# EDGAR Filing Document

**Accession Number:** 0001866030
**File Stem:** 0001493152-26-014416
**Filing Date:** 2026-4
**Character Count:** 557471
**Document Hash:** f2304acc8665dae63436d7b5dcff754a
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001493152-26-014416.hdr.sgml**: 20260401

**ACCESSION NUMBER**: 0001493152-26-014416

**CONFORMED SUBMISSION TYPE**: 20-F

**PUBLIC DOCUMENT COUNT**: 150

**CONFORMED PERIOD OF REPORT**: 20251231

**FILED AS OF DATE**: 20260401

**DATE AS OF CHANGE**: 20260331

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** A2Z CUST2MATE SOLUTIONS CORP.
- **CENTRAL INDEX KEY:** 0001866030
- **STANDARD INDUSTRIAL CLASSIFICATION:** GENERAL INDUSTRIAL MACHINERY & EQUIPMENT, NEC [3569]
- **ORGANIZATION NAME:** 06 Technology
- **EIN:** 000000000
- **STATE OF INCORPORATION:** A1
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 20-F
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-40472
- **FILM NUMBER:** 26824297

**BUSINESS ADDRESS:**
- **STREET 1:** 559 BRIAR HILL AVENUE,
- **CITY:** TORONTO
- **STATE:** A6
- **ZIP:** M5N 1N1
- **BUSINESS PHONE:** 1 647 558 5564

**MAIL ADDRESS:**
- **STREET 1:** 559 BRIAR HILL AVENUE,
- **CITY:** TORONTO
- **STATE:** A6
- **ZIP:** M5N 1N1

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** A2Z Smart Technologies Corp
- **DATE OF NAME CHANGE:** 20210604

?xml version='1.0' encoding='ASCII'?

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 20-F**

**(Mark One)**

**☐** **REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934**

**OR**

☒ **ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** 

**For the fiscal year ended December 31, 2025**

**OR**

**☐** **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**For the transition period from &nbsp;&nbsp;&nbsp;&nbsp; to**&nbsp;&nbsp;&nbsp;&nbsp;

**OR**

**☐** **SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**Date of event requiring this shell company report**

**Commission file number 001-40472**

**A2Z CUST2MATE SOLUTIONS CORP.**

**(formerly A2Z Smart Technologies Corp.)**

**N/A**

**(Translation of Registrant's name into English)**

**British Columbia**

**(Jurisdiction of incorporation or organization)**

**1600-609 Granville Street**

**Vancouver, British Columbia V7Y 1C3 Canada**

**(Address of principal executive offices)**

**Gadi Graus**

**Chief Executive Officer**

**1600-609 Granville Street**

**Vancouver, British Columbia V7Y 1C3 Canada**

**Tel: (647) 558-5564**

**(Name, telephone, email and/or facsimile number and address of Company contact person)**

**Securities registered or to be registered pursuant to Section 12(b) of the Act:**

---

| | | |
|:---|:---|:---|
| **Title of each class** | **Trading Symbol(s)** | **Name of each exchange on which registered** |
| **Common Shares** | **AZ** | **The Nasdaq Stock Market LLC** |

---

**Securities registered or to be registered pursuant to Section 12(g) of the Act:**

**None**

**(Title of Class)**

**Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:**

**None**

**(Title of Class)**

Indicate the number of outstanding shares of each of the issuer's classes of capital or common stock as of the close of the period covered by the Annual Report: **At December 31, 2025, 43,888,042 common shares were issued and outstanding.**

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ☐ Yes ☒ No

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. ☐ Yes ☒ No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer ☐ Accelerated Filer ☐ Non-Accelerated Filer ☒ Emerging growth company ☒

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☒

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP ☐ International Financial Reporting Standards as issued by the International Accounting Standards Board ☒ Other ☐

If "Other" has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow. ☐ Item 17 ☐ Item 18

If this is an Annual Report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

**A2Z CUST2MATE SOLUTIONS CORP.**

**Table of Contents**

---

| | | |
|:---|:---|:---|
| **[INTRODUCTION](#px_001)** | **[INTRODUCTION](#px_001)** | 3 |
| **[CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS](#px_002)** | **[CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS](#px_002)** | 3 |
| **[STATUS AS AN EMERGING GROWTH COMPANY](#px_003)** | **[STATUS AS AN EMERGING GROWTH COMPANY](#px_003)** | 5 |
| **[FOREIGN PRIVATE ISSUER](#px_004)** | **[FOREIGN PRIVATE ISSUER](#px_004)** | 5 |
| **[PART I](#px_005)** | **[PART I](#px_005)** | 6 |
|  | [ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS](#px_006) | 6 |
|  | [ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE](#px_007) | 6 |
|  | [ITEM 3. KEY INFORMATION](#px_008) | 6 |
|  | [ITEM 4. INFORMATION ON THE COMPANY](#px_009) | 28 |
|  | [ITEM 4A. UNRESOLVED STAFF COMMENTS](#px_010) | 37 |
|  | [ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS](#px_011) | 37 |
|  | [ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES](#ak_001) | 50 |
|  | [ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS](#ak_002) | 58 |
|  | [ITEM 8. FINANCIAL INFORMATION](#ak_003) | 60 |
|  | [ITEM 9. THE OFFER AND LISTING](#ak_004) | 61 |
|  | [ITEM 10. ADDITIONAL INFORMATION](#ak_005) | 61 |
|  | [ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](#ak_006) | 70 |
|  | [ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES](#ak_007) | 71 |
| [**PART II**](#ak_008) | [**PART II**](#ak_008) |  |
|  | [ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES](#ak_009) | 72 |
|  | [ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS](#ak_010) | 72 |
|  | [ITEM 15. CONTROLS AND PROCEDURES](#ak_011) | 72 |
|  | [ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT](#ak_012) | 74 |
|  | [ITEM 16B. CODE OF ETHICS](#ak_013) | 74 |
|  | [ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES](#ak_014) | 74 |
|  | [ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES](#ak_015) | 75 |
|  | [ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS](#ak_016) | 75 |
|  | [ITEM 16F. CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT](#ak_017) | 75 |
|  | [ITEM 16G. CORPORATE GOVERNANCE](#ak_018) | 75 |
|  | [ITEM 16H. MINE SAFETY DISCLOSURE](#ak_019) | 76 |
|  | [ITEM 16I. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS](#ak_020) | 76 |
|  | [ITEM 16J. INSIDER TRADING POLICIES](#ak_021) | 76 |
|  | [ITEM 16K CYBERSECURITY](#ak_022) | 76 |
| [**PART III**](#ak_023) | [**PART III**](#ak_023) |  |
|  | [ITEM 17. FINANCIAL STATEMENTS](#ak_024) | 77 |
|  | [ITEM 18. FINANCIAL STATEMENTS](#ak_025) | 77 |
|  | [ITEM 19. EXHIBITS](#ak_026) | 77 |
|  | [EXHIBIT INDEX](#ak_027) | 77 |
| [**SIGNATURES**](#ak_028) | [**SIGNATURES**](#ak_028) | 79 |
| **[FINANCIAL STATEMENTS](#N_001)** | **[FINANCIAL STATEMENTS](#N_001)** | F-1 |

---

**INTRODUCTION**

Unless otherwise indicated, all references in this Annual Report on Form 20-F to "A2Z," "we," "our," "us," "the company" or similar terms refer to A2Z Cust2Mate Solutions Corp. and its consolidated subsidiaries. We publish our consolidated financial statements in US dollars. In this Annual Report, unless otherwise specified, all references to "$" or "US$" means to the lawful currency of the United States, to "CAD$" to the lawful currency of Canada and to "NIS" are to lawful currency of Israel.

This Annual Report on Form 20-F contains our audited consolidated financial statements and related notes for the years ended December 31, 2025, 2024, and 2023 ("Annual Financial Statements"). Our Annual Financial Statements have been prepared in accordance with International Financial Reporting Standards ("IFRS"), as issued by the International Accounting Standards Board ("IASB").

**CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS**

This Annual Report contains forward-looking statements, within the meaning of Section 27A of the U.S. Securities Act and Section 21E of the Exchange Act pursuant to the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995, and "forward-looking information" within the meaning of applicable Canadian securities laws. These statements are neither historical facts nor assurances of future performance. Instead, they are based on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, and other future conditions. Forward-looking statements can be identified by words such as "anticipate," "believe," "estimate," "expect," "forecast," "intend," "may," "plan," "predict," "project," "target," "potential," "will," "would," "could," "should," "continue," and other similar expressions, although not all forward-looking statements contain these identifying words. These forward-looking statements include all matters that are not historical facts. They appear in many places throughout this Annual Report and include statements regarding our intentions, beliefs or current expectations concerning, among other things, our results of operations, financial condition, liquidity, business prospects, growth, strategies, expectations regarding industry trends and the size and growth rates of addressable markets, our business plan and growth strategies, including plans for expansion to new markets and new products, and the industry in which we operate.

Risks which could affect future results and could cause results to differ materially from those expressed in the forward-looking statements contained herein include:

● The Company has incurred significant losses and there can be no assurance when, or if, the Company will achieve or maintain profitability.

● The Company expects that it may need to raise additional capital to meet the Company's business requirements in the future, which might be challenging, could be highly dilutive and may cause the market price of the common shares to decline.

● The Company's operational offices and a significant number of customers are located in Israel and, therefore, the business, financial condition and results of operation may be adversely affected by political, economic and military instability in Israel and in the Middle East.

● Failure to effectively develop and expand the Company's sales and marketing capabilities could harm the ability to grow the business and achieve broader market acceptance of the Company's products.

● The Company expects the sales cycle to be long and unpredictable and require considerable time and expense before executing a customer agreement, which may make it difficult to project when, if at all, the Company will obtain new customers and when the Company will generate revenue from those customers.

● If the Company is not able to enhance the brand and increase market awareness of the Company and products, then the business, results of operations and financial condition may be adversely affected.

● If the Company does not develop enhancements to the technology and introduce new products that achieve market acceptance, the business, results of operations and financial condition could be adversely affected.

● The technology markets in which the Company competes are both subject to rapid technological change and, to compete, the Company must continually enhance its products and services.

● The Company's growth depends, in part, on the success of the strategic relationships with third parties.

● The Company's future profitability depends, in part, on subcontractor and supplier performance and financial viability as well as component availability and pricing.

● Information technology system failures or breaches of the Company's network security could interrupt the operations and adversely affect the business.

● Real or perceived errors, failures, or bugs in the technology could adversely affect the Company's operating results and growth prospects.

● The Company could be harmed by improper disclosure or loss of sensitive or confidential Company, employee, or customer data, including personal data.

● A material breach in security relating to the Company's information systems and regulation related to such breaches could adversely affect the Company.

● The Company's contracts may contain performance obligations that require innovative design capabilities, are technologically complex, require state-of-the-art manufacturing expertise or are dependent upon factors not wholly within the Company's control. Failure to meet the contractual obligations could adversely affect the Company's profitability, reputation and future prospects.

● The Company's insurance coverage, customer indemnifications or other liability protections may be unavailable or inadequate to cover all of the significant risks or the insurers may deny coverage of or be unable to pay for material losses the Company incurs, which could adversely affect the Company's profitability and overall financial position.

● The Company may not be able to adequately protect its intellectual property, which, in turn, could harm the value of the brands and adversely affect the business.

● The Company's business operations and future development could be significantly disrupted if the Company loses key members of its management team.

● The Company's ability to meet the needs of its customers depends, in part, on the Company's ability to maintain a qualified workforce.

● If the Company is able to expand the operations, the Company may be unable to successfully manage its future growth.

● The Company may become subject to various investigations, claims, disputes, enforcement actions, litigation, arbitration and other legal proceedings that could ultimately be resolved against the Company.

● The Company's reputation, the ability to do business and the Company's financial position, results of operations and/or cash flows may be impacted by the improper conduct of employees, agents, subcontractors, suppliers, business partners or joint ventures in which the Company participates.

● It may be difficult to enforce a judgment of a Canadian court against the Company, certain of the Company's officers and directors or the Israeli experts named in the Annual Report are in Israel, to assert Canadian securities laws claims in Israel or to serve process on certain of the officers and directors and these experts.

● The Company may become subject to claims for payment of compensation for assigned service inventions by the Company's current or former employees, which could result in litigation and adversely affect the business.

● A more active, liquid trading market for the common shares may not develop, and the price of the common shares may fluctuate significantly.

● Concentration of ownership of the common shares may enable one shareholder or a small number of shareholders to significantly influence matters requiring shareholder approval.

● Sales by the Company's shareholders of a substantial number of the common shares in the public market could adversely affect the market price of the common shares.

● The exercise of outstanding warrants and options will have a dilutive effect on the percentage ownership of the common shares by existing shareholders.

Although we base the forward-looking statements contained in this Annual Report on assumptions that we believe are reasonable, we caution you that actual results and developments (including our results of operations, financial condition and liquidity, and the development of the industry in which we operate) may differ materially from those made in or suggested by the forward-looking statements contained in this Annual Report. Additional impacts may arise that we are not aware of currently. The potential of such additional impacts intensifies the business and operating risks that we face, and should be considered when reading the forward-looking statements contained in this Annual Report. In addition, even if results and developments are consistent with the forward-looking statements contained in this Annual Report, those results and developments may not be indicative of results or developments in subsequent periods. As a result, any or all of our forward-looking statements in this Annual Report may prove to be inaccurate. We have included important factors in the cautionary statements included in this Annual Report on Form 20-F, particularly in Section 3.D of this Annual Report on Form 20-F titled "Risk Factors", that we believe could cause actual results or events to differ materially from the forward-looking statements that we make. No forward-looking statement is a guarantee of future results. Moreover, we operate in a highly competitive and rapidly changing environment in which new risks often emerge. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make.

You should read this Annual Report and the documents that we reference herein and have filed as exhibits hereto completely and with the understanding that our actual future results may be materially different from what we expect. The forward-looking statements contained herein are made as of the date of this Annual Report, and we do not assume any obligation to update any forward-looking statements except as required by applicable laws.

**STATUS AS AN EMERGING GROWTH COMPANY**

We are an "emerging growth company" as defined in Section 3(a) of the United States Securities Exchange Act of 1934, as amended (the "Exchange Act") by the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"), and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies. We will continue to qualify as an "emerging growth company" until the earliest to occur of: (a) the last day of the fiscal year during which we had total annual gross revenues of USD$1,235,000,000 (as such amount is indexed for inflation every 5 years by the United States Securities and Exchange Commission ("SEC")) or more; (b) the last day of our fiscal year following the fifth anniversary of the date of the first sale of equity securities pursuant to an effective registration statement under the United States Securities Act of 1933, as amended (the "Securities Act"); (c) the date on which we have, during the previous 3-year period, issued more than USD$1,000,000,000 in non-convertible debt; or (d) the date on which we are deemed to be a "large accelerated filer", as defined in Exchange Act Rule 12b-2. We expect to continue to be an emerging growth company until January 4, 2027.

Generally, a registrant that registers any class of its securities under Section 12 of the Exchange Act is required to include in the second and all subsequent annual reports filed by it under the Exchange Act a management report on internal control over financial reporting and, subject to an exemption available to registrants that are neither an "accelerated filer" or a "large accelerated filer" (as those terms are defined in Exchange Act Rule 12b-2), an auditor attestation report on management's assessment of internal control over financial reporting. However, for so long as we continue to qualify as an emerging growth company, we will be exempt from the requirement to include an auditor attestation report on management's assessment of internal controls over financial reporting in its annual reports filed under the Exchange Act, even if we were to qualify as an "accelerated filer" or a "large accelerated filer". In addition, Section 103(a)(3) of the Sarbanes-Oxley Act of 2002 (the "SOX") has been amended by the JOBS Act to provide that, among other things, auditors of an emerging growth company are exempt from any rules of the Public Company Accounting Oversight Board requiring a supplement to the auditor's report in which the auditor would be required to provide additional information about the audit and the financial statements of the Company.

**FOREIGN PRIVATE ISSUER**

We are considered a "foreign private issuer" pursuant to Rule 405 promulgated under the Securities Act. In our capacity as a foreign private issuer, we are exempt from certain rules under the Exchange Act that impose certain disclosure obligations and procedural requirements for proxy solicitations under Section 14 of the Exchange Act. In addition, our officers, directors and principal shareholders are exempt from the reporting and "short-swing" profit recovery provisions of Section 16 of the Exchange Act and the rules under the Exchange Act with respect to their purchases and sales of our shares. Moreover, we are not required to file periodic reports and financial statements with the SEC as frequently or as promptly as United States companies whose securities are registered under the Exchange Act. In addition, we are not required to comply with Regulation FD, which restricts the selective disclosure of material information. For as long as we are a "foreign private issuer" we intend to file our annual financial statements on Form 20-F and furnish our quarterly financial statements on Form 6-K to the SEC for so long as we are subject to the reporting requirements of Section 13(g) or 15(d) of the Exchange Act. However, the information we file or furnish may not be the same as the information that is required in annual and quarterly reports on Form 10-K or Form 10-Q for United States domestic issuers. Accordingly, there may be less information publicly available concerning us than there is for a company that files as a domestic issuer.

We may take advantage of these exemptions until such time as we are no longer a foreign private issuer. We are required to determine our status as a foreign private issuer on an annual basis at the end of our second fiscal quarter. We would cease to be a foreign private issuer at such time as more than 50% of our outstanding voting securities are held by United States residents and any of the following three circumstances applies: (1) the majority of our executive officers or directors are United States citizens or residents; (2) more than 50% of our assets are located in the United States; or (3) our business is administered principally in the United States. If we lose our "foreign private issuer status" we would be required to comply with Exchange Act reporting and other requirements applicable to United States domestic issuers, which are more detailed and extensive than the requirement for foreign private issuers.

**PART I**

**ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS**

Not applicable.

**ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE**

Not applicable.

**ITEM 3. KEY INFORMATION**

**A. [Reserved]**

**B. Capitalization and Indebtedness**

Not applicable.

**C. Reasons for the Offer and Use of Proceeds**

Not applicable.

**D. Risk Factors**

There are numerous and varied risks, known and unknown, that may prevent us from achieving our goals. The risks described below are not the only ones we will face. If any of these risks actually occur, our business, financial condition or results of operations may be materially and adversely affected. In that case, the trading price of our securities could decline and investors in such securities could lose all or part of their investment. Additional risks not currently known to the Company, or that it currently considers immaterial, may also adversely impact the Company's business, operations, financial results or prospects, should any such other events occur.

**Risks Related to the Company's Financial Position and Capital Requirements**

*The Company has incurred significant losses and there can be no assurance when, or if, the Company will achieve or maintain profitability.*

The Company realized a comprehensive loss of approximately $39.8 million for the year ended December 31, 2025, $18.5 million for the year ended December 31, 2024 and $17.8 million for the year ended December 31, 2023. The Company has an accumulated deficit of $138 million as of December 31, 2025. Because of the numerous risks and uncertainties associated with the provision of the Company's maintenance services and sale and development of the Company's products, the Company is unable to predict the extent of any future losses or when the Company will become profitable, if at all. Expected future operating losses will have an adverse effect on the Company's cash resources, shareholders' equity and working capital. The Company's failure to become and remain profitable could depress the value of the common shares and impair the Company's ability to raise capital, expand its business, maintain its development efforts, or continue its operations. A decline in the Company's value could also cause a holder of common shares to lose all or part of such holder's investment in the Company.

*Our operations may not be profitable.*

The Company may not be able to generate significant revenues in the future. In addition, we expect to incur substantial operating expenses in order to fund the expansion of our business. As a result, we may experience substantial negative cash flow for at least the foreseeable future and cannot predict when, or even if, the Company might become profitable.

*The Company expects that it might need to raise additional capital to meet the Company's business requirements in the future, which may be challenging, could be highly dilutive and may cause the market price of the common shares to decline.*

Conditions in the capital markets are such that traditional sources of capital may not be available to the Company when needed or may be available only on unfavorable terms. The Company's ability to raise additional capital, if needed, will depend on conditions in the capital markets, economic conditions, the impact of any potential future health crisis, such as the COVID 19 pandemic, conflict in the Middle East and potential escalation and spread thereof and a number of other factors, many of which are outside the Company's control, and on its financial performance. Accordingly, the Company cannot assure that the Company will be able to successfully raise additional capital at all or on terms that are acceptable to the Company. If the Company cannot raise additional capital when needed, it may have a material adverse effect on the Company's business, results of operations and financial condition.

To the extent that the Company raises additional capital through the sale of equity or convertible debt securities, the issuance of such securities could result in substantial dilution for the Company's current shareholders. The terms of any securities issued by the Company in future capital transactions may be more favorable to new investors, and may include preferences, superior voting rights and the issuance of warrants or other derivative securities, which may have a further dilutive effect on the holders of any of the Company's securities then-outstanding. The Company may issue additional common shares or securities convertible into or exchangeable or exercisable for the common shares in connection with hiring or retaining personnel, option or warrant exercises, future acquisitions or future placements of the Company's securities for capital-raising or other business purposes. The issuance of additional securities, whether equity or debt, by the Company, or the possibility of such issuance, may cause the market price of the common shares to decline and existing shareholders may not agree with the Company's financing plans or the terms of such financings. In addition, the Company may incur substantial costs in pursuing future capital financing, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing and distribution expenses and other costs. The Company may also be required to recognize non-cash expenses in connection with certain securities the Company issues, such as convertible notes and warrants, which may adversely impact the Company's financial condition. Furthermore, any additional debt or equity financing that the Company may need may not be available on terms favorable to the Company, or at all. If the Company is unable to obtain such additional financing on a timely basis, the Company may have to curtail its development activities and growth plans and/or be forced to sell assets, perhaps on unfavorable terms, or the Company may have to cease its operations, which would have a material adverse effect on the Company's business, results of operations and financial condition.

*We expect that we may become profitable from sales of our products, however we may still need to invest significant time and capital before achieving such profitability. Certain capital has been made available from our recent capital raising. Failure to become profitable before this capital is expended and failure to obtain additional necessary capital, when needed, may force us to delay, limit or terminate our product development efforts or other operations.*

We expect that we may become profitable from sales of our products, however we may still need to invest significant time and capital before achieving such profitability. This capital has been made available from our recent capital raising. In addition, our operating plans may change as a result of many factors that may currently be unknown to us, and we may need to seek additional funds sooner than planned. Our future capital requirements will depend on many factors, including but not limited to production and manufacturing costs (which are dependent on the costs of mechanical and electronic components of our products), research and development activities, sales activities including compensation for salespersons, development of additional software and hardware products for our current offerings, and marketing costs related to expansion into new markets. Adequate additional financing, if needed, may not be available to us on acceptable terms, or at all. If we need additional financing, but are unable to obtain sufficient funding on a timely basis or on favorable terms, we may be required to significantly delay, reduce or eliminate one or more of our product development programs and/or commercialization efforts. We may also be unable to expand our operations or otherwise capitalize on business opportunities as desired. Any of these events could materially and adversely affect our financial condition and business prospects.

*We may not accurately forecast revenues, profitability and appropriately plan our expenses.*

We base our current and future expense levels on our operating forecasts and estimates of future income and operating results. Income and operating results are difficult to forecast because they generally depend on the volume of sales and timing, which are uncertain. Additionally, our business is affected by general economic and business conditions around the world. A softening in income, whether caused by changes in customer preferences in the markets we serve, or a weakening in global economies, may result in decreased net revenue levels, and we may be unable to adjust our expenses in a timely manner to compensate for any unexpected shortfall in income. This inability could cause our (loss)/income after tax in a given quarter to be (higher)/lower than expected. We also make certain assumptions when forecasting the amount of expense we expect related to our share-based payments, which includes the expected volatility of our share price, and the expected life of share options granted. These assumptions are partly based on historical results. If actual results differ from our estimates, our operating results in a given period may be lower than expected.

*Exchange rate fluctuations between multiple foreign currencies may negatively affect our earnings, operating cash flow.*

Our reporting currency is the US Dollar and our functional currency is the New Israeli Shekel ("NIS"). Our key expenses and revenues are currently primarily payable in NIS and U.S. In addition, we receive and have received funding in CAD, U.S. dollars, and NIS. As a result, we are exposed to the currency fluctuation risks relating to the recording of our expenses and revenues in U.S. dollars, and potential cash flow shortage. We may, in the future, decide to enter into currency hedging transactions. These measures, however, may not adequately protect us from material adverse effects.

*The imposition of tariffs, sanctions, restrictions on imports or other trade barriers between the United States and various countries may impact our revenue and results of operations.*

The current political landscape has introduced significant uncertainty with respect to future trade regulations and existing international trade agreements. The new, substantial tariff increases on imports to the United States from Canada, Mexico and China announced on February 1, 2025, or other tariffs should they be implemented and sustained for an extended period of time, could have a significant adverse effect, including financial, on us, and our supply chain. Further, retaliatory tariffs imposed by other governments would exacerbate the impact.

As long as such tariffs are in effect, we expect that the costs certain products and materials would increase. It is difficult to predict what further trade-related actions governments may take, which may include additional or increased tariffs and trade restrictions, and we may be unable to quickly and effectively react to such actions, which could result in supply shortages and increased costs.

We cannot predict whether, and to what extent, there may be changes to international trade agreements or whether quotas, duties, tariffs, exchange controls or other restrictions on our products will be changed or imposed. If we are unable to source our products from the countries where we wish to purchase them, either because of regulatory changes or for any other reason, or if the cost of doing so increases, it could have a material adverse effect on our business, financial condition and results of operations. Furthermore, imposition of tariffs may result in local sourcing initiatives, or other developments that make it more difficult to sell our products in foreign countries, which would negatively impact our business and operating results.

**Risks Related to the Company's Operations in Israel**

*The Company's operational offices and a significant number of customers are located in Israel and, therefore, the business, financial condition and results of operation may be adversely affected by political, economic and military instability in Israel and in the Middle East.*

The Company's operational offices and a significant number of customers are located in Israel. In addition, a majority of the Company's employees, officers and directors are residents of Israel. Accordingly, political, economic and military conditions in the Middle East may directly affect the business. Since the establishment of the State of Israel in 1948, a number of armed conflicts have taken place between Israel and its neighboring countries and terrorist organizations active in the region, including Hamas (an Islamist militia and political group in the Gaza Strip) and Hezbollah (an Islamist militia and political group in Lebanon). Any hostilities involving Israel or the interruption or curtailment of trade between Israel and its trading partners could adversely affect the Company's operations and results of operations.

In particular, in October 2023, Hamas terrorists infiltrated Israel's southern border from the Gaza Strip and conducted a series of attacks on civilian and military targets. Hamas also launched extensive rocket attacks on the Israeli population and industrial centers located along Israel's border with the Gaza Strip and in other areas within the State of Israel. These attacks resulted in thousands of deaths and injuries, and Hamas additionally kidnapped many Israeli civilians and soldiers. Following the attack, Israel's security cabinet declared war against Hamas and commenced a military campaign against Hamas and these terrorist organizations in parallel continued rocket and terror attacks. As a result of the events of October 7, 2023, the Israeli government declared that the country was at war and the Israeli military began to call-up reservists for active duty. Military service call ups that result in absences of personnel from us for an extended period of time may materially and adversely affect our business, prospects, financial condition and results of operations. In October 2025, a ceasefire was brokered between Israel and Hamas. However, we cannot predict if and to what extent this ceasefire will remain in effect or upheld. In 2026, tensions between Israel and Iran escalated into another direct military conflict. Israel, United States, and Iran commenced a series of attacks and counterattacks. While there is hope talks among the parties will resume along with a ceasefire, it is not clear when an agreement will be reached and if an agreement will be upheld. The situation remains volatile, with the potential for escalation into a broader regional conflict, and future developments are unpredictable in the region. Actual or perceived political or security instability in Israel, or changes in the political environment, could adversely affect the Israeli economy and, in turn, our business, financial condition, results of operations and prospects.

The Company is continuing with its operations both in Israel and globally. However, potential changes to the security situation in Israel are difficult to predict at this stage, as are the war's economic implications on our business and operations and on Israel's economy in general. If the ceasefire collapses or the conflict expands to other fronts, such as Lebanon, Syria and the West Bank, our operations may be adversely affected.

Any hostilities, armed conflicts, terrorist activities involving Israel or the interruption or curtailment of trade between Israel and its trading partners, or any political instability in the region could adversely affect business conditions and our results of operations and could make it more difficult for us to raise capital. Parties with whom we do business have sometimes declined to travel to Israel during periods of heightened unrest or tension, forcing us to make alternative arrangements when necessary in order to meet our business partners face to face.

Continued hostilities between Israel and its neighbors and any future armed conflict, terrorist activity or political instability in the region could adversely affect our operations in Israel and adversely affect the market price of our ordinary shares. An escalation of tensions or violence might result in a significant downturn in the economic or financial condition of Israel, which could have a material adverse effect on our operations in Israel and our business.

Our commercial insurance does not cover losses that may occur as a result of events associated with war and terrorism. Although the Israeli government currently covers the reinstatement value of direct damages that are caused by terrorist attacks or acts of war, we cannot assure you that this government coverage will be maintained or that it will sufficiently cover our potential damages. Any losses or damages incurred by us could have a material adverse effect on our business. Any armed conflicts or political instability in the region would likely negatively affect business conditions and could adversely affect our results of operations.

Further, in the past, the State of Israel and Israeli companies have been subjected to economic boycotts. Several countries still restrict business with the State of Israel and with Israeli companies. These restrictive laws and policies may have an adverse impact on our operating results, financial condition or the expansion of our business. A campaign of boycotts, divestment and sanctions has been undertaken against Israel, which could also adversely impact our business.

Israel's most recent general elections were held on April 9, 2019, September 17, 2019, March 2, 2020, March 23, 2021 and November 1, 2022. In addition, proposed judicial reform has sparked widespread protests across Israel. Uncertainty surrounding future elections and the outcome of the judicial reform in Israel may continue and the political situation in Israel may further deteriorate. Actual or perceived political instability in Israel or any negative changes in the political environment, may individually or in the aggregate adversely affect the Israeli economy and, in turn, our business, financial condition, results of operations and growth prospects.

*The Company's operations may be disrupted as a result of the obligation of management or key personnel to perform military service.*

The Company's operations could also be disrupted by the obligations of personnel to perform military service. Some of the Company's employees and independent contractors may be called upon to perform a significant number of days of military reserve duty until they reach the age of 40 (and in some cases, depending on their specific military profession up to 45 or even 49 years of age). In certain emergency circumstances, individuals may be called to immediate and unlimited active duty. In response to increases in terrorist activity, there have been periods of significant call-ups of military reservists and it is possible that there will be similar large-scale military reserve duty call-ups in the future. The Company's operations could be disrupted by the absence of a significant number of employees related to military service, which could materially adversely affect the business and results of operations.

*It may be difficult to enforce a judgment of a Canadian court against the Company, certain of the Company's officers and directors or the Israeli experts named in this Annual Report are in Israel, to assert Canadian securities laws claims in Israel or to serve process on certain of the officers and directors and these experts.*

The Company is incorporated in British Columbia, Canada. Other than Alan Rootenberg who resides in Canada, and Reeves Ambrecht who resides in the United States, all of the executive officers and directors reside in Israel, and substantially all of the Company's assets and a substantial portion of the assets of these persons are located in Israel. Therefore, a judgment obtained against the Company, or any of these persons, including a judgment based on the civil liability provisions of Canadian securities laws, may not be collectible in the Canada and may not be enforced by an Israeli court. It also may be difficult to effect service of process on these persons in Israel or to assert Canadian securities law claims in original actions instituted in Israel. Israeli courts may refuse to hear a claim based on an alleged violation of Canadian securities laws on the grounds that Israel is not the most appropriate forum in which to bring such a claim. In addition, even if an Israeli court agrees to hear a claim, it may determine that Israeli law and not Canadian law is applicable to the claim. If Canadian law is found to be applicable, the content of applicable Canadian. law must be proven as a fact by expert witnesses, which can be a time consuming and costly process. Certain matters of procedure will also be governed by Israeli law. There is little binding case law in Israel that addresses the matters described above. As a result of the difficulty associated with enforcing a judgment against the Company in Israel, one may not be able to collect any damages awarded by either a Canadian or foreign court.

*The Company may become subject to claims for payment of compensation for assigned service inventions by the Company's current or former employees, which could result in litigation and adversely affect the business.*

Under the Israeli Patents Law, 5727-1967, or the Patents Law, inventions conceived by an employee during the scope of his or her employment are regarded as "service inventions" and are owned by the employer, absent a specific agreement between the employee and employer giving the employee service invention rights. Section 134 of the Patents Law provides that if no agreement between an employer and an employee exists that prescribes whether, to what extent, and on what conditions the employee is entitled to remuneration for his or her service inventions, then such matters may, upon application by the employee, be decided by a government-appointed compensation and royalties committee established under the Patents Law, or the Committee. Although the Company's employees have agreed to assign to the Company all rights to any intellectual property created in the scope of their employment and most of the current employees, including all those involved in the development of the Company's intellectual property, have agreed to waive their economic rights with respect to service inventions, the Company cannot assure you that claims will not be brought against the Company by current or former employees demanding remuneration in consideration for assigned service inventions. If any such claims were filed, the Company could potentially be required to pay remuneration to the Company's current or former employees for such assigned service inventions, or be forced to litigate such claims, which could negatively affect the business.

**Risks Related to the Company and the Company's Business**

*Failure to effectively develop and expand the Company's sales and marketing capabilities could harm the ability to grow the business and achieve broader market acceptance of the Company's products.*

The Company's ability to achieve customer adoption of its retail automation solutions and civilian technology will depend, in part, on the ability to effectively establish, focus and train a sales and marketing force. The Company's ability to achieve significant revenue growth in the future will depend, in part, on the Company's ability to recruit, train and retain a sufficient number of experienced sales professionals. In addition, even if the Company is successful in hiring qualified sales personnel, new hires require significant training and experience before they achieve full productivity, particularly for sales efforts targeted at new markets.

*The Company expects the sales cycle to be long and unpredictable and require considerable time and expense before executing a customer agreement, which may make it difficult to project when, if at all, the Company will obtain new customers and when the Company will generate revenue from those customers.*

In both the retail automation and civilian technology market, the decision to adopt the Company's products may require the approval of multiple technical and business decision makers, including security, compliance, procurement, operations and information technology. In addition, the Company expects that while a customer may be willing to deploy the Company's products on a limited basis, before they will commit to deploying the products at scale, they will require extensive education about the Company's products and significant customer support time, engage in protracted pricing negotiations and seek to secure readily available development resources. As a result, it is difficult to predict when the Company will obtain new customers and begin generating revenue from these customers. As part of the sales cycle, the Company may incur significant expenses before executing a definitive agreement with a prospective customer and before the Company is able to generate any revenue from such agreement. The Company has no assurance that the substantial time and money spent on the sales efforts will generate significant revenue. If conditions in the marketplace generally or with a specific prospective customer change negatively, it is possible that no definitive agreement will be executed, and the Company will be unable to recover any of these expenses. If the Company is not successful in targeting, supporting and streamlining the sales processes and if revenue expected to be generated from a prospective customer is not realized in the time period expected or not realized at all, the Company's ability to grow its business, and its operating results and financial condition may be adversely affected. If the sales cycles lengthen, the Company's future revenue could be lower than expected, which would have an adverse impact on the operating results and could cause the Company's share price to decline.

*If the Company is not able to enhance the brand and increase market awareness of the Company and products, then the business, results of operations and financial condition may be adversely affected.*

The Company believes that enhancing the "A2Z" and "Cust2Mate" brand identity and increasing market awareness of the Company and products is critical to achieving widespread acceptance of the Company's products. The Company's ability to penetrate its target markets may be adversely affected by a lack of awareness or acceptance of the brand. To the extent that the Company is unable to foster name recognition and affinity for the brand, the growth may be significantly delayed or impaired. The successful promotion of the Company's brand will depend largely on the marketing efforts, market adoption of the products, and the ability to successfully differentiate the Company's products from competing products and services. The Company's brand promotion may not be successful or result in revenue generation. Any incident that erodes consumer affinity for the brand could significantly reduce the brand value and damage the Company's business. If consumers perceive or experience a reduction in quality, or in any way believe the Company may fail to deliver a consistently positive experience, the brand value could suffer, and the business may be adversely affected.

*If the Company does not develop enhancements to the technology and introduce new products that achieve market acceptance, the business, results of operations and financial condition could be adversely affected.*

The Company's ability to attract new customers depends in part on the ability to enhance and improve the existing technology, increase adoption and usage of the solutions and introduce new products. The success of any enhancements or new products depends on several factors, including timely completion, adequate quality testing, actual performance quality, and overall market acceptance. Enhancements and new products that the Company develops may not be introduced in a timely or cost-effective manner, may contain errors or defects, may have interoperability difficulties with other products or may not achieve the broad market acceptance necessary to generate significant revenue. Furthermore, the ability to increase the usage of the Company's solutions and technology depends, in part, on the development of new use cases and may be outside of the Company's control. If the Company is unable to successfully enhance the existing solutions and technology to meet evolving customer requirements, increase adoption and usage, develop new products, then the business, results of operations and financial condition would be adversely affected.

