Two years have passed since smart glass company Gauzy (Nasdaq: GAUZ) held its Wall Street IPO, and in that time it has lost 98% of its market cap and become one of the most glaring failures of any Israeli company. This week, the company reported to investors and creditors about a debt settlement proposal, after former employees filed a petition to open insolvency proceedings.
Gauzy, which held its IPO at a valuation of $319 million, is currently trading at a negligible market cap of less than $7 million and has even received warnings in recent months for not meeting trading terms on Nasdaq. This is due to a share price below the required threshold, and because it has not published financial statements since the second quarter of 2025. Gauzy does not report in its proposal the extent of its current debt, but according to estimates, it is in the tens of millions of dollars.
Gauzy was founded in 2009 by CEO Eyal Peso and CTO Adrian Lofer. The Tel Aviv-based company has developed a unique technology that controls the passage of light through transparent surfaces, mainly glass, for use in aviation, vehicles and architecture. At the same time, it also entered the automotive safety market, developing driver assistance systems (ADAS), through an acquisition in France after it decided to expand its solution to the automotive world.
Last November, about 18 months after the IPO, it became clear that Gauzi was in difficulties, with the opening of insolvency proceedings for three of its subsidiaries in a French court, a step it appealed. As a result of the proceedings, Gauzy postponed the publication of its financial results for the third quarter of 2025, which were supposed to be published on the day the proceedings were announced in France, and has not published any reports since. Peso wrote at the time in an email to employees that the company had signed a financing agreement for $15 million, but the legal process prevented the agreement from being completed, he claimed. Subsequently, the company’s situation worsened and resulted in non-payment of salaries to employees, claims from employees and creditors, and an inability to obtain financing.
Two repayment mechanisms
This week, Gauzy reported on a proposed debt settlement that includes a private placement (PIPE) that will inject $7 million into its coffers. This is an arrangement that requires a majority of over 51% of creditors in general, and of holders of over 75% of the total debt and then court approval. Gauzy notes that it is working to ensure creditors’ support for the settlement. According to the report, the company and the board of directors are proposing a debt settlement in accordance with the Insolvency Law, which they say includes the full repayment of debts to all creditors, through two alternative mechanisms. The first mechanism includes an exit event (sale, merger, secondary offering or any other transaction) that will generate total proceeds exceeding $330 million, as a result of which the company will pay all of its debts from the proceeds.
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The second is in the event that the company achieves operating profitability before an exit event, in which case it will pay creditors 25% of its net profit annually (according to GAAP rules), starting from the first profitable year until the completion of the repayment. In such a case, the order of creditor groups will be maintained, with the secured creditors, the financial entity OIC and Mizrahi Tefahot Bank, receiving the repayment first, followed by the Israel Tax Authority, the National Insurance Institute and various suppliers. Suppliers will receive all the debt owed to them after a period of 6 months, and in up to 60 payments.
According to Gauzy, employees and former employees to whom the company owes money will receive full payment on completion of the PIPE transaction.
Published by Globes, Israel business news – en.globes.co.il – on July 22, 2026.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2026.
