to the lenders under the Facility Agreement.

In connection with the NotePurchase Agreement, we issued (i) warrants to purchase up to 686,400 series D-5 preferred shares, or the D-5 Warrants, and (ii) warrantsto purchase up to 274,559 series D-6 preferred shares, or the D-6 Warrants. The D-5 Warrants and the D-6 Warrants are exercisable untilNovember 8, 2028. The D-5 Warrants and the D-6 Warrants are exercisable into ordinary shares (and the number of ordinary shares of theCompany into which the D-5 Warrants and D-6 Warrants are exercisable, respectively, is the number of ordinary shares into which such PreferredD-5 shares and Preferred D-6 shares, respectively, would have converted had they been converted prior to our initial public offering).The D-5 Warrants and the D-6 Warrants vest on a daily basis, such that each day from the date of their issuance the number of shares thatmay be purchased thereunder equals the product of (i) the maximum number of shares exercisable under the applicable warrant and (ii) afraction, the numerator of which is the aggregate principal amount of the 2023 Notes issued to the 2023 Note Purchaser pursuant to theNote Purchase Agreement, and the denominator of which is $60,000,000. The D-5 Warrants are exercisable at a price per share equal to $15.61.The D-6 Warrants are exercisable at a price per share equal to the D-5 Exercise Price multiplied by 1.2, or $18.73.

Under the Note Purchase Agreement,we and our subsidiaries are subject to various negative and affirmative covenants, which include, among others, the following: (i) limitationson incurrence of additional financial indebtedness and granting of liens (subject to certain permitted incurrences of indebtedness); (ii)limitations on investments in, and formation or acquisition of, additional entities or joint ventures; (iii) limitations on the conductof any material activities other than those related to the development, manufacture and marketing of light and vision control technologiesor incidental thereto; (iv) we are required to maintain at all times a cash balance of at least $1.5 million; and (v) additional limitationson payments to shareholders of dividends or any indebtedness, and other limitations on change in control as specified in the Note PurchaseAgreement. In addition, the Note Purchase Agreement contains events of default customary in such transactions, including non-payment,breach of covenants, breach of representations, bankruptcy, insolvency proceedings and creditors’ process, or occurrence of a materialadverse event. In some events, default is subject to grace or cure periods prescribed by the Note Purchase Agreement.

On January 19, 2022, we enteredinto a facility agreement with certain credit funds for a loan facility in the aggregate amount of up to $30.0 million, or the Facilityand the Facility Agreement, respectively. Subsequent to entering into the Facility Agreement, on January 26, 2022, we drew down an amountof $20 million, or the First Loan, which was used to repay our bank loans with an Israeli bank, and towards the acquisition of VisionLite.

The Facility Agreement wasamended by a First Amendment on April 25, 2022, under which Vision Lite acceded to the Facility Agreement as an additional borrower, andassumed 25% of the first loan ($5 million) and 25% of the unutilized amount of the Facility ($2.5 million), against repayment of a correspondingamount owed by it to us under inter-company loans. The Facility was thereafter fully utilized on April 25, 2022 by the drawdown of loansby each of the Company and Vision Lite (aggregated into a loan in an amount of $22.5 million (75%) owed by us, and a loan in an amountof $7.5 million owed by Vision Lite (25%)), or the Facility Loans.

The credit funds also receiveda “phantom warrant” under the terms of the Facility Agreement which entitled them to a cash payment (allocated proportionatelyamong the Company (75%) and Vision Lite (25%)) equal, in the aggregate, to the higher of (i) $3 million, or the Cash Payment; or (ii)the difference between the price per share (PPS) of a series D preferred share in an “Exit Event” (based on our valuation,as reflected in the terms of the Exit Event as defined below), and the preferred D shares PPS of $31.08, multiplied by 172,624 seriesD preferred shares (or such number of ordinary shares into which such shares shall have been converted, on or prior to such Exit Event,in accordance with their terms).