*The technology markets in which the Company competes are both subject to rapid technological change and, to compete, the Company must continually enhance its products and services.*

The Company must continue to enhance and improve the performance, functionality and reliability of its technology. The technology markets in which the Company competes are characterized by rapid technological change, changes in user requirements and preferences, frequent new product and services introductions embodying new technologies and the emergence of new industry standards and practices that could render its products obsolete. The Company's success will depend, in part, on the ability to both internally develop and enhance existing technology, develop new products that address the increasingly sophisticated and varied needs of the Company's customers, and respond to technological advances and emerging industry standards and practices on a cost-effective and timely basis. The development of the Company's technology involves significant technical and business risks. The Company may fail to use new technologies effectively or to adapt its proprietary technology and systems to customer requirements or emerging industry standards. If the Company is unable to adapt to changing market conditions, customer requirements or emerging industry standards, the Company may not be able to increase its revenue and expand its business.

*Issues related to the development and use of Artificial Intelligence ("AI") could give rise to legal and/or regulatory action, damage our reputation or otherwise materially harm our business.*

 

We are in the process of developing and integrating use of AI technology in certain offerings and our business operations. AI systems are complex, rapidly changing, and may not operate as intended. Use of AI could lead to unintended consequences, including exposing us to additional risks related to cybersecurity, privacy and data security, such as the risk of increased vulnerability to cybersecurity threats and exposure, impacts to the stability of our operations, the inadvertent disclosure, misuse, or corruption of intellectual property, confidential, personal, or competitively sensitive information that could affect our reputation. AI algorithms and datasets may also contain errors or biases or produce unexpected or unintended outcomes.

Our efforts to expand AI capabilities within our products and internal functions involve risks, costs and operational challenges. Although we aim to design, develop, and deploy AI responsibly and to identify and mitigate associated ethical, legal and technical risks, we may not detect or resolve issues before they occur.

AI technologies are complex and rapidly evolving, we could face significant competition in the market and from other companies regarding such technologies. Further, the legal and regulatory landscape for AI is rapidly evolving and uncertain, and requirements may differ across jurisdictions. Compliance with new or existing AI-related laws, regulations, or government guidance-including emerging frameworks such as those in the European Union-may impose significant costs, restrict our ability to integrate certain AI capabilities, or expose us to liability. Failures, deficiencies, or misuse of AI technologies could result in regulatory inquiries or actions, litigation or reputational damage, any of which could materially harm our business and operations.

*The Company currently depends on a few customers for the smart-cart sales, a major source of the Company's current revenues; the loss of these customers may have a material adverse effect on the Company's operating results.*

Currently, a few customers are responsible for a significant portion of the Company's smart-cart revenues. During the years ended December 31, 2025, 2024 and 2023, these customers constituted 41%, 10% and 67% of the total revenues, respectively. The percentage of the Company's sales to the Company's major customers may fluctuate from period to period, and the Company's principal customers may also vary from year to year. Significant reduction in sales to any of the major customers, or the loss of a major customer, could have a material adverse effect on the results of operations and financial condition.

*The Company's growth depends, in part, on the success of the strategic relationships with third parties.*

To grow the business, the Company anticipates that the Company will continue to depend on relationships with third parties, such as the Company's customers, suppliers and software providers. Identifying partners, and negotiating and documenting relationships with them, requires significant time and resources. If the Company is unsuccessful in establishing or maintaining its relationships with third parties, the Company's ability to compete in the marketplace or to grow the Company's revenue could be impaired, and the results of operations may suffer. Even if the Company is successful, the Company cannot assure you that these relationships will result in increased customer usage of the products or increased revenue.

*The Company's future profitability depends, in part, on subcontractor and supplier performance and financial viability as well as component availability and pricing.*

The Company relies on other companies to provide components and subsystems for its technology and to produce hardware elements and sub-assemblies, provide software and intellectual property, provide information about the parts they supply to the Company, and to do so in compliance with all applicable laws, regulations and contract terms. Disruptions or performance problems caused by the Company's subcontractors and suppliers, or a misalignment between the Company's contractual obligations and the agreement with its subcontractors and suppliers, could have various impacts on the Company, including on the ability to meet the Company's commitments to customers.

The Company's ability to perform its obligations on time could be adversely affected if one or more of the Company's subcontractors or suppliers were unable to provide the agreed-upon products, materials or information, or perform the agreed-upon services in a timely, compliant and cost-effective manner or otherwise to meet the requirements of the contract. Changes in political or economic conditions, including changes in defense budgets or credit availability or sanctions, or other changes impacting a subcontractor or supplier (including changes in ownership or operations), as well as their ability to retain talent and other resources, and requirements or changes in requirements imposed on them by other customers, could adversely affect the financial stability of the Company's subcontractors and suppliers and/or their ability to perform. The inability of the Company's suppliers to perform, or their inability to perform adequately, could also result in the need for the Company to transition to alternate suppliers, which could result in significant incremental cost and delay or the need for the Company to provide other resources to support its existing suppliers. This risk may increase as the demands grow for the Company's subcontractors and suppliers to meet extensive government-related cyber and other requirements.

If the Company's subcontractors or suppliers fail to perform or the Company is unable to procure, or experience significant delays in deliveries of, needed products, materials or services; or if they do not comply with all applicable laws, regulations, requirements and contract terms, including if what the Company received is counterfeit or otherwise improper, the Company's financial position, results of operations and/or cash flows could be materially adversely affected.

*Information technology system failures or breaches of the Company's network security could interrupt the operations and adversely affect the business.*

The Company's operations depend upon the ability to protect the Company's computer equipment and systems against damage from physical theft, fire, power loss, telecommunications failure or other catastrophic events, as well as from internal and external security breaches, viruses, worms and other disruptive problems. Any damage or failure of the computer systems or network infrastructure that causes an interruption in the operations could have a material adverse effect on the business and subject the Company to litigation or actions by regulatory authorities. Although the Company employs both internal resources and external consultants to conduct auditing and testing for weaknesses in the systems, controls, firewalls and encryption and intend to maintain and upgrade the Company's security technology and operational procedures to prevent such damage, breaches or other disruptive problems, there can be no assurance that these security measures will be successful.

*Real or perceived errors, failures, or bugs in the technology could adversely affect the Company's operating results and growth prospects.*

The Company has discovered and expects that the Company will continue to discover errors, failures and bugs in its technology and anticipate that certain of these errors, failures and bugs will only be discovered and remediated after deployment. Real or perceived errors, failures or bugs in the platform could result in negative publicity, government inquiries, loss of or delay in market acceptance of the Company's technology, loss of competitive position, or claims by customers for losses sustained by them. In such an event, the Company may be required, or may choose, for customer relations or other reasons, to expend additional resources in order to help correct the problem.

*The Company could be harmed by improper disclosure or loss of sensitive or confidential Company, employee, or customer data, including personal data.*

In connection with the operation of the business, the Company stores, processes and transmits data, including personal and payment information, about the Company's employees and customers, a portion of which is confidential and/or personally sensitive. Unauthorized disclosure or loss of sensitive or confidential data may occur through a variety of methods. These include, but are not limited to, systems failure, employee negligence, fraud or misappropriation, or unauthorized access to or through the information systems, whether by the Company's employees or third parties, including a cyberattack by computer programmers, hackers, members of organized crime and/or state-sponsored organizations, who may develop and deploy viruses, worms or other malicious software programs. Such disclosure, loss or breach could harm the Company's reputation and subject the Company to government sanctions and liability under the contracts and laws that protect sensitive or personal data and confidential information, resulting in increased costs or loss of revenues. It is possible that security controls over sensitive or confidential data and other practices the Company and its third-party vendors follow may not prevent the improper access to, disclosure of, or loss of such information. The potential risk of security breaches and cyberattacks may increase as the Company introduces new products and offerings. Further, data privacy is subject to frequently changing rules and regulations, which sometimes conflict among the various jurisdictions in which the Company provides services. Any failure or perceived failure to successfully manage the collection, use, disclosure, or security of personal information or other privacy related matters, or any failure to comply with changing regulatory requirements in this area, could result in legal liability or impairment to the Company's reputation in the marketplace.

*A material breach in security relating to the Company's information systems and regulation related to such breaches, cyber-attacks, or other disruptions could adversely affect the Company, expose us to liability and affect our business and reputation.*

Information security risks have generally increased in recent years, in part because of the proliferation of new technologies and the use of the Internet, and the increased sophistication and activity of organized crime, hackers, terrorists, activists, cybercriminals and other external parties, some of which may be linked to terrorist organizations or hostile foreign governments. Cybersecurity attacks are becoming more sophisticated and include malicious software, ransomware, attempts to gain unauthorized access to data and other electronic security breaches that could lead to disruptions in critical systems, unauthorized release of confidential or otherwise protected information and corruption of data, substantially damaging the Company's reputation. Any person who circumvents the security measures could steal proprietary or confidential customer information or cause interruptions in the Company's operations.

We are increasingly dependent on our information technology systems and infrastructure for our business. We, our collaborators and our service providers collect, store, and transmit sensitive information including intellectual property, proprietary business information, and personal information in connection with our business operations. The secure maintenance of this information is critical to our operations and business strategy. Some of this information could be an attractive target of criminal attack by third parties with a wide range of motives and expertise, including organized criminal groups, "hacktivists," disgruntled current or former employees, nation-state and nation-state supported actors, and others. Cyber-attacks are of ever-increasing levels of sophistication, and despite our security measures, our information technology and infrastructure may be vulnerable to such attacks or may be breached, including due to employee error or malfeasance.

We have implemented information security measures to protect our systems, proprietary information, and sensitive data against the risk of inappropriate and unauthorized external use and disclosure and other types of compromise. However, despite these measures, and due to the ever-changing information cyber-threat landscape, we cannot guarantee that these measures will be adequate to detect, prevent or mitigate security breaches and other incidents and we may be subject to data breaches through cyber-attacks, malicious code (such as viruses and worms), phishing attacks, social engineering schemes, and insider theft or misuse. Any such breach could compromise our networks and the information stored there could be accessed, modified, destroyed, publicly disclosed, lost or stolen. If our systems become compromised, we may not promptly discover the intrusion. The Company incurs significant costs to protect against security breaches and may incur significant additional costs to alleviate problems caused by any breaches.

Any security breach or other incident, whether real or perceived, could cause us to suffer reputational damage. Such incidents could result in costs to respond to, investigate and remedy such incidents, notification obligations to affected individuals, government agencies, credit reporting agencies and other third parties, legal claims or proceedings, and liability under our contracts with other parties and federal and state laws that protect the privacy and security of personal information. The Company's failure to prevent security breaches, or well-publicized security breaches affecting the Internet in general, could significantly harm the Company's reputation and business and financial results.

*The Company's contracts may contain performance obligations that require innovative design capabilities, are technologically complex, require state-of-the-art manufacturing expertise or are dependent upon factors not wholly within the Company's control. Failure to meet the contractual obligations could adversely affect the Company's profitability, reputation and future prospects.*

The Company designs and develops advanced and innovative products and services, which are applied by the customers in a variety of environments, including some under highly demanding operating conditions. Problems and delays in development or delivery, or system failures, as a result of issues with respect to design, technology, intellectual property rights, labor, inability to achieve learning curve assumptions, inability to manage effectively a broad array of programs, manufacturing materials or components, or subcontractor performance could prevent the Company from meeting requirements and create significant risk and liabilities. Similarly, failures to perform on schedule or otherwise to fulfill the contractual obligations could negatively impact the Company's financial position, reputation and ability to win future business. If the Company is unable to meet its obligations, including due to issues regarding the design, development or manufacture of the products or services, it could have a material adverse effect on the Company's reputation, the ability to compete for other contracts and the financial position, results of operations and/or cash flows.

*The Company's insurance coverage, customer indemnifications or other liability protections may be unavailable or inadequate to cover all of the significant risks or the insurers may deny coverage of or be unable to pay for material losses the Company incurs, which could adversely affect the Company's profitability and overall financial position.*

The Company endeavors to obtain insurance agreements from financially solid, responsible, highly rated counterparties in established markets to cover significant risks and liabilities. Not every risk or liability can be insured, and for risks that are insurable, the policy limits and terms of coverage reasonably obtainable in the market may not be sufficient to cover all actual losses or liabilities incurred. Even if insurance coverage is available, the Company may not be able to obtain it at a price or on terms acceptable to the Company. Disputes with insurance carriers, including over policy terms, reservation of rights, the applicability of coverage (including exclusions), compliance with provisions (including notice) and/or the insolvency of one or more of the insurers may significantly affect the availability or timing of recovery, and may impact the Company's ability to obtain insurance coverage at reasonable rates in the future.

In some circumstances the Company may be entitled to certain legal protections or indemnifications from its customers through contractual provisions, laws, regulations or otherwise. However, these protections are not always available, can be difficult to obtain, are typically subject to certain terms or limitations, including the availability of funds, and may not be sufficient to cover all losses or liabilities incurred. If insurance coverage, customer indemnifications and/or other legal protections are not available or are not sufficient to cover the risks or losses, it could have a material adverse effect on the Company's financial position, results of operations and/or cash flows.

*The Company may face intense competition and expects competition to increase in the future, which could prohibit the Company from developing a customer base and generating revenue.*

The Company faces significant competition in every aspect of the business. Many companies that the Company competes with may already have an established market in the industries in which the Company competes and some of these companies have significantly greater financial and other resources than the Company and have been developing their products and services longer than the Company has been developing theirs. In addition, some of the Company's larger competitors have substantially broader product offerings and leverage their relationships based on other products or incorporate functionality into existing products to gain business in a manner that discourages potential customers from purchasing the Company's products. Potential customers may also prefer to purchase from their existing solution providers rather than a new solution provider regardless of product performance or features. These larger competitors often have broader product lines and market focus and will therefore not be as susceptible to downturns in a particular market. Conditions in the Company's market could change rapidly and significantly as a result of technological advancements, partnering by the Company's competitors or continuing market consolidation. New start-up companies that innovate and large competitors that are making significant investments in research and development may invent similar or superior products and technologies that compete with the Company's products. In addition, some of the Company's competitors may enter into new alliances with each other or may establish or strengthen cooperative relationships. Any such consolidation, acquisition, alliance or cooperative relationship could lead to pricing pressure and the loss of any future market share and could result in a competitor with greater financial, technical, marketing, service and other resources, all of which could harm the Company's ability to compete. Furthermore, organizations may be more willing to incrementally add solutions to their existing infrastructure from competitors than to replace their existing infrastructure with the Company's products. Any failure to meet and address these factors could harm the Company's business, results of operations and financial condition.

*The Company's business operations and future development could be significantly disrupted if the Company loses key members of its management team.*

The success of the business continues to depend to a significant degree upon the continued contributions of the Company's senior officers and key employees, both individually and as a group. The Company's future performance will be substantially dependent in particular on the ability to retain and motivate Gadi Graus, the Chief Executive Officer, senior officers or other key employees could have a material adverse effect on the business and plans for future development. The Company has no reason to believe that the Company will lose the services of any of these individuals in the foreseeable future; however, the Company currently has no effective replacement for any of these individuals due to their experience, reputation in the industry and special role in the Company's operations. The Company also does not maintain any key man life insurance policies for any of its employees.

*The Company's ability to meet the needs of its customers depends, in part, on the Company's ability to maintain a qualified workforce.*

The Company's operating results and growth opportunities are heavily dependent upon the ability to attract and retain sufficient personnel with security clearances and requisite skills in multiple areas, including science, technology, engineering and math. Additionally, as the Company grows its international business, it is increasingly important that the Company is able to attract and retain personnel with relevant local qualifications and experience. In addition, in a tightened labor market, the Company is facing increased competition for talent, both with traditional defense companies and commercial companies. If qualified personnel are scarce or difficult to attract or retain or if the Company experiences a high level of attrition, generally or in particular areas, or if such personnel are unable to obtain security clearances on a timely basis, the Company could experience higher labor, recruiting or training costs in order to attract and retain necessary employees.

*If the Company is able to expand the operations, the Company may be unable to successfully manage its future growth.*

The Company's growth may strain the Company's infrastructure and resources. Any such growth could place increased strain on the Company's management, operational, financial and other resources, and the Company will need to train, motivate, and manage employees, as well as attract management, sales, finance and accounting, international, technical, and other professionals. Any failure to expand these areas and implement appropriate procedures and controls in an efficient manner and at a pace consistent with the Company's business objectives could have a material adverse effect on the business, results of operations and financial condition.

*We are subject to certain Israeli, U.S. and foreign anti-corruption anti-money laundering and other trade laws and regulations. We can face serious consequences for violations.*

Among other matters, Israeli, U.S. and foreign anticorruption, anti-money laundering and other trade laws and regulations, which are collectively referred to as Trade Laws, prohibit companies and their employees, agents, legal counsel, accountants, consultants, contractors and other partners from authorizing, promising, offering, providing, soliciting or receiving, directly or indirectly, corrupt or improper payments or anything else of value to or from recipients in the public or private sector. Violations of Trade Laws can result in substantial criminal fines and civil penalties, imprisonment, the loss of trade privileges, debarment, tax reassessments, breach of contract and fraud litigation, reputational harm, and other consequences. We have direct or indirect interactions with officials and employees of government agencies or government-affiliated entities. We can be held liable for the corrupt or other illegal activities of our personnel, agents or partners, even if we do not explicitly authorize or have prior knowledge of such activities.

*The Company may become subject to various investigations, claims, disputes, enforcement actions, litigation, arbitration and other legal proceedings that could ultimately be resolved against the Company.*

The size, nature and complexity of the business make the Company susceptible to investigations, claims, disputes, enforcement actions, prosecutions, litigation and other legal proceedings, particularly those involving governments (including federal, state and outside the U.S.). The Company may become subject to investigations, claims, disputes, enforcement actions and administrative, civil or criminal litigation, arbitration or other legal proceedings globally and across a broad array of matters, including, but not limited to, government contracts, commercial transactions, false claims, false statements, antitrust, mischarging, contract performance, fraud, procurement integrity, products liability, privacy, warranty liability, the use of hazardous materials, personal injury claims, environmental, shareholder derivative actions, prior acquisitions and divestitures, intellectual property, tax, employees, export/import, anti-corruption, labor, health and safety, accidents, launch failures and employee benefits and plans, including plan administration, and improper payments. These matters could divert financial and management resources; result in administrative, civil or criminal fines, penalties or other sanctions (which terms include judgments or convictions and consent or other voluntary decrees or agreements), compensatory, treble or other damages, non-monetary relief or actions, or other liabilities; and otherwise harm the business and the Company's ability to obtain and retain awards. Government regulations provide that certain allegations against a contractor may lead to suspension or debarment from government contracts or suspension of export privileges for the company or one or more of its components. Suspension or debarment or criminal resolutions in particular could have a material adverse effect on the company because of its reliance on government contracts and export authorizations. An investigation, claim, dispute, enforcement action or litigation, even if not substantiated or fully indemnified or insured, could also negatively impact the Company's reputation among its customers and the public, and make it substantially more difficult for the Company to compete effectively for business, obtain and retain awards or obtain adequate insurance in the future. Investigations, claims, disputes, enforcement actions, litigation or other legal proceedings could have a material adverse effect on the Company's financial position, results of operations and/or cash flows.

*The Company's reputation, the ability to do business and the Company's financial position, results of operations and/or cash flows may be impacted by the improper conduct of employees, agents, subcontractors, suppliers, business partners or joint ventures in which the Company participates.*

The Company has implemented policies, procedures, and other compliance controls, and have negotiated terms designed to prevent misconduct by employees, agents or others working on the Company's behalf or with the Company that would violate the applicable laws of the jurisdictions in which the Company operates, including laws governing the protection of classified information, procurement integrity, information security and data privacy, or the terms of the Company's contracts. However, the Company cannot ensure that the Company will prevent all such misconduct committed by its employees, agents, subcontractors, suppliers, business partners or others working on the Company's behalf or with the Company. This risk of improper conduct may increase as the Company continues to expand globally and do business with new partners. Improper actions by those with whom or through whom the Company does business (including the Company's employees, agents, subcontractors, suppliers, business partners and joint ventures) could subject the Company to administrative, civil or criminal investigations and enforcement actions; monetary and non-monetary penalties; liabilities; and the loss of privileges and other sanctions, including suspension and debarment, which could negatively impact the Company's reputation and ability to conduct business and could have a material adverse effect on the Company's financial position, results of operations and/or cash flows.

*The Company may not generate the expected benefits of any future acquisition, and such acquisition could disrupt the Company's ongoing business, distract management and increase the Company's expenses.*

The Company may, in the future, engage in additional acquisitions to expand its product and service offerings. These acquisitions involve risks and uncertainties such as:

● the Company's pre-acquisition due diligence may fail to identify material risks;

● significant acquisitions may negatively impact the Company's financial results, including cash flow and financial liquidity;

● significant goodwill assets recorded on the Company's consolidated balance sheet from prior acquisitions are subject to impairment testing, and unfavorable changes in circumstances could result in impairment to those assets;

● acquisitions may result in significant additional unanticipated costs associated with price adjustments or write-downs;

● the Company may not integrate newly acquired businesses and operations in an efficient and cost-effective manner;

● relocation or combination of facilities of acquired businesses may be more costly or time consuming than planned;

● the Company may fail to achieve the strategic objectives, synergies, cost savings and other benefits expected from acquisitions;

● the technologies acquired may not prove to be those needed to be successful in the Company's markets or may not have adequate intellectual property rights protection;

● the Company may assume significant liabilities and exposures that exceed the enforceability or other limitations of applicable indemnification provisions, if any, or the financial resources of any indemnifying parties, including indemnity for tax or regulatory compliance issues, such as anti-corruption and environmental compliance, that may result in the Company incurring successor liability;

● the Company may fail to retain key employees of the acquired businesses;

● the attention of senior management may be diverted from its existing operations;

**●** the Company may be exposed to potential shareholder claims if the Company acquires a significant interest in a publicly traded company; and

● the Company could be subject to more restrictive regulations by the local authorities after the acquisition, including regulations relating to foreign ownership of local companies.

The Company cannot assure that these risks or other unforeseen factors will not offset the intended benefits of any additional acquisitions, and such risks could have a material adverse effect on the Company's financial condition and results of operation.

*If the Company expands its operations into other parts of the world, the Company will face certain additional risks and challenges.*

The Company may expand its operations into other jurisdictions around the world as part of the Company's business expansion plans, which will subject the Company to a variety of risks, including fluctuations in foreign currencies, changes in the economic strength or greater volatility in the economies of foreign countries in which the Company does business, difficulties in enforcing contractual rights and intellectual property rights, theft or vandalism, economic instability, taxes or government royalties by foreign governments, adverse changes in the regulatory environments, including in tax laws and regulations, of the foreign countries in which the Company does business, compliance with anti-corruption and anti-bribery laws, restrictions on the withdrawal of foreign investments, the ability to identify and retain qualified local managers and the challenge of managing a culturally and geographically diverse operation. The Company cannot guarantee compliance with all applicable laws and regulations, and violations could result in substantial fines, sanctions, civil or criminal penalties, competitive or reputational harm, litigation or regulatory action and other consequences that might adversely affect the Company's results of operations.

*There are tax risks we may be subject to in carrying on business in Israel, Canada and the United States.*

We are incorporated in British Columbia, with subsidiaries in Israel and the United States. Since we are operating in a new and developing industry there is a risk that foreign governments may look to increase their tax revenues or levy additional taxes to level the playing field for perceived disadvantages to traditional brick and mortar businesses. There is no guarantee that governments will not impose such additional adverse taxes in the future.

*Our products may be subject to recall or return.*

Manufacturers and distributors of products are sometimes subject to the recall or return of their products for a variety of reasons, including product defects, safety concerns, packaging issues and inadequate or inaccurate labeling disclosure. If any of our products were to be recalled due to an alleged product defect, safety concern or for any other reason, we could be required to incur unexpected expenses of the recall and any legal proceedings that might arise in connection with the recall. We may lose a significant amount of sales and may not be able to replace those sales at an acceptable margin or at all. In addition, a product recall may require significant management time and attention. Additionally, product recalls may lead to increased scrutiny of our products by our customers and regulators, requiring further management time and attention and potential legal fees, costs and other expenses.

*If we release defective products or services, our operating results could suffer.*

Products designed and released by us involve testing and verification, assembly processes, and quality and functionality inspection and are difficult to develop and manufacture. While we have quality controls in place to detect and prevent defects in our products and services before they are released, these quality controls are subject to human error, overriding, and reasonable resource constraints. Therefore, these quality controls and preventative measures may not be effective in detecting and preventing defects in our products before they have been released into the marketplace. In such an event, we could be required, or decide voluntarily, to suspend the availability of the product or services, which could significantly harm our business and operating results.

*Our products and services are complex and could have unknown defects or errors, which may give rise to legal claims against us, diminish our brand or divert our resources from other purposes.*

Our products are comprised of and rely on complex and sensitive electronic hardware, algorithms, software, user-friendly interfaces and tightly integrated, electromechanical designs. Despite testing, our products could contain defects and errors and may in the future contain defects, errors or performance problems when first introduced, when new versions or enhancements are released, or even after these products have been used by our customers for a period of time. These problems could result in expensive and time-consuming design modifications or warranty charges, delays in the introduction of new products or enhancements, significant increases in our service and maintenance costs, exposure to liability for damages, damaged customer relationships and harm to our reputation, any of which could materially harm our results of operations and ability to achieve market acceptance. In addition, increased development and warranty costs could be substantial and could significantly reduce tour operating margins.

The existence of any defects, errors, or failures in our products or the misuse of our products could also lead to product liability claims or lawsuits against it. A defect, error or failure in one of our products could result in failure or damage to the products it is embedded in, or property damage, injury, death and/or significant damage our reputation and support for our services in general. We anticipate this risk will grow as more and more products using our products are deployed.

We cannot provide any assurance that we have or will have insurance adequate to protect us from material judgments and expenses related to potential future claims or that such insurance will be available in the future at economical prices or at all. Even if we are fully insured as it relates to a particular claim, the claim could nevertheless diminish our brand and divert management's attention and resources, which could have a negative impact on our business, financial condition and results of operations.

*Our senior management team has limited experience managing a public company listed on a U.S. exchange, and regulatory compliance may divert its attention from the day to day management of our business.*

The individuals who now constitute our senior management team have relatively limited experience managing a publicly traded company listed on a U.S. exchange and limited experience complying with the increasingly complex laws pertaining to public companies compared to senior management of other publicly traded companies listed on a U.S. exchange. Our senior management team may not successfully or efficiently manage our transition as a recently listed public company subject to significant regulatory oversight and reporting obligations under U.S. securities laws. In particular, these new obligations will require substantial attention from our senior management and could divert their attention away from the day to day management of our business.

*Failure to adhere to our financial reporting obligations and other public company requirements could adversely affect the market price of our common shares.*

The reporting and other obligations related to being a public company will place significant demands on our management, administrative, operational and accounting resources. If we are unable to meet such demands in a timely and effective manner, our ability to comply with our financial reporting obligations and other rules applicable to reporting issuers could be impaired. Moreover, any failure to maintain effective internal controls could cause us to fail to satisfy our reporting obligations or result in material misstatements in our financial statements. If we cannot provide reliable financial reports or prevent fraud, our reputation and operating results could be materially adversely affected which could also cause investors to lose confidence in our reported financial information, which could result in a reduction in the trading price of our common shares.

In addition, we do not expect that our disclosure controls and procedures and internal controls over financial reporting will prevent all errors or fraud. A control system, no matter how well designed and implemented, can provide only reasonable, not absolute, assurance that the control system's objectives will be met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Due to the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues within an organization are detected. The inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple errors or mistakes. Controls can also be circumvented by individual acts of certain persons, by collusion of two or more people or by management override of the controls. Due to the inherent limitations in a control system, misstatements due to errors or fraud may occur and may not be detected in a timely manner or at all.

*We have identified material weaknesses in our internal control over financial reporting. Failure to remediate these material weaknesses could result in material misstatements in our financial statements*

 

As disclosed in Item 15 of this Annual Report, management identified material weaknesses in internal control over financial reporting relating to controls over inventory, payroll and accounts payable as of December 31, 2025. During 2025, six key control areas were tested. Controls over cash, equity, payroll and financial reporting were determined to be effective; however, material weaknesses were identified in controls over procurement to pay and inventory management and counts. As a result of these material weaknesses, management concluded that our internal control over financial reporting was not effective as of December 31, 2025.

During 2025, we initiated remediation measures, including engaging an external SOX advisor to assist with control design, documentation and testing, hiring additional personnel within our finance and operations functions to enhance segregation of duties, and preparing for the implementation of a new enterprise resource planning (ERP) system, which became effective January 1, 2026. However, the remediation measures were not fully implemented and tested as of year end.

Although management believes these remediation efforts will strengthen our overall control environment, there can be no assurance that the measures will be sufficient to remediate the identified material weaknesses or prevent additional material weaknesses from being identified in the future. Until such time as the material weaknesses are fully remediated and tested, there is a risk that material misstatements in our financial statements could occur and not be prevented or detected on a timely basis.

If we fail to remediate the material weaknesses or maintain effective internal control over financial reporting, we may experience delays in filing required reports, increased audit costs, restatements of previously issued financial statements, regulatory scrutiny, loss of investor confidence and a decline in the market price of our common shares.

*We may experience adverse effects on our reported results of operations as a result of adopting new accounting standards or interpretations.*

Our implementation of and compliance with changes in accounting rules, including new accounting rules and interpretations, could adversely affect our reported financial position or operating results or cause unanticipated fluctuations in our reported operating results in future periods.

*We are an emerging growth company as defined in the JOBS Act and the reduced disclosure requirements applicable to emerging growth companies may make our common shares less attractive to investors and, as a result, adversely affect the price of our common shares and result in a less active trading market for our common shares.*

We are an emerging growth company as defined in the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies. For example, we have elected to rely on an exemption from the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act relating to internal control over financial reporting, and we will not provide such an attestation from our auditors for so long as we qualify as an emerging growth company.

We may avail ourselves of these disclosure exemptions until we are no longer an emerging growth company. We cannot predict whether investors will find our common shares less attractive because of our reliance on some or all of these exemptions. If investors find our common shares less attractive, it may cause the trading price of the common shares to decline and there may be a less active trading market for our common shares.

We will cease to be an emerging growth company upon the earliest of:

● the last day of the fiscal year in which we have more than $1.235 billion in annual revenue;

● the last day of the fiscal year in which we qualify as a "large accelerated filer";

● the date on which we have, during the previous three-year period, issued more than $1.0 billion in non-convertible debt securities; and

● the last day of the fiscal year in which the fifth anniversary (June 2028) of the completion of our first sale of common equity securities pursuant to an effective registration statement under the Securities Act.

*We will be affected by operational risks and may not be adequately insured for certain risks.*

We will be affected by a number of operational risks and we may not be adequately insured for certain risks, including: product liability litigation, as we may not have adequate product liability insurance; labor disputes; further workforce reductions; catastrophic accidents; fires; blockades or other acts of social activism; changes in the regulatory environment; impact of non-compliance with laws and regulations; cyber-attacks and ransom requests; natural phenomena, such as inclement weather conditions, floods, earthquakes and ground movements. There is no assurance that the foregoing risks and hazards will not result in damage to, or destruction of, our technologies, personal injury or death, environmental damage, adverse impacts on our operation, costs, monetary losses, potential legal liability and adverse governmental action, any of which could have an adverse impact on our future cash flows, earnings and financial condition. Also, we may be subject to or affected by liability or sustain loss for certain risks and hazards against which we cannot insure or which we may elect not to insure because of the cost. This lack of insurance coverage could have an adverse impact on our future cash flows, earnings, results of operations and financial condition.

*The markets in which we compete are characterized by rapid technological change, which requires us to develop new products and product enhancements, and could render our existing products and technologies obsolete.*

Continuing technological changes in the market for our products could make our products less competitive or obsolete, either generally or for particular applications. Our future success will depend upon our ability to develop and introduce a variety of new technologies, innovations, capabilities and enhancements to our existing product and service offerings, as well as introduce a variety of new product offerings, to address the changing needs of the markets in which we offer products. Delays in introducing new products, technologies and enhancements, the failure to choose correctly among technical alternatives or the failure to offer innovative products or enhancements at competitive prices may cause existing and potential customers to purchase our competitors' products.

If we are unable to devote adequate resources to develop new products or cannot otherwise successfully develop new products or enhancements that meet customer requirements on a timely basis, our products could lose market share, our revenue and profits could decline, and we could experience operating losses.

*If critical components or raw materials used to manufacture our products become scarce or unavailable, then we may incur delays in manufacturing and delivery of our products, which could damage our business.*

We obtain materials, mechanical parts, hardware and electronics components, various subsystems and manufacturing and assembly services from a limited group of suppliers and sub-contractors. We do not have long-term agreements with any of these suppliers or sub-contractors that obligate them to continue to sell materials, components, subsystems, or provide manufacturing services to us. Our reliance on these suppliers or sub-contractors involves significant risks and uncertainties, including whether our suppliers or sub-contractors will provide an adequate supply of required components, subsystems, or services of sufficient quality, will increase prices for the components, subsystems or services and will perform their obligations on a timely basis. As of the date of this Annual Report, the Company has not experienced any significant delays or shortages in the supply of critical components or raw materials used for manufacturing its products.

In addition, certain raw materials and components used in the manufacture of our products are periodically subject to supply shortages, and our business is subject to the risk of price increases and periodic delays in delivery. Similarly, the market for electronic components is subject to cyclical reductions in supply. If we are unable to obtain components from third-party suppliers in the quantities and of the quality that we require, on a timely basis and at acceptable prices, then we may not be able to deliver our products on a timely or cost-effective basis to our customers, which could cause customers to terminate their contracts with us, increase our costs and seriously harm our business, results of operations and financial condition. Moreover, if any of our suppliers or sub-contractors become financially unstable, then we may have to find new suppliers or sub-contractors. It may take several months to locate alternative suppliers or sub-contractors, if required, or to redesign our products to accommodate components from different suppliers. We may experience significant delays in manufacturing and shipping our products to customers and incur additional development, manufacturing and other costs to establish alternative sources of supply if we lose any of these sources or are required to redesign our products. We cannot predict if we will be able to obtain replacement components within the time frames that we require at an affordable cost, if at all.

*If we fail to successfully promote our product and brand, it could have a material adverse effect on our business, prospects, financial condition and results of operations.*

We believe that brand recognition is an important factor to our success. If we fail to promote our brands successfully, or if the expenses of doing so are disproportionate to any increased net sales we achieve, it would have a material adverse effect on our business, prospects, financial condition and results of operations. This will depend largely on our ability to maintain trust, be a technology leader, and continue to provide high-quality and secure technologies, products and services. Any negative publicity about us or our industry, the quality and reliability of our technologies, products and services, our risk management processes, changes to our technologies, products and services, our ability to effectively manage and resolve customer complaints, our privacy and security practices, litigation, regulatory activity, and the experience of sellers and buyers with our products or services, could adversely affect our reputation and the confidence in and use of our technologies, products and services. Harm to our brand can arise from many sources, including; failure by us or our partners to satisfy expectations of service and quality; inadequate protection of sensitive information; compliance failures and claims; litigation and other claims; employee misconduct; and misconduct by our partners, service providers, or other counterparties. If we do not successfully maintain a strong and trusted brand, our business could be materially and adversely affected.

*Environmental, social and governance matters may impact our business and reputation.*

Governmental authorities, non-governmental organizations, customers, investors, external stakeholders and employees are increasingly sensitive to environmental, social and governance, or ESG, concerns, such as diversity and inclusion, climate change, water use, recyclability or recoverability of packaging, and plastic waste. This focus on ESG concerns may lead to new requirements that could result in increased costs associated with developing, manufacturing and distributing our products. Our ability to compete could also be affected by changing customer preferences and requirements, such as growing demand for more environmentally friendly products, packaging or supplier practices, or by failure to meet such customer expectations or demand. We risk negative shareholder reaction, including from proxy advisory services, as well as damage to our brand and reputation, if we do not act responsibly, or if we are perceived to not be acting responsibly in key ESG areas, including equitable access, product quality and safety, diversity and inclusion, environmental stewardship, support for local communities, corporate governance and transparency, and addressing human capital factors in our operations. If we do not meet the ESG expectations of our investors, customers and other stakeholders, we could experience reduced demand for our products, loss of customers, and other negative impacts on our business and results of operations.