On July 3, 2023, we enteredinto a waiver and amendment agreement to the Facility Agreement, or the Waiver and Amendment Agreement, pursuant to which our repaymentobligations were amended such that the repayment date for certain principal amounts occurring on June 30, 2023 in accordance with theFacility Agreement were to be postponed and repaid on September 30, 2023, or the Postponed Amounts, with the interest payments continuingto be repaid in accordance with the original payment schedule on the original repayment date pursuant to the Facility Agreement. The PostponedAmounts bear an additional interest at a rate of 2% per annum until repayment, which were due on September 30, 2023. Pursuant to the Waiverand Amendment Agreement, commencing July 1, 2023, the interest rate of the Facility Loans was increased at a rate of 1% per annum. Underthe Waiver and Amendment Agreement, the credit funds were granted a right, upon full repayment of the Facility Loans, to demand paymentof up to 50% of the “phantom warrant.” Under the Waiver and Amendment Agreement, were undertook to deliver to the credit funds,no later than July 31, 2023, commitments of investors to invest $10.0 million in the Company no later than September 30, 2023.

October 5, 2023, we enteredinto another waiver and amendment agreement with respect to the Facility Agreement, under which it was agreed that our payment obligationsunder the Facility Agreement due on or prior to September 30, 2023 may be postponed until November 2, 2023, in consideration for paymentof a waiver fee in a total amount of $1.5 million. We paid the waiver fee on November 11, 2023 along with the amount that was initiallydue on November 2, 2023.

On January 29, 2024, the partiesto the Facility Agreement entered into a payoff and full satisfaction of secured obligations letter, or the Payoff Letter. Under the termsof the Payoff Letter, all amounts payable to the credit funds have been repaid to the credit funds, other than 50% of the “phantomwarrant,” which remains payable pursuant to the provisions of the Facility Agreement. Upon the consummation of our initial publicoffering in June 2024, the parties to the Facility Agreement, were entitled to receive, at their election, either $1.5 million or 88,253ordinary shares, based upon an initial public offering price of $17.00 per share. In July 2024, the parties to the Facility Agreementelected to receive $1.5 million, which, when paid in full, will satisfy the remaining 50% of the “phantom warrant.” In August2024 and November 2024, we paid $0.75 million and $0.56 million, respectively, of the “phantom warrant” and the remainingbalance of $0.19 million was paid in January 2025.

In May 2020, we entered intoa bank loan in the amount of $0.5 million under an Israeli government established state-guaranteed loan plan for the financial supportof businesses following the outbreak of the COVID-19 pandemic. The loan has a maturity date of May 20, 2025 and bears annual interestof prime plus 1.5% that is payable by us beginning from the second year of the loan, which has commenced prior to the date of this Form6-K.

OnJune 7, 2024, we closed our initial public offering of 4,411,765 ordinary shares at a public offering price of $17.00 per ordinary share,for aggregate gross proceeds of $75,000,000, prior to deducting underwriting discounts and other offering expenses.

Ourordinary shares began trading on the Nasdaq Global Market under the ticker symbol “GAUZ” on June 6, 2024.

Net cash used in operatingactivities decreased by approximately $11.8 million, or (75.3)%, to approximately $3.9 million for the six months ended June 30, 2025,compared to $15.7 million for the six months ended June 30, 2024. The decrease resulted from an increase in accounts receivable of $11.0million and an increase in trade payables of $2.5 million.

Net cash used in investingactivities decreased by $0.6, or (13.5)%, to approximately $3.6 million for the six months ended June 30, 2025, compared to approximately$4.2 million for the six months ended June 30, 2024. This increase was mainly due to purchases of property, plant, and equipment.

Net cash provided by (usedin) financing activities decreased by $76.0 million, or (96.3)%, to approximately $3.0 million for the six months ended June 30, 2025,compared to $79.0 million for the six months ended June 30, 2024. This decrease was mainly due to decrease in proceeds from initial publicoffering, net of offering costs in the amount of $66.5 million, decrease in factoring loans in the amount of $4.2 million, decrease inproceeds from the issuance of convertible loan agreement in the amount of $11.8 million, decrease of long-term debt in the amount of $4.5million, offset by increase in proceeds from bank borrowings in the amount of $9.9 million and decrease in settlement of phantom warrantsin the amount of $1.3 million.

We prepare our consolidatedfinancial statements in accordance with U.S. GAAP. The preparation of these consolidated financial statements requires us to make estimates,assumptions and judgments that can significantly impact the amounts we report as assets, liabilities, revenue, costs and expenses andthe related disclosures. We base our estimates on historical experience and other assumptions that we believe are reasonable under thecircumstances. Our actual results could differ significantly from these estimates under different assumptions and conditions.

While our significant accountingpolicies are described in more detail in the notes to our unaudited interim consolidated financial statements appearing elsewhere in thisForm 6-K, we believe the following accounting policies used in the preparation of our unaudited interim consolidated financial statementsrequire the most significant judgments and estimates. Please see Note 2 to our unaudited interim consolidated financial statements appearingelsewhere in this Form 6-K for additional information.

We recognize the cost of share-basedawards granted to employees and directors based on the estimated grant-date fair value of the awards. We elected to recognize share-basedcompensation costs on a straight-line method for awards. Forfeitures are accounted for as they occur. The fair value of each option awardis estimated on the grant date using the Black-Scholes option pricing model. The application of the Black-Scholes model utilizes significantassumptions, including the underlying share price and volatility. Significant judgment is required in determining the expected volatilityof our ordinary shares. Due to the limited history of trading of our ordinary shares, we determined expected volatility based on a peergroup of publicly traded companies. Increases (decreases) in the assumptions result in a directionally similar impact to the fair valueof the option award.

The Company analyses warrantsissued to determine whether they meet the classification as liabilities or equity under US GAAP. Derivative warrant liabilities are adjustedto reflect fair value at each reporting period, with any increase or decrease in the fair value recorded as finance expenses (income)in the statement of comprehensive loss. The Company uses a fair valuation specialist to estimate the value of these instruments usingnumerous iterations using the Black–Scholes option price model.

The key assumptions used inthe models are the expected future volatility in the price of the Company’s shares, the expected life of the warrants and the probabilityof a future down-round adjustment event.

We perform an impairment testannually and whenever events or changes in circumstances indicate that the carrying amount of a reporting unit may not be recoverable.When tested for impairment, we estimate the fair values of our reporting units using a discounted cash flow model which utilizes Level3 unobservable inputs. Key estimates include revenue growth rates and operating margins, terminal growth rates and discount rates. Thediscount rate used is based on the WACC, adjusted for the relevant risk associated with the country- and business-specific characteristicsof each reporting unit. See note 2l to our 2024 Annual report.

We are exposed to a varietyof financial risks, which result from our financing, operating and investing activities. The objective of financial risk management isto 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 instrumentsis to raise financing for our operations. We actively measure, monitor and manage our financial risk exposures by various functions pursuantto 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 arises when afailure by counterparties to discharge their obligations could reduce the amount of future cash inflows from financial assets on handat the balance sheet date. We closely monitor the activities of our counterparties and control the access to our intellectual propertywhich enables us to ensure the prompt collection. Our main financial assets are cash as well as trade receivables and other receivablesand 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 is the riskthat the value of financial instruments will fluctuate due to changes in foreign exchange rates. Currency risk arises when future commercialtransactions and recognized assets and liabilities are denominated in a currency that is not our functional currency. We are exposed toforeign exchange risk arising from currency exposure primarily with respect to NIS, as the majority of our expenses are denominated inNIS. As most of our revenues are USD derived, the USD is our functional currency. Our current policy is not to enter into any currencyhedging transactions.