**Risks Related to our Intellectual Property**

*If we fail to protect, or incur significant costs in defending, our intellectual property and other know-how or proprietary rights, our business, financial condition, and results of operations could be materially harmed.*

Our success depends, in large part, on our ability to protect our intellectual property, know-how and other proprietary rights. We rely primarily on patents, trademarks, copyrights, trade secrets other contractual provisions, to protect our intellectual property and other proprietary rights. However, most of our technology and know-how is not patented, and we may be unable or may not seek to obtain patent protection for this technology. Moreover, existing U.S. legal standards relating to the validity, enforceability and scope of protection of intellectual property rights offer only limited protection, may not provide us with any competitive advantages, and may be challenged by third parties. The laws of countries other than the U.S. may be even less protective of intellectual property rights. Accordingly, despite our efforts, we may be unable to prevent third parties from infringing upon or misappropriating our intellectual property or otherwise gaining access to our technology. Unauthorized third parties may try to copy or reverse engineer our products or portions of our products or otherwise obtain and use our intellectual property. Moreover, many of our employees have access to our trade secrets and other intellectual property. If one or more of these employees leave to work for one of our competitors, then they may disseminate this proprietary information, which may as a result damage our competitive position. If we fail to protect our intellectual property and other proprietary rights, then our business, results of operations or financial condition could be materially harmed. From time to time, we may have to initiate lawsuits to protect our intellectual property and other proprietary rights. Pursuing these claims is time consuming and expensive and could adversely impact our results of operations.

In addition, affirmatively defending our intellectual property rights and investigating whether we are pursuing a product or service development that may violate the rights of others may entail significant expense. Any of our intellectual property rights may be challenged by others or invalidated through administrative processes or litigation. If we resort to legal proceedings to enforce our intellectual property rights or to determine the validity and scope of the intellectual property or other proprietary rights of others, then the proceedings could result in significant expense to us and divert the attention and efforts of our management and technical employees, even if we prevail.

*The Company may not be able to adequately protect its intellectual property, which, in turn, could harm the value of the brands and adversely affect the business.*

Patent applications in prosecuting have no guarantee that they will be granted, or if granted that the scope of protection will be adequate. A Freedom to Operate search has not been performed and there is no guarantee that the Company is not infringing other patents. The Company's ability to implement the business plan successfully depends in part on the ability to build brand recognition using the Company's trademarks, service marks and other proprietary intellectual property, including the Company's names and logos. The Company currently has limited registered trademarks. While the Company plans to register a number of its trademarks; no assurance can be given that the Company's trademark applications will be approved. No assurance can be given that the Company's patent applications which are in process will be approved. If the Company's patent applications are not approved, the ability to expand or develop the business may be negatively affected.

Third parties may also oppose the Company's trademark or patent applications, or otherwise challenge the use of the trademarks or patents. In the event that the trademarks or patents are successfully challenged, the Company could be forced to rebrand its goods and services or redesign its technology, which could result in loss of brand recognition, and could require the Company to devote resources to advertising and marketing new brands and products.

If the Company's efforts to register, maintain and protect its intellectual property are inadequate, or if any third party misappropriates, dilutes or infringes on the intellectual property, the value of the Company's brands may be harmed, which could have a material adverse effect on the business and might prevent the Company's brands from achieving or maintaining market acceptance. The Company may also face the risk of claims that the Company has infringed third parties' intellectual property rights. If third parties claim that the Company infringes upon their intellectual property rights, the Company's operating profits could be adversely affected. Any claims of intellectual property infringement, even those without merit, could be expensive and time consuming to defend, require the Company to rebrand its services, if feasible, divert management's attention and resources or require the Company to enter into royalty or licensing agreements in order to obtain the right to use a third party's intellectual property.

Any royalty or licensing agreements, if required, may not be available to the Company on acceptable terms or at all. A successful claim of infringement against the Company could result in the Company being required to pay significant damages, enter into costly license or royalty agreements, or stop the sale of certain products or services, any of which could have a negative impact on the operating profits and harm the Company's future prospects.

The Company also relies significantly upon proprietary technology, information, processes and know-how. The Company typically seeks to protect this information, including by entering into confidentiality agreements with its employees and other parties such as consultants, teammates and subcontractors. These agreements and other measures may not provide adequate protection for the Company's trade secrets and other proprietary information. In the event of an infringement of such intellectual property rights, a breach of a confidentiality agreement, a misuse or theft of the Company's intellectual property or divulgence of proprietary information, the Company may not have adequate legal remedies. In addition, the Company's trade secrets, or other proprietary information may otherwise become known or be independently developed by competitors.

If the Company is unable to adequately exploit its intellectual property rights, to protect its intellectual property rights, or to obtain rights to intellectual property of others, it could have a material adverse effect on the Company's reputation, ability to compete for and perform on contracts, financial position, results of operations and/or cash flows.

*Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment, and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements.*

The United States Patent and Trademark Office (the "USPTO") and various foreign national or international patent agencies require compliance with a number of procedural, documentary, fee payment, and other similar provisions during the patent application process. Periodic maintenance fees on any issued patent are due to be paid to the USPTO and various foreign national or international patent agencies in several stages over the lifetime of the patent. While an inadvertent lapse can in many cases be cured by payment of a late fee or by other means in accordance with the applicable rules, there are situations in which non-compliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. Non-compliance events that could result in abandonment or lapse of patent rights include, but are not limited to, failure to timely file national and regional stage patent applications based on our international patent application, failure to respond to official actions within prescribed time limits, non-payment of fees, and failure to properly legalize and submit formal documents. If we fail to maintain the patents and patent applications covering our products, our competitors might be able to enter the market, which would have a material adverse effect on our business.

While a patent may be granted by a national patent office, there is no guarantee that the granted patent is valid. Options exist to challenge the validity of a patent which, depending upon the jurisdiction, may include re-examination, opposition proceedings before the patent office, and/or invalidation proceedings before the relevant court. Patent validity may also be the subject of a counterclaim to an allegation of patent infringement.

Pending patent applications may be challenged by third parties in protest or similar proceedings. Third parties can typically submit prior art material to patentability for review by the patent examiner. Regarding Patent Cooperation Treaty applications, a positive opinion regarding patentability issued by the International

Searching Authority does not guarantee allowance of a national application derived from the Patent Cooperation Treaty application. The coverage claimed in a patent application can be significantly reduced before the patent is issued, and the patent's scope can be modified after issuance. It is also possible that the scope of claims granted may vary from jurisdiction to jurisdiction.

The grant of a patent does not have any bearing on whether the invention described in the patent application would infringe the rights of earlier filed patents. It is possible to both obtain patent protection for an invention and yet still infringe the rights of an earlier granted patent.

*We may be sued by third parties for alleged infringement of their proprietary rights, which could be costly, time-consuming and limit our ability to use certain technologies in the future.*

We may become subject to claims that our technologies infringe upon the intellectual property or other proprietary rights of third parties. Any claims, with or without merit, could be time-consuming and expensive, and could divert our management's attention away from the execution of our business plan. Moreover, any settlement or adverse judgment resulting from these claims could require us to pay substantial amounts or obtain a license to continue to use the disputed technology, or otherwise restrict or prohibit our use of the technology. We cannot assure that we would be able to obtain a license from the third party asserting the claim on commercially reasonable terms, if at all, that we would be able to develop alternative technology on a timely basis, if at all, or that we would be able to obtain a license to use a suitable alternative technology to permit us to continue offering, and our customers to continue using, our affected product. An adverse determination also could prevent us from offering our products to others. Infringement claims asserted against us may have a material adverse effect on our business, results of operations or financial condition.

*We may not be able to protect our intellectual property rights throughout the world.*

Filing, prosecuting, and defending patents on all of our products throughout the world would be prohibitively expensive. Therefore, we have filed applications and/or obtained patents only in the United States. Competitors may use our technologies in jurisdictions where we have not obtained patent protection to develop their own products and their products may compete with our products.

**Risks Related to the Common Shares**

*An investment in the Company's common shares is speculative and there can be no assurance of any return on any such investment.*

An investment in the Company's common shares is speculative, and there is no assurance that investors will obtain any return on their investment. Investors will be subject to substantial risks involved in an investment in the Company, including the risk of losing their entire investment.

*The trading price of our common shares is likely to be volatile, which could result in substantial losses to investors..*

The trading price of our common shares is likely to be volatile and could fluctuate widely due to factors beyond our control. This may happen because of broad market and industry factors, including the performance and fluctuation of the market prices of other companies with business operations located outside of the United States that have listed their securities in the United States. In addition to market and industry factors, the price and trading volume for the common shares may be highly volatile for factors specific to our own operations. Furthermore, the stock market is subject to significant price and volume fluctuations, and the price of the common shares could fluctuate widely in response to several factors, including:

● the Company's quarterly or annual operating results;

● changes in the Company's earnings estimates;

● investment recommendations by securities analysts following the Company's business or the industry;

● additions or departures of key personnel;

● changes in the business, earnings estimates or market perceptions of the Company's competitors;

● the Company's failure to achieve operating results consistent with securities analysts' projections;

● changes in industry, general market or economic conditions;

● announcements of legislative or regulatory changes; and

● natural disasters and political and economic instability, including wars, terrorism, political unrest, results of certain elections and votes, emergence of a pandemic, or other widespread health emergencies (or concerns over the possibility of such an emergency), boycotts, adoption or expansion of government trade restrictions, and other business restrictions.

The stock market has experienced extreme price and volume fluctuations in recent years that have significantly affected the prices of the securities of many companies. The changes often appear to occur without regard to specific operating performance. The price of the common shares could fluctuate based upon factors that have little or nothing to do with the Company and these fluctuations could materially reduce the share price.

*If we are not able to comply with the applicable continued listing requirements or standards of the Nasdaq Capital Market, then Nasdaq could delist our common shares.*

In order to maintain the listing of our common shares on the Nasdaq Capital Market, we must satisfy minimum financial and other continued listing requirements and standards, including those regarding director independence and independent committee requirements, minimum stockholders' equity, minimum share price, and certain corporate governance requirements. There can be no assurances that we will be able to comply with such applicable listing standards. On January 13, 2026, we received a letter from Nasdaq indicating that, since we had not yet held an annual meeting of shareholders within twelve months of the prior fiscal year end, we were no longer in compliance with Nasdaq Listing Rules 5620(a) and 5810(c)(2)(G). In accordance with Nasdaq Listing Rules we submitted the plan to regain compliance, based on which Nasdaq granted 180 days or until June 29, 2026, to regain compliance. Company indicated to Nasdaq that it will hold the annual meeting on March 31, 2026. If the Nasdaq Stock Market determines to delist our Common Shares from trading on its exchange and we are unable to obtain listing on another national securities exchange, a reduction in some or all of the following may occur, each of which could have a material adverse effect on our shareholders:

● the liquidity of our Common Shares;

● the market price of our Common Shares;

● our ability to obtain financing for the continuation of our operations;

● the number of investors that will consider investing in our Common Shares;

● the number of market makers in our Common Shares;

● the availability of information concerning the trading prices and volume of our Common Shares; and

● the number of broker-dealers willing to execute trades in our Common Shares.

Further, if we were to be delisted from Nasdaq and we are unable to obtain listing on another national securities exchange, our Common Shares would cease to be recognized as covered securities and we would be subject to regulation in each state in which we offer our securities.

*Sales by the Company's shareholders of a substantial number of the common shares in the public market could adversely affect the market price of the common shares.*

A substantial portion of the total outstanding shares may be sold into the market at any time. If a significant shareholder was to decide to sell large amounts of common shares over a short period of time (presuming such sales were permitted) such sales could cause the market price of the common shares to drop significantly, even if the business is doing well. Further, the market price of the common shares could decline as a result of the perception that such sales could occur. These sales, or the possibility that these sales may occur, also might make it more difficult for the Company to sell equity securities in the future at a time and price that the Company deems appropriate.

*The exercise of outstanding warrants and options will have a dilutive effect on the percentage ownership of the common shares by existing shareholders.*

As of the date of this Annual Report, the Company had outstanding warrants to acquire 1,033,841 common shares and options to purchase 4,228,170 common shares. Warrants and options are exercisable for prices ranging between $1.88 and $22.75. The expiration of the term of such options and warrants ranges from January 4, 2026, to March 27, 2036. If a significant number of such warrants and stock options are exercised by the holders, the percentage of common shares owned by the Company's existing shareholders will be diluted.

**ITEM 4. INFORMATION ON THE COMPANY**

&nbsp;&nbsp;&nbsp;&nbsp;**A.** **History and Development of the Company** 

The Company was incorporated in British Columbia, Canada under the *Business Corporations Act* (British Columbia) ("BCBCA"), on January 15, 2018 under the name ECC Ventures 1 Corp. ("ECC1"). On July 20, 2020, the Company changed its name to "A2Z Smart Technologies Corp." and on August 12, 2024, the Company changed its name to "A2Z Cust2Mate Solutions Corp." to better reflect the Company's business plan.

The Company's principal place of business and its registered and records office of the Company is located at 1600 - 609 Granville Street Vancouver, British Columbia, Canada V7Y 1C3; telephone +16475585564. The Company has appointed Cogency Global Inc., with an address at 122 East 42nd Street, 18th Floor, New York, NY 10168; telephone 1-800-221-0102, as its agent for service of process in the United States. The Company's operational offices are located at Alon 2 Tower, 4 Ariel Sharon St., Givatayim, Israel.

On April 18, 2018, ECC1 completed its initial public offering on the TSX Venture Exchange, or the TSXV, under the trading symbol "EONE.P", by issuing 2,000,000 common shares at a price of CAD$0.10 per share for aggregate proceeds of CAD$200,000.

On September 11, 2019, the Company, its wholly owned subsidiary 1219054 B.C. Ltd ("Acquireco") and A2Z Advanced Solutions Ltd ("A2ZAS"), a company incorporated in Israel, entered into an arrangement agreement ("Arrangement Agreement"), pursuant to which ECC1, through a court-approved plan of arrangement: (i) initially acquired 99.46% of the issued and outstanding ordinary shares of A2ZAS through Acquireco, with the remaining shares of A2ZAS ("Remaining Shares") being acquired following the receipt of regulatory approvals under Section 350 of the Israel Companies Law; (ii) completed a share consolidation of its common shares on a 1.4 to 1 basis; (iii) issued 41,690,578 post-consolidation common shares of ECC1 to the shareholders of A2ZAS; and (iv) changed its name to "A2Z Technologies Canada Corp."

On December 18, 2019, the common shares commenced trading on the TSXV under the symbol "AZ".

A2ZAS was the parent company of Advanced Military Solutions Ltd. ("A2ZMS"). A2ZMS was incorporated under the laws of the State of Israel in November 1998 under name Eligal Laboratories Ltd., as an engineering firm providing a cost-efficient solution for organizations to outsource maintenance of critical and sophisticated equipment. In 1992, Eligal Laboratories Ltd. expanded into the production of unmanned ground vehicle robotics as a second area of operations. In 2003, Eligal Laboratories Ltd. changed its name to Intelligent Robotics, Ltd., and in 2017, the name was changed once again to "Advanced Military Solutions Ltd." During this time period, all sales were conducted in Israel and were focused on Israeli clientele. Effective June 30, 2025, we entered into a share purchase agreement pursuant to which we sold A2ZMS to a purchaser residing in Irael for a purchase price of 500,000 ILS. The purchaser is related to one of our directors at that time, and the agreement and related transaction were approved by all of our non-interested directors.

In February 2019, A2ZAS completed the purchase of 80% of the share capital of AAI Advanced Automotive Innovations Inc. ("AAI") by way of the issuance of 7,664,788 ordinary shares of A2ZAS and warrants to purchase 3,832,394 ordinary shares of A2ZAS, exercisable at a purchase price of $0.23333 per share and with a term ending on December 31, 2021. In connection with the Arrangement Agreement, the ordinary shares and warrants issued to the sellers of AAI were exchanged for shares and warrants of the Company. AAI holds the rights to a certain technology, by way of a patent application with the U.S. Department of Commerce, number 62/801,140 titled "Device and Methodology of Anti Inflammation Capsule, regarding a capsule, "Fuel Tank Inertia Capsule System" ("FTICS"), that can be inserted into automobile gasoline tanks in order to suppress combustibility of any remaining gasoline or gasoline fumes inside the gasoline tank in the event of a collision. The development of the FTICS technology is now on hold as the Company focuses on its core business.

On December 30, 2019, A2ZAS entered into a call option agreement ("Call Option Agreement") with the Company's former Chairperson, Bentsur Joseph, pursuant to which Mr. Joseph granted A2ZAS a 10 year option ("Call Option") to purchase 66,000 ordinary shares of Cust2Mate Ltd., or Cust2Mate, constituting 19% of Cust2Mate's issued and outstanding share capital (on a fully diluted basis) for an aggregate purchase price of $66,000. On November 5, 2020, A2ZAS and Mr. Joseph entered into a share purchase agreement pursuant to which A2ZAS exercised the Call Option and acquired an additional 190,549 ordinary shares of Cust2Mate, together constituting 77.51% of the issued and outstanding shares of Cust2Mate (on a fully diluted basis) for an aggregate purchase price of approximately $1.56 million. The acquisition of Cust2Mate was completed on November 16, 2020 and Mr. Joseph no longer owns any securities of Cust2Mate.

On July 20, 2020, the Company changed its name to "A2Z Smart Technologies Corp." and on August 12, 2024, the Company changed its name to "A2Z Cust2Mate Solutions Corp." to better reflect the Company's business plan.

On January 5, 2022, the common shares commenced trading on the Nasdaq Capital Market.

On January 17, 2022, the Company announced that it entered into a share purchase agreement (the "SPA") to acquire all of the issued and outstanding shares of Isramat Ltd ("Isramat"), an Israeli manufacturer of precision metal parts (the "Isramat Acquisition"). The Isramat Acquisition vertically integrates certain manufacturing capabilities for the production of the Cust2Mate smart cart while complementing existing contract manufacturing partnerships to support anticipated worldwide growth. As consideration for the acquisition of Isramat, the Company paid an aggregate acquisition price of NIS 9.3 million (approximately US$2.989 million) (the "Consideration"). NIS 2.8 million (approximately US$0.9 million) of the Consideration will be paid in cash and the remaining Consideration in the amount of NIS 6.5 million (approximately US$2.089 million) will be paid through the issuance to the shareholders of Isramat (the "Isramat Shareholders") of 109,510 common shares (the "Acquisition Shares") at a deemed price per Acquisition Share of US$19.0777 (CAD$27.812) (the "Equity Consideration"). The SPA also provides that in the event that the aggregate proceeds received by an Isramat Shareholder from the sale of its Acquisition Shares during the lock-up period (the "Lock-up"), together with the value of its unsold Acquisition Shares as of the end of such period, is lower than its pro rata portion in the Equity Consideration, A2Z will pay the difference in cash to such Isramat Shareholder. As of the date of this report, the Company has fully paid this difference. The Acquisition Shares will be subject to the Lock-up and shall be released as follows: (i) during the first six months following signing of the SPA (but in any event not prior to four months and one day following the issuance of the Acquisition Shares), the holders of the Acquisition Shares will not be allowed to sell or otherwise transfer any of the Acquisition Shares, (ii) during each of the 20 months following the 6-month period detailed above, each Isramat Shareholder will be entitled to sell or otherwise transfer up to 1/20 of his pro rata portion of the Acquisition Shares, subject to applicable securities laws, and (iii) following the lapse of 26 months following the signing of the SPA, each Isramat Shareholder shall be entitled to freely trade its Acquisition Shares. The Isramat Acquisition subsequently closed on February 3, 2022.

On April 12, 2023, the Company filed with the Securities and Exchange Commission (the "Commission") a shelf-registration statement on Form F-3 (File No. 333-271226) ("Registration Statement") for the sale of its securities from time to time, in one or more offerings for an aggregate of US$200,000,000 (or the equivalent thereof in other currencies). The Registration Statement was declared effective by the SEC on April 21, 2023.

On February 20, 2024, the Company announced that it had applied and received approval for a voluntary delisting of the common shares from the TSXV. Effective as at the close of trading on February 28, 2024, the common shares were no longer listed and posted for trading on the TSXV. The delisting from the TSXV has not affected the Company's listing on the Nasdaq Capital Market and the common shares continued to trade on the Nasdaq Capital Market under the symbol "AZ".

On August 12, 2024, the Company announced the appointment of Mr. Alan Rootenberg to the position of Chief Financial Officer, effective immediately. Mr. Rootenberg has over 45 years of accounting and financial services experience, having also served as the chief financial officer of other publicly listed companies. In addition, Mr. Rootenberg has a BCom CPA designation. In connection with his appointment as Chief Financial Officer, Mr. Rootenberg resigned from the audit committee of the board of directors and was replaced by director Adi Vazan.

On December 11, 2024, A2ZAS and Cust2Mate entered into a Loan Repayment and Option Grant Agreement ("Loan and Option Agreement") with Smart Cart Ltd. ("Smart Cart") and Oren Orlitsky ("Orlitsky" and, together with Smart Cart, the "Sellers"), pursuant to which Cust2Mate agreed to pay back to the Sellers their loan to Cust2Mate in the amount of $363,714. The Sellers also granted Cust2Mate an option to purchase their combined 19.33% interest (on an as issued but not fully diluted basis) in Cust2Mate (the "Transaction Shares") for $2,000,000 (the "CL Option"). On February 13, 2025, Cust2Mate and Sellers agreed to amend the Loan and Option Agreement and Cust2Mate exercised the CL Option and paid $1.85 million for the Transaction Shares.

After the acquisition of the 66,194 shares in Cust2Mate the Company now holds in aggregate 322,743 shares of Cust2Mate, constituting 96.58% of Cust2Mate's issued and outstanding share capital.

On February 12, 2025, A2ZAS and the shareholders entered into a share purchase agreement pursuant to which A2ZAS exercised the Call Option and acquired an additional 66,194 ordinary shares of Cust2Mate, together constituting 19.81% of the issued and outstanding shares of Cust2Mate (on a fully diluted basis) for the aggregate purchase price of $1.85 million. After the acquisition of the 66,194 shares in Cust2Mate the Company now holds in aggregate 322,743 shares of Cust2Mate, constituting 96.58% of Cust2Mate's issued and outstanding share capital.

On January 2, 2026, the Company announced that Bentsur Joseph stepped down from his role as director and Chairman of the Board of Directors of the company and all its subsidiaries, effective December 31, 2025. Gadi Graus was appointed as Interim Chairman immediately following Mr. Joseph's resignation.

Our website address is www.cust2mate.com. Information contained on, or accessible through, our website is not a part of this Annual Report and the inclusion of our website address in this Annual Report is an inactive textual reference. The SEC maintains a website at www.sec.gov that contains reports, proxy and information statements, and other information regarding registrants that make electronic filings with the SEC using its EDGAR system. Similar information can also be found under the Company's profile on SEDAR+ at https://www.sedarplus.ca/home/.

&nbsp;&nbsp;&nbsp;&nbsp;**B.** **Business Overview** 

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| | | | |
|:---|:---|:---|:---|
|  | Precision Metal Parts | Smart Carts | **Total (\*)** |
| *Revenues (in thousands of $US)* |  |  |  |
| Year ended December 31, 2025 | $4693 | $3208 | $7901 |
| Year ended December 31, 2024 | $4844 | $532 | $5376 |
| Year ended December 31, 2023 | $3084 | $6128 | $9212 |

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(\*) All revenues are generated in the state of Israel.

Revenues from the smart cart segment are generated from one customer, and account for 41%, 10%, and 67% of the Company's revenues for the years ended December 31, 2025, 2024, and 2023. Revenues from the precision metal parts segment are generated from dozens of customers, and account for 59%, 90%, and 33% of the Company's revenues for the years ended December 31, 2025, 2024, and 2023.

**Business of the Company**

We are an innovative technology company operating the following four complementary business lines through our subsidiaries: (i) development and commercialization of retail "smart cart" solutions designed primarily for use in large grocery stores and supermarkets ("Cust2Mate Carts" or "Cust2Mate Products"); (ii) manufacture of precision metal parts; (iii) provision of maintenance services in Israel, including for Cust2Mate Products deployed in Israel; and (iv) development of our Fuel Tank Inertia Capsule System technology, or FTICS, a vehicle device cover for the military and civilian automotive industry.

In 2020, we began to rapidly develop smart carts for the retail industry, with the aim of becoming the leading mobile checkout system in the international market by providing the optimal solution for shoppers and supermarket retailers. We have since focused the majority of our strategic planning, investment, research, development and marketing efforts on our Cust2Mate Products, as management currently believes our operational capabilities are most effectively leveraged by growing market share in the smart cart industry.

On February 3, 2022, we completed the acquisition of precision metal parts manufacturer Isramat.

As of the date of this annual report, the Company has two key operating subsidiaries, both incorporated under the laws of Israel: (1) Cust2mate Ltd. and (2) Isramat Ltd. On August 10, 2023, Cust2mate announced the launch of Cust2mate USA Inc. (Cust2mate USA"), its subsidiary incorporated on July 12, 2023, under the laws of Delaware.

**Smart Cart Products and Services**

Cust2Mate is a mobile self-checkout shopping cart solution that streamlines the retail shopping experience. With a user-friendly smart algorithm, touch screen and proprietary software, our Cust2Mate smart cart scans, recognizes and adds to a displayed shopping list, each item placed in the cart, providing the shopper with real-time information regarding items in the cart and tabulating the total cost of purchase. Our in-cart solution also enables shoppers to use the cart as the point of sale by use of mobile payment applications, e-wallets and other financial services. Cust2Mate's point of sale feature effectively increases overall efficiency of the shopping experience, by expanding payment options for shoppers and retailers alike, reducing the need for cashiers, and reducing checkout wait times, which ultimately leads to improved customer engagement and satisfaction.

We combine scanning, computer vision, security scales and other anti-fraud/theft technologies, with a large screen tablet capable of relaying real-time shopping information and value-added digital services. Our solution is stackable and lightweight, with a robust recognition platform that provides a higher level of accuracy in product identification, leveraging in-store Wi-Fi and cutting-edge software.

For retailers, Cust2Mate enables improved inventory management, increased efficiency, reduced labor costs, increased anti-fraud protection, reduced theft, larger spend by shoppers, improved product mix and real-time data analytics and insights regarding consumer behavior. Our solutions are designed to easily integrate with existing store systems.

The Cust2Mate touch screen allows for the display of advertisements, promotions and other digital services which can bring added value to shoppers and additional revenue sources to retailers.

We have launched a modular version of the Cust2Mate smart cart, allowing local set-up with modular parts, making mass production and deployment of our smart carts faster and more efficient. With a detachable control unit, our new generation cart will employ the same technologies as our previous offerings, presently deployed in the Yochananof retail chain in Israel and in pilot programs throughout the world.

Our largest smart carts are available in 212 liter and 275 liter sizes, as customized at the discretion of retailers.

We also offer smaller, lighter smart carts, available in 180 liter and 75 liter sizes, with the same touch screen, detachable control panel and security features of our larger carts. Our smaller carts are ideal for urban groceries and supermarkets, drugstores and duty-free shops, where aisles space tends to be limited.

We leverage third-party partners for the manufacture of our Cust2Mate Products in the locations we serve.

In September 2025, we launched a separate division within Cust2mate to focus on advancing a business model that combines smart-cart subscriptions with retail media and advertising revenue – Retail Media Division. We are using the Company's technology to monetize through two primary pillars: (i) a subscription-based smart-cart model and (ii) a retail media platform.

Rather than relying on one-time hardware sales, Cust2Mate generates revenue through a minimal upfront fee combined with recurring monthly per-cart subscriptions under multiyear agreements. Cust2Mate's retail media platform is positioned as a second growth engine for the Company. We anticipate that we will generate revenues for our smart cart customers and from non-smart cart customers.

**Our Customers**

M. Yochananof and Sons (1988) Ltd. ("Yochananof"), a large Israeli retailer, has been our largest Cust2Mate customer to date. On September 3, 2025, we announced a $55 million purchase order from Yochananof. The purchase order covers the deployment of 5,000 cutting-edge Cust2Mate 3.0 smart shopping carts across Yochananof's network. The purchase order is comprised of an upfront payment and monthly charges per cart, for at least 60 months.

On September 10, 2024, we announced our strategic partnership with Nayax Ltd., a global commerce enablement payments and loyalty platform designed to help merchants scale their business, to pair Nayax's convenient automated self-service retail mobile payment system with our innovative smart cart platform for smart retail stores. The smart carts with Nayax's payment solution will initially be deployed in France. Further, on September 25, 2024, we announced that we had entered into a framework agreement with Nayax Capital, whereby Nayax Capital will enable financing for the sale or lease of Cust2Mate smart carts enabled with Nayax's complete solution.

On October 10, 2024, we announced that we signed a framework agreement with Trixo ("Trixo"), a leading retail technology integrator providing technology and IT and other services in Mexico and Central America, for in-field installation, deployment, in-store and laboratory support, maintenance, help desk services and warranty fulfillment related to our Cust2Mate smart cart solutions to be rolled out in Mexico and Central America. On June 17, 2025, we announced that we secured an initial order for 3,000 next-generation Cust2Mate 3.0 Smart Carts from Trixo. The value of the order exceeds $25 million. The smart carts are designated for rollout starting in the first quarter of 2026. According to the agreement, they will be deployed under the Company's recurring revenue model, with monthly charges applied per unit for at least 36 months.

On September 22, 2025, we announced a new milestone in our retail media journey through a landmark advertising agreement with Toys "R" Us Israel and The Red Pirate, two leading toy retail chains. For the first time, these household names will connect directly with shoppers through Cust2Mate's cutting edge smart carts. The campaigns will run across up to 5,000 smart carts currently rolling out in Yochananof, Israel's premier supermarket chain, delivering dynamic image, animation, and video ads designed to spark shopper engagement. The multi-year agreement, effective until December 2028 with an optional two-year extension, establishes Cust2Mate as a pioneering force in retail media monetization. In addition to payment based on a cost-per-thousand impressions (CPM) model, campaigns will feature QR codes and shoppable links driving purchases directly to the toy chains' websites and apps, with Cust2Mate earning commissions on every completed transaction. Under the Agreement, Cust2Mate is guaranteed a minimum of $1.2 million in revenue starting January 2026 over the initial term, laying the foundation for recurring, performance-driven income streams.

On October 1, 2025, we announced an agreement to advertise Lego products in Israel, marking an additional milestone in the company's rapidly expanding retail media strategy. Unlike many retail media platforms that rely solely on ad impressions, this agreement also provides Cust2Mate with commissions on every completed transaction-unlocking a powerful dual revenue stream that maximizes long-term value.

On November 25, 2025, we announced a purchase order (PO) from Super Sapir, a prominent Israeli supermarket chain, for 3,000 Cust2Mate smart shopping carts. The total contract value is $30 million. The deployment will begin in the first half of 2026. According to the agreement Super Sapir will pay a monthly fee per cart for a period of 60 months. The monthly fee covers the smart carts, charging stations, software, management system, dashboards, and maintenance and support services that ensure long-term platform performance and innovation, while also generating recurring revenue for A2Z Cust2Mate. In addition, A2Z Cust2Mate has received the exclusive right to commercialize the digital services provided on or generated by the Smart Carts platform within the Super Sapir chain, including advertising and media services, data collection and analysis, and the provision of services to third parties (digital marketplace), all subject to applicable commercial and privacy laws. As part of the agreement, Cust2Mate shall pay Super Sapir a fixed amount for every one-thousand advertisements sold (CPM).

On December 4, 2025, we announced that we entered into an agreement with a premium grocery retailer operating more than 50 stores in Central America to deploy the A2Z Cust2mate smart cart platform. Initial rollout is planned for early 2026 in two flagship locations, with the shared goal of expanding to a full chain-wide deployment following successful implementation

On January 5, 2026, we announced that the Company's smart carts will be available at select stores of Migros Ticaret A.S., Turkiye's leading in Q3 2026.

On March 31, 2026, the Company and Global Retail, a leading franchisee of the Global Carrefour group (Carrefour Israel) announced a five-year strategic agreement, valued at approximately $50 million, to deploy 4,000 smart carts across Carrefour Israel stores, alongside a comprehensive data, retail media and digital services collaboration. This landmark agreement positions Carrefour Israel as one of the first retailers in the world to implement smart cart technology at this scale, establishing a model for future deployments across international markets.

The rollout is set to begin in the third quarter of 2026 across six Carrefour Israel flagship stores and includes end to end delivery of smart carts, charging infrastructure, advanced software systems, as well as full implementation, training, and long-term support.

Our objective is to continue to generate significant additional orders of Cust2Mate smart carts in 2026.

**Our Markets**

We aspire to be the global leading provider of smart carts and associated technology solutions, providing a superior customer experience and cutting-edge platform for digital value-added services, easing the pain points for all stakeholders in the retail industry.

The market for smart carts is large and diverse, and includes grocery stores, hardware stores, household essentials, "do it yourself (DIY)" retailers, discount stores, warehouse stores, convenience stores, drug stores, duty free shops and similar outlets.

We have designed the range of our Cust2Mate smart carts to accommodate the needs of a varied customer base: large carts for hypermarkets or large stores, medium carts for supermarkets or medium sized stores, and small carts for city stores, drug stores, duty free shops, etc. We are also able to customize our carts with a "look and feel" unique to each retailer as requested.

**Business Model**

We envision deriving several distinct revenue stream opportunities from big data, retail media, and third party applications:

●  ***Outright Purchase Model*** . The outright purchase of smart carts by customers and payment of a monthly maintenance fee has been the business model to date. For example, the first 1,300 carts ordered by Yochananof were sold to it outright with revenue recognized upon delivery. We intend to move away from this model; however, it will remain available as some retailers prefer this option.

●  ***Subscription Based Model.*** We intend to retain title to our smart carts and make them available to customers on a multiyear subscription basis, against payment of a one-time up-front payment and monthly fees to cover hardware and software maintenance, service and version updates. The length of the subscription period depends on many variables unique to each customer, including the design and customization required by the customer, and the size of the up-front payment. We intend to fund the manufacture of our smart carts at scale, against orders, through loans against receivables from such orders, whilst looking to lower per unit manufacturing costs and increase margin as unit sales increase. The subscription model would also enable us to charge additional fees for add-on features such as store navigation maps, shopping lists, etc. The subscription model should also facilitate the provision of the smart carts to customers and, as revenue would be recognized monthly, would allow for a sustained increase of revenue in conjunction with the increase in the installed base of the smart carts.

●  ***Digital Services*** . As our smart carts are fully integrated into the retailers' systems, we envision them serving as a de-facto marketplace, which we refer to as a Smart Cart Marketplace, for all retail directed apps and digital services. Our Cust2Mate smart carts incorporate a large touch screen, and can present to the shopper additional information at the discretion of the retailer, such as details of the shopper's purchases, ingredients of goods purchased, allergy information, shopping lists, in-store navigation for goods, and many more applications, while simultaneously facilitating the provision of real-time personalized and directed promotions, advertisements, e-coupons and other digital services by all stakeholders in the retail industry (such as the retailer, consumer product and other manufacturers and advertisers and any third party service provider that joins the Smart Cart Marketplace). As these promotions, advertisements, coupons, etc., are displayed to the shopper when the shopper is deciding what to buy (and not, for example, when the shopper is paying for products already purchased), we believe that digital services will be of considerable value to shoppers, retailers, manufacturers and other third parties. We intend to enter into revenue sharing agreements with stakeholders, allowing us, our customers and relevant third parties to all enjoy increased revenue streams, whilst simultaneously providing shoppers with significant added value. We believe that digital revenues from the Smart Cart Marketplace can become considerable. As the revenue to retailers from digital services increases, the net cost of our smart carts to retailers is expected to decrease.

●  ***AI Empowered Big Data Analytics*** . At present, in many instances the retailer has limited information regarding the actions and decisions of the shopper until the actual time of payment. The retailer may often not know when a shopper has entered the store, how much time a shopper has spent in the store, the route the shopper takes, or where a shopper spends most or as little time in the store, how decisions are actually made by the shopper, and similar customer behavioral information. We are developing software for our smart carts to generate a wealth of data on such shopping behavior which will be made accessible to the Company's advanced AI service (under development) for insight generation, as well as raw data access to clients for use by with their own advanced data departments. The insights based on the domain knowledge the Company has accumulated from its product will serve stakeholders in the retail industry.

**Competition and Competitive Strengths**

There are a number of companies currently offering smart carts to the retail industry in one form or another. Our Cust2Mate Products, and some of other industry players, offer mobile self-checkout smart carts in which goods are scanned when placed in the smart cart. Other industry participants offer solutions based on "Scan and Go" or image recognition technologies. We believe we are one of the only smart carts providing a full end-to-end turnkey solution for all customers. Below is a brief summary of the various technologies:

●  ***"Scan and Go"*** comprises a scanner and small screen, either on cart or connected to an app on the mobile phone. These solutions generally come without large screens and thus cannot efficiently provide information and digital services, without on cart anti-fraud protection and without on cart payment capabilities. Though inexpensive, the scan and go carts do not provide the full user experience and retailer added value offered by our Cust2Mate Products.

●  ***Image Recognition.*** Many companies are trying to offer smart carts which do not require the scanning of products but instead claim to utilize software which recognizes the products as they are being placed in the smart cart ("one to many"). We believe that there remain technological hurdles to adopting image recognition software both on a practical and conceptual level. On a practical level, every store contains at least several tens of thousands of SKUs which have to be accurately recognized every time in all configurations, from all angles and in different lighting backgrounds, within a very short time without charging the shopper for products not purchased, while charging the shopper for all products purchased. This is a significant technological challenge. On a conceptual level, we believe many types of products are not easily adapted to image recognition, such as clothing size, and meats and cheeses purchased over the counter.

In addition, in an attempt to mitigate the increasing frustration of shoppers at the lengthening queues in the stores, many retailers have installed self-checkout (SCO) stations with the aim that these would lead to a quicker checkout and reduced labor cost. However, these SCO stations have not adequately solved such problems, as check-out queues have not disappeared, and the SCO stations have been accompanied by equipment issues, high up-front costs, consumer confusion, sub-optimal use of space and increased risk of theft.

We believe that our Cust2Mate Products have, and can further develop, the following competitive strengths:

● our smart carts utilize existing technologies proven to work—there is no technological risk to overcome; barcode scanning is a tried and tested, easy to use technology which can easily be adapted for use in a smart cart;

● our software, hardware and customer success teams have, among them, decades of experience in retail technology, supporting our efforts to design one stop shop smart cart solutions which answer the needs of the shopper, retailer and other stakeholders in the retail industry;

● our smart carts have a proven track record with hundreds of smart carts deployed in multiple sites and markets, enabling us to provide the most comprehensive working solution, customer experience and digital platform;

● our smart carts have multiple anti-fraud/theft capabilities which are designed to significantly reduce shrinkage from the carts without harming the shopping experience;

● we intend to continue the development of "one to one" computer vision software and the AI-Powered Shopping Cart Inventory Change Indicator System and incorporate the solutions in future Cust2Mate smart cart offerings. The solution will supplement the smart car's other anti-theft and fraud protection components;

● a barcode can provide additional information, over and above product identification; for example, by providing details of the expiry or best before date which could allow dynamic pricing based on proximity of such date;

● our smart carts are designed to be mass deployed in large supermarket chains, thus enabling them to be used by significant portions of the shoppers in the store;

● our smart carts can provide the retail industry with new revenue streams and insights; and

● our contemplated installed base subscription model allows for consistent revenue growth in a very large addressable market.

We continue to improve our smart carts. We have launched a lighter and easier to maneuver modular smart cart with a detachable control unit, allowing the cart, without its expensive components, to leave the store premises and to be retrofitted onto existing carts.

**Marketing and Sales**

We are currently marketing directly to targeted customers and indirectly through local partners. In Israel, we sell our Cust2Mate Products directly to our retailer customers. Outside of Israel, our local partners are responsible for support, training, implementation and sales of our Cust2Mate Products, while we focus on product development and direct marketing with strategic customers.

We currently have local distribution and service partners in the United States, Mexico and Central America, Australia, France, Canada and Chile. In the United States, we have a non-exclusive relationship with our distributor, who provides products and services to several thousands of stores nationally. On July 12, 2023, Cust2mate established a wholly owned subsidiary Cust2mate USA Inc. ("Cust2Mate USA") as a strategic move to serve the thriving U.S. retail market more effectively. On September 19, 2024, we announced that we had entered into a framework agreement with Level 10, LLC, a leading retail IT service provider, for in-field installation, deployment, in-store and laboratory support, maintenance, help desk services and warranty fulfillment related to our Cust2Mate smart cart solutions to be rolled out in the United States.

Our distributors in France, Mexico and Central America and Chile (exclusive for certain chains) are leading suppliers and integrators of retail technologies throughout the country.

Our go-to-market strategy is built on the retail, grocery, and DIY markets, with a focus on supermarkets and hypermarket food chains within Tier 1 (thousands of stores) and Tier 2 (hundreds of stores). We will manage targeted customers for Cust2Mate Products in selected regions directly, leveraging select local partners for sales and distribution to chains in Tier 2 and Tier 3 (tens of stores). Our local partners will take full responsibility for support, training, implementation and sales, while we will focus on product development and direct contact with strategic customers.

On September 10, 2024 we announced a strategic partnership with Nayax Ltd., to pair Nayax's convenient automated self-service retail mobile payment system with A2Z Cust2Mate's innovative smart cart platform for smart retail stores. Nayax and A2Z Cust2Mate will collaborate to sell the Cust2Mate 3.0 smart cart system with integrated Nayax payment technology as a unified, end-to-end solution for retailers around the world. The first smart carts with Nayax's payment solution have been deployed in France.

We presently contemplate that Cust2Mate would (directly or through subsidiaries which it would establish for each country), be the provider of the smart carts to the retailers and that Cust2Mate would enter into a revenue share or other commercial arrangement with its local distribution and service partners.

**Changes to Board of Directors and Formation of Advisory Board**

In July 2023, Adi Vazan was appointed to the Company's board of directors. Mr. Vazan is an experienced entrepreneur and accomplished senior executive, with extensive and diverse experience in managing companies and organizations, with understanding of both the technological and business aspects inherent in the Company's activities. Also in July 2023, Niv Raz resigned from the Company's board of directors. His resignation was not due to any disagreement with the Company, its policies, or management.

In March 2024, Gadi Graus was appointed Chief Executive Officer of the Company's subsidiary, Cust2mate Ltd. in place of Guy Mordoch. Mr. Graus currently serves as the Chief Executive Officer, director and President of the Company, and as a director of Cust2Mate Ltd. Prior to joining the Company, Gadi Graus was a senior partner at Shibolet & Co., Law Offices, one of Israel's largest law firms. Mr. Graus has an LLB from Hebrew University, Jerusalem, Israel and an MBA from the Kellogg - Recanati program (Tel-Aviv University and Northwestern University).

On August 12, 2024, the Company announced the appointment of Mr. Alan Rootenberg to the position of Chief Financial Officer, effective immediately. The Company wishes to thank Gadi Levin for his service as Chief Financial Officer and wish him the best as he continues with his other business endeavours, including continued consulting services to the Company. Mr. Rootenberg has over 45 years of accounting and financial services experience, having also served as the chief financial officer of other publicly listed companies. In addition, Mr. Rootenberg has a BCom CPA designation. In connection with his appointment as Chief Financial Officer, Mr. Rootenberg resigned from the audit committee of the board of directors and was replaced by director Adi Vazan.

Effective December 31, 2025, Mr. Bentsur Joseph stepped down from his role as our Director and Chairman of the Board of Directors and all our subsidiaries. Following Mr. Joseph's resignation, Mr. Gadi Graus, our Chief Executive Officer, was appointed interim Chairman of the Board, in addition to his role as CEO. We are in the process of appointing a chairperson with a track record in leading large global companies.

**C. Organizational Structure**

The following chart lists our material subsidiaries as at the date of this Annual Report, their respective jurisdictions of incorporation, and our direct and indirect ownership interest in each of these subsidiaries:

![](form20-f_001.jpg)

**D. Property, Plants and Equipment**

The corporate headquarters of A2Z are located at 1600 - 609 Granville Street Vancouver, British Columbia, Canada V7Y 1C3. One of the Company's Israeli subsidiaries leases office space with the lease expiring on March 31, 2029. Lease payments are approximately $48 thousand per month ($576 thousand annually). Another one of the Company's Israeli subsidiaries leases warehouse space, with the lease expiring on March 31, 2027. Lease payments are approximately $18 thousand per month ($216 thousand annually). Another one of the Company's Israeli subsidiaries leases its factory space with the lease expiring on March 31, 2027. Lease payments are approximately $19 thousand per month ($228 thousand annually).

**ITEM 4A. UNRESOLVED STAFF COMMENTS**

None.

**ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS**

The following discussion and analysis should be read in conjunction with our financial statements and related notes and the related information included elsewhere in this Annual Report. This discussion and other parts of this Annual Report contain forward-looking statements based upon current expectations that involve risks and uncertainties. Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of several factors, including those set forth under "Risk Factors" and elsewhere in this Annual Report.

The preparation of financial statements in conformity with these accounting principles requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent liabilities at the financial statement date and reported amounts of revenue and expenses during the reporting period. On an on-going basis, we review our estimates and assumptions. The estimates were based on historical experience and other assumptions that we believe to be reasonable under the circumstances. Actual results are likely to differ from those estimates or other forward-looking statements under different assumptions or conditions, but we do not believe such differences will materially affect our financial position or results of operations. Our actual results may differ materially as a result of many factors, including those set forth under the headings entitled "Cautionary Note Regarding Forward-Looking Statements" and "Risk Factors".

**COMPANY OVERVIEW AND DESCRIPTION OF THE BUSINESS**

We are an innovative technology company operating the following four complementary business lines through our subsidiaries: (i) development and commercialization of retail "smart cart" solutions designed primarily for use in large grocery stores and supermarkets ("Cust2Mate Carts" or "Cust2Mate Products"); (ii) manufacture of precision metal parts, in part for use in our Cust2Mate Products.

In 2020, we began to rapidly develop smart carts for the retail industry, with the aim of becoming the leading mobile checkout system in the international market by providing the optimal solution for shoppers and supermarket retailers. We have since focused the majority of our strategic planning, investment, research, development and marketing efforts on our Cust2Mate smart cart products, as management believes our operational capabilities are most effectively leveraged by growing market share in the smart cart industry.

**RESULTS OF OPERATIONS**

The following is a discussion of the results of operations which have been derived from the financial statements of the Company for the years ended December 31, 2025, 2024 and 2023 (in thousands of U.S. Dollars):

---

| | | | |
|:---|:---|:---|:---|
|  | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** |
|  | **2025** | **2024** | **2023** |
| **Revenues** | $7901 | $5376 | $9212 |
| Cost of revenues | 6807 | 3487 | 7959 |
| **Gross profit** | 1094 | 1889 | 1253 |
| **Expenses:** |  |  |  |
| Research and development costs | $9944 | $3853 | $4103 |
| Sales and marketing costs | 3857 | 1216 | 1377 |
| General and administration expenses | 23749 | 7948 | 13067 |
| Loss on impairment | - | 1727 | 1027 |
| **Operating loss** | (36456) | (12855) | (18321) |
| Loss (gain) on revaluation of warrant liability | (998) | 4389 | (1255) |
| Financial income | (618) | (158) | (85) |
| Financial expense | 1219 | 336 | 256 |
| Loss from continued operations | $(36059) | $(17422) | $(17237) |
| Loss from discontinued operations | (2425) | (1841) | (820) |
| **Net loss for the year** | $(38484) | $(19263) | $(18057) |
| **Other comprehensive income** |  |  |  |
| **Item that will not be reclassified to profit or loss:** |  |  |  |
| Adjustments arising from translating financial statements of foreign operations | (1323) | 775 | 303 |
| &nbsp;&nbsp;&nbsp;Remeasurement loss from defined benefit plans | - | 6 | 1 |
| &nbsp;&nbsp;&nbsp;**Other comprehensive income** | (1323) | 781 | 304 |
| **Total comprehensive loss for the year** | $(39807) | $(18482) | $(17753) |
| **Less: Net loss attributable to non-controlling shareholders** | (749) | (2267) | (1996) |
| **Net loss attributable to A2Z's shareholders** | $(37735) | $(16996) | $(16061) |
| &nbsp;&nbsp;&nbsp;**Basic and diluted loss per share from continuing operations** | $(0.96) | $(0.71) | $(1.10) |
| &nbsp;&nbsp;&nbsp;**Basic and diluted loss per share from discontinued operations** | $(0.07) | $(0.09) | $(0.06) |
| &nbsp;&nbsp;&nbsp;**Weighted average number of shares outstanding** | 36958606 | 21369527 | 13899212 |

---

***<u>Year ended December 31, 2025 compared to the year ended December 31, 2024</u>***

Revenues

---

| | | |
|:---|:---|:---|
|  | **Year ended December 31,** | **Year ended December 31,** |
|  | **2025** | **2024** |
| Smart Carts | $**3208** | $532 |
| Precision Metal Parts | **4693** | 4844 |
|  | $**7901** | $5376 |

---

Revenues for the year ended December 31, 2025, were $7,901 thousand as compared to $5,376 thousand for the year ended December 31, 2024. The increase is due primarily to the increase in revenues in the Company's smart cart segment as the Company continues to delivery Smart Carts to Yochananof.

While revenues from the smart cart division is currently derived from only one customer, revenues from the Company's advanced engineering and precision metal parts segments are derived from hundreds of customers.

Cost of revenues

Cost of revenues for the year ended December 31, 2025, were $6,807 thousand as compared to $3,487 thousand for the year ended December 31, 2024. The increase is due primarily to the increase in materials and components consumed. Materials and components consumed for the year ended December 31, 2025, was $3,675 thousand as compared to $1,566 thousand for the year ended December 31, 2024.

The Company's gross margin in the advanced engineering segment fluctuates depending on the level of revenue, since a large component relates to fixed payroll costs, and the nature of the project, as some project types have higher margins than others.

Research and development expenses

---

| | | |
|:---|:---|:---|
|  | **Year ended December 31,** | **Year ended December 31,** |
|  | **2025** | **2024** |
| Payroll and related expenses | $**4610** | $2417 |
| Subcontractor and outsourced work | **935** | 1081 |
| Share-based compensation | **4154** | 191 |
| Pilot expenses and other | **245** | 164 |
|  | $**9944** | $3853 |

---

Research and development expenses related mainly to the Company's Cust2Mate product. Most of these expenses relate to outsourced software engineers that work on integrating future customers' point of sales systems to the Company's software.

Research and development expenses were $9,944 thousand for the year ended December 31, 2025, as compared to $3,853 thousand for the year ended December 31, 2024. The increase in 2025 results from the replacement of subcontractors and outsourced work with the hiring of additional employees who are able to do the same work at a lower cost. Share-based compensation were $4,154 thousand for the year ended December 31, 2025, as compared to $191 thousand for the year ended December 31, 2024. Payroll and related expenses were $4,610 thousand for the year ended December 31, 2025, as compared to $2,417 thousand for the year ended December 31, 2024. The increase is primarily due to an increase in the number of employees in the Company's smart cart segment. Subcontractor and outsourced was $935 thousand for the year ended December 31, 2025, as compared to $1,081 thousand for the year ended December 31, 2024. The decrease is primarily due to a decrease in the subcontractor and outsourced work in the Company's smart cart segment.

Sales and marketing

Sales and marketing expenses were $3,857 thousand for the year ended December 31, 2025, as compared to $1,216 thousand for the year ended December 31, 2024. The increase is primarily due to a increase in marketing costs related to the Company's launch of its model 3.0 smart cart, and related share based compensation expenses to employees in sales and marketing.

General and administrative expenses

---

| | | |
|:---|:---|:---|
|  | **Year ended December 31,** | **Year ended December 31,** |
|  | **2025** | **2024** |
| Payroll and related | $**2956** | $2891 |
| Professional fees | **2525** | 1470 |
| Share-based compensation | **13550** | 1632 |
| Depreciation and amortization | **494** | 395 |
| Office maintenance | **951** | 367 |
| Public company related expenses | **173** | 144 |
| Rent and related | **244** | 200 |
| Travel | **349** | 184 |
| Directors and officers insurance | **350** | 228 |
| Investor Relations | **1298** | 258 |
| Other | **859** | 179 |
|  | $**23749** | $7948 |

---

General and administrative expenses were $23,749 thousand for the year ended December 31, 2025, as compared to $7,948 thousand for the year ended December 31, 2024. The increase is primarily due to the increase in share-based compensation which amounted to $13,550 thousand for the year ended December 31, 2025, compared to $1,632 thousand for the year ended December 31, 2024. The increase in share-based compensation is mainly due to a increase in share-based grants in 2025 in comparison to 2024. These grants were in recognition of management achievements during 2025, including two successful financing and the launch of the model 3.0 smart-cart. Another factor which contributes to the increase in general and administrative expenses is the increase in professional fees, which amounted to $2,525 thousand for the year ended December 31, 2025, compared to $1,470 thousand for the year ended December 31, 2024. The increase in professional fees is mainly due increased activities by the company. Finally, another significant factor to the increase in general and administrative expenses is the increase in investor relations which amounted to $1,298 thousand for the year ended December 31, 2025, compared to $258 thousand for the year ended December 31, 2025. The increase in investor relations is mainly due increase activities relating to shareholder communications.

Loss on impairment

Loss on impairment for the year ended December 31, 2025, was $Nil thousand as compared to a loss of $1,727 thousand for the year ended December 31, 2024. The loss in 2024 relates to the impairment of an intangible asset recognized by the Company as a result of an undeveloped patent.

Loss on impairment of goodwill for the year ended December 31, 2025, was $Nil thousand as compared to a loss of $Nil for the year ended December 31, 2024, this shows improvement in the profits in the Company's precision metal parts segment, that have led the Company to determine that there are no signs of decline in the value of Isramat, and no need to recognize a loss of impairment of goodwill.

Gain on revaluation of warrant liability

Gain on revaluation of warrant liability for the year ended December 31, 2025, was $998 thousand as compared to a loss of $4,389 thousand for the year ended December 31, 2024. The gain in 2025 relates to the decrease in the value of the warrant liability as of December 31, 2024, primarily caused by the decrease in the Company's share price.

Financial expenses

Financial expenses, net for the year ended December 31, 2025, were $601 thousand as compared to $178 thousand for the year ended December 31, 2024. The expenses in 2024 were mainly a result of the recognition of the commitment to compensate former shareholders of Isramat. Financial expenses comprise interest on loans and leases, interest and accretion in respect of application of IFRS 16, revaluation of a provision and long term financial asset, and bank charges.

***<u>Year ended December 31, 2024 compared to the year ended December 31, 2023</u>***

Revenues

---

| | | |
|:---|:---|:---|
|  | **Year ended December 31,** | **Year ended December 31,** |
|  | **2024** | **2023** |
| Smart Carts | $**532** | $6128 |
| Precision Metal Parts | **4844** | 3084 |
|  | $**5376** | $9212 |

---

Revenues for the year ended December 31, 2024, were $5,376 thousand as compared to $9,212 thousand for the year ended December 31, 2023. The decrease is due primarily to the decrease in revenues in the Company's smart cart segment as the Company completed delivery of its purchase order to Yochananof in 2023 and the Company is rolling out its new generation smart cart.

While revenues from the smart cart division is currently derived from only one customer, revenues from the Company's advanced engineering and precision metal parts segments are derived from hundreds of customers.

Cost of revenues

Cost of revenues for the year ended December 31, 2024, were $3,487 thousand as compared to $7,959 thousand for the year ended December 31, 2023. The decrease is due primarily to the decrease of cost of revenues in the smart cart segment.

The Company's gross margin in the advanced engineering segment fluctuates depending on the level of revenue, since a large component relates to fixed payroll costs, and the nature of the project, as some project types have higher margins than others.

Research and development expenses

---

| | | |
|:---|:---|:---|
|  | **Year ended December 31,** | **Year ended December 31,** |
|  | **2024** | **2023** |
| Payroll and related expenses | $**2417** | $1758 |
| Subcontractor and outsourced work | **1081** | 1683 |
| Share-based compensation | **191** | 532 |
| Pilot expenses and other | **164** | 130 |
|  | $**3853** | $4103 |

---

Research and development expenses related mainly to the Company's Cust2Mate product. Most of these expenses relate to outsourced software engineers that work on integrating future customers' point of sales systems to the Company's software.

Research and development expenses were $3,853 thousand for the year ended December 31, 2024, as compared to $4,103 thousand for the year ended December 31, 2023. The decrease in 2024 results from the replacement of subcontractors and outsourced work with the hiring of additional employees who are able to do the same work at a lower cost. Payroll and related expenses were $2,417 thousand for the year ended December 31, 2024, as compared to $1,758 thousand for the year ended December 31, 2023. The increase is primarily due to an increase in the number of employees in the Company's smart cart segment. Subcontractor and outsourced work were $1,081 thousand for the year ended December 31, 2024, as compared to $1,683 thousand for the year ended December 31, 2023. The decrease is primarily due to a decrease in the subcontractor and outsourced work in the Company's smart cart segment.

Sales and marketing

Sales and marketing expenses were $1,216 thousand for the year ended December 31, 2024, as compared to $1,377 thousand for the year ended December 31, 2023. The decrease is primarily due to a decrease in marketing costs for the marketing of the Company's Cust2Mate smart cart.

General and administrative expenses

---

| | | |
|:---|:---|:---|
|  | **Year ended December 31,** | **Year ended December 31,** |
|  | **2024** | **2023** |
| Payroll and related | $**2891** | $4007 |
| Professional fees | **1470** | 1966 |
| Share-based compensation | **1632** | 4531 |
| Depreciation and amortization | **395** | 414 |
| Office maintenance | **367** | 252 |
| Public company related expenses | **144** | 824 |
| Rent and related | **200** | 360 |
| Travel | **184** | 129 |
| Directors and officers insurance | **228** | 253 |
| Investor Relations | **258** |  |
| Other | **179** | 331 |
|  | $**7948** | $13067 |

---

General and administrative expenses were $7,948 thousand for the year ended December 31, 2024, as compared to $13,067 thousand for the year ended December 31, 2023. The decrease is primarily due to the decrease in share-based compensation which amounted to $1,632 thousand for the year ended December 31, 2024, compared to $4,531 thousand for the year ended December 31, 2023. The decrease in share-based compensation is mainly due to a decrease in share-based grants in 2024 in comparison to 2023. Another significant factor to the decrease in general and administrative expenses is the decrease in public company related expenses, which amounted to $144 thousand for the year ended December 31, 2024, compared to $824 thousand for the year ended December 31, 2023. The decrease in public company related expenses is mainly due to cost-cutting measures taken by the Company. Another significant factor to the decrease in general and administrative expenses is the decrease in payroll which amounted to $2,891 thousand for the year ended December 31, 2024, compared to $4,007 thousand for the year ended December 31, 2024. The decrease in payroll is mainly due to cost-cutting measures taken by the Company as well as a reduction in headcount.

Loss on impairment

Loss on impairment for the year ended December 31, 2024, was $1,727 thousand as compared to a loss of $1,027 thousand for the year ended December 31, 2023. The loss in 2024 relates to the impairment of an intangible asset recognized by the Company as a result of an undeveloped patent. The loss in 2023 relates to the impairment of goodwill recognized by the Company.

Loss on impairment of goodwill for the year ended December 31, 2024, was $Nil thousand as compared to a loss of $1,027 thousand for the year ended December 31, 2023, this shows improvement in the profits in the Company's precision metal parts segment, that have led the Company to determine that there are no signs of decline in the value of Isramat, and no need to recognize a loss of impairment of goodwill.

Loss on revaluation of warrant liability

Loss on revaluation of warrant liability for the year ended December 31, 2024, was $4,389 thousand as compared to a profit of $1,255 thousand for the year ended December 31, 2023. The loss in 2024 relates to the increase in the value of the warrant liability as of December 31, 2024, primarily caused by the increase in the Company's share price.

Financial expenses

Financial expenses, net for the year ended December 31, 2024, were $178 thousand as compared to $171 thousand for the year ended December 31, 2023. The expenses in 2023 were mainly a result of the recognition of the commitment to compensate former shareholders of Isramat. Financial expenses comprise interest on loans and leases, interest and accretion in respect of application of IFRS 16, revaluation of a provision and long term financial asset, and bank charges.

***<u>Additional annual financial information</u>***

---

| | | | |
|:---|:---|:---|:---|
| | **Year Ended December 31** | **Year Ended December 31** | **Year Ended December 31** |
| <br>(In Thousands) | **2025** | **2024** | **2023** |
| Total assets | $**85160** | $18878 | $8519 |
| Total non-current financial liabilities | **1787** | 496 | 5196 |
| Distributions or cash dividends declared per-share | **-** |  |  |

---

**REVIEW OF QUARTERLY RESULTS**

---

| | | | | |
|:---|:---|:---|:---|:---|
| (In Thousands) | **31/12/2025** | **30/09/2025** | **30/06/2025** | **31/03/2025** |
| Total revenues | $3647 | $1547 | $1160 | $1547 |
| Gross profit (loss) | $(282) | $526 | $270 | $580 |
| Total comprehensive loss from continuing operations | $(18303) | $(2695) | $(12865) | $(5944) |
| Basic and diluted loss per share from continuing operations | $(0.42) | $(0.07) | $(0.31) | $(0.16) |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| (In Thousands) | **31/12/2024** | **30/09/2024** | **30/06/2024** | **31/03/2024** |
| Total revenues | $1420 | $1572 | $1144 | $1240 |
| Gross profit | $790 | $690 | $85 | $324 |
| Total comprehensive loss from continuing operations | $(11879) | $(3399) | $(2532) | $(672) |
| Basic and diluted gain (loss) per share from continuing operations | $(0.40) | $(0.16) | $(0.16) | $0.02 |

---

The loss per quarter and related net loss per share is a function of the level of activity that took place during the relevant quarter. Total comprehensive losses in the fourth quarter of 2025 and throughout four quarters in 2024 remained consistent. The reason for the losses is due to increased research and development expenses and general and administrative costs, largely due to the Company's expansion ahead of expected increased revenues in future periods.

**<u>Analysis of Fourth quarter results</u>**

Revenues for the fourth quarter of 2025 were $3,647 thousand as compared to $1,547 thousand for third quarter of 2025. Gross profit (loss) for the fourth quarter of 2025 was $(282) thousand as compared to a gross profit of $526 thousand for the third quarter of 2025. Comprehensive loss for the fourth quarter of 2025 was $18,303 thousand as compared to $2,695 thousand for third quarter of 2025. The increase is mainly due to increase in general and administration expenses.

**LIQUIDITY AND CAPITAL RESOURCES**

The Company has incurred recurring losses and negative cash flows from operating activities since inception, such that as of December 31, 2025, the Company had accumulated losses of $138,187 thousand and a net loss in the amount of $38,484 thousand for the year ended December 31, 2025. As of the date of the issuance of the accompanied consolidated financial statements, the Company has not yet commenced generating sufficient revenues to fund its operations and therefore depends on fundraising from new and existing investors to finance its activities. Following the equity raised during the first quarter of 2026, the Company has sufficient working capital for at least the next 12 months.

***Working capital***

---

| | | |
|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2024** |
| Cash and cash equivalents | $13525 | $13526 |
| Restricted cash | 384 | 206 |
| Inventories | 3891 | 796 |
| Investment in financial assets | 55642 |  |
| Short term trade receivables | 3034 | 2024 |
| Other accounts receivable | 2937 | 581 |
| Total current assets | $79413 | $17133 |
| Short term loan and current portion of long-term loans | 9 | 826 |
| Lease liability | 819 | 217 |
| Trade payables | 3348 | 1834 |
| Other accounts payable | 2200 | 918 |
| Warrant liability | 576 | 7743 |
| Total current liabilities | $6952 | $11538 |
| Working capital | $72461 | $5595 |

---

Cash flow

---

| | | |
|:---|:---|:---|
|  | **Year ended December 31,** | **Year ended December 31,** |
|  | **2025** | **2024** |
| Net cash used in operating activities | (22907) | (11711) |
| Net cash used in investing activities | (57019) | (269) |
| Net cash provided from financing activities | 81305 | 22807 |
| Increase in cash | 1379 | 10827 |

---

*Year ended December 31, 2025, compared to the year ended December 31, 2024*

During the year ended December 31, 2025, the Company's overall position of cash increased by $1,379 as compared to an increase of $10,827 thousand for the year ended December 31, 2024. This increase can be attributed to the following activities:

Operating activities

The Company's net cash used in operating activities during the year ended December 31, 2025, was $22,907 thousand as compared to $11,711 thousand for the year ended December 31, 2024. The increase is due primarily to the increase in the net loss for the period.

Investing activities

Cash used in investing activities for the year ended December 31, 2025, was $57,019 thousand as compared to $269 thousand used in investing activities during the year ended December 31, 2024.

Financing activities

Cash provided from financing activities for the year ended December 31, 2025, was $81,305 thousand, and was mainly due to the issuance of shares and warrants in the amount of $65,727 thousand, and the exercise of warrants in the amount of $18,433 thousand and proceeds from receipt of loans in the amount of $Nil thousand, offset by repayment of loans in the amount of $808 thousand, and a repayment of a contingent liability in the amount of $Nil thousand. Cash provided from financing activities for the year ended December 31, 2024, was $22,807 thousand, and was mainly due to the issuance of shares and warrants in the amount of $24,435 thousand, and the exercise of warrants in the amount of $576 thousand and proceeds from receipt of loans in the amount of $95 thousand, offset by repayment of loans in the amount of $580 thousand, and a repayment of a contingent liability in the amount of $1,136 thousand.

*Capital Resources*

The Company is an early-stage technology company focused on research and development of its products and currently does not generate significant cash flows from some areas of its operations.

As at December 31, 2025, the Company had an estimated working capital of $72.5 million including a cash balance of $13.5 million.

On January 3, 2024, the Company entered into a securities purchase agreement with certain accredited investors, pursuant to which the Company issued and sold to such investors an aggregate of (i) 1,022,521 common shares, and (ii) warrants to purchase up to up to 511,260 common shares, in a registered direct offering. The common shares were sold at a purchase price of $1.15 per share and accompanying 0.5 of one Warrant, and each warrant to purchase common shares is for an exercise price equal to $1.50 per share, exercisable from the date of issuance, and exercisable for a period of two years from the date of issuance. The gross proceeds from the offering were approximately US$3.2 million, before deducting the offering expenses payable by the Company. The Company paid certain non-US residents fees in connection with the offering, as US$258 thousand in cash, and issued to such persons warrants to purchase 89,802 common shares. Each warrant exercisable into one common share for an exercise price of $1.50 with a two-year term. Such warrants were issued pursuant to an exemption from registration provided by Section 4(a)(2) of the Securities Act for transactions not involving a public offering.

On April 2, 2024, the Company closed a registered direct offering for gross proceeds of approximately $3.3 million, before deducting the offering expenses payable by the Company, at a purchase price of $0.875 per share and issued an aggregate of 3,792,200 common shares in the registered direct offering. The Company also entered into binding agreements to sell 6,842,857 Shares in a private placement, at a purchase price of $0.35 per share. In connection with the registered direct offering, the Company issued certain non-U.S. residents 293,776 common shares as finders fees. These finder fees shares were issued pursuant to an exemption from registration provided by Section 4(a)(2) of the Securities Act, for transactions not involving a public offering and Rule 506(b) promulgated thereunder, as applicable.

On August 12, 2024, the Company closed its previously announced private placement for gross proceeds of approximately $2.4 million, at a purchase price of $0.875 per common share and $0.87475 per pre-funded warrant. The Company issued a total of 1,839,554 common shares and pre-funded warrants to purchase up to 1,200,000 common shares, with each pre-funded warrant having an exercise price of $0.001 per share. Each pre-funded warrant has an exercise price of $0.0025 per share and will expire when exercised in full.

Additionally, certain directors and officers of the Company participated in the registered direct offering and the private placement in an amount of $525 thousand (the "Insider Participation"). The Insider Participation transaction is considered a "related party transaction" within the meaning of Canadian Securities Administrators Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61- 101"). The Company expects to rely on exemptions from the formal valuation and minority approval requirements in sections 5.5(a) and 5.7(1)(a) of MI 61-101 in respect of the Insider Participation.

On September 24, 2024, the Board approved a 1-for-2.5 reverse stock split. Consequently, all share numbers, share prices, and exercise prices have been retroactively adjusted in this report for all periods presented.

On October 2, 2024, the Company closed a registered direct offering, for gross proceeds of approximately $4 million, before deducting the offering expenses payable by the Company, at a purchase price of US$1.875 per share and issued an aggregate of 2,164,000 common shares. The Company paid $325 thousand and issued warrants to purchase up to 21,333 common shares, for an exercise price of $0.75 and a four year term, as finders' fee to a non-US resident in connection with the Registered Direct Offering, which shares were issued pursuant to an exemption from registration provided by Section 4(a)(2) of the Securities Act, for transactions not involving a public offering.

On October 15, 2024, the Company closed a registered direct offering, for gross proceeds of $1.8 million, before deducting the offering expenses payable by the Company, at a purchase price of US$2.80 per share and issued an aggregate of 642,858 common shares The Company paid $144 thousand and issued 51,428 common shares as finders' fee to a non-US resident in connection with the Registered Direct Offering. The Company issued 134,720 common shares to a non-US resident in connection with its offering that closed on October 2, 2024. The finder fees shares were issued pursuant to an exemption from registration provided by Section 4(a)(2) of the Securities Act, for transactions not involving a public offering.

On December 16, 2024, the Company closed a registered direct offering, for gross proceeds of approximately $12.5 million, before deducting the offering expenses payable by the Company, at a purchase price of $6.40 per share and issued an aggregate of 1,947,000 common shares. The Company paid $997 thousand in cash and issued 146,940 common shares as finders' fees to certain non-US and non-Canadian residents in connection with the Registered Direct Offering, which shares were issued pursuant to an exemption from registration provided by Section 4(a)(2) of the Securities Act, for transactions not involving a public offering.

On January 29, 2025, the Company announced the pricing of an underwritten public offering of 3,281,250 common shares at a public offering price of $6.40 per share. The Company concurrently announced the pricing of a registered direct offering of 1,406,250 common shares at a purchase price of $6.40 per share (the "Registered Direct Offering"). The offerings closed on January 29, 2025. The total gross proceeds to the company were $30 million, before deducting underwriting discounts and other offering expenses. Titan Partners Group LLC, a division of American Capital Partners ("Titan Partners"), acted as sole bookrunner for the underwritten public offering. The Company paid $2.4 million in cash toward underwriter discounts and issued to the Underwriter, or its assignees, five-year warrants to purchase up to 229,688 Common Shares with an exercise price of $8.00 per share. The Company also issued 60,650 common shares as finders' fees to a non-US resident in connection with the Registered Direct Offering, which shares were issued pursuant to an exemption from registration provided by Section 4(a)(2) of the Securities Act, for transactions not involving a public offering.

On September 16, 2025, the Company announced the pricing of an underwritten public offering of 5,625,000 common shares at a public offering price of $8.00 per share. The offering closed on September 18, 2025. The total gross proceeds to the company were $45 million, before deducting underwriting discounts and other offering expenses. Titan Partners acted as sole bookrunner for the offering. The Company paid $2.4 million in cash toward underwriter discounts and issued to the Underwriter, or its assignees, five-year warrants to purchase up to 324,625 Common Shares with an exercise price of $10.00 per share. The Company also paid certain non-US residents, not related to the underwriter, $553,000 cash fees in connection with the public offering.

*Short-term borrowings*

Short term borrowing relates to bank loans which will be repaid over the following 12 months. The Company requires short-term borrowing from time to time to accommodate urgent requests from customers that require an initial outlay of cash by the Company.

*Long-term borrowings*

Long-term borrowing relates to bank loans which will be repaid after the following 12 months. Currently, the nature of cash requirements by the Company can fluctuate greatly from year to year as the Company is reliant on a relatively small pool of customers that have shifting needs. As contracts can vary greatly from year to year the Company is sometimes required to take on long term debt.

*No History of Dividends*

Since incorporation, the Company has not paid any cash or other dividends on its Common Shares and does not expect to pay such dividends in the foreseeable future.

**Management of Capital**

The Company's main use for liquidity is to fund the development of its programs and working capital purposes. These activities include staffing, preclinical studies, clinical trials and administrative costs. The primary source of liquidity has been from financing activities to date. The ability to fund operations, to make planned capital expenditures and execute the growth/acquisition strategy depends on the future operating performance and cash flows, which are subject to prevailing economic conditions, regulatory and financial, business and other factors, some of which are beyond the Company's control.

The Company intends to grow rapidly and expand its operations within the next 12 to 24 months. This growth, along with the expectation of operating at a loss for at minimum the next 12 months, will diminish the Company's working capital. However, the financings completed in the first quarter of 2025 have provided the Company with sufficient funds to continue for at least the next 12 months. To the extent that the Company raises further capital, any additional equity financing may be dilutive to investors and debt financing, if available, may involve restrictions on financing and operating activities. There is no assurance that additional financing will be available on terms acceptable to the Company, if at all. If the Company is unable to obtain additional financing as needed, it may be required to and has the ability to reduce the scope of its operations or anticipated expansion.

**OFF BALANCE SHEET ARRANGEMENTS**

There are no off-balance sheet arrangements to which the Company is committed.

**TRANSACTIONS WITH RELATED PARTIES**

Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making operating and financial decisions. This would include the Company's senior Management, who are considered to be key management personnel by the Company.

Parties are also related if they are subject to common control or significant influence. Related parties may be individuals or corporate entities. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties.