Liquidity risk is the riskthat 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 liquidcurrent assets and by having available an adequate amount of committed credit facilities. As of June 30, 2025 and 2024, we had accumulatedlosses of approximately $246.5 million and $208.2 million, respectively.

On July 4, 2025, the UnitedStates enacted tax reform legislation through the One Big Beautiful Bill Act, which changes existing U.S. tax laws, including extendingor making permanent certain provisions of the Tax Cuts and Jobs Act, repealing certain clean energy initiatives, in addition to otherchanges. We are still in the process of evaluating the impact of this new legislation to provision for income taxes, deferred tax assets,deferred tax liabilities, and to income taxes payable in the period of enactment and will continue to assess the impact the new legislationwill have on the consolidated financial statements.

We qualify as an “emerginggrowth company,” as defined in the U.S. Jumpstart Our Business Startups Act of 2012, or JOBS Act, and we may take advantage of certainexemptions, including exemptions from various reporting requirements that are otherwise applicable to public traded entities that do notqualify as emerging growth companies. These exemptions include:

Section 107 of the JOBS Act also provides thatan emerging growth company can take advantage of the extended transition period provided in Section 13(a) of the Securities Exchange Actof 1934, as amended, or the Exchange Act, for complying with new or revised accounting standards. This means that an emerging growth companycan delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have electedto take advantage of the extended transition period to comply with new or revised accounting standards and to adopt certain of the reduceddisclosure requirements available to emerging growth companies. As a result of the accounting standards election, we will not be subjectto the same implementation timing for new or revised accounting standards as other public companies that are not emerging growth companieswhich may make comparison of our financial statements to those of other public companies more difficult. In addition, the informationthat we provide in the 2024 Annual Report and this Form 6-K may be different than the information you may receive from other public companiesin which you hold equity interests.

Wewill remain an emerging growth company until the earliest of: (i) the last day of the first fiscal year in which our annual gross revenuesexceed $1.235 billion; (ii) the last day of the fiscal year following the fifth anniversary of the date of our initial public offering(i.e., December 31, 2029); (iii) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the ExchangeAct, which would occur if the aggregate worldwide market value of our ordinary shares, including ordinary shares represented by warrants,held by non-affiliates is at least $700 million as of the last business day of our most recently completed second fiscal quarter; or (iv)the date on which we have issued more than $1.0 billion in non-convertible debt securities during any three-year period.

Exceptas otherwise disclosed in our other filings made with the SEC on or prior to the date of this Form 6-K, there have been no material changesto the risk factors previously disclosed in the 2024 Annual Report.

Exhibit No.
99.1		Press release titled: “Gauzy Ltd. Announces Second Quarter 2025 Results”.
99.2		Condensed Consolidated Interim Financial Statements (unaudited) as of June 30, 2025.
99.3		Operating and Financial Review and Prospects as of June 30, 2025.
101.INS		Inline XBRL Instance Document
101.SCH		Inline XBRL Taxonomy Extension Schema Document
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

	Gauzy Ltd.

Date: August 13, 2025	By:	/s/ Eyal Peso
	Name:	Eyal Peso
	Title:	Chief Executive Officer

	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands of USD)	2025			2024			2025			2024
Net Loss	$	(10,736	)		(23,087	)	$	(21,514	)		(36,334	)
Other financial (income) expenses, net⁽¹⁾	$	(4,092	)		12,062		$	(3,942	)		11,169
Amortization of intangible assets⁽²⁾	$	778			823		$	1,492			1,653
Acquisition related costs and debt raising costs	$	159			852		$	243			2,182
Non-cash fair value adjustments⁽³⁾	$	-			(193	)	$	-			(168	)
One-time expense (income)	$	88			-		$	209			-
Equity-based compensation expense	$	1,072			1,164		$	1,970			3,324
Doubtful debt expenses⁽⁴⁾	$	267			553		$	304			389
Adjusted Net Loss	$	(12,464	)		(7,826	)	$	(21,238	)		(17,785	)

(2)	Intangible assets resulted from the acquisition of Vision Lite.

(3)	One-time expenses (income).

(4)	Doubtful debt expenses related to accounts receivable that we do not expect to collect; such amounts are not included in our net trade receivables.

	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands of USD)	2025			2024			2025			2024
Net Loss	$	(10,736	)		(23,087	)	$	(21,514	)		(36,334	)
Other financial (income) expenses, net⁽¹⁾	$	(4,092	)		12,062		$	(3,942	)		11,169
Amortization of intangible assets⁽²⁾	$	778			823		$	1,492			1,653
Acquisition related costs and debt raising costs	$	159			852		$	243			2,182
Non-cash fair value adjustments⁽³⁾	$	-			(193	)	$	-			(168	)
One-time expense (income)	$	88			-		$	209			-
Equity-based compensation expense	$	1,072			1,164		$	1,970			3,324
Doubtful debt expenses⁽⁴⁾	$	267			553		$	304			389
Adjusted Net Loss	$	(12,464	)		(7,826	)	$	(21,238	)		(17,785	)

	Second Quarter 2025
	Aeronautics			Architecture			Automotive			Safety tech			Total
Revenues from external customers	$	6,862		$	2,489		$	1,406		$	9,297		$	20,054
Gross profit (loss)	$	1,576		$	843		$	220		$	1,647		$	4,286
Gross profit (loss) margin		23.0	%		33.9	%		15.6	%		17.7	%		21.4	%

	Second Quarter 2024
	Aeronautics			Architecture			Automotive			Safety tech			Total
Revenues from external customers	$	10,045		$	2,625		$	912		$	10,827		$	24,409
Gross profit (loss)	$	3,753		$	916		$	(148	)	$	2,071		$	6,592
Gross profit (loss) margin		37.4	%		34.9	%		(16.2	)%		19.1	%		27.0	%

	Three Months Ended June 30, (unaudited)
(in thousands of USD, except share and per share data)	2025			2024
Revenues	$	20,054		$	24,409
Cost of revenues (exclusive of depreciation and amortization)		15,249			17,323
Depreciation and amortization		519			494
Total cost of revenues		15,768			17,817
Gross profit		4,286			6,592
Gross profit margin		21.4	%		27.0	%
Operating expenses:
Research and development expenses (exclusive of depreciation and amortization reflected below)	$	4,868		$	4,131
General and administrative expenses (exclusive of depreciation and amortization reflected below)		6,076			5,271
Sales and marketing expenses (exclusive of depreciation and amortization reflected below)		4,142			4,153
Depreciation and amortization		1,710			1,021
Other expenses		-			(63	)
Operating loss		12,510			7,921
Financial (income) expenses, net		(1,790	)		15,274
Other income		-			(130	)
Loss before income tax		10,720			23,065
Income tax		16			22
Net Loss	$	10,736		$	23,087

	Six Months Ended June 30, (unaudited)
(in thousands of USD, except share and per share data)	2025			2024
Revenues	$	42,421		$	49,138
Cost of revenues (exclusive of depreciation and amortization)		31,386			35,330
Depreciation and amortization		1,017			1,001
Total cost of revenues		32,403			36,331
Gross profit		10,018			12,807
Gross profit margin		23.6	%		26.1	%
Operating expenses:
Research and development expenses (exclusive of depreciation and amortization reflected below)	$	8,325		$	8,512
General and administrative expenses (exclusive of depreciation and amortization reflected below)		11,773			11,400
Sales and marketing expenses (exclusive of depreciation and amortization reflected below)		7,811			8,443
Depreciation and amortization		3,312			2,042
Other expenses (income)		-			(38	)
Operating loss		21,203			17,552
Financial expenses, net		240			18,828
Other expenses (income)		-			(130	)
Loss before income tax		21,443			36,250
Income tax		71			84
Net Loss	$	21,514		$	36,334