**The following transactions arose with related parties (in thousands of US Dollars):**

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Year ended December 31, 2025** | **Year ended December 31, 2025** | **Year ended December 31, 2025** | **Year ended December 31, 2025** | |
|  | **Directors Fees** | **Consulting Fees/Salaries** | **Share based awards** | **Total** | **Amounts owing by (to) as of**<br>**December 31,**<br> **2025** |
| Chairman and former CEO | $- | $578 | $- | $578 | $(61) |
| Director and CEO |  | 1161 | 9035 | 10196 | (63) |
| CFO and director |  | 34 | 8 | 42 | (3) |
| Directors | 21 | - | 21 | 42 | (2) |
|  | $21 | $1773 | $9064 | $10858 | $(129) |

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Year ended December 31, 2024** | **Year ended December 31, 2024** | **Year ended December 31, 2024** | **Year ended December 31, 2024** | |
|  | **Directors Fees** | **Consulting Fees/Salaries** | **Share based awards** | **Total** | **Amounts owing by (to) as of**<br>**December 31,**<br> **2024** |
| Chairman and former CEO | $- | $730 | $- | $730 | $(44) |
| Director and CEO |  | 543 | 249 | 792 | (27) |
| Former CFO |  | 90 |  | 90 |  |
| CFO and director | 14 | 19 | 34 | 67 | (2) |
| Directors | 19 |  | 63 | 82 | (4) |
|  | $33 | $1382 | $346 | $1761 | $(76) |

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Year ended December 31, 2023** | **Year ended December 31, 2023** | **Year ended December 31, 2023** | **Year ended December 31, 2023** | |
|  | **Directors Fees** | **Consulting Fees/Salaries** | **Share based awards** | **Total** | **Amounts owing by (to) as of**<br>**December 31,**<br> **2023** |
| CEO and company controlled by CEO | $- | $1235 | $- | $1235 | $(103) |
| CFO |  | 96 |  | 96 | (9) |
| Directors | 32 | 325 | 263 | 620 | (30) |
|  | $32 | $1656 | $263 | $1951 | $(142) |

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**Financial Instruments and Financial Risk Exposure**

The Company is exposed to a variety of financial risks, which results from its financing, operating and investing activities. The objective of financial risk management is to contain, where appropriate, exposures in these financial risks to limit any negative impact on the Company's financial performance and position.

The Company's financial instruments are its cash, trade and other receivables, payables, other payables and loans. The main purpose of these financial instruments is to raise finance for the Company's operation. The Company actively measures, monitors and manages its financial risk exposures by various functions pursuant to the segregation of duties and principals. The risks arising from the Company's financial instruments are mainly credit risk and currency risk. The risk rate on loans is fixed. The risk management policies employed by the Company to manage these risks are discussed below.

<u>Market risks</u>:

That part of the Company's' business of providing maintenance services of various electronic systems is highly competitive and involves a certain degree of risk. The Company's business operations will depend largely upon the outcome of continued sales and services to security establishments and the commercialization of its products and services currently in development.

The Company's Cust2Mate smart cart platform is new and the Company is aware of competitors in the market. In addition to the regular management oversight and skills required, success in this segment will require the Company to penetrate the market as rapidly as possible.

**Critical Accounting Policies and Estimates**

The areas requiring the use of estimates and critical judgments that may potentially have a significant impact on the Company's earnings and financial position are the useful life of property and equipment and income tax.

**The useful life of property, plant and equipment**

Property and equipment are amortized or depreciated over their useful lives. Useful lives are based on management's estimates of the period that the assets will generate revenue, which are periodically reviewed for continued appropriateness. Changes to estimates can result in significant variations in the amounts charged to the consolidated statement of comprehensive income in specific periods.

**Intangible assets**

An impairment test on capitalized development costs is undertaken whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. The Company evaluates the carrying value of its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability Test includes recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the asset. Where the carrying value of an asset exceeds its recoverable amount (i.e., the higher value in use and fair value less costs to sell), the asset is written down accordingly.

**Impairment of non-financial assets**

Impairment tests on goodwill and other intangible assets with indefinite useful economic lives are undertaken annually at the financial year end. Other non-financial assets are subject to impairment tests whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Where the carrying value of an asset exceeds its recoverable amount (i.e., the higher of value in use and fair value less costs to sell), the asset is written down accordingly.

Where it is not possible to estimate the recoverable amount of an individual asset, the impairment test is carried out on the smallest group of assets to which it belongs for which there are separately identifiable cash flows; its cash generating units ('CGUs'). Goodwill is allocated on initial recognition to each of the Company's CGUs that are expected to benefit from a business combination that gives rise to the goodwill.

Impairment charges are included in profit or loss, except to the extent they reverse gains previously recognized in other comprehensive income. An impairment loss recognized for goodwill is not reversed.

**Goodwill**

Goodwill arising on the acquisition of a subsidiary represents the excess of the cost of acquisition over the Company's interest in the net fair value of the identifiable assets, liabilities and Contingent liabilities of the subsidiary or jointly controlled entity recognized at the date of acquisition. Goodwill is initially recognized as an asset at cost and is subsequently measured at cost less any accumulated impairment losses.

**Derivative liability - Warrants**

The Company uses the Black-Scholes option-pricing model to estimate fair value at each reporting date. The key assumptions used in the model are the expected future volatility in the price of the Company's shares and the expected life of the warrants.

**Determining the fair value of share-based payment transactions:**

The fair value of share-based payment transactions is determined upon initial recognition by the Binomial model. The Binomial model is based on share price and exercise price and assumptions regarding expected volatility, term of share option, dividend yield and risk-free interest rate.

**CURRENT SHARE DATA**

A2Z is authorized to issue an unlimited number of Common Shares. As of the date of this MD&A there were 44,545,009 Common Shares issued and outstanding. In addition, the following warrants and options were outstanding:

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| | | | |
|:---|:---|:---|:---|
| **Outstanding as of**<br> **the date of this report**  |  | **Date of expiry** | **Exercise price USD** |
| 88440 | Warrants | April 18, 2026 | $22.75 |
| 433825 | Warrants | May 28, 2026 | $22.75 |
| 3200 | Warrants | October 2, 2026 | $1.88 |
| 183751 | Warrants | January 29, 2030 | $8.00 |
| 324625 | Warrants | September 16, 2030 | $10.00 |
| 20000 | Options | June 3, 2026 | $15.32 |
| 6670 | Options | October 28, 2026 | $14.59 |
| 360000 | Options | August 2, 2032 | $6.49 |
| 120000 | Options | August 21, 2032 | $7.30 |
| 320000 | Options | January 4, 2033 | $3.01 |
| 40000 | Options | November 25, 2027 | $3.67 |
| 99000 | Options | April 18, 2033 | $2.92 |
| 441000 | Options | August 14, 2033 | $6.40 |
| 105000 | Options | January 15, 2035 | $3.67 |
| 500000 | Options | February 2, 2035 | $2.92 |
| 30000 | Options | June 20, 2035 | $1.775 |
| 187000 | Options | June 20, 2035 | $6.40 |
| 224000 | Options | October 9, 2035 | $8.00 |
| 500000 | Options | December 30, 2035 | $6.00 |
| 1250500 | Options | December 30, 2035 | $8.00 |
| 25000 | Options | March 27, 2036 | $8.00 |
| 5262011 |  |  |  |

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**<u>Research and Development, Patents and Licenses etc.</u>**

Our success and ability to compete depend substantially upon our core technology and intellectual property rights. We generally rely on patent, trademark and copyright laws, trade secret protection and confidentiality agreements to protect our intellectual property rights. In addition, we generally require employees and consultants to execute appropriate nondisclosure and proprietary rights agreements. These agreements acknowledge our exclusive ownership of intellectual property developed for us and require that all proprietary information remain confidential.

As of December 31, 2025, five of our patent applications were protected through pending applications. We file patent applications in the United States and, when appropriate, certain other countries for inventions that we consider significant.

In addition to patents, we also possess other intellectual property, including trademarks, know-how, trade secrets, design rights and copyrights. We control access to and use of our software, technology and other proprietary information through internal and external controls, including contractual protections with employees, contractors, customers and partners. Our software is protected by U.S. and international copyright, patent and trade secret laws. Despite our efforts to protect our software, technology and other proprietary information, unauthorized parties may still copy or otherwise obtain and use our software, technology and other proprietary information. In addition, we have expanded our international operations, and effective patent, copyright, trademark and trade secret protection may not be available or may be limited in foreign countries.

Companies in the industry in which we operate frequently are sued or receive informal claims of patent infringement or infringement of other intellectual property rights. We may receive such claims from companies, including from competitors and customers, some of which have substantially more resources and have been developing relevant technology similar to ours. As and if we become more successful, we believe that competitors will be more likely to try to develop products that are similar to ours and that may infringe on our proprietary rights. It may also be more likely that competitors or other third parties will claim that our products infringe their proprietary rights. Successful claims of infringement by a third party, if any, could result in significant penalties or injunctions that could prevent us from selling some of our products in certain markets, result in settlements or judgments that require payment of significant royalties or damages or require us to expend time and money to develop non-infringing products. We cannot assure you that we do not currently infringe, or that we will not in the future infringe, upon any third-party patents or other proprietary rights, but will not and have never done so intentionally.

**ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES**

**A. Directors and Senior Management**

The following sets forth certain information relating to our directors and senior management. The business address for our directors and senior management is c/o 1600 - 609 Granville Street Vancouver, British Columbia, Canada V7Y 1C3. Each director's term will expire at the next annual meeting of shareholders.

 

**Bentsur Joseph, 66,** was the President and Chief Executive Officer of the Company from December 18, 2019 until April 18, 2024, and a Director and Chairman of the Board of the Company from December 18, 2019 until December 31, 2025, as well as the President and Chief Executive Officer of A2ZMS since 1998. Effective December 31, 2025, Mr. Joseph resigned from all his roles held with the Company and all our subsidiaries. Prior to joining A2Z, between 1999 and 2001, Mr. Joseph served as the Chairman of Elad Hotels – Part of the Isaac Tshuva group of companies. Prior thereto, between 2001 and 2003, Mr. Joseph served as the CEO of DIG Ltd., a public company which produces and sells electric components through the biggest shops and chain stores all over Israel. Prior thereto, Mr. Joseph served as a director of MARLAZ, a large well recognized public holding company which owns various publicly traded companies in the industrial, real estate, communication, and hi-tech industries. Mr. Joseph holds an Electronic field-engineer degree from Israeli Air-Force unit and Project Management Diploma from Tel-Aviv University.

**Reeves Ambrecht, 48,** was appointed to serve on the board of directors on April 14, 2024. Mr. Ambrecht presently serves as Managing Partner of RDA Enterprises, LLC and as Managing Director of Stillwater Asset Management. Prior to that, he served as Managing Director at The Debt Exchange, where he advised financial institutions on portfolio management and liquidity needs. Mr. Ambrecht began his career as a licensed real estate associate with Cushman & Wakefield where he advised commercial tenants regarding real estate strategies.

**Alan Rootenberg, 73,** has served on the board of directors since May 2020, and was appointed as Chief Financial Officer on August 12, 2024. Mr. Rootenberg is a chartered professional accountant who has served as the Chief Financial Officer of a number of publicly traded companies listed on the TSX, TSXV, OTCBB and CSE. These companies include mineral exploration, mining, technology and companies in the cannabis industry. These companies are: BioHarvest Sciences Inc. (since November 2018); Eco (Atlantic) Oil & Gas Ltd. (since November 2011); Osino Resources Corp. (since June 2018); Empower Clinics Inc. (from August 2013 to May 2018) Solvbl Solutions Inc. since February 2021. Mr. Rootenberg has a Bachelor of Commerce degree from the University of the Witwatersrand in Johannesburg, South Africa and received his professional designation in both South Africa and Ontario, Canada.

**Yonatan de Jongh, 43,** has served on the board of directors since February 2021. Yonatan de Jongh presently serves as Senior Manager of Revenues and Billing at DraftKings Inc. Mr. de Jongh holds a Bachelor and Master degree in Business Administration and Accounting from College of Management (Rishon Lezion, Israel) from 2015.

**Gadi Graus, 60,** has served on the board of directors since January 6, 2023 and as interim Chairman since January 1, 2026. On April 18, 2024, Mr. Graus was appointed as Chief Executive Officer of the Company. Prior to joining the Company, Mr. Graus was a senior partner at Shibolet & Co., Law Offices, one of Israel's largest law firms. He also serves as a director and Chief Executive Officer of Cust2Mate, one of the Company's subsidiaries. Mr. Graus has an LLB from Hebrew University, Jerusalem, Israel and an MBA from the Kellogg - Recanati program (Tel-Aviv University and Northwestern University).

**Adi Vazan, 44,** has served on the board of directors since July 7, 2023. Mr. Vazan is an experienced entrepreneur and accomplished senior executive, with extensive and diverse experience in managing companies and organizations, with understanding of both the technological and business aspects inherent in the Company's activities. Mr. Vazan has a BA in economics and logistics from Bar Ilan University, Israel and an MBA from the Lev Academy, Jerusalem, Israel.

The participation of the directors and senior management of the Company in publicly traded issuers at the date of this Annual Report is described in the following table:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Name** | **Name of**<br> **Reporting Issuer** | **Name of**<br> **Exchange or Market** | **Position** | **From** | **To** |
| Alan Rootenberg | Solvbl Solutions Inc. | CSE | CFO | February 2021 | Present |
|  | A2Z Cust2Mate Solutions Corp. | Nasdaq | Director and CFO | May 2020 (director) and August 2024 (CFO) | Present |
|  | BioHarvest Sciences Inc. | CSE | CFO | November 2018 | Present |
|  | Clearmind Medicine Inc. | CSE | Director and CFO | December 2019 | Present |
|  | Eco (Atlantic) Oil & Gas Ltd | TSXV | CFO | November 2011 | Present |

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**B. Compensation**

The following table is a summary of compensation paid to senior management for the financial year ended December 31, 2025:

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| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | | | | **Non-equity incentive plan compensation ($) (USD)** | **Non-equity incentive plan compensation ($) (USD)** | | | |
| <br>**Name and principal position** |<br>**Salary ($)**<br> **(USD)** |<br>**Share-based awards ($) (1)**<br> **(USD)** |<br>**Option-based awards ($)**<br> **(USD)** | **Annual incentive plans** | **Long-term incentive plans** |<br>**Pension value ($)**<br> **(USD)** |<br>**All other compensation ($)**<br> **(USD)** |<br>**Total compensation ($)**<br> **(USD)** |
| Bentsur Joseph – Former CEO \* | 578000 |  |  |  |  |  |  | 578000 |
| Alan Rootenberg –CFO | 34000 |  | 8100 |  |  |  |  | 42100 |
| Gadi Graus - CEO | 1161000 | 2971000 | 6064000 |  |  |  |  | 10196000 |

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**\*** *resigned effective April 18, 2024*

&nbsp;&nbsp;&nbsp;&nbsp;(1) Fair value of restricted
 share units granted during the year, based on the closing price of the Company's shares at day of grant.

**<u>Services Agreement with Mida Consulting and Investments Ltd.</u>**

On January 1, 2020, the Company and Mida Consulting and Investments Ltd. ("Mida") entered into a services agreement wherein the Company wished to retain the services of Bentsur Joseph through Mida. Bentsur Joseph holds a controlling interest of Mida. In the Services Agreement, Mr. Joseph has agreed to act as the Company's Chairman. Mr. Joseph will be compensated a sum of NIS 150,000, plus VAT, per month. Mr. Joseph is entitled to receive reimbursement for all direct and indirect expenses incurred in connection with his automobile. The services agreement has an unlimited term. Both parties are entitled to terminate the Services Agreement for any reason, or no reason, by giving the other party prior written notice of 90 days. On July 1, 2024, the Company and the Company's chairman agreed that the fees due for the consulting agreement would be reduced to NIS100,000 per month (approx. $26,500).

On February 1, 2022, the Company's subsidiary Isramat and Mida entered into a services agreement wherein Isramat wished to retain the services of Bentsur Joseph through Isramat. Bentsur Joseph holds a controlling interest of Mida. In the services agreement, Mr. Joseph has agreed to provide consulting services to the Company. Mr. Joseph will be compensated a sum of NIS 100,000, plus VAT, per month. Mr. Joseph is entitled to receive reimbursement for all direct and indirect expenses incurred in connection with his automobile. The services agreement has an unlimited term. Following 24 months from the date of entry into the agreement, both parties are entitled to terminate the Services Agreement for any reason, or no reason, by giving the other party prior written notice of 30 days.

**<u>Agreement with Alan Rootenberg</u>**

On August 10, 2024, the Company and Mr. Rootenberg entered into a consulting agreement (the "Services Agreement") wherein the Company wished to retain the services of Mr. Rootenberg as its Chief Financial Officer. Pursuant to the Services Agreement, Mr. Rootenberg agreed to act as the Company's Chief Financial Officer. Mr. Rootenberg will be compensated a sum of CAD 4,000, plus Canadian G.S.T, per month. Mr. Joseph is entitled to receive reimbursement for all direct and indirect expenses incurred in connection with his promotion of the Company, or in providing consulting services to the Company. The Services Agreement has an initial term of 1 year (the Initial Term). Both parties are entitled to terminate the Services Agreement for any reason, or no reason, by giving the other party prior written notice of one (1) month. Unless the Company or Mr. Rootenberg has provided notice to the other at least one (1) month prior to the end of the Initial Term, upon completion of the Initial Term, the Services Agreement shall automatically be renewed and shall continue until terminated by either the Company or Mr. Rootenberg in accordance with the terms of the Services Agreement.

**<u>Agreements with Gadi Graus</u>**

On August 4, 2022, the Company issued Mr. Gadi Graus with: (i) 160,000 RSUs, of which 40,000 vest immediately and 120,000 vest in three equal annual instalments with the first instalment vesting on August 2, 2023; (ii) 360,000 Options to purchase common shares of the Company with exercise price of CDN$8.9, of which 90,000 vest immediately and the remainder in 6 equal instalments every six months, with the first instalment on February 2, 2023. The options can be exercised until August 2, 2032. RSUs and Options were issued in accordance with the Company's stock option plan under the 102 Equity Grant route.

On November 1, 2022, the Company's subsidiary Cust2mate and Gadi Graus entered into an employment agreement, under which Gadi Graus will serve as President of the Company and of Cust2mate. Mr. Graus will receive a gross monthly salary of NIS45,000, payments for his use of a car, plus customary social and ancillary payments. Bonuses to be paid at the discretion of the board of directors of the Company. The employment agreement has an unlimited term. Both parties are entitled to terminate the Employment Agreement for any reason, or no reason, by giving the other party prior written notice of 3 months. If Cust2mate notifies that it is terminating the employment (except for cause) before the lapse of 24 months, Mr. Graus will be entitled to paid gardening leave of 9 months; If Cust2mate notifies that it is terminating the employment after the lapse of 24 months, but before the lapse of 36 months Mr. Graus will be entitled to paid gardening leave of 6 months; If Cust2mate notifies that it is terminating the employment after the lapse of 36 months Mr. Graus will be entitled to paid gardening leave of 3 months.

On January 4, 2023, the Company issued Mr. Gadi Graus with 100,000 RSUs, which will vest after the lapse of 12 months. The RSUs were issued in accordance with the Company's stock option plan under the 102 Equity Grant route.

On April 18, 2024, Gadi Graus was appointed as Chief Executive Officer of the Company.

On August 14, 2024, the Company issued Mr. Gadi Graus with: (i) 140,000 RSUs, vested immediately. The RSUs were issued in accordance with the Company's stock option plan under the 102 Equity Grant route.

On November 8, 2024, the company approved the updated monthly salary for Mr. Graus of $50,000 plus social benefits, as well as a one-time bonus of $150,000.

On February 12, 2025, the Company issued Mr. Gadi Graus with: (i) 500,000 share options to purchase Common Shares with an exercise price of $6.40 per share, vesting immediately and expiring on February 2, 2035.

On February 12, 2025, the Company granted Mr. Gadi Graus 400,000 RSUs pursuant to the Company's RSU plan and in acknowledgement of the Company's recent success and future workload. The RSUs will vest upon the Company entering into one or more agreements for the binding supply of at least 10,000 smart carts.

On December 28, 2025, the Company granted Mr. Gadi Graus 500,000 RSUs pursuant to the Company's RSU plan and in acknowledgement of the Company's recent success and future workload. The RSUs will vest upon the Company entering into one or more agreements for the binding supply of at least 30,000 smart carts.

On December 30, 2025, the Company issued Mr. Gadi Graus with: (i) 500,000 share options to purchase Common Shares with an exercise price of $8.00 per share, vesting immediately and expiring on December 30, 2037.

**Incentive Plan Awards**

***Outstanding share-based awards and option-based awards***

 ****

The following table is a summary of option awards granted to the Named Executive Officers that were outstanding as at December 31, 2025.

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Option-based Awards** | **Option-based Awards** | **Option-based Awards** | **Option-based Awards** |
| <br>**Name** | **Number of**<br> **securities**<br> **underlying**<br> **unexercised**<br> **options (#)** | **Option exercise price ($)** | **Option expiration date** | **Value of**<br> **unexercised**<br> **in-the-money**<br> **options ($)(1)** |
| Alan Rootenberg | 12000 | 1.78 | August 14, 2034 | 56760 |
| Yonatan de Jongh | 10000 | 1.78 | August 14, 2034 | 47300 |
| Yonatan de Jongh | 6671 | 14.59 | October 28, 2026 | Nil |
| Adi Vazan | 10000 | 1.78 | August 14, 2034 | 47300 |
| Reeves Ambrecht | 10000 | 1.78 | August 14, 2034 | 47300 |
| Gadi Graus | 360000 | 6.19 | August 2, 2032 | 115200 |
| Gadi Graus | 500000 | 6.40 | February 12, 2035 | 55000 |
| Gadi Graus | 500000 | 8.00 | December 30, 2035 | Nil |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) Calculated
 based on the difference between the closing price of $6.51 per Common Share as at December
 31, 2025, and the exercise price of the options, multiplied by the number of unexercised
 options.

***Value Vested or Earned During the Year ended December 31, 2025***

---

| | | | |
|:---|:---|:---|:---|
| **Name** | **Option – based**<br> **awards – Value**<br> **vested during**<br> **the year**<br> **($)(USD)** | **Share-based**<br> **awards – Value**<br> **vested during**<br> **the year**<br> **($)** | **Non-equity**<br> **incentive plan**<br> **compensation –**<br> **Value earned**<br> **during the year**<br> **($)** |
| Gadi Graus | $6064000 | $2971000 |  |
| Alan Rootenberg | $8100 | $- |  |
| Yonatan de Jongh | $6750 | $- |  |
| Adi Vazan | $6782 | $- |  |
| Reeves Ambrecht | $6750 | $- |  |

---

**Pension Plan Benefits**

No benefits were paid, and no benefits are proposed to be paid to any of the Named Executive Officers under any pension or retirement plan, other than what has been specified above.

**Directors Compensation**

***Director Compensation Table***

 ****

The following table is a summary of compensation paid to the directors of the Company, other than: (i) directors who are members of senior management; and (ii) directors who were appointed during the fiscal year 2025 who did not receive any compensation from the Company in any other role during fiscal 2025, for the year ended December 31, 2025:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Name and principal position** | **Year** | **Fees earned**<br> **($)**<br> **(USD)** | **Share-based awards**<br> **($)**<br> **(USD)** | **Option- based awards**<br> **($)**<br> **(USD)** | **Total compensation**<br> **($)**<br> **(USD)** |
| Yonatan de Jongh - Director | 2024 | 12000 | 7100 | 16500 Nil | 35600 |
|  | 2025 | 10500 |  | 6750 Nil | 17250 |
| Reeves Ambrecht - Director | 2024 | Nil | 7100 | 16500 Nil | 23600 |
|  | 2025 | Nil |  | 6750 Nil | 6750 |
| Adi Vazan - Director | 2024 | 12000 | 7100 | 16500 Nil | 35600 |
|  | 2025 | 10500 |  | 6782 Nil | 17282 |

---

 ****

 ****

***Incentive Plan Awards – Value Vested or Earned During the Year***

---

| | | | |
|:---|:---|:---|:---|
| **Name** | **Option – based**<br> **awards –Value**<br> **vested during**<br> **the year**<br> **($)**<br> **(USD)** | **Share-based**<br> **awards–Value**<br> **vested during**<br> **the year**<br> **($)** | **Non-equity**<br> **incentive plan**<br> **compensation–Value**<br> **earned during**<br> **the year**<br> **($)** |
| Yonatan de Jongh |  |  |  |
| Reeves Ambrecht |  |  |  |
| Adi Vazan |  |  |  |

---

**Clawback Policy**

On November 22, 2023, the Board adopted the A2Z Cust2Mate Solutions Corp. Clawback Policy (the "Clawback Policy"), effective December 1, 2023, providing for the recovery of certain incentive-based compensation from current and former executive officers of the Company in the event the Company is required to restate any of its financial statements filed with the SEC under the Exchange Act in order to correct an error that is material to the previously-issued financial statements, or that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period. Adoption of the Clawback Policy was mandated by new Nasdaq listing standards introduced pursuant to Exchange Act Rule 10D-1. The Clawback Policy is in addition to Section 304 of the Sarbanes-Oxley Act of 2002 which permits the SEC to order the disgorgement of bonuses and incentive-based compensation earned by a registrant issuer's chief executive officer and chief financial officer in the year following the filing of any financial statement that the issuer is required to restate because of misconduct, and the reimbursement of those funds to the issuer. A copy of the Clawback Policy has been filed herewith as Exhibit 97.1.

**C. Board Practices**

**Committees of the Board of Directors**

The Board of Directors discharges its responsibilities directly, as well as indirectly through the Audit Committee, the Compensation Committee and the Nominating Committee. Each director's term expires at the next annual meeting of shareholders or until their respective successors are elected or appointed.

*Audit Committee*

 

The mandate of the Audit Committee is formalized in a written charter. The members of the Audit Committee are Messrs. Reeves Ambrecht (Chairperson), Adi Vazan and Yonatan de Jongh. The Audit Committee members have been determined by the Board to be "independent" (as such term is defined in NI 52-101) and "financially literate" (as such term is defined in NI 52-110), having the ability to understand and critically evaluate the financial statements of the Company. The Board made this determination based on the experience of each Audit Committee member. The Audit Committee's primary objective is to assist the Board in fulfilling its oversight responsibilities to: (i) review financial reports and financial information provided to any regulatory authority or provided for release to the public and the Company's shareholders; (ii) review the Company's disclosure control systems; (iii) review the Company's internal control systems with respect to finance, accounting and legal compliance; and (iv) review the Company's accounting and financial reporting processes.

The Audit Committee has not adopted formal policies and procedures for the engagement of non-audit services. Subject to the requirements of the NI 52-110, the engagement of non-audit services is considered by, as applicable, the Board and the Committee, on a case-by-case basis.

*Compensation Committee*

The members of the Compensation Committee are Messrs. Reeves, Adi Vazan and de Jongh (Chairperson). The purpose of the Compensation Committee is to assist the Board in fulfilling its oversight responsibilities with respect to compensation of members of the Board and the executive officers of the Company.

*Nominating Committee*

 

The members of the Nominating Committee are Messrs. Reeves (Chairperson), Adi Vazan and de Jongh. The purpose of the Nominating Committee is to assist the Board in fulfilling its oversight responsibilities with respect to nomination of members of the Board.

**D. Employees**

The Company had 122 employees, 119 are located in Israel, as of the date of this annual report. The Company's Cust2Mate division has 81 employees (directly or through a dedicated subcontractor) and the Company's subsidiary, Isramat, has 38 employees.

**E. Share Ownership**

See Item 6.B. - "Compensation" and Item 7 - "Major Shareholders and Related Party Transactions."

**Stock Option Plan**

The purpose of the Company's stock option plan (the "Stock Option Plan") is to attract, retain and motivate directors, officers, employees and consultants (the "Option Plan Eligible Persons") by providing them with the opportunity, through stock options, to acquire a proprietary interest in the Company and benefit from its growth. The maximum number of common shares which may be issued under options granted under this Stock Option Plan, from time to time, shall be equal to ten percent (10%) of the outstanding shares of the Company less the aggregate number of shares reserved for issuance or issuable under any other Security Based Compensation Plan (as defined therein) of the Company. Pursuant to the Stock Option Plan, the maximum number of common shares reserved for issuance in any 12-month period to any one optionee other than a consultant may not exceed 5% of the issued and outstanding common shares at the date of the grant. The maximum number of common shares reserved for issuance in any 12-month period to any consultant may not exceed 2% of the issued and outstanding common shares at the date of the grant and the maximum number of common shares reserved for issuance in any 12-month period to all persons engaged in investor relations activities may not exceed 2% of the issued and outstanding number of common shares at the date of the grant.

Subject to the discretion of the Board, if any Option Plan Eligible Person ceases to be an Option Plan Eligible Persons for any reason, other than for cause or death, the options held by such person will terminate on the earlier of (i) the expiry date of the option; and (ii) ninety (90) days from the date such person ceases to be an Option Plan Eligible Person. The Option Plan Eligible Person may exercise any option issued under the Stock Option Plan that is then exercisable at any time within that period unless an existing agreement between the Option Plan Eligible Person and the Company provides for a different period.

In the event that an Option Plan Eligible Person ceases to be an Option Plan Eligible Person because of termination for cause, the options of the Option Plan Eligible Person not exercised at such time shall immediately be cancelled on the date of such termination. In the event of the death of a Participant during the term of the Option Plan Eligible Person's option, the option theretofore granted to the Option Plan Eligible Person shall be exercisable by the Option Plan Eligible Person's heirs or administrators within the period of one (1) year succeeding the Option Plan Eligible Person's death.

A copy of the Company's Stock Option Plan is incorporated by reference into this Form 20-F.

**RSU Plan**

On April 22, 2021, the Company's shareholders adopted a Restricted Share Unit Plan ("RSU Plan"). The purpose of the RSU Plan is to advance the interests of the Company by: (i) providing eligible persons with incentives; (ii) rewarding performance by participants; (iii) increasing the proprietary interest of participants in the success of the Company; (iv) encouraging participants to remain with the Company or its affiliates; (v) attracting new directors, employees, officers and consultants; and; (vi) aligning the interests of the participants with those of the shareholders of the Company. The RSU Plan is administered by the Board and the administration can be delegated to a committee and/or to any member thereof. The Company is responsible for all costs related to the administration of the RSU Plan. All defined terms herein have the meaning of the term as defined in the RSU Plan.

The RSU Plan entitles a director, officer, employee or consultant of the Company or any of its affiliates and any such person's personal holding company ("Eligible Person"), as designated by the Board in a resolution, to receive a Restricted Share Unit ("Restricted Share Units" or "RSUs"), granted or credited to a Participant's notional account pursuant to the terms of the RSU Plan. The maximum aggregate number of common shares issuable under the RSU Plan is 3,424,501 common shares. Participants of the RSU Plan who are residents of Israel are subject to the sub plan.

The RSUs are subject to several limitations discussed below:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the aggregate number of RSUs and the options issued under Company's stock option plan) (together: "Security Based Compensation Plans") granted to any one Eligible Person (and companies wholly owned by that Eligible Person) in a 12-month period must not exceed 5% of the shares, calculated on the date an RSU is granted to the Eligible Person, unless the Company has obtained the requisite approval of a majority of shareholders of the Company voting at a duly called and held meeting of the shareholders, excluding votes of Insiders to whom RSUs may be granted under the Plan ("Disinterested Shareholder Approval");

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the aggregate number of RSUs and all other Security Based Compensation Plans granted to Insiders, as a group, (and companies wholly owned by Insiders) at any time must not exceed 10% of the shares, unless the Company has obtained the requisite Disinterested Shareholder Approval;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) the aggregate number of RSUs and all other Security Based Compensation Plans granted to Insiders, as a group, (and companies wholly owned by Insiders) in a 12-month period must not exceed 10% of the shares, calculated on the date an RSU or other Security Based Compensation is granted to Insiders, unless the Company has obtained the requisite Disinterested Shareholder Approval;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) the aggregate number of RSUs and all other Security Based Compensation Plans granted to any one Consultant in a 12-month period must not exceed 2% of the shares of the Company, calculated at the date an RSU is granted to the Consultant; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) persons involved in Investor Relations Activities are not eligible to receive Restricted Share Units.

All RSUs shall vest on the earlier of (i) the date of which the criteria established by the Board in respect of each RSU grant, if any, which, without limitation, may include criteria based on the financial performance of the Company and/or any Affiliate ("Performance Criteria") is achieved, if applicable, or (ii) the third (3<sup>rd</sup>) anniversary of the Date of Grant provided the Participant is continuously employed by or in service with the Company, or any of its Affiliates, from the Date of Grant until such Vesting Date. RSUs may be granted as dividend equivalents and these shall vest simultaneously with the RSUs to which they relate.

As of December 31, 2025, there were 1,430,000 RSUs outstanding to purchase common shares, of which 930,000 have vested as of this date.

**ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS**

&nbsp;&nbsp;&nbsp;&nbsp;**A.** **Major Shareholders.** 

**Security Ownership**

The following table sets forth information relating to the beneficial ownership of our shares as of March 31, 2026, by:

● each
 person or group who is known by us to own beneficially more than 5% of our common shares;

● each
 of our directors; and

● each
 of our named executive officers.

Beneficial ownership is determined in accordance with SEC rules. The information is not necessarily indicative of beneficial ownership for any other purpose. In general, under these rules a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise has or shares voting power or investment power with respect to such security. A person is also deemed to be a beneficial owner of a security if that person has the right to acquire beneficial ownership of such security within 60 days. Except as otherwise indicated, and subject to applicable community property laws, the persons named in the table have sole voting and investment power with respect to all shares held by that person.

The Company's major shareholders do not have different voting rights.

The percentage of voting shares beneficially owned is computed on the basis of 44,545,009 shares outstanding as of the date of this Annual Report.

---

| | | |
|:---|:---|:---|
| | **Common Shares** | **Common Shares** |
| <br>**Name of beneficial owner** | **Number of**<br> **shares** | **Percentage of**<br> **shares** |
| **Named executive officers and directors:** |  |  |
| Reeves Ambrecht(1) | 46827 | \* |
| Alan Rootenberg (2) | 29833 | \* |
| Yonatan de Jongh(3) | 18004 | \* |
| Gadi Graus (4) | 2371428 | 5.3% |
| Adi Vazan(5) | 7333 | \* |
| **Over 5% shareholders:** |  |  |
| Bentsur Joseph | 2403818 | 5.4% |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) Includes
 3,333 options.

&nbsp;&nbsp;&nbsp;&nbsp;(2) Includes
 4,000 options.

(3) Includes 10,004 options.

(4) Includes 1,360,000 options.

(5) Includes 3,333 options

\* Less than 1%

**Significant Changes in Ownership**

We are not aware of significant changes in ownership of our shares by these shareholders during the past three fiscal years.

**Record Holders**

Based upon a review of the information provided to us by our transfer agent, as of March 31, 2026, there were a total of 4,046 holders of record of our shares, of which 208 are located in Canada and 31 are located in the United States.

&nbsp;&nbsp;&nbsp;&nbsp;**B.** **Related Party Transactions** 

To the knowledge of the Company, other than as immediately described below, no director or executive officer of the Company or any of the Company's subsidiaries, and no person or company who beneficially owns, directly or indirectly, or otherwise exercises control over more than 10% of the voting rights of the Company, or any proposed director, and no associate or affiliate of the foregoing persons, has had any material interest, direct or indirect, in any transaction within the Company's three most recently completed financial years or any proposed transaction which has materially affected or would materially affect the Company or any of its subsidiaries within the three most recently completed financial years.

The Company's former Chairman, Bentsur Joseph, participated in the private placements closed on November 28, 2022, and on August 14, 2024, in the aggregate amount of $750 thousand, and $340 thousand, respectively, on the same terms and conditions as all other participants.

The Company's Chief Executive Officer, Gadi Graus, participated in the private placements closed on April 4, 2024, and on August 14, 2024, in the aggregate amount of $105 thousand, and $80 thousand, respectively, on the same terms and conditions as all other participants.

On June 30, 2025, the Company entered into a share purchase agreement (the "A2ZMS Agreement") pursuant to which it sold its wholly owned subsidiary A2ZMS Advanced Military Solutions Ltd., a company organized under the laws of Israel ("A2ZMS"), to a purchaser residing in Israel for a purchase price of 500,000 ILS. The purchaser is related to a director of the Company. The A2ZMS Agreement was approved by all of the independent directors of the Company. The Company received an independent valuation of A2ZMS in connection with this transaction. See also note 31.

**The following transactions arose with related parties:**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Year ended December 31, 2025** | **Year ended December 31, 2025** | **Year ended December 31, 2025** | **Year ended December 31, 2025** | |
|  | **Directors Fees** | **Consulting Fees/Salaries** | **Share based awards** | **Total** | **Amounts owing by (to) as of**<br>**December 31,**<br> **2025** |
| Former Chairman and CEO | $- | $578 | $- | $578 | $(61) |
| Director and CEO |  | 1161 | 9035 | 10196 | (63) |
| CFO and director |  | 34 | 8 | 42 | (3) |
| Directors | 21 |  | 21 | 42 | (2) |
|  | $21 | $1773 | $9064 | $10858 | $(129) |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Year ended December 31, 2024** | **Year ended December 31, 2024** | **Year ended December 31, 2024** | **Year ended December 31, 2024** | |
|  | **Directors Fees** | **Consulting Fees/Salaries** | **Share based awards** | **Total** | **Amounts owing by (to) as of**<br>**December 31,**<br> **2024** |
| Former Chairman and CEO | $- | $730 | $- | $730 | $(44) |
| Director and CEO |  | 543 | 249 | 792 | (27) |
| Former CFO |  | 90 |  | 90 |  |
| CFO and director | 14 | 19 | 34 | 67 | (2) |
| Directors | 19 |  | 63 | 82 | (4) |
|  | $33 | $1382 | $346 | $1761 | $(76) |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Year ended December 31, 2023** | **Year ended December 31, 2023** | **Year ended December 31, 2023** | **Year ended December 31, 2023** | |
|  | **Directors Fees** | **Consulting Fees/Salaries** | **Share based awards** | **Total** | **Amounts owing by (to) as of**<br>**December 31,**<br> **2023** |
| Director and CEO | $- | $- | $- | $- | $462 |
| Company controlled by CEO |  | $1235 | $- | $1235 | $(103) |
| CFO |  | 96 |  | 96 | (9) |
| Directors | 32 | 325 | 263 | 620 | (30) |
|  | $32 | $1656 | $263 | $1951 | $(142) |

---

On September 30, 2023, the Company entered into a Share Purchase Agreement (the "Agreement") with Shelfie-Tech Ltd. ("Shelfie") an Israeli company organized under the laws of the State of Israel, developing an innovative patented technology, a robotic retail shelf monitoring system using advanced machine learning and image processing algorithms to automatically optimize inventory management. At the closing and upon the terms and conditions set forth in the Agreement, the Company invested $158 in cash, in exchange for 237,897 ordinary shares, NIS 0.001 par value of Shelfie (the "Shelfie Shares") based on a price per share of $0.66, during the year 2024, the Company invested $42 in cash, in exchange for 65,548 ordinary shares, NIS 0.001 par value of Shelfie based on a price per share of $0.65, resulting in the Company holding 1.3% of the issued and outstanding shares of Shelfie. As of December 31, 2025, fair value of the Shelfie Shares is $333 and the Company has recorded a financial gain in the amount of $123 for the year ended December 31, 2025.

The Company's former Chairman, Bentsur Joseph, serves as the Chief Executive Officer of Shelfie.

**Director Indemnity Agreements**

On March 17, 2025, the Company entered into several director indemnity agreements (the "DIAs") with the directors of the Company. The DIAs are subject to all applicable laws, including the applicable limitations and restrictions set forth in the BCBCA. The following material points must be read in conjunction with the form of indemnity agreement which is included as an exhibit in this Annual Report. Pursuant to the DIA, the Company will:

● indemnify and hold harmless the director against and from any and all losses (as such term is defined in the form of indemnity agreement which is included as an exhibit to this Annual Report), which may be reasonably suffered, sustained, incurred or be required to pay in respect of any claim (as such term is defined in the form of indemnity agreement which is included as an exhibit to this Annual Report) if the director acted honestly and in good faith with a view to the best interests of the Company, and if in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, the director has reasonable grounds to believe their conduct was lawful;

● gross up any indemnity payment made pursuant to the DIAs by the amount of any income tax payable by the Directors in respect of that payment; and

● indemnify the directors for the amount of all costs they incur in obtaining any Court approval required to enable or require the Company to make a payment to them under the DIAs, or enforce the DIAs against the Company, including without limitation legal fees and disbursements on a full indemnity basis.

Notwithstanding the above, the Company will have no obligation to indemnify or save harmless the directors in respect of any liability for which they are entitled to indemnity pursuant to any valid and collectible policy of insurance obtained and maintained by the Company, to the extent of the amounts actually collected by the directors under the insurance policy.

**C. Interests of Experts and Counsel**

Not applicable.

**ITEM 8. FINANCIAL INFORMATION**

**A. Consolidated Financial Statements and Other Financial Information**

See Item 18. — "Financial Statements."

**A.7 Legal Proceedings**

As of the date of this Annual Report, the Company is not aware of any existing or contemplated legal proceedings material to the Company, to which the Company is, or was, a party or of which any of its property is, as of the date of this Annual Report was subject.

**A.8 Dividend Policy**

The Company has never declared or paid cash dividends on its common shares. Any future dividend payment will be made at the discretion of the Board, and will depend upon, among other factors, earnings, capital requirements, the Company's financial needs to fund its operations and its future growth, and any other factor that the Board deems necessary to consider in the circumstances.

**B. Significant Changes**

See "Note 33 - Subsequent Events" to our consolidated financial statements included in this Annual Report beginning on page F-1 for a discussion of significant events that have occurred since December 31, 2025.

**ITEM 9. THE OFFER AND LISTING**

Not applicable except for Item 9.A.4 and Item 9.C.

Our common shares trade on the Nasdaq Capital Market under the symbol "AZ". The common shares are also listed on the Frankfurt Stock Exchange (the "FSE") under the symbol "A23".

**ITEM 10. ADDITIONAL INFORMATION**

**A. Share Capital**

Not applicable.

**B. Notice of Articles and Articles of Association**

The following is a summary of certain important provisions of our articles and certain related sections of the BCBCA. Please note that this is only a summary and is not intended to be exhaustive. This summary is subject to, and is qualified in its entirety by reference to, the provisions of our articles and the BCBCA.

**Stated Objects or Purposes**

Our articles do not contain stated objects or purposes and do not place any limitations on the business that we may carry on.

**Directors**

*Power to vote on matters in which a director is materially interested*. Under the BCBCA a director who has a material interest in a contract or transaction, whether made or proposed, that is material to us, must disclose such interest to us, subject to certain exceptions such as if the contract or transaction: (i) is an arrangement by way of security granted by us for money loaned to, or obligations undertaken by, the director for our benefit or for one of our affiliates' benefit; (ii) relates to an indemnity or insurance permitted under the BCBCA; (iii) relates to the remuneration of the director in his or her capacity as director, officer, employee or agent of our company or of one of our affiliates; (iv) relates to a loan to our company while the director is the guarantor of some or all of the loan; or (v) is with a corporation that is affiliated with us while the director is also a director or senior officer of that corporation or an affiliate of that corporation. Directors will also be required to comply with certain other relevant provisions of the BCBCA regarding conflicts of interest.

Under our articles, a director who holds a disclosable interest in a contract or transaction into which the Company has entered or proposes to enter is not entitled to vote on any directors' resolution to approve that contract or transaction, unless all the directors have a disclosable interest in that contract or transaction, in which case any or all of those directors may vote on such resolution.

*Directors' power to determine the remuneration of directors.* The remuneration of our directors, if any, may be determined by our directors subject to our articles. If the directors so decide, the remuneration of the directors, if any, will be determined by the shareholders. That remuneration may be in addition to any salary or other remuneration paid to any officer or employee of the Company as such, who is also a director.

*Number of shares required to be owned by a director.* Neither our articles nor the BCBCA provide that a director is required to hold any of our shares as a qualification for holding his or her office. To align the economic interests of directors with those of our shareholders, non-executive directors receive $1,150 CAD per month for their services.

**Certain Amendments and Change of Control**

In addition to any other voting right or power to which the holders of voting shares shall be entitled by law or regulation or other provisions of our articles from time to time in effect, but subject to the provisions of our articles, holders of voting shares shall be entitled to vote separately as a class, in addition to any other vote of our shareholders that may be required, in respect of any alteration, repeal or amendment of our articles which would adversely affect the rights or special rights of the holders of common shares or affect the holders of common shares differently, on a per share basis.

Our articles do not contain any change of control limitations with respect to a merger, acquisition or corporate restructuring that involves us.

**Shareholder Meetings**

Subject to applicable stock exchange requirements, we must hold a general meeting of our shareholders at least once every calendar year at a time and place determined by our board of directors, provided that the meeting must not be held later than 15 months after the preceding annual general meeting.

The Company must send notice of the date, time and location of any meeting of shareholders (including, without limitation, any notice specifying the intention to propose a resolution as an exceptional resolution, a special resolution or a special separate resolution, and any notice to consider approving an amalgamation into a foreign jurisdiction, an arrangement or the adoption of an amalgamation agreement, and any notice of a general meeting, class meeting or series meeting), in the manner provided in our Articles, or in such other manner, if any, as may be prescribed by ordinary resolution (whether previous notice of the resolution has been given or not), to each shareholder entitled to attend the meeting, to each director and to the auditor of the Company, unless our Articles otherwise provide, at least the following number of days before the meeting: (1) if and for so long as the Company is a public company, 21 days; (2) otherwise, 10 days. Under the BCBCA, shareholders entitled to notice of a meeting may waive or reduce the period of notice for that meeting, provided applicable securities laws are met. The accidental omission to send notice of any meeting of shareholders to, or the non-receipt of any notice by, any of the persons entitled to notice does not invalidate any proceedings at that meeting.

Subject to the special rights and restrictions attached to the shares of any class or series of shares and to Article 11.4 of our Articles, the quorum for the transaction of business at a meeting of shareholders is two persons who are, or who represent by proxy, shareholders who, in the aggregate, hold at least 5% of the issued shares entitled to be voted at the meeting. If there is only one shareholder entitled to vote at a meeting of shareholders: (1) the quorum is one person who is, or who represents by proxy, that shareholder, and (2) that shareholder, present in person or by proxy, may constitute the meeting.

**Shareholder Proposals**

Under the BCBCA, qualified shareholders holding shares that constitute (i) at least one percent (1%) of our issued voting shares or (ii) have a fair market value in excess of CAD$2,000 may make proposals for matters to be considered at the annual general meeting of shareholders. Such proposals must be sent to us in advance of any proposed meeting by delivering a timely written notice in proper form to our registered office in accordance with the requirements of the BCBCA. The notice must include information on the business the shareholder intends to bring before the meeting. To be a qualified shareholder, a shareholder must currently be and have been a registered or beneficial owner of at least one share of the company for at least two years before the date of signing the proposal.

**Limitations on Rights to Own Securities**

There are no limitations on rights to own or exercise voting rights on our securities by the BCBCA or our articles.

**Limitation of Liability and Indemnification**

Under the BCBCA, a company may indemnify: (i) a current or former director or officer of that company; (ii) a current or former director or officer of another corporation if, at the time such individual held such office, the corporation was an affiliate of the company, or if such individual held such office at the company's request; or (iii) an individual who, at the request of the company, held, or holds, an equivalent position in another entity (an "indemnifiable person") against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by him or her in respect of any civil, criminal, administrative or other legal proceeding or investigative action (whether current, threatened, pending or completed) in which he or she is involved because of that person's position as an indemnifiable person, unless: (i) the individual did not act honestly and in good faith with a view to the best interests of such company or the other entity, as the case may be; or (ii) in the case of a proceeding other than a civil proceeding, the individual did not have reasonable grounds for believing that the individual's conduct was lawful. A company cannot indemnify an indemnifiable person if it is prohibited from doing so under its articles or by applicable law. A company may pay, as they are incurred in advance of the final disposition of an eligible proceeding, the expenses actually and reasonably incurred by an indemnifiable person in respect of that proceeding only if the indemnifiable person has provided an undertaking that, if it is ultimately determined that the payment of expenses was prohibited, the indemnifiable person will repay any amounts advanced. Subject to the aforementioned prohibitions on indemnification, a company must, after the final disposition of an eligible proceeding, pay the expenses actually and reasonably incurred by an indemnifiable person in respect of such eligible proceeding if such indemnifiable person has not been reimbursed for such expenses, and was wholly successful, on the merits or otherwise, in the outcome of such eligible proceeding or was substantially successful on the merits in the outcome of such eligible proceeding. On application from an indemnifiable person or the company, a court may make any order the court considers appropriate in respect of an eligible proceeding, including the indemnification of penalties imposed or expenses incurred in any such proceedings and the enforcement of an indemnification agreement. As permitted by the BCBCA, our articles require us to indemnify our directors, former directors or alternate directors (and such individual's respective heirs and legal representatives) and permit us to indemnify any person to the extent permitted by the BCBCA.

**C. Material Contracts**

Please refer to Item 4 Section B for a discussion of our largest customer contracts.

**D. Exchange Controls**

We are not aware of any governmental laws, decrees, regulations or other legislation in Canada that restrict the export or import of capital, including the availability of cash and cash equivalents for use by our affiliated companies, or that affect the remittance of dividends, interest or other payments to non-resident holders of our securities. Any remittances of dividends to residents of the United States and to other non-resident holders are, however, subject to withholding tax. See Item 10.E. - "Taxation".

**E. Taxation**

**U.S. Federal Income Taxation**

This summary does not address the U.S. federal income tax consequences of the ownership and disposition by non-U.S. holders of common shares. The discussion below is limited to U.S. federal income tax matters. Accordingly, holders should consult their tax advisors regarding the U.S. federal alternative minimum, the Medicare tax on net investment income, U.S. federal estate and gift, U.S. state and local, and non-U.S. tax consequences (including the potential application of and operation of any income tax treaties) relating to the ownership and disposition of common shares.

This summary is based on provisions of the U.S. Internal Revenue Code (the "**Code**"), U. S. Treasury regulations promulgated thereunder (whether final, temporary, or proposed), administrative rulings, and judicial interpretations thereof, and the Canada-U.S. Tax Treaty, all as in effect on the date hereof, and all of which are subject to change, possibly with retroactive effect.

This summary is for general information purposes only and does not purport to be a complete analysis or listing of all potential U.S. federal income tax considerations that may apply to a holder as a result of the ownership and disposition of common shares. In addition, this summary does not take into account the individual facts and circumstances of any particular holder that may affect the U.S. federal income tax consequences to such holder, including specific tax consequences to a holder under applicable tax treaties other than the Canada-U.S. Tax Treaty. Accordingly, this summary is not intended to be, and should not be construed as, legal or U.S. federal income tax advice with respect to any holder. Holders should consult their tax advisors regarding such tax consequences in light of their individual circumstances.

This summary is limited to considerations relevant for investors holding common shares as capital assets (generally, property held for investment). This summary does not discuss all aspects of U.S. federal income taxation that may be important to holders in light of their individual circumstances, including holders subject to special tax rules, such as:

● banks, thrifts, mutual funds, financial institutions, underwriters, insurance companies;

● real estate investment trusts and regulated investment companies;

● tax-exempt organizations, pension funds, qualified retirement plans, individual retirement accounts, or other tax-deferred accounts;

● expatriates or former long-term residents of the U.S.;

● persons holding shares through a partnership, limited liability, or other fiscally or tax transparent entity;

● dealers or traders in securities, commodities or currencies;

● grantor trusts;

● persons subject to the alternative minimum tax;

● U.S. persons whose "functional currency" is not the U.S. dollar;

● partnerships or other pass-through entities;

● persons who received common shares through the exercise of incentive stock options or through the issuance of restricted stock under an equity incentive plan or through a tax-qualified retirement plan or through other compensatory arrangements;

● persons who own (directly, indirectly or constructively) 10% or more (by vote or value) of the outstanding shares of the Company; or

● holders holding common shares as a position in a "straddle," as part of a "synthetic security" or "hedge," as part of a "conversion transaction" or other integrated investment, or as other than a capital asset.

Holders that are subject to special provisions under the Code, including holders described immediately above, should consult their tax advisors regarding the U.S. federal, U.S. federal alternative minimum, U.S. federal estate and gift, U.S. state and local, and non-U.S. tax consequences of the ownership and disposition of common shares.

As used in this Annual Report, the term "**U.S. holder**" means a beneficial owner of common shares, that is, for U.S. federal income tax purposes:

● an individual who is a citizen or resident of the U.S.;

● a corporation or other entity taxable as a corporation that is created or organized in or under the laws of the U.S., any state in the U.S. or the District of Columbia;

● an estate the income of which is subject to U.S. federal income taxation regardless of its source; or

● a trust that (i) is subject to the primary supervision of a court within the U.S. and the control of one or more U.S. persons with respect to all of its substantial decisions, or (ii) has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person.

As used in this Annual Report, the term "**non-U.S. holder**" means a beneficial owner (other than a partnership or other entity or arrangement treated as a partnership for U.S. federal income tax purposes) of common shares, that is not a U.S. holder.

The U.S. federal income tax treatment of a partner in a partnership (including any entity or arrangement treated as a partnership for U.S. federal income tax purposes) that holds common shares generally will depend on the status of the partner and the activities of the partnership. A partnership or partner in a partnership that holds common shares should consult its own tax advisor regarding the tax consequences of investing in and disposing of common shares.

**U.S. Federal Income Tax Consequences to U.S. Holders of the Ownership and Disposition of Common Shares**

***Distributions on Common Shares***

Subject to the discussion under "*-Passive Foreign Investment Company Status*" below, the gross amount of any distribution on common shares (including withheld taxes, if any) made out of the Company's current or accumulated earnings and profits (as determined for U.S. federal income tax purposes) will generally be taxable to a U.S. holder as ordinary dividend income on the date such distribution is actually or constructively received. Any such dividends paid to corporate U.S. holders generally will not qualify for the dividends-received deduction that may otherwise be allowed under the Code with respect to dividends received from U.S. corporations. Distributions in excess of the Company's current and accumulated earnings and profits will be treated first as a non-taxable return of capital to the extent of the U.S. holder's basis in such holder's common shares, and thereafter as capital gain. There can be no assurance that the Company will maintain calculations of its earnings and profits in accordance with U.S. federal income tax accounting principles. U.S. holders should therefore assume that any distribution with respect to common shares will constitute ordinary dividend income.

Dividends paid in currencies other than the U.S. dollar, if any, will generally be taxable to a U.S. holder as ordinary dividend income in an amount equal to the U.S. dollar value of the currency received on the date such distribution is actually or constructively received. Such U.S. dollar value must be determined using the spot rate of exchange on such date, regardless of whether the non-U.S. currency is actually converted into U.S. dollars on such date. The U.S. holder may realize exchange gain or loss if the currency received is converted into U.S. dollars after the date on which it is actually or constructively received. Any such gain or loss will be ordinary and will generally be treated as from sources within the U.S. for U.S. foreign tax credit purposes.

Dividends received by non-corporate U.S. holders (including individuals) from a "qualified foreign corporation" may be eligible for reduced rates of taxation, provided that certain holding period requirements and other conditions are satisfied. For these purposes, a non-U.S. corporation will be treated as a qualified foreign corporation if it is eligible for the benefits of a comprehensive income tax treaty with the U.S. which is determined by the U.S. Treasury Department to be satisfactory for purposes of these rules and which includes an exchange of information provision. The U.S. Treasury Department has determined that the Canada-U.S. Tax Treaty meets these requirements. A non-U.S. corporation is also treated as a qualified foreign corporation with respect to dividends paid by that corporation on shares that are readily tradable on an established securities market in the U.S. U.S. Treasury Department guidance indicates that the common or ordinary shares which are listed on Nasdaq, should be considered readily tradable on an established securities market in the U.S. Accordingly, the common shares are expected to satisfy this requirement in respect of the taxable year ended December 31, 2025. However, there can be no assurance that the common shares will be considered readily tradable on an established securities market in future years. Notwithstanding the foregoing, the Company will not constitute a qualified foreign corporation for purposes of these rules if either it is a passive foreign investment company, or "PFIC", for the taxable year in which it pays a dividend or for the preceding taxable year (see "*-Passive foreign investment company status*" below).

U.S. holders should consult their own advisors regarding the availability of the lower tax rates applicable to qualified dividend income for any dividends paid on common shares.

Subject to certain conditions and limitations, withholding taxes, if any, on dividends paid by the Company may be treated as foreign taxes eligible for credit against a U.S. holder's U.S. federal income tax liability under the U.S. foreign tax credit rules. For purposes of calculating the U.S. foreign tax credit, dividends paid on common shares will generally be treated as income from sources outside the U.S. and will generally constitute passive category income. The rules governing the U.S. foreign tax credit are complex. U.S. holders should consult their tax advisors regarding the availability of the U.S. foreign tax credit under their individual circumstances.

***Sale, Exchange, Redemption or Other Taxable Disposition of Common Shares***

Subject to the discussion under "*-Passive Foreign Investment Company Status*" below, a U.S. holder will generally recognize gain or loss on any sale, exchange, redemption, or other taxable disposition of common shares in an amount equal to the difference between the U.S. dollar value of the amount realized on the disposition and such holder's tax basis in the shares (determined in U.S. dollars). Any gain or loss recognized by a U.S. holder on a taxable disposition of common shares will generally be capital gain or loss and will be long-term capital gain or loss if the holder's holding period in such shares exceeds one year at the time of the disposition. Preferential tax rates apply to long-term capital gains of a U.S. holder that is an individual, estate or trust. There are currently no preferential tax rates for long-term capital gains of a U.S. holder that is a corporation. The deductibility of capital losses is subject to limitations. Any gain or loss recognized by a U.S. holder on the sale or exchange of common shares will generally be treated as U.S. source gain or loss. Each U.S. holder should consult its own tax advisor as to the tax treatment of dispositions of common shares in exchange for Canadian dollars.

***Passive Foreign Investment Company Status***

Notwithstanding the foregoing, certain adverse U.S. federal income tax consequences could apply to a U.S. holder if the Company is treated as a PFIC for any taxable year during which the U.S. holder holds common shares. A non-U.S. corporation, such as the Company, will be classified as a PFIC for U.S. federal income tax purposes for any taxable year in which, after applying certain look-through rules, either (i) 75% or more of its gross income for such year consists of certain types of "passive" income or (ii) 50% or more of the value of its assets (determined on the basis of a quarterly average) during such year produce or are held for the production of passive income. Passive income generally includes dividends, interest, royalties, rents, annuities, net gains from the sale or exchange of property producing such income and net foreign currency gains.

The Company is not currently expected to be treated as a PFIC for U.S. federal income tax purposes for its taxable year ended December 31, 2025, or for foreseeable future taxable years. This conclusion is a factual determination, however, that must be made annually at the close of each taxable year and, thus, is subject to change. In addition, certain aspects of the PFIC rules are unclear and subject to differing interpretations. Accordingly, there can be no assurance that the Company will not be treated as a PFIC for any taxable year.

If the Company were to be treated as a PFIC, U.S. holders holding common shares could be subject to certain adverse U.S. federal income tax consequences with respect to gains realized on a taxable disposition of such shares and certain distributions received on such shares. In addition, dividends received with respect to common shares would not constitute qualified dividend income eligible for preferential tax rates if the Company is treated as a PFIC for the taxable year of the distribution or for its preceding taxable year. Certain elections (including a mark-to-market election) may be available to U.S. holders to mitigate some of the adverse tax consequences resulting from PFIC treatment. U.S. holders should consult their tax advisors regarding the application of the PFIC rules to their investment in common shares.

Each current or prospective U.S. holder should consult its own tax advisor regarding potential status of the Company as a PFIC, the possible effect of the PFIC rules to such holder in their particular circumstances, information reporting required if the Company were treated as a PFIC and the availability of any election that may be available to the holder to mitigate adverse U.S. federal income tax consequences of holding shares in a PFIC.

***Information Reporting and Backup Withholding***

In general, information reporting will apply to dividends in respect of common shares and the proceeds from the sale, exchange, or redemption of common shares that are paid to a U.S. holder within the U.S. (and in certain cases, outside the U.S.), unless such holder is an exempt recipient. A backup withholding tax may apply to such payments if the holder fails to provide a taxpayer identification number ("**TIN**") or certification of exempt status or fails to report in full its dividend and interest income (or if such holder otherwise fails to establish an exemption).

Any amounts withheld under the backup withholding rules will be allowed as a refund or a credit against the holder's U.S. federal income tax liability provided the required information is timely furnished to the IRS. The IRS may impose a penalty upon any taxpayer that fails to provide its correct TIN.

Certain U.S. holders holding specified foreign financial assets with an aggregate value in excess of the applicable dollar threshold are required to report information relating to common shares, subject to certain exceptions (including an exception for common shares held in accounts maintained by certain financial institutions), by attaching a complete IRS Form 8938, Statement of Specified Foreign Financial Assets, to their tax return, for each year in which they hold common shares. Failure to complete such reporting could result in substantial penalties and in the extension of statute of limitations with respect to such holder's U.S. federal income tax returns. Holders should consult their tax advisors regarding the application of information reporting requirements relating to their ownership of common shares.

**Certain Material Canadian Federal Income Tax Considerations**

The following is a summary of the principal Canadian federal income tax considerations generally applicable to the holding and disposition of common shares by a beneficial owner, and who, at all relevant times, for purposes of the Income Tax Act (Canada) (the "**Tax Act**"): (i) deals at arm's length with the Company; (ii) is not affiliated with the Company; (iii) holds the common shares as capital property; and (iv) has not entered into, with respect to the common shares, a "derivative forward agreement", a "synthetic disposition arrangement" or a "dividend rental arrangement", each as defined in the Tax Act (a "Holder"). Generally, the common shares will be capital property to a Holder provided the Holder does not acquire or hold such common shares in the course of carrying on a business or as part of an adventure or concern in the nature of trade.

This summary is of a general nature only and is not intended to be, nor should it be construed to be, legal or tax advice to any Holder. Accordingly, Holders are urged to consult their own tax advisors with respect to their particular circumstances.

This summary is based upon the current provisions of the Tax Act, the regulations thereunder, all specific proposals to amend the Tax Act and the regulations publicly announced by the Minister of Finance (Canada) prior to the date hereof, the Canada-U.S. Tax Convention (1980), as amended (the "**Treaty**"), the Fifth Protocol to the Treaty signed on September 21, 2007 (the "Protocol"), and Canadian tax counsel's understanding of the current administrative practices published in writing by the Canada Revenue Agency. This summary does not otherwise take into account any changes in law, whether by legislative, governmental or judicial decision or action, nor does it take into account or consider any provincial, territorial or foreign income tax considerations.

Generally, for purposes of the Tax Act, all amounts relating to the acquisition, holding or disposition of common shares must be converted into Canadian dollars based on exchange rates as determined in accordance with the Tax Act. The amount of dividends, if any, required to be included in the income of, and capital gains or capital losses realized by, a Holder may be affected by fluctuations in the Canadian / U.S. dollar exchange rate.

***Holders Resident in the U.S.***

This portion of the summary is generally applicable to a Holder who, at all relevant times, for purposes of the Tax Act and the Treaty: (i) is a resident of the U.S., (ii) is not, and is not deemed to be, a resident of Canada, and (iii) does not use or hold, and is not deemed to use or hold, the common shares in a business carried on in Canada (a "U.S. resident holder"). Special rules, which are not discussed in this summary, may apply to a U.S. resident holder that is an insurer that carries on an insurance business in Canada and elsewhere.

*Dividends on Common Shares*

Dividends paid or credited, or deemed under the Tax Act to be paid or credited, to a U.S. resident holder on common shares are subject to Canadian withholding tax under the Tax Act at the rate of 25%; however, the rate of Canadian withholding tax applicable to a U.S. resident holder is generally reduced to 15% under the Treaty (or 5% in the case of a U.S. resident holder that is a corporation beneficially owning at least 10% of the common shares). A U.S. resident holder must not be subject to the limitation on benefits restrictions in the Treaty to be entitled to the 15% (or 5%) withholding tax rate on dividends on the common shares.

*Disposition of Common Shares*

A U.S. resident holder for whom common shares are not "taxable Canadian property" will not be subject to tax under the Tax Act on the disposition of such shares. Generally, provided that common shares are listed on a "designated stock exchange" (which includes Nasdaq), common shares will not be taxable Canadian property to a U.S. resident holder at a particular time unless at any time during the 60-month period immediately preceding that time (a) one or any combination of (i) the U.S. resident holder, (ii) persons with whom the U.S. resident holder did not deal at arm's length, or (iii) partnerships in which the U.S. resident holder or a person with whom the U.S. resident holder did not deal at arm's length held a membership interest directly or indirectly through one or more partnerships, owned 25% or more of the issued shares of any class or series of the capital stock of the Company, and at that time (b) more than 50% of the fair market value of the common shares was derived directly or indirectly from one or any combination of real or immovable property situated in Canada, Canadian resource properties (as defined in the Tax Act), timber resource properties (as defined in the Tax Act) or an option in respect of, an interest in, or for civil law a right in, any such property, whether or not such property exists. common shares may also be deemed to be taxable Canadian property of a U.S. resident holder in certain circumstances. U.S. resident holders whose common shares may constitute taxable Canadian property should consult their own tax advisors.

***Holders Resident in Canada***

This portion of the summary is generally applicable to a Holder who, at all relevant times, for purposes of the Tax Act, is, or is deemed to be resident in Canada (a "**Canadian resident holder**"). Certain Canadian resident holders may be entitled to make, or may have already made, the irrevocable election under subsection 39(4) of the Tax Act, the effect of which may be to deem the common shares (and all other "Canadian securities" as defined in the Tax Act) owned by such Canadian resident holder to be capital property in the taxation year in which the election is made and in all subsequent taxation years. Canadian resident holders to whom common shares might not otherwise be considered capital property should consult their own tax advisors regarding this election.

This portion of the summary is not applicable to a Canadian resident holder (i) that is a "specified financial institution" as defined in the Tax Act, (ii) an interest in which is a "tax shelter investment" as defined in the Tax Act, (iii) that is a "financial institution" for the purposes of the mark-to-market rules in the Tax Act, (iv) that makes or who has made an election under section 261 of the Tax Act to report its "Canadian tax results" as defined in the Tax Act in a currency other than the Canadian currency, or (v) that is a corporation that, or is a corporation that does not deal at arm's length for purposes of the Tax Act with a corporation resident in Canada that, is or becomes, as part of a transaction or event or series of transactions or events that includes the acquisition of the common shares, controlled by (a) a non-resident corporation, (b) a non-resident individual, (c) a non-resident trust, or (d) a group of persons comprised of any combination of persons included in (a) to (c) above that do not deal with each other at arm's length for the purposes of the "foreign affiliate dumping" rules in section 212.3 of the Tax Act. Such Canadian resident holders should consult their own tax advisors.

*Dividends on Common Shares*

Dividends received or deemed to be received on common shares by an individual Canadian resident holder (including certain trusts) will be included in computing the individual's income and will be subject to the gross-up and dividend tax credit rules applicable to taxable dividends received from taxable Canadian corporations, including an enhanced gross-up and dividend tax credit for dividends designated as "eligible dividends" by the Company. Dividends received or deemed to be received on common shares by a Canadian resident holder that is a corporation will be included in computing its income and will generally be deductible in computing taxable income. In certain circumstances, subsection 55(2) of the Tax Act will treat a taxable dividend received by a Canadian resident holder that is a corporation as proceeds of a disposition or a capital gain. A Canadian resident holder that is a "private corporation" or a "subject corporation" (each as defined in the Tax Act) may be liable to pay a 38 1/3% refundable tax under Part IV of the Tax Act on dividends received or deemed to be received on the common shares to the extent that such dividends are deductible in computing the Canadian resident holder's taxable income.

*Disposition of Common Shares*

Generally, a Canadian resident holder who disposes or is deemed to dispose of a subordinate voting share will realize a capital gain (or capital loss) equal to the amount by which the proceeds of disposition, net of any reasonable costs of disposition, are greater (or less) than the adjusted cost base of the common shares to the Canadian resident holder.

Generally, one-half of any capital gain (a "**taxable capital gain**") realized must be included in the Canadian resident holder's income. Subject to and in accordance with the provisions of the Tax Act, one-half of any capital loss (an "allowable capital loss") must be deducted against taxable capital gains realized in the year of disposition. Any unused allowable capital losses may be applied to reduce net taxable capital gains realized in any of the three prior years or in any subsequent year in the circumstances and to the extent provided in the Tax Act.

The amount of any capital loss realized by a Canadian resident holder that is a corporation on the disposition of a subordinate voting share may be reduced by the amount of any dividends received (or deemed to be received) by the Canadian resident holder on such subordinate voting share to the extent and under the circumstances prescribed by the Tax Act. Similar rules may apply where a subordinate voting share is owned by a partnership or trust of which a corporation, trust or partnership is a member or beneficiary. Such Canadian resident holders should consult their own tax advisors regarding their particular circumstances.

A Canadian resident holder that is throughout the year a "Canadian-Controlled Private Corporation" (as defined in the Tax Act) may be liable to pay a refundable tax at a rate of 10 2/3% on certain investment income, including taxable capital gains. Canadian resident holders that are "Canadian-Controlled Private Corporations" should consult their own tax advisors regarding their particular circumstances.

**THE U.S. FEDERAL AND CANADIAN FEDERAL INCOME TAX CONSEQUENCES SUMMARIZED ABOVE ARE FOR GENERAL INFORMATION ONLY. EACH HOLDER OF COMMON SHARES SHOULD CONSULT SUCH HOLDER'S TAX ADVISOR AS TO THE CONSEQUENCES OF AN INVESTMENT IN COMMON SHARES IN LIGHT OF SUCH HOLDER'S PARTICULAR CIRCUMSTANCES.**

**F. Dividends and Payment Agents**

Not applicable.

**G. Statement by Experts**

Not applicable.

**H. Documents on Display**

You may request a copy of this Annual Report and the related exhibits, and any other report, at no cost, by writing to us at 559 Briar Hill Avenue, Toronto, Ontario, Canada M5N 1N1. Copies of our financial statements and other continuous disclosure documents required under applicable securities legislation are available for viewing on SEDAR at www.sedar.com. All of the documents referred to are in English.

We are subject to the informational requirements of the Exchange Act and are required to file reports and other information with the SEC. The SEC maintains a website at www.sec.gov that contains reports, proxy and information statements, and other information regarding registrants that make electronic filings with the SEC using its EDGAR system.

We also make available on our website's investor relations page, free of charge, our Annual Report and the text of our reports on Form 6-K, including any amendments to these reports, as well as certain other SEC filings, as soon as reasonably practicable after they are electronically filed with or furnished to the SEC. The information contained on our website is not incorporated by reference in this Annual Report.

**I. Subsidiary Information**

Not applicable.

**ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**

**Financial Instruments and Financial Risk Exposure**

The Company is exposed to a variety of financial risks, which results from its financing, operating and investing activities. The objective of financial risk management is to contain, where appropriate, exposures in these financial risks to limit any negative impact on the Company's financial performance and position.

The Company's financial instruments are its cash, trade and other receivables, payables, other payables and loans. The main purpose of these financial instruments is to raise finance for the Company's operation. The Company actively measures, monitors and manages its financial risk exposures by various functions pursuant to the segregation of duties and principals. The risks arising from the Company's financial instruments are mainly credit risk and currency risk. The risk rate on loans is fixed. The risk management policies employed by the Company to manage these risks are discussed below.

**Credit Risk**

Credit risk arises when a failure by counterparties to discharge their obligations could reduce the amount of future cash inflows from financial assets on hand at the balance sheet date. The Company closely monitors the activities of its counterparties and controls the access to its intellectual property which enables it to ensure the prompt collection of customers' balances. The Company's main financial assets are cash and cash equivalents as well as other receivables and represent the Company's maximum exposure to credit risk in connection with its financial assets.

Wherever possible and commercially practical the Company holds cash with major financial institutions in Israel. Credit risk arises when a failure by counterparties to discharge their obligations could reduce the amount of future cash inflows from financial assets on hand at the balance sheet date. The Company closely monitors the activities of its counterparties and controls the access to its intellectual property which enables it to ensure the prompt collection of customers' balances.

Although we maintain incident management and disaster response plans, in the event of a major disruption caused by a natural disaster or man-made problem, or outbreaks of pandemic diseases, including COVID-19, we may be unable to continue our operations and may experience system interruptions and reputational harm. Acts of terrorism and other geo-political unrest, including the ongoing conflict in Ukraine, could also cause disruptions in our business or the business of our customers, partners, vendors, or the economy as a whole. All of the aforementioned risks may be further increased if our disaster recovery plans prove to be inadequate.

The Company's main financial assets are cash and cash equivalents and trade accounts receivable as well as marketable securities and represent the Company's maximum exposure to credit risk in connection with its financial assets. Wherever possible and commercially practical the Company holds cash with major financial institutions In Israel.

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| | | |
|:---|:---|:---|
|  | **December 31,**<br>**2025** | **December 31,**<br>**2024** |
| Cash and cash equivalents | $**13525** | $13526 |
| Restricted deposits | **384** | 206 |
| Investment in financial assets | **55642** |  |
| Short term and long term trade receivables | **4255** | 2024 |
| Long term financial assets at fair value | **333** | 200 |
| Other accounts receivable | **2937** | 581 |
| **Total** | $**77076** | $16537 |

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**Market Risks**

The Company's business of maintenance services of various electronic systems is highly competitive and involves a certain degree of risk. The Company's business operations will depend largely upon the outcome of continued sales and services to security establishments and the initiation of sales of their products to the civilian markets.

The Company's Cust2Mate business is relatively new, and the Company is aware of competitors in the market. In addition to the regular management oversight and skills required, success in this segment will require the Company to penetrate the market as rapidly as possible.

Foreign exchange risk arises when the Company enters into transactions denominated in a currency other than its functional currency. The Company buys its inventories mostly in USD and sells its products in NIS. Foreign exchange exposures are managed within utilizing forward foreign exchange contracts**.**

As of December 31, 2025, if the Company's functional currency (ILS) had strengthened/ weakened by 5% against the USD, with all other variables held constant, the loss for the year would decrease /increase by approximately $838.

**Liquidity Risk:**

Liquidity risk is the risk that arises when the maturity of assets and the maturity of liabilities do not match. An unmatched position potentially enhances profitability but can also increase the risk of loss. The Company has procedures with the object of minimizing such loss by maintaining sufficient cash and other highly liquid current assets and by having an available adequate amount of committed credit facilities. The following tables detail the Company's remaining contractual maturity for its financial liabilities. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay

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| | | | |
|:---|:---|:---|:---|
| **Contractual** | **Contractual** | **Contractual** | **Contractual** |
|  | **Carrying amounts** | **Within 1 year** | **over 1 year** |
| Trade payables | $3348 | $3348 | $- |
| Other accounts payable | $2200 | $2200 | $- |
| Loans | $38 | $9 | $29 |
| Lease liability | $2577 | $819 | $1758 |

---

**Interest Rate Risks:**

The Company is exposed to cash flow interest rate risk from long-term borrowings at variable rate. It is currently Company policy that between 50% and 75% of Company borrowings are fixed rate borrowings. This policy is managed centrally. Although the board accepts that this policy neither protects the Company entirely from the risk of paying rates in excess of current market rates nor eliminates fully cash flow risk associated with variability in interest payments, it considers that it achieves an appropriate balance of exposure to these risks.

During 2025 and 2024, the Company's borrowings at variable rate were denominated in NIS.

The Company's exposure to cash flow interest rate risk from long-term borrowings at variable rate, which is immaterial.

**Capital Management:**

The Company considers its capital to be comprised of shareholders' equity. The Company's objectives in managing its capital are to maintain its ability to continue as a going concern and to further develop its business. To effectively manage the Company's capital requirements, the Company has a planning and budgeting process in place to meet its strategic goals. In order to facilitate the management of its capital requirements, the Company prepares expenditure budgets that are updated as necessary depending on various factors, including successful capital deployment and general industry conditions. Management reviews the capital structure on a regular basis to ensure the above objectives are met. There have been no changes to the Company's approach to capital management during the year ended December 31, 2025. There are no externally imposed restrictions on the Company's capital.

**ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES**

Not applicable.

**PART II**

**ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES**

None.

**ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS**

**A. – D. Material Modifications to the Rights of Security Holders**

None.

**E. Use of Proceeds**

None.

**ITEM 15. CONTROLS AND PROCEDURES**

**A. – D.**

**Disclosure Controls and Procedures**

Management, with the participation of the Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the Company's disclosure controls and procedures as of December 31, 2025. Based on this evaluation, management concluded that, as of December 31, 2025, the Company's disclosure controls and procedures were not effective due to the material weaknesses in internal control over financial reporting described below.

**Management's Annual Report on Internal Control over Financial Reporting**

Management is responsible for establishing and maintaining adequate internal control over financial reporting ("ICFR") as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. ICFR is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with IFRS as issued by the IASB.

Management assessed the effectiveness of ICFR as of December 31, 2025 based on the criteria set forth in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

Management identified material weaknesses in controls over inventory, payroll and accounts payable. A material weakness is a deficiency, or a combination of deficiencies, in ICFR such that there is a reasonable possibility that a material misstatement of the Company's annual or interim financial statements would not be prevented or detected on a timely basis.

As a result of these material weaknesses, management concluded that the Company's ICFR was not effective as of December 31, 2025.

**Remediation Efforts**

During 2025, the Company initiated remediation actions to address the identified material weaknesses. These actions included engaging an external SOX advisor to assist with control design, documentation and testing, hiring additional personnel within the finance and operations functions to enhance segregation of duties and strengthening oversight procedures.

During 2025, six key control areas were tested. Based on testing performed, controls over cash, equity, payroll and financial reporting were determined to be effective however, material weaknesses were identified in controls over procurement to pay and inventory management and counts In addition, the Company prepared during 2025 for the implementation of a new enterprise resource planning (ERP) system, which became effective January 1, 2026. Although management believes these actions will strengthen the overall control environment, the remediation measures were not fully implemented and tested as of December 31, 2025. Accordingly, the material weaknesses described above had not been remediated as of year-end.

Management will continue to monitor the effectiveness of the remediation measures and will evaluate whether the identified material weaknesses have been remediated in future reporting periods following sufficient time and testing.

**Changes in Internal Control Over Financial Reporting**

Except for the remediation activities described above, there were no changes in the Company's internal control over financial reporting during the year ended December 31, 2025 that have materially affected, or are reasonably likely to materially affect, the Company's ICFR.

This annual report does not include an attestation report of the Company's independent registered public accounting firm regarding ICFR as the Company is an emerging growth company and is exempt from such requirement.

**ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT**

Our audit committee is comprised of Messrs. Reeves, de Jongh, and Adi Vazan with Mr. Reeves serving as chairman of the committee. Messrs. Reeves, de Jongh, and Adi Vazan each meet the independence requirements under the rules of Nasdaq and under Rule 10A-3 under the Exchange Act. We have determined that Mr. Reeves is an "audit committee financial expert" within the meaning of Item 407 of Regulation S-K. For information relating to qualifications and experience of each audit committee member, see Item 6 - "Directors, Senior Management and Employees".

**ITEM 16B. CODE OF ETHICS**

Our board of directors has adopted a code of ethics applicable to our directors, officers, and employees. This code is intended to qualify as a "code of ethics" within the meaning of the applicable rules of the SEC. Our code of ethics is available on our website at www.cust2mate.com. Information contained on, or that can be accessed through, our website is not incorporated by reference into this Annual Report.

**ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES**

**Principal Accountant Fees and Services**

The following table summarizes the fees charged by BDO Ziv Haft for certain services rendered to our company during fiscal year 2025 and fiscal year 2024.

---

| | | |
|:---|:---|:---|
|  | **For the year ended** | **For the year ended** |
|  | **December 31, 2025** | **December 31, 2024** |
| Audit fees(1) | $216500 | $150000 |
| Audit-related fees(2) | 35000 | 16000 |
| Tax fees(3) | 13500 | 13500 |
| All other fees(4) | - | - |
| Total | $265000 | $179500 |

---

(1) The aggregate fees billed
 in connection with the audit of the Company.

(2) The
aggregate fees billed for assurance and related services that are reasonably related to the performance of the audit or review of the
Company's financial statements.

(3) The aggregate fees billing
 for tax compliance, tax advice and tax planning.

(4) The aggregate fees billed
 for products and services provided by the auditors of the Company, other than as described above.

**Audit Committee Pre-Approval Policies and Procedures**

Our audit committee reviews and pre-approves the scope and the cost of audit services related to us and permissible non-audit services performed by the independent auditors, other than those for *de minimis* services which are approved by the audit committee prior to the completion of the audit. All of the services related to our company provided by our auditors named above have been pre-approved by the audit committee.

**ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES**

Not applicable.

**ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS**

On January 7, 2026, we announced the approval of a share repurchase program ("Share Repurchase Program"). The Share Repurchase Program authorizes us to repurchase up to $20.0 million of our Common Shares. The Share Repurchase Program initially was due to expire on April 6, 2026 but on March 26, 2026 it was extended to July 6, 2026. Pursuant to the Share Repurchase Program, we may purchase common shares from time to time at the discretion of management through open market purchases or block trades, as appropriate. The timing and actual number of shares repurchased will depend on a variety of factors including price, corporate and regulatory requirements, market conditions and other corporate liquidity requirements and priorities. Share repurchases may be executed through various means in compliance with Rule 10b-18 under the Securities Exchange Act. We expect to utilize existing cash and cash equivalents to fund repurchases made under this program. We have engaged Oppenheimer &Co., Inc. as the broker for the Repurchase Program.

We made no repurchases of our securities during the period covered by this Report.

**ITEM 16F. CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT**

Not applicable.

**ITEM 16G. CORPORATE GOVERNANCE**

The Company is a foreign private issuer and its common shares are listed on the Nasdaq Capital Market.

Nasdaq Rule 5615(a)(3) permits a foreign private issuer to follow its home country practice in lieu of the requirements of the Rule 5600 Series, the requirement to distribute annual and interim reports set forth in Rule 5250(d), and the Direct Registration Program requirement set forth in Rules 5210(c) and 5255; provided, however, that such a company shall comply with the Notification of Material Noncompliance requirement (Rule 5625), the Voting Rights requirement (Rule 5640), have an audit committee that satisfies Rule 5605(c)(3), and ensure that such audit committee's members meet the independence requirement in Rule 5605(c)(2)(A)(ii).

Nasdaq Rule 5620(a) ("Rule 5620(a)") requires that each company listing common stock or voting preferred stock, and their equivalents, shall hold an annual meeting of shareholders no later than one year after the end of the company's fiscal year-end. To that end, on January 13, 2026, we received a letter from Nasdaq indicating that, since we had not yet held an annual meeting of shareholders within twelve months of the prior fiscal year end, we were no longer in compliance with Nasdaq Listing Rules 5620(a) and 5810(c)(2)(G). In accordance with Nasdaq Listing Rules we have been given 45 calendar days to submit the plan to regain compliance, based on which Nasdaq may grant 180 days or until June 29, 2026, to regain compliance. The meeting is proposed to be held on March 31, 2026.

The Company has reviewed the Nasdaq corporate governance requirements and confirms that except as described herein, the Company is in compliance with the Nasdaq corporate governance standards in all significant respects:

The Company does not follow Rule 5620(c), under which the Nasdaq minimum quorum requirement for a shareholder meeting is 33-1/3% of the outstanding shares of common stock. In addition, a registrant listed on Nasdaq is required to state its quorum requirement in its by-laws. The Company's quorum requirement is set forth in its articles. A quorum for a meeting of shareholders of the Company is two shareholders or proxyholders that hold or represent, as applicable, not less than 5% of the issued and outstanding shares entitled to be voted at the meeting. In lieu of following Rule 5620(c), the Company follows the rules of British Columbia, Canada.

The Company does not follow Rule 5635(d), which requires shareholder approval in order to enter into any transaction, other than a public offering, involving the sale, issuance or potential issuance by the Company of common shares (or securities convertible into or exercisable for ordinary common shares) equal to 20% or more of the outstanding share capital of the Company or 20% or more of the voting power outstanding before the issuance for less than the greater of book or market value of the ordinary shares. We will follow British Columbia, Canada law with respect to any requirement to obtain shareholder approval in connection with any private placements of equity securities.

The Company does not follow Rule 5635(c), which requires shareholder approval prior to an issuance of securities when a stock option or purchase plan is to be established or materially amended or other equity compensation arrangement made or materially amended, pursuant to which stock may be acquired by officers, directors, employees or consultants. We will follow British Columbia, Canada law with respect to any requirement to obtain shareholder approval in connection with such issuances.

The foregoing is consistent with the laws, customs, and practices in the province of British Columbia and Canada.

**ITEM 16H. MINE SAFETY DISCLOSURE**

Not applicable.

**ITEM 16I. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS**

Not applicable.

**ITEM 16J. INSIDER TRADING POLICIES**

We have adopted an insider trading policy governing the purchase, sale, and other dispositions of our securities by directors, senior management, and employees. A copy of our insider trading policy is attached as Exhibit 11.2 to this annual report.

**ITEM 16K. CYBERSECURITY**

We have established policies and processes for assessing, identifying, and managing material risk from cybersecurity threats, and have integrated these processes into our overall risk management systems and processes. We routinely assess material risks from cybersecurity threats, including any potential unauthorized occurrence on or conducted through our information systems that may result in adverse effects on the confidentiality, integrity, or availability of our information systems or any information residing therein.

We conduct periodic risk assessments to identify cybersecurity threats, as well as assessments in the event of a material change in our business practices that may affect information systems that are vulnerable to such cybersecurity threats. These risk assessments include identification of reasonably foreseeable internal and external risks, the likelihood and potential damage that could result from such risks, and the sufficiency of existing policies, procedures, systems, and safeguards in place to manage such risks.

Following these risk assessments, we re-design, implement, and maintain reasonable safeguards to minimize identified risks; reasonably address any identified gaps in existing safeguards; and regularly monitor the effectiveness of our safeguards. Primary responsibility for assessing, monitoring and managing our cybersecurity risks rests with chief security officer who reports to the COO of Cust2mate Ltd., to manage the risk assessment and mitigation process.

As part of our overall risk management system, we monitor and test our safeguards and train our employees on these safeguards, in collaboration with IT and management. Personnel at all levels and departments are made aware of our cybersecurity policies through trainings.

We engage consultants, or other third parties in connection with our risk assessment processes. These service providers assist us to design and implement our cybersecurity policies and procedures, as well as to monitor and test our safeguards. We are in the process of requiring each third-party service provider to certify that it has the ability to implement and maintain appropriate security measures, consistent with all applicable laws, to implement and maintain reasonable security measures in connection with their work with us, and to promptly report any suspected breach of its security measures that may affect our company.

We have not encountered cybersecurity challenges that have materially impaired our operations or financial standing. For additional information regarding risks from cybersecurity threats, please refer to Item 1A, "Risk Factors," in this annual report on Form 20-F.

**PART III**

**ITEM 17. FINANCIAL STATEMENTS.**

See Item 18. — "Financial Statements".

**ITEM 18. FINANCIAL STATEMENTS.**

Our Annual Financial Statements are included at the end of this Annual Report.

**ITEM 19. EXHIBITS**

**EXHIBIT INDEX**

---

| | |
|:---|:---|
| **Exhibit No.** | **Exhibit Title** |
| 1.1 | [Articles of ECC Ventures 1 Corp. (incorporated herein by reference to the Company's annual report on Form 20-F filed on March 27, 2023)](https://www.sec.gov/Archives/edgar/data/1866030/000149315223009101/ex1-1.htm) |
| 1.2 | [Certificate of Name Change (incorporated herein by reference to the Company's annual report on Form 20-F filed on March 27, 2023)](https://www.sec.gov/Archives/edgar/data/1866030/000149315223009101/ex1-2.htm) |
| 1.3 | [Certificate of Incorporation (incorporated herein by reference to the Company's annual report on Form 20-F filed on March 27, 2023)](https://www.sec.gov/Archives/edgar/data/1866030/000149315223009101/ex1-3.htm) |
| 1.4 | [Certificate of Name Change](ex1-4.htm) |
| 2.1 | [Specimen Share Certificate (incorporated herein by reference to the Company's annual report on Form 20-F filed on March 27, 2023)](https://www.sec.gov/Archives/edgar/data/1866030/000149315223009101/ex2-1.htm) |
| 2.2 | [Description of the Rights of Each Class of Securities (incorporated herein by reference to the Company's annual report on Form 20-F filed on March 27, 2023)](https://www.sec.gov/Archives/edgar/data/1866030/000149315223009101/ex2-2.htm) |
| 4.1+ | [Cust2mate Smart Cart Orders with Yochananof (incorporated herein by reference to the Company's annual report on Form 20-F filed on March 27, 2023)](https://www.sec.gov/Archives/edgar/data/1866030/000149315223009101/ex4-1.htm) |
| 4.2+ | [Maintenance and Support Agreement with Yochananof (incorporated herein by reference to the Company's annual report on Form 20-F filed on March 27, 2023)](https://www.sec.gov/Archives/edgar/data/1866030/000149315223009101/ex4-2.htm) |
| 4.3 | [Flex Manufacturing Agreement (incorporated herein by reference to the Company's annual report on Form 20-F filed on March 27, 2023)](https://www.sec.gov/Archives/edgar/data/1866030/000149315223009101/ex4-3.htm) |
| 4.4 | [Services Agreement with Mida Consulting and Investments Ltd. (incorporated herein by reference to the Company's annual report on Form 20-F filed on March 27, 2023)](https://www.sec.gov/Archives/edgar/data/1866030/000149315223009101/ex4-4.htm) |
| 4.5 | [Services Agreement with Ninety Six Capital Ltd (incorporated herein by reference to the Company's annual report on Form 20-F filed on March 27, 2023)](https://www.sec.gov/Archives/edgar/data/1866030/000149315223009101/ex4-5.htm) |
| 4.6 | [Employment Agreement with Gadi Graus (incorporated herein by reference to the Company's annual report on Form 20-F filed on March 27, 2023)](https://www.sec.gov/Archives/edgar/data/1866030/000149315223009101/ex4-6.htm) |
| 4.7 | [Stock Option Plan (incorporated herein by reference to the Company's annual report on Form 20-F filed on March 27, 2023)](https://www.sec.gov/Archives/edgar/data/1866030/000149315223009101/ex4-7.htm) |
| 4.8 | [RSU Plan (incorporated herein by reference to the Company's annual report on Form 20-F filed on March 27, 2023)](https://www.sec.gov/Archives/edgar/data/1866030/000149315223009101/ex4-8.htm) |
| 4.9 | [Form of 2023 Subscription Agreement (incorporated herein by reference to the Company's annual report on Form 20-F filed on March 27, 2023)](https://www.sec.gov/Archives/edgar/data/1866030/000149315223009101/ex4-9.htm) |
| 4.10 | [Form of 2023 Warrant (incorporated herein by reference to the Company's annual report on Form 20-F filed on March 27, 2023)](https://www.sec.gov/Archives/edgar/data/1866030/000149315223009101/ex4-10.htm) |
| 4.11 | [Form of October 2022 Subscription Agreement (incorporated herein by reference to the Company's annual report on Form 20-F filed on March 27, 2023)](https://www.sec.gov/Archives/edgar/data/1866030/000149315223009101/ex4-11.htm) |
| 4.12 | [Form of October 2022 Warrant (incorporated herein by reference to the Company's annual report on Form 20-F filed on March 27, 2023)](https://www.sec.gov/Archives/edgar/data/1866030/000149315223009101/ex4-12.htm) |
| 4.13 | [Services Agreement between A2Z MS Military Solutions Ltd. and Elmag Law Offices dated November 1, 2022 (incorporated herein by reference to the Company's annual report on Form 20-F filed on March 27, 2023)](https://www.sec.gov/Archives/edgar/data/1866030/000149315223009101/ex4-13.htm) |
| 4.14 | [Form of Purchase agreement (incorporated herein by reference to the Company's current report on Form 6-K filed on June 14, 2023)](https://www.sec.gov/Archives/edgar/data/1866030/000149315223021266/ex99-1.htm) |
| 4.15 | [Form of Warrant (incorporated herein by reference to the Company's current report on Form 6-K filed on June 14, 2023)](https://www.sec.gov/Archives/edgar/data/1866030/000149315223021266/ex99-2.htm) |
| 4.16 | [Form of Private Warrant (incorporated herein by reference to the Company's current report on Form 6-K filed on June 14, 2023)](https://www.sec.gov/Archives/edgar/data/1866030/000149315223021266/ex99-5.htm) |
| 4.17 | [Form of Purchase agreement (incorporated herein by reference to the Company's current report on Form 6-K filed on June 20, 2023)](https://www.sec.gov/Archives/edgar/data/1866030/000149315223021766/ex99-1.htm) |
| 4.18 | [Form of Warrant (incorporated herein by reference to the Company's current report on Form 6-K filed on June 20, 2023)](https://www.sec.gov/Archives/edgar/data/1866030/000149315223021766/ex99-2.htm) |

---

---

| | |
|:---|:---|
| **Exhibit No.** | **Exhibit Title** |
| 4.19 | [Form of Private Warrant (incorporated herein by reference to the Company's current report on Form 6-K filed on June 20, 2023)](https://www.sec.gov/Archives/edgar/data/1866030/000149315223021766/ex99-5.htm) |
| 4.20 | [Form of Purchase agreement (incorporated herein by reference to the Company's current report on Form 6-K filed on December 14, 2023)](https://www.sec.gov/Archives/edgar/data/1866030/000149315223044809/ex99-1.htm) |
| 4.21 | [Form of Warrant (incorporated herein by reference to the Company's current report on Form 6-K filed on December 14, 2023)](https://www.sec.gov/Archives/edgar/data/1866030/000149315223044809/ex99-2.htm) |
| 4.22 | [Form of Private Warrant (incorporated herein by reference to the Company's current report on Form 6-K filed on December 14, 2023)](https://www.sec.gov/Archives/edgar/data/1866030/000149315223044809/ex99-5.htm) |
| 4.20 | [Form of Purchase agreement (incorporated herein by reference to the Company's current report on Form 6-K filed on January 4, 2024)](https://www.sec.gov/Archives/edgar/data/1866030/000149315224001096/ex99-1.htm) |
| 4.21 | [Form of Warrant (incorporated herein by reference to the Company's current report on Form 6-K filed on January 4, 2024)](https://www.sec.gov/Archives/edgar/data/1866030/000149315224001096/ex99-2.htm) |
| 4.22 | [Form of Private Warrant (incorporated herein by reference to the Company's current report on Form 6-K filed on January 4, 2024)](https://www.sec.gov/Archives/edgar/data/1866030/000149315224001096/ex99-5.htm) |
| 4.23 | [Form of Securities Purchase Agreement (incorporated by reference herein to the Company's current report on Form 6-K filed on April 2, 2024)](https://www.sec.gov/Archives/edgar/data/1866030/000149315224012808/ex99-1.htm) |
| 4.24 | [Form of Private Placement Common Share Purchase Agreement. (incorporated by reference herein to the Company's current report on Form 6-K filed on April 2, 2024)](https://www.sec.gov/Archives/edgar/data/1866030/000149315224012808/ex99-2.htm) |
| 4.25 | [Form of Securities Purchase Agreement (incorporated by reference herein to the Company's current report on Form 6-K filed on October 2, 2024)](https://www.sec.gov/Archives/edgar/data/1866030/000149315224039206/ex99-1.htm) |
| 4.26 | [Form of Securities Purchase Agreement (incorporated by reference herein to the Company's current report on Form 6-K filed on October 15, 2024)](https://www.sec.gov/Archives/edgar/data/1866030/000149315224041106/ex99-1.htm) |
| 4.27 | [Form of Securities Purchase Agreement (incorporated by reference herein to the Company's current report on Form 6-K filed on December 16, 2024)](https://www.sec.gov/Archives/edgar/data/1866030/000149315224050141/ex99-1.htm) |
| 4.28 | [Underwriting Agreement by and between the Company and Titan Partners Group LLC, dated January 27, 2025 (incorporated by reference herein to the Company's current report on Form 6-K filed on January 29, 2025)](https://www.sec.gov/Archives/edgar/data/1866030/000149315225004055/ex99-1.htm) |
| 4.29 | [Form of Representative Warrant (incorporated by reference herein to the Company's current report on Form 6-K filed on January 29, 2025)](https://www.sec.gov/Archives/edgar/data/1866030/000149315225004055/ex99-2.htm) |
| 4.30 | [Form of Securities Purchase Agreement (incorporated by reference herein to the Company's current report on Form 6-K filed on January 29, 2025)](https://www.sec.gov/Archives/edgar/data/1866030/000149315225004055/ex99-3.htm) |
| 4.31 | [Consulting Agreement with Alan Rootenberg](ex4-31.htm) |
| 4.32 | [Form of Director Indemnity Agreement](ex4-32.htm) |
| 4.33 | [Share Purchase Agreement (incorporated herein by reference to the Company's current report on Form 6-K filed on June 12, 2025)](https://www.sec.gov/Archives/edgar/data/1866030/000164117225014915/ex99-1.htm) |
| 4.34 | [Share Purchase Agreement (incorporated herein by reference to the Company's current report on Form 6-K filed on July 8, 2025)](https://www.sec.gov/Archives/edgar/data/1866030/000164117225018189/ex99-1.htm) |
| 4.35 | [Underwriting Agreement by and between the Company and Titan Partners Group LLC, dated January 27, 2025 (incorporated herein by reference to the Company's current report on Form 6-K filed on September 18, 2025)](https://www.sec.gov/Archives/edgar/data/1866030/000149315225013985/ex99-1.htm) |
| 4.36 | [Form of Representative Warrant (incorporated herein by reference to the Company's current report on Form 6-K filed on September 18, 2025)](https://www.sec.gov/Archives/edgar/data/1866030/000149315225013985/ex99-2.htm) |
| 8.1 | [List of subsidiaries](ex8-1.htm) |
| 11.1 | [Code of Ethics (incorporated herein by reference to the Company's annual report on Form 20-F filed on March 27, 2023)](https://www.sec.gov/Archives/edgar/data/1866030/000149315223009101/ex11-1.htm) |
| 11.2 | [Insider Trading Policy](ex11-2.htm) |
| 12.1 | [Certifications required by Rule 13a-14(a) (17 CFR 240.13a-14(a)) or Rule 15d-14(a) by Principal Executive Officer](ex12-1.htm) |
| 12.2 | [Certifications required by Rule 13a-14(a) (17 CFR 240.13a-14(a)) or Rule 15d-14(a) by Principal Financial Officer](ex12-2.htm) |
| 13.1 | [Certification required by Rule 13a-14(b) (17 CFR 240.13a-14(b)) or Rule 15d-14(b) (17 CFR 240.15d-14(b)) and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. 1350) of the Chief Executive Officer.](ex13-1.htm) |
| 13.2 | [Certification required by Rule 13a-14(b) (17 CFR 240.13a-14(b)) or Rule 15d-14(b) (17 CFR 240.15d-14(b)) and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. 1350) of the Chief Financial Officer.](ex13-2.htm) |
| 15.1 | [Consent of Ziv Haft Certified Public Accountants (Isr.)](ex15-1.htm) |
| 97.1 | [Clawback Policy (incorporated by reference herein to the Company's annual report on Form 20-F filed on April 3, 2024)](https://www.sec.gov/Archives/edgar/data/1866030/000149315224012884/ex97-1.htm) |
| 101 | Interactive Data File |
| 104 | Cover Page Interactive Data File |

---

+ Indicates that certain identified information has been excluded from the exhibit because it is the type that the registrant treats as private or confidential.

**SIGNATURES**

The registrant hereby certifies that it meets all of the requirements for filing on annual report on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.

---

| | |
|:---|:---|
| **A2Z Cust2Mate Solutions Corp.** | **A2Z Cust2Mate Solutions Corp.** |
| By: | */s/ Gadi Graus* |
| Name: | Gadi Graus |
| Title: | *Chief Executive Officer* |

---

Date: March 31, 2026

**<u>A2Z CUST2MATE SOLUTIONS CORP.</u>**

**<u>CONSOLIDATED FINANCIAL STATEMENTS</u>**

**<u>AS OF DECEMBER 31, 2025</u>**

**<u>**TABLE OF CONTENTS**</u>**

---

| | |
|:---|:---|
|  | **Page** |
| [Independent Auditors' Report (Ziv Haft Certified Public Accountants (Isr.); Tel-Aviv, Israel;](#F_001) PCAOB ID#1185) | F-2 |
| [Consolidated Statements of Financial Position](#F_002) | F-3 |
| [Consolidated Statements of Comprehensive Loss](#F_003) | F-4 |
| [Consolidated Statements of Changes in Equity (Deficit)](#F_004) | F-5 |
| [Consolidated Statements of Cash Flows](#F_005) | F-8 |
| [Notes to Consolidated Financial Statements](#F_006) | F-9 - F-37 |

---

**Report of Independent Registered Public Accounting Firm**

Shareholders and Board of Directors

A2Z CUST2MATE SOLUTIONS CORP

Vancouver, Canada

**Opinion on the Consolidated Financial Statements**

We have audited the accompanying consolidated statement of financial position of A2Z CUST2MATE SOLUTIONS CORP and subsidiaries (the "Company") as of December 31, 2025 and 2024, the related consolidated statements of comprehensive loss, changes in equity (deficit), and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025**,** in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board (IFRS Accounting Standards).

**Basis for Opinion**

These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

---

| |
|:---|
| */s/ Ziv Haft* |
| Certified Public Accountants (Isr) |
| BDO Member Firm |

---

---

| |
|:---|
| We have served as the Company's auditor since 2017. |
| Tel Aviv, Israel |
| March 31, 2026.<br>|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; , 2026 |

---

**A2Z CUST2MATE SOLUTIONS CORP.**

**CONSOLIDATED STATEMENTS OF FINANCIAL POSITION**

**(In Thousands of US Dollars, except per share data)**

---

| | | |
|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2024** |
| **ASSETS** |  |  |
| **Current assets** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents | $13525 | $13526 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Short-term deposits | 384 | 206 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Financial assets at fair value (note 5) | 55642 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories (note 6) | 3891 | 796 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Short term trade receivables, net (*note 7*) | 3034 | 2024 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other accounts receivable (note 8) | 2937 | 581 |
| **Total current assets** | 79413 | 17133 |
| **Non-current assets** |  |  |
| &nbsp;&nbsp;&nbsp;Intangible assets (note 9) | 637 |  |
| &nbsp;&nbsp;&nbsp;Long term financial assets at fair value (note 10) | 333 | 200 |
| &nbsp;&nbsp;&nbsp;Long term trade receivables (*note 7*) | 1221 |  |
| &nbsp;&nbsp;&nbsp;Property, equipment and right of use assets, net (note 11) | 3556 | 1545 |
| **Total non-current assets** | 5747 | 1745 |
| &nbsp;&nbsp;&nbsp;**Total Assets** | $85160 | $18878 |
| **LIABILITIES AND SHAREHOLDERS' EQUITY** |  |  |
| **Current liabilities** |  |  |
| &nbsp;&nbsp;&nbsp;Short term loan and current portion of long-term loans (note 12) | $9 | $826 |
| &nbsp;&nbsp;&nbsp;Lease liability (note 13) | 819 | 217 |
| &nbsp;&nbsp;&nbsp;Trade payables | 3348 | 1834 |
| &nbsp;&nbsp;&nbsp;Other accounts payable (note 14) | 2200 | 918 |
| &nbsp;&nbsp;&nbsp;Warrant Liability (note 16) | 576 | 7743 |
| **Total current liabilities** | 6952 | 11538 |
| **Non-current liabilities** |  |  |
| &nbsp;&nbsp;&nbsp;Lease liability (note 13) | 1758 | 241 |
| &nbsp;&nbsp;&nbsp;Long term loans (note 15) | 29 | 108 |
| &nbsp;&nbsp;&nbsp;Severance payment, net | - | 147 |
| **Total non-current liabilities** | 1787 | 496 |
| **Total liabilities** | 8739 | 12034 |
| **Equity (note 18)** |  |  |
| Share capital and additional paid in capital | 206953 | 83120 |
| Warrant Reserve | 10147 | 30863 |
| Accumulated other comprehensive loss | (1872) | (549) |
| Reserve with respect to transactions with non-controlling interests | 927 | 927 |
| Accumulated losses | (138187) | (100452) |
| Total equity attributable to Company shareholders | 77968 | 13909 |
| Non-controlling interests (note 20) | (1547) | (7065) |
| Total equity | 76421 | 6844 |
| **Total liabilities and equity** | $85160 | $18878 |

---

<u>March 31, 2026</u> <u>"Yonathan De Yonge"</u> <u>"Gadi Graus"</u> <br> Date of approval of the financial statements Yonathan De Yonge - Director Gadi Graus Chief Executive Officer

*The accompanying notes are an integral part of the financial statements.*

**A2Z CUST2MATE SOLUTIONS CORP.**

**CONSOLIDATED STATEMENT OF COMPREHENSIVE LOSS**

**(Expressed in Thousands of US Dollars, except per share data)**

---

| | | | |
|:---|:---|:---|:---|
|  | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** |
|  | **2025** | **2024(\*)** | **2023(\*)** |
| **Revenues (note 21)** | $7901 | $5376 | $9212 |
| Cost of revenues (note 22) | 6807 | 3487 | 7959 |
| **Gross profit** | 1094 | 1889 | 1253 |
| **Expenses:** |  |  |  |
| Research and development (note 23) | $9944 | $3853 | $4103 |
| Sales and marketing (note 24) | 3857 | 1216 | 1377 |
| General and administration (note 25) | 23749 | 7948 | 13067 |
| Loss on impairment (note 9) | - | 1727 | 1027 |
| **Operating loss** | (36456) | (12855) | (18321) |
| Loss (gain) on revaluation of warrant liabilities (note 16) | (998) | 4389 | (1255) |
| Financial income (note 27) | (618) | (158) | (85) |
| Financial expenses (note 27) | 1219 | 336 | 256 |
| **Net loss for the year from continuing operations** | (36059) | (17422) | (17237) |
| **Net loss for the year from discontinuing operations** (note 32) | (2425) | (1841) | (820) |
| **Net loss for the year** | $(38484) | $(19263) | $(18057) |
| **Less: Net loss attributable to non-controlling interests** | (749) | (2267) | (1996) |
| **Net loss attributable to the Company's shareholders** | (37735) | (16996) | (16061) |
| Net loss for the year | $(38484) | $(19263) | $(18057) |
| **Other comprehensive income** |  |  |  |
| **Items that will not be reclassified to profit or loss:** |  |  |  |
| Adjustments arising from translating financial statements of foreign operations | (1323) | 775 | 303 |
| &nbsp;&nbsp;&nbsp;Remeasurement loss from defined benefit plans | - | 6 | 1 |
| &nbsp;&nbsp;&nbsp;**Other comprehensive income** | (1323) | 781 | 304 |
| **Total comprehensive loss for the year** | $(39807) | $(18482) | $(17753) |
| **Less: Comprehensive loss attributable to non-controlling interests** | (749) | (2267) | (1996) |
| **Comprehensive loss attributable to the Company's shareholders** | (37735) | (16996) | (16061) |
|  | $(38484) | $(19263) | $(18057) |
| &nbsp;&nbsp;&nbsp;**Basic and diluted loss per share from continuing operations** | $(0.96) | $(0.71) | $(1.10) |
| &nbsp;&nbsp;&nbsp;**Basic and diluted loss per share from discontinued operations** | $(0.07) | $(0.09) | $(0.06) |
| &nbsp;&nbsp;&nbsp;**Weighted average number of shares outstanding** | 36958606 | 21369527 | 13899212 |

---

(\*) Reclassified due to discontinued operations (note 32).

*The accompanying notes are an integral part of the financial statements.*

**A2Z CUST2MATE SOLUTIONS CORP.**

**STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIT)**

**(Expressed in Thousands of US Dollars, except per share data)**

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Ordinary share capital** | **Ordinary share capital** | | | | | | |
|  | **Number of shares** | **Additional paid in capital** |<br>**Warrant reserve** | **Accumulated**<br>**Other Comprehensive loss** | **Reserve with respect to transactions**<br>**with non-controlling interests** |<br>**Accumulated losses** |<br>**Non-controlling interest** |<br>**Total Equity<br> (Deficit)** |
| **Balance - January 1, 2025** | 29590297 | $83120 | $30863 | $(549) | $927 | $(100452) | $(7065) | $6844 |
| Net loss for the year |  |  |  |  |  | (37735) | (749) | (38484) |
| Adjustments arising from translating financial statements of foreign operations | - | - | - | (1323) | - | - | - | (1323) |
| &nbsp;&nbsp;&nbsp;Total comprehensive loss for the year |  |  |  | (1323) |  | (37735) | (749) | (39807) |
| Issuance of shares in January 2025 private placement (note 18) | 4748150 | 25946 | 1368 |  |  |  |  | 27314 |
| Issuance of shares in September 2025 private placement (note 18) | 5625000 | 39781 | 1960 |  |  |  |  | 41741 |
| Transactions with non-controlling interests |  | (8117) |  |  |  |  | 6267 | (1850) |
| Exercise of RSU's (note 18(P)) | 219667 |  |  |  |  |  |  |  |
| Exercise of warrants (note 18(R)) | 3474596 | 45318 | (24044) |  |  |  |  | 21274 |
| Exercise of options (note 18(Q)) | 225332 | 548 |  |  |  |  |  | 548 |
| Shares issued for services*(note 18(s))* | 5000 | 35 |  |  |  |  |  | 35 |
| Share based compensation (note 19(b,c)) | - | 20322 | - | - | - | - | - | 20322 |
| **Balance - December 31, 2025** | **43888042** | $**206953** | $**10147** | $**(1872)** | $**927** | $**(138187)** | $**(1547)** | $**76421** |

---

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Ordinary share capital** | **Ordinary share capital** | | | | | | |
|  | **Number of shares** | **Additional paid in capital** |<br>**Warrant reserve** | **Accumulated**<br>**Other Comprehensive loss** | **Reserve with respect to transactions**<br>**with non-controlling interests** |<br>**Accumulated losses** |<br>**Non-controlling interest** |<br>**Total Equity<br> (Deficit)** |
| **Balance - January 1, 2024** | **15359799** | $**55485** | $**30863** | $**(1330)** | $**927** | $**(83456)** | $**(4798)** | $**(2309)** |
| Net loss for the year | **-** | **-** | **-** | **-** |  | (16996) | (2267) | (19263) |
| Remeasurement loss from defined benefit plans | **-** | **-** | **-** | 6 |  |  | **-** | 6 |
| Adjustments arising from translating financial statements of foreign operations | **-** | **-** | **-** | 775 | - | **-** | - | 775 |
| &nbsp;&nbsp;&nbsp;Total comprehensive income (loss) for the year |  |  |  | 781 |  | (16996) | (2267) | (18482) |
| Issuances of shares *(note 18)* | 12136197 | 24696 |  |  |  |  |  | 24696 |
| Exercise of RSU's (*note 18(M))* | 764001 |  |  |  |  |  |  |  |
| Exercise of warrants *(note 18(L))* | 1330300 | 576 |  |  |  |  |  | 576 |
| Share based compensation *(note 19(b,c))* | - | 1913 | - | - | - | - | - | 1913 |
| **Balance - December 31, 2024** | **29590297** | $**83120** | $**30863** | $**(549)** | $**927** | $**(100452)** | $**(7065)** | $**6844** |

---

**A2Z CUST2MATE SOLUTIONS CORP.**

**STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIT)**

**(Expressed in Thousands of US Dollars, except per share data)**

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Ordinary share capital** | **Ordinary share capital** | | | | | | |
|  | **Number of shares** | **Additional**<br> **paid in capital** |<br>**Warrant reserve** | **Accumulated**<br>**Other Comprehensive Income** | **Reserve with respect to transactions**<br>**with non-controlling parties** |<br>**Accumulated deficit** |<br>**Non-controlling interest** | **Total<br> Equity of shareholders**<br>**of the<br> Company (Deficit)** |
| **Balance - January 1, 2023** | **12378129** | $**43452** | $**30863** | $**(1634)** | $**-** | $**(67395)** | $**(2397)** | $**2889** |
| Net loss for the year | **-** |  | **-** |  |  | (16061) | (1996) | (18057) |
| Remeasurement loss from defined benefit plans |  |  |  | 1 |  |  | **-** | 1 |
| Adjustments arising from translating financial statements of foreign operations | **-** | - | - | 303 | - | **-** | - | 303 |
| &nbsp;&nbsp;&nbsp;Total comprehensive income (loss) for the year | **-** |  |  | 304 |  | (16061) | (1996) | (17753) |
| Transactions with non-controlling parties |  |  |  |  | 927 |  | (405) | 522 |
| Issuances of shares *(note 18)* | 2759047 | 7129 |  |  |  |  |  | 7129 |
| Exercise of RSU's *(note 18(E))* | 185800 |  |  |  |  |  |  |  |
| Exercise of warrants *(note 18(D))* | 36800 | 102 |  |  |  |  |  | 102 |
| Share based compensation | **-** | 4802 | - | - | - | - | - | 4802 |
| **Balance - December 31, 2023** | **15359799** | $**55485** | $**30863** | $**(1330)** | $**927** | $**(83456)** | $**(4798)** | $**(2309)** |

---

*The accompanying notes are an integral part of the financial statements.*

**A2Z CUST2MATE SOLUTIONS CORP.**

**CONSOLIDATED STATEMENT OF CASH FLOWS**

**(Expressed in Thousands of US Dollars, except per share data)**

---

| | | | |
|:---|:---|:---|:---|
|  | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** |
|  | **2025** | **2024** | **2023** |
| **Cash flows from operating activities** |  |  |  |
| &nbsp;&nbsp;&nbsp;Loss for the year | $(38484) | $(19263) | $(18057) |
| Adjustments to reconcile net loss to net cash provided by operating activities: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization and depreciation | 815 | 862 | 1027 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Share based compensation | 20357 | 1913 | 5324 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Share based compensation to service providers |  | 1286 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss on deconsolidation of a subsidiary | 461 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss on impairment |  | 1727 | 1027 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss (gain) on revaluation of warrant liability | (998) | 4389 | (1255) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gain from revaluation of investment in associate | (133) | (123) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Changes in employee benefits | 12 | 26 | 88 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Changes in inventory | (3113) | (546) | 125 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Changes in short term and long term trade receivables | (2535) | (547) | (104) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Changes in other account receivables | (2491) | 79 | 1910 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued interest on loans and leases | 191 | 149 | 9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Changes in provision |  | (169) | (85) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Changes in accounts payable | 1592 | 92 | (482) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Changes in bank overdraft |  | 30 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Changes in deferred revenues |  |  | (1373) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Changes in other accounts payable | 1419 | (1616) | 459 |
| Cash flow used in operating activities | (22907) | (11711) | (11387) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Cash flows from investing activities** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Change in deposits | (241) | (129) | (69) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Divestment in a subsidiary | (47) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Investment in financial asset at fair value | (55642) |  | (77) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchase of Intangible asset | (637) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchase of property and equipment | (452) | (140) | (174) |
| Cash flow used in investing activities | (57019) | (269) | (320) |
| **Cash flows from financing activities** |  |  |  |
| Transactions with non-controlling parties | (1850) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Issuance of shares and warrants, net | 65727 | 24435 | 10317 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Change in other accounts payables |  |  | 1119 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Exercise of options | 548 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Exercise of warrants | 18433 | 576 | 102 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Repayment of contingent liability |  | (1136) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Lease payments | (745) | (583) | (336) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Repayment of loans | (808) | (580) | (476) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from receipt of loans | - | 95 | 167 |
| Cash flows from financing activities | 81305 | 22807 | 10893 |
| **Increase (decrease) in cash and cash equivalents** | 1379 | 10827 | (814) |
| Effect of changes in foreign exchange rates | (1380) | 308 | 465 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash at beginning of year | 13526 | 2267 | 2616 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash at the end of the year | $13525 | $13526 | $2267 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest paid during the year | 29 | 64 | 80 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**APPENDIX A: NON-CASH ACTIVITIES** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Recognition of a lease liability and right-of-use asset | 2381 | 283 |  |

---

See note 32 for cash flows from discontinued operations

*The accompanying notes are an integral part of the financial statements.*

**A2Z CUST2MATE SOLUTIONS CORP.**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**

**(Expressed in Thousands of US Dollars, except per share data)**

**NOTE 1 - DESCRIPTION OF BUSINESS:**

**Overview**

A2Z CUST2MATE SOLUTIONS CORP. (the "Company") was incorporated on January 15, 2018 under the laws of British Columbia. The head office is located at 1600 – 609 Granville Street, Vancouver, British Columbia V7Y 1C3, and the records and registered office is located at 2200 HSBC Building 885 West Georgia Street, British Columbia, V6C 3E8.

The Company has been listed on the NASDAQ Stock Market LLC ("Nasdaq") starting January 22, 2022, and traded under the symbol "AZ". The Company has been listed on the TSX Venture Exchange ("TSX.V") in Toronto until February 28, 2024. Following an approval for a voluntary delisting, the Company no longer trades on the TSX.V but has remained a reporting issuer in Canada and its common shares (the "Common Shares") remain listed on Nasdaq under the symbol AZ.

The Company had two key subsidiaries (the "Subsidiaries"), all of which are companies incorporated under the laws of Israel: (1) Cust2mate Ltd. ("Cust2mate"); and (2) Isramat Ltd. ("A2Z Isramat"). On JulyMew sta 13, 2023, Cust2mate incorporated a wholly owned subsidiary, Cust2mate USA Inc. under the laws of Delaware.

On February 12, 2025, the Company and the minority shareholders of Cust2Mate Ltd. entered into a share purchase agreement pursuant to which the Company exercised its call option and acquired an additional 66,194 ordinary shares of Cust2Mate, together constituting 19.81% of the issued and outstanding shares of Cust2Mate (on a fully diluted basis) for the aggregate purchase price of $1,850. After the acquisition of the 66,194 shares in Cust2Mate, the Company now holds an aggregate 322,743 shares of Cust2Mate, constituting 96.58% of Cust2Mate's issued and outstanding share capital.

On June 30, 2025, the Company entered into a share purchase agreement (the "A2ZMS Agreement") pursuant to which it sold its wholly owned subsidiary A2ZMS Advanced Military Solutions Ltd., a company organized under the laws of Israel ("A2ZMS"), to a purchaser residing in Israel for a purchase price of 500,000 ILS. The purchaser is related to a director of the Company. The A2ZMS Agreement was approved by all of the independent directors of the Company. The Company received an independent valuation of A2ZMS in connection with this transaction. See also note 32.

The Company owns 96.58% of the common shares of Cust2Mate, a technology company focused on providing retail automation solutions, in particular for large grocery stores and supermarkets. The Company's primary product is the Cust2Mate system which incorporates a "smart cart" which automatically calculates the value of the customers purchases in their smart cart, without having to unload and reload their purchases at a customer checkout point.

The Cust2Mate system offers various features for shoppers and retailers such as product information and location, an on-cart scale to weigh items and automatically calculate costs, bar-code scanner and on-board payment system to bypass checkout lines. In addition, the product includes big data smart algorithms and computer vision capabilities, allowing for customer specific targeted advertising. ("The Cust2Mate Platform").

The Company's activities through A2Z Isramat include the development of precision metal parts for the military and security markets, as well as for the civilian markets.

In October 2023, Israel was attacked by the Hamas terrorist organization and entered a state of war on several fronts. As of October 9, 2025, Israel and Hamas entered into a ceasefire agreement calling for a permanent end of the war. However, there are no assurances that such agreements will hold. In June 2025, following escalating threats and intelligence reports of imminent attacks, Israel conducted preemptive strikes on military and nuclear infrastructure in Iran. Iran responded with drones and missiles attacks, some of which caused civilian casualties and infrastructure damage. While a ceasefire was reached between Israel and Iran in June 2025 after 12 days of hostilities, on February 28, 2026, the United States and Israel launched coordinated military strikes against Iran, including attacks on strategic military infrastructure and leadership targets, with the stated aim of degrading Iran's capacity to conduct or support hostile operations against them. In response, Iran has fired missiles and drones toward population centers and military installations in Israel, Europe and neighboring countries in the Gulf region, and also launched counter-strikes against U.S. forces and allied bases throughout the Gulf region. In March 2026, hostilities resumed along Israel's northern border with Lebanon, when Hezbollah resumed its attacks as part of a broader regional escalation. In response, Israel resumed military operations against Hezbollah in southern Lebanon. As of the date of these consolidated financial statements, conflict continues in parts of the region. The extent to which the security situation in Israel may impact the Company's financial condition, results of operations, or liquidity is uncertain, and as of the date of issuance of these consolidated financial statements, the Company is not aware of any specific event or circumstance that would require an update to its estimates or judgments or an adjustment to the carrying value of the Company's assets or liabilities as of December 31, 2025.

These consolidated financial statements were authorized for issue by the Board of Directors on March 31, 2026.

**A2Z CUST2MATE SOLUTIONS CORP.**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**

**(Expressed in Thousands of US Dollars, except per share data)**

**NOTE 2 – BASIS OF PREPARATION:**

**A. Basis of preparation**

The principal accounting policies adopted in the preparation of the financial statements are set out above. These financial statements have been prepared in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board (IFRS Accounting Standards).

**B. Basis of consolidation**

Where the Company has control over an investee, it is classified as a subsidiary. The financial statements of the subsidiaries are included in the consolidated financial statements from the date that control commenced until the date control ceases. The Company controls an investee if all three elements are present: power over the investee, exposure to variable returns from the investee, and the ability of the investor to use its power to affect those variable returns. Control is reassessed whenever facts and circumstances indicate that there may be a change in any of these elements of control.

The consolidated financial statements of the Company include the accounts of the Company and its Subsidiaries as if they formed a single entity. Any intercompany transactions were eliminated in full.

**C. Functional and foreign currency** 

The Company's Israeli subsidiaries functional currency is the New Israeli Shekel ("NIS"), since their primary economic environment is in Israel. However, the presentation currency is in US Dollars ("USD") due to expected future expansion. Transactions and balances in foreign currencies are converted into US Dollars in accordance with the principles set forth by International Accounting Standard (IAS) 21 "The Effects of Changes in Foreign Exchange Rates".

**NOTE 3 - MATERIAL ACCOUNTING POLICIES:**

**A. Cash and cash equivalents**

Cash equivalents are considered by the Company to be highly liquid investments, including, inter alia, short-term deposits with banks, the maturity of which do not exceed three months at the time of deposit, and which are not restricted.

**B. Loss per share**

Basic loss per share is computed by dividing the net loss available to common shareholders by the weighted average number of shares outstanding during the reporting period. Diluted loss per share is computed similarly to basic loss per share except that the weighted average number of shares outstanding is increased to include additional shares from the assumed exercise of stock options and warrants, if dilutive. The average number of shares is calculated by assuming that outstanding conversions were exercised and that the proceeds from such exercises were used to acquire common shares at the average market price during the reporting period. For the years ended December 31, 2025, and 2024, potentially dilutive common shares issuable upon the exercise of warrants and options were not included in the computation of loss per share because their effect was anti-dilutive.

**C. Provisions**

Provisions are recognized when the Company has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic benefits will result and that outflow can be reliably measured. Provisions are measured using the best estimate of the amounts required to settle the obligation at the end of the reporting period.

**D. Fair value measurement**

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

1. In
 the principal market for the asset or liability, or

2. In
 the absence of a principal market, in the most advantageous market for the asset or liability.

The principal or the most advantageous market must be accessible to the Company.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

**A2Z CUST2MATE SOLUTIONS CORP.**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**

**(Expressed in Thousands of US Dollars, except per share data)**

**NOTE 3 - MATERIAL ACCOUNTING POLICIES (CONTINUED):**

**D. Fair value measurement (cont.)**

A fair value measurement of a non-financial asset takes into account a market participant's ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use. The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

Classification of fair value hierarchy

The financial instruments presented in the statement of financial position at fair value are grouped into classes with similar characteristics using the following fair value hierarchy which is determined based on the source of input used in measuring fair value:

---

| |
|:---|
| Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities. |
| Level 2 – Inputs other than quoted prices included within Level 1 that are observable either directly or indirectly. |
| Level 3 – Inputs that are not based on observable market data (valuation techniques which use inputs that are not based on observable market data). |

---

&nbsp;&nbsp;&nbsp;&nbsp;1. Financial
 assets

The Company classifies its financial assets into one of the following categories, based on the business model for managing the financial asset and its contractual cash flow characteristics. The Company's accounting policy for the relevant category is as follows:

Amortized cost: These assets arise principally from the provision of goods and services to customers (e.g. trade accounts receivable) but also incorporate other types of financial assets where the objective is to hold these assets in order to collect contractual cash flows and the contractual cash flows are solely payments of principal and interest. They are initially recognized at fair value plus transaction costs that are directly attributable to their acquisition or issue and are subsequently carried at amortized cost using the effective interest rate method, less provision for impairment. Impairment provisions for trade accounts receivable are recognized based on the simplified approach within IFRS 9 using a provision in the determination of the lifetime expected credit losses. During this process the probability of the non-payment of the trade receivables is assessed. This probability is then multiplied by the amount of the expected loss arising from default to determine the lifetime expected credit loss for the trade receivables. For trade receivables, which are reported net, such provisions are recorded in a separate provision account with the loss being recognized within general and administrative expenses in the consolidated statement of comprehensive income. On confirmation that the trade receivable will not be collectable, the gross carrying value of the asset is written off against the associated provision.

Financial assets not measured at fair value include cash and cash equivalents and trade and other receivables. Due to their short-term nature, the carrying value of cash and cash equivalents, loans to others, trade and other receivables, and trade payables approximates their fair value.

**A2Z CUST2MATE SOLUTIONS CORP.**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**

**(Expressed in Thousands of US Dollars, except per share data)**

**NOTE 3 - MATERIAL ACCOUNTING POLICIES (CONTINUED):**

**D. Fair value measurement (cont.):**

&nbsp;&nbsp;&nbsp;&nbsp;2. Financial
 Liabilities

The Company classifies its financial liabilities into one of two categories, depending on the purpose for which the liability was acquired. The Company's accounting policy for each category is as follows:

Fair value through profit or loss: Warrants are initially recognized at fair value net of any transaction costs directly attributable to the issue of the instrument. Such liabilities are subsequently measured at fair value through profit or loss.

Other financial liabilities include the following items: Bank borrowings are initially recognized at fair value net of any transaction costs directly attributable to the issue of the instrument. Such interest-bearing liabilities are subsequently measured at amortized cost using the effective interest rate method, which ensures that any interest expense over the period to repayment is at a constant rate on the balance of the liability carried in the consolidated statement of financial position. For the purposes of each financial liability, interest expense includes initial transaction costs and any premium payable on redemption, as well as any interest or coupon payable while the liability is outstanding. Trade accounts payable and other accounts payable, which are initially recognized at fair value and subsequently carried at amortized cost using the effective interest method.

&nbsp;&nbsp;&nbsp;&nbsp;3. Allocation
 of Units fund raising:

The issue of a Unit of various securities (shares and warrants) involves the allocation of the proceeds received (before issue expenses) to the underlying securities issued in the Unit based on the following order: warrant derivatives at their calculated fair value and proceeds allocated to common shares are determined to be the residual amount. Issue costs are allocated to each component pro rata to the amounts determined for each component in the Unit.

&nbsp;&nbsp;&nbsp;&nbsp;4. <u>Warrant liabilities</u> - <u>Derivatives:</u> 

Warrants that are denominated in a currency other than the functional currency of the Company are considered a derivative liability and are classified as financial liabilities at fair value through profit or loss. Accordingly, these warrants are measured at fair value and the changes in fair value in each reporting period are recognized in profit or loss.

**A2Z CUST2MATE SOLUTIONS CORP.**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**

**(Expressed in Thousands of US Dollars, except per share data)**

**NOTE 3 - MATERIAL ACCOUNTING POLICIES (CONTINUED):**

**D. Fair value measurement (cont.):** 

&nbsp;&nbsp;&nbsp;&nbsp;5. Impairment
 of financial assets

*ECL and their measurement*

ECL are measured as the unbiased probability-weighted present value of all cash shortfalls over the expected life of each financial asset. For receivables from financial services, ECL are mainly calculated with a statistical model using three major risk parameters: probability of default, loss given default and exposure at default. The estimation of these risk parameters incorporates all available relevant information, not only historical and current loss data, but also reasonable and supportable forward-looking information reflected by the future expectation factors. This information includes macroeconomic factors (e.g., gross domestic product growth, unemployment rate, cost performance index) and forecasts of future economic conditions. For receivables from financial services, these forecasts are performed using a scenario analysis (base case, adverse and optimistic scenarios).

As of December 31, 2025, and December 31, 2024, ECL for trade and other account receivables are not material. The ECL for trade and other account receivables in 2025 and 2024 were $17 and $15, respectively.

*Definition of default, including reasons for selecting the definition*

Prior to commencing a business relationship, the Company will enter into an agreement with the customer. The agreement or contract typically includes details of the terms of payment to which the customer is entitled. In most cases, the customer updates the Company if there is a delay in the payment beyond the terms of the agreement. Any delays in payment for more than two months are subject to approval of management. If a customer's scheduled payment is delayed by more than two months and such delay is not approved by the Company's management, the CEO will typically make direct contact with the customer's management and inform them of the overdue obligation and that Company will pursue remedies available to collect the overdue payment. If the customer and the Company are not able to resolve the matter at that time, the receivable is considered to be in default as the collectability is no longer certain. If the collection effort is not successful, the Company will retain legal counsel in the applicable country to assist with collection and sends a demand letter to that effect.

*Write-off policy*

The Company writes off its financial assets if any of the following occur:

● Inability to locate the debtor.

● Discharge of the debt in a bankruptcy.

● It is determined that the efforts to collect the debt are no longer cost effective given the size of receivable.

The collections department must comply with the collection efforts outlined in the policy to collect on delinquent customer accounts before any write-offs are made.

**NOTE 3 - MATERIAL ACCOUNTING POLICIES (CONTINUED):**

**D. Fair value measurement (cont.):**

*Aging Schedule based on due date*

---

| | | |
|:---|:---|:---|
|  | **Aging schedule** | **Aging schedule** |
|  | **December 31, 2025** | **December 31, 2024** |
| Within payment terms | $**4255** | $2024 |
| Total | $**4255** | $2024 |

---

*Three-level matrix*

Based on its past experience and historical data along with a consideration of future projections of factors, such as the economic environment, the Company has established a three-level matrix. The three-level matrix contains the following groups and balances:

---

| | | |
|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2024** |
| Government institutions | $**-** | $663 |
| Industrial customers | **1658** | 1361 |
| Supermarket Chains | **1376** |  |
| Long term trade receivables | **1221** | - |
| Total | $**4255** | $2024 |

---

**A2Z CUST2MATE SOLUTIONS CORP.**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**

**(Expressed in Thousands of US Dollars, except per share data)**

**NOTE 3 - MATERIAL ACCOUNTING POLICIES (CONTINUED):**

**E. Operating Segment:**

An operating segment is a component of the Company that meets the following three criteria:

&nbsp;&nbsp;&nbsp;&nbsp;1. Is
 engaged in business activities from which it may earn revenues and incur expenses;

2. Whose
 operating results are regularly reviewed by the Company's chief operating decision maker to make decisions about allocated
 resources to the segment and assess its performance; and

3. For
 which separate financial information is available.

Segment revenue and segment costs include items that are attributable to the relevant segments and items that can be allocated to segments. Items that cannot be allocated to segments include the Company's financial income and expenses and income tax. The Company has three operating segments; Precision Metal Parts, Advanced Engineering and Smart Carts.

**F. Share-based compensation:**

Where equity settled share options are awarded to employees and service providers, the fair value of the options calculated at the grant date is based on the market share price and is charged to the statement of comprehensive income over the vesting period. Non-market vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each reporting date so that, ultimately, the cumulative amount recognized over the vesting period is based on the number of options that eventually vest. Market vesting conditions are factored into the fair value of the options granted. As long as all other vesting conditions are satisfied, a charge is made irrespective of whether the market vesting conditions are satisfied. The cumulative expense charged is not adjusted for failure to achieve a market vesting condition.

**Share based payment transactions**

The Company's employees and other service providers are entitled to remuneration in the form of equity-settled share-based payment.

The cost of equity-settled transactions is recognized in profit or loss together with a corresponding increase in equity during the period which the performance and/or service conditions are to be satisfied ending on the date on which the relevant employees become entitled to the award ("the vesting period"). The cumulative expense recognized for equity-settled transactions at the end of each reporting date includes the Group's best estimate of the number of equity instruments that will ultimately vest.

The cost of equity-settled transactions with employees is measured at the fair value of the equity instruments granted at the grant date. The fair value of option granted is determined using the Black and Scholes model, which was aimed to model the value of the Company's assets over time. The simulation approach was designed to take into account the terms and conditions of the share options, as well as the capital structure of the Company and the volatility of its assets, on the date of grant based on certain assumptions.

**G. Deferred taxes**

Deferred taxes are recognized in respect of temporary differences between the carrying amounts of assets and liabilities in the financial statements and the amounts attributable for tax purposes. Significant judgment is required to determine the amount of deferred tax assets that can be recognized, based upon the estimated timing and level of future taxable profits together with future tax planning strategies.

Deferred taxes are measured at the tax rates that are expected to apply in the period when the temporary differences are reversed based on tax laws that have been enacted or substantively enacted at the end of the reporting period. Deferred taxes are recognized in Profit or loss, except when they relate to items recognized in other comprehensive income or directly in equity. Deferred tax assets are reviewed at the end of each reporting period and reduced to the extent that it is not probable that they will be utilized. In addition, temporary differences (such as carry forward losses) for which deferred tax assets have not been recognized or reassessed are recognized to the extent that their recoverability is probable. Any resulting reduction or reversal is recognized as "income tax" within the statement of comprehensive income. All deferred tax assets and liabilities are presented in the statement of financial position as non-current items, respectively.

Deferred taxes are offset in the statement of financial position if there is a legally enforceable right to offset a current tax asset against a current tax liability and the deferred taxes relate to the same taxpayer and the same taxation authority.

The current tax liability is measured using the tax rates and tax laws that have been enacted or substantively enacted by the reporting date as well as adjustments required in connection with the tax liability in respect of previous years.

Deferred tax assets in respect to carryforward losses have not been recognized in respect of these items because it is not probable that future taxable profit will be available against which the group can utilize the benefits therefrom.

**A2Z CUST2MATE SOLUTIONS CORP.**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**

**(Expressed in Thousands of US Dollars, except per share data)**

**NOTE 3 - MATERIAL ACCOUNTING POLICIES (CONTINUED):**

**H. Defined benefit schemes**

The Company contributes towards the state pension in accordance with local legislation where required. The only obligation of the Company is to make the required contributions. Costs related to such contributions are expensed in the period in which they are incurred.

The Company has several employee benefits plans as to its employees:

1. Short-term
 employee benefits: Short-term employee benefits include salaries, paid annual leave, paid sick leave, recreation and social security
 contributions and are recognized as expenses as the services are rendered. A liability in respect of a cash bonus or a profit-sharing
 plan is recognized when the Company has a legal or constructive obligation to make such payment as a result of past service rendered
 by an employee and a reliable estimate of the amount can be made.

2. Post-employment
 benefits: The plans are normally financed by contributions to insurance companies and classified as defined contribution plans or
 as defined benefit plans.

This liability is calculated based on actuary measurement.

Contributions to the defined contribution plan in respect of severance or retirement pay are recognized as an expense simultaneously with receiving the employee's services and no additional provision is required in the financial statements except for the unpaid contribution. The Company also operates for some employees an immaterial defined benefit plan in respect of severance pay pursuant to the Severance Pay Law. The Company presents the accrued severance pay liability net from severance pay fund.

**I. Property, equipment and right of use assets**

Depreciation and amortization are computed by the straight-line method, based on the estimated useful lives of the assets, as follows:

---

| | | |
|:---|:---|:---|
|  | Estimated useful lives | Estimated useful lives |
| Computers and electronic equipment |  | 3 |
| Machines and manufacturing equipment |  | 10 |
| Furniture and equipment |  | 7 |
| Vehicles |  | 6.67 |
| ERP system |  | 3-6 |
| Right of use assets and leasehold improvement |  | over the lease periods |

---

**A2Z CUST2MATE SOLUTIONS CORP.**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**

**(Expressed in Thousands of US Dollars, except per share data)**

**NOTE 3 - MATERIAL ACCOUNTING POLICIES (CONTINUED):**

**J. Revenue recognition**

Revenue is recognized based on the five-step model outlined in IFRS 15, Revenue from Contracts with Customers. IFRS 15 sets out a single revenue recognition model, according to which the entity shall recognize revenue in accordance with the said core principle by implementing a five-step model framework:

&nbsp;&nbsp;&nbsp;&nbsp;1. Identify
 the contracts with a customer.

2. Identify
 the performance obligations in the contract.

3. Determine
 the transaction price.

4. Allocate
 the transaction price to the performance obligations in the contract.

5. Recognize
 revenue when the entity satisfies a performance obligation.

i. Revenues generated from Isramat are to Israeli customers (amounted to $4,693 in 2025) and are recognized upon delivery, which is the point in time when the control of the goods is transferred to them.

ii Revenue from sale of smart carts is recognized from sale of goods in profit or loss at the point in time when the control of the goods is transferred to the customer, generally upon delivery of the smart carts to the customer. *Allocation of the Transaction Price to Performance Obligations* The Company allocates the transaction price to each performance obligation in the contract based on its relative Standalone Selling Price (SSP). The Company determines the SSP for each performance obligation as follows: Equipment (Products): The SSP for equipment is determined based on Observable Prices from standalone sales of the same or similar products to similar customers in representative circumstances. Services: For services where a standalone selling price is not directly observable, the Company estimates the SSP using the Expected Cost Plus a Margin approach. Under this method, the Company forecasts the costs expected to be incurred in satisfying the service (including direct labor and relevant overheads) and adds an appropriate margin. This margin reflects the return the Company expects to receive based on market conditions, industry benchmarks, and historical profit margins for similar service arrangements. In contracts involving multiple performance obligations, the total transaction price is allocated to the equipment and services based on the relative proportion of these estimated standalone selling prices. When consideration is received over a period exceeding 12 months, the Company adjusts the transaction price to reflect the time value of money. Revenue is recognized at the discounted present value, and the unwinding of the discount is recognized as interest income over the payment period. For the year ended December 31, 2025 and 2024, difference between the gross amount and the discounted presented value amounted to $128 and nil, respectively.

iii Revenue from services maintenance of smart carts is recognized - over the period of the provision of such services, following the delivery of the smart cart.

iv In cases where the Company enters into a buy-back agreement in which older models are repurchased from the customer, the amounts paid for the older models are recorded in inventory at the lower of the amount paid and the fair value of the older model. Any difference is netted off against Revenues and accounted as consideration paid to customers, for the years ended December 31, 2025 and 2024 the company recognized discounts in amount of $564 and none, respectively.

v The Company sells smart carts to customers under arrangements that may include bill-and-hold terms, whereby legal title and control of the goods transfer to the customer upon execution of the sales agreement, while the Company retains physical possession at the customer's request pending delivery at a future date. Revenue is recognized under such arrangements in accordance with IFRS 15), when all of the following criteria are met:

&nbsp;&nbsp;&nbsp;&nbsp;(a) The
 reason for the bill-and-hold arrangement is substantive (e.g., the customer has requested the arrangement due to ongoing site preparation
 for installation);

(b) The
 goods are separately identified as belonging to the customer;

(c) the
 goods are currently ready for physical transfer to the customer; and

(d) The
 Company cannot use the goods or direct them to another customer.

In addition, the Company assesses whether the general indicators of transfer of control are satisfied, including: a present right to payment, transfer of legal title, transfer of significant risks and rewards of ownership, and customer acceptance. Physical possession is retained by the Company as custodian on the customer's behalf and does not preclude the transfer of control in a bill-and-hold arrangement.<br>For the years ended December 31, 2025 and 2024, the Company recognized revenue of $2,200 thousand and nil, respectively, under bill-and-hold arrangements.<br>

**A2Z CUST2MATE SOLUTIONS CORP.**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**

**(Expressed in Thousands of US Dollars, except per share data)**

**NOTE 3 - MATERIAL ACCOUNTING POLICIES (CONTINUED):**

**K. Research and development expenses**

Research expenses are recognized in profit or loss when incurred. An intangible asset arising from a development project or from the development phase of an internal project is recognized if the Company can demonstrate all of the following: the technical feasibility of completing the intangible asset so that it will be available for use or sale; the Company's intention to complete the intangible asset and use or sell it; the Company's ability to use or sell the intangible asset; how the intangible asset will generate future economic benefits; the availability of adequate technical, financial and other resources to complete the intangible asset; and the Company's ability to measure reliably the expenditure attributable to the intangible asset during its development. Development costs in respect of the Company's model 3.0 Cart meet the aforementioned criteria and therefore development costs in respect thereof in the amounts if $637 have been capitalized to Intangible Assets (see note 9).

**L. New standards, interpretations and amendments adopted from 1 January 2025**

The following new amendments are effective for the period beginning 1 January 2025: The Company and its subsidiaries did not have to change their accounting policies or make retrospective adjustments as a result of adopting these amended standards:

*<u>Lack of exchangeability (Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates)</u>*

On 15 August 2023, the IASB issued Lack of Exchangeability which amended IAS 21 The Effects of Changes in Foreign Exchange Rates (the "Amendments").

These Amendments are applicable for annual reporting periods beginning on or after January 1, 2025. The Amendments introduce requirements to assess when a currency is exchangeable into another currency and when it is not. The Amendments require an entity to estimate the spot exchange rate when it concludes that a currency is not exchangeable into another currency. The Amendments also introduce additional disclosure requirements when an entity estimates a spot exchange rate because a currency is not exchangeable into another currency.

IAS 21, prior to the Amendments, did not include explicit requirements for the determination of the exchange rate when a currency is not exchangeable into another currency, which led to diversity in practice.

When applying the Amendments, an entity is not permitted to restate comparative information

These Amendments have had no material effect on the interim condensed consolidated financial statements.

**M. New standards, interpretations and amendments not yet effective**

There are a number of standards, amendments to standards, and interpretations which have been issued by the IASB that are effective in future accounting periods that the Company has decided not to adopt early.

The following standards and amendments are effective for the annual reporting period beginning 1 January 2027:

- IFRS 18 Presentation and Disclosure in Financial Statements <br> - IFRS 19 Subsidiaries without Public Accountability: Disclosures.

The Company is currently assessing the effect of these new accounting standards and amendments.

IFRS 18 Presentation and Disclosure in Financial Statements, which was issued by the IASB in April 2024 supersedes IAS 1 and will result in major consequential amendments to IFRS Accounting Standards including IAS 8 Basis of Preparation of Financial Statements (renamed from Accounting Policies, Changes in Accounting Estimates and Errors). Even though IFRS 18 will not have any effect on the recognition and measurement of items in the consolidated financial statements, it is expected to have a significant effect on the presentation and disclosure of certain items. These changes include categorization and sub-totals in the statement of profit or loss, aggregation/disaggregation and labelling of information, and disclosure of management-defined performance measures.

The Group does not expect to be eligible to apply IFRS 19.

**N. Going Concern**

In order to assess whether it is appropriate for the company to continue as a going concern, management is required to apply judgment and make estimates with respect to future cash flow projections. In arriving at this judgment, there were several assumptions and estimates involved in calculating these future cash flow projections. This includes making estimates regarding the timing and amounts of future revenues and expenditures and the ability and timing of raising additional financing.

**O. Functional Currency**

The Company and its subsidiaries are required to determine their functional currencies based on the primary economic environment in which each entity operates. In order to do that, management has to analyze several factors, including which currency mainly influences the cost of undertaking the business activities, in which currency the entity has received financing, and in which currency it keeps its receipts from operating activities. Management uses its judgment to determine which factors are most important when the above indicators are mixed and the functional currency is not obvious.

**A2Z CUST2MATE SOLUTIONS CORP.**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**

**(Expressed in Thousands of US Dollars, except per share data)**

**NOTE 4 - CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS:**

The areas requiring the use of estimates and critical judgments that may potentially have a significant impact on the Company's earnings and financial position are:

**Impairment of intangible assets**

An impairment test on capitalized development costs is undertaken whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. The Company evaluates the carrying value of its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability Test includes recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the asset. Where the carrying value of an asset exceeds its recoverable amount (i.e., the higher value in use and fair value less costs to sell), the asset is written down accordingly.

**Determination of fair value - Warrants liabilities - derivatives and share-based payment transactions**

The Company uses the Black-Scholes option-pricing model to estimate fair value. The key assumptions used in the model are the expected future volatility in the price of the Company's shares and the expected life of the instrument.

**NOTE 5 – FINANCIAL ASSETS AT FAIR VALUE**

The reconciliation of the opening and closing fair value balance of financial instruments is provided below:

---

| | |
|:---|:---|
| **Financial assets at fair value** | **Level 1** |
|  | USD in thousand |
| **January 1, 2024** | $- |
| Purchases |  |
| Disposals |  |
| Gain (loss) | - |
| **December 31, 2024** | $- |
| Purchases | 55240 |
| Disposals |  |
| Gain (loss) | 402 |
| **December 31, 2025** | $55642 |

---

General objectives, policies and processes

The Company's investment strategy regarding its financial assets is the preservation of capital; the Company does not invest for trading or speculative purposes. The Company holds level 1 short-term investments (mutual funds and bonds) with yields ranging between 3.70% to 4.35%.

Other market price risk

The Company is exposed to price risks of shares, certificate of participation in mutual funds and bonds, which are classified as financial assets carried at fair value through profit or loss. The effect of a 1% increase in the value of the portfolio securities investment held at the reporting date would, if all other variables held constant, have resulted in an increase in the fair value through profit or loss and net assets of $560. A 1% decrease in their value would, on the same basis, have decreased the fair value through other profit or loss reserve and net assets by the same amount.

**A2Z CUST2MATE SOLUTIONS CORP.**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**

**(Expressed in Thousands of US Dollars, except per share data)**

**NOTE 6** - **INVENTORIES:**

---

| | | |
|:---|:---|:---|
|  | **December 31,**<br>**2025** | **December 31,**<br>**2024** |
| Raw materials | $**117** | $454 |
| Smart cart parts | **2528** | 342 |
| Inventory in transit | **636** |  |
| Finished goods | **610** | - |
|  | $**3891** | $796 |

---

**NOTE 7** – **SHORT TERM AND LONG TERM **TRADE RCEIVABLES, NET**:**

---

| | | |
|:---|:---|:---|
|  | **December 31,**<br>**2025** | **December 31,**<br>**2024** |
| Customers | $**4272** | $2039 |
| Expected credit losses | **(17)** | (15) |
| Trade receivables, net | $**4255** | $2024 |

---

As of December 31, 2025, the Company did not have any overdue balances and has experienced immaterial credit losses.

**NOTE 8** – **PREPAYMENTS AND OTHER ACCOUNTS RECEIVABLE:**

---

| | | |
|:---|:---|:---|
|  | **December 31,**<br>**2025** | **December 31,**<br>**2024** |
| Advances to suppliers | $**2412** | $- |
| Prepaid expenses | **120** | 223 |
| Government institutions | **166** | 241 |
| Other | **239** | 117 |
|  | $**2937** | $581 |

---

**NOTE 9** – **INTANGIBLE ASSETS:**

---

| | |
|:---|:---|
| **Balance, January 1, 2024** | $1850 |
| Depreciation | (123) |
| write off of patent (a) | (1727) |
| **Balance, December 31, 2024** | $- |
| Capitalization of model 3.0 smart carts (b) | 637 |
| **Balance, December 31, 2025** | $637 |

---

&nbsp;&nbsp;&nbsp;&nbsp;(a) In February 2024, the Company decided to cease the development
of its patent and recognized a loss as a result of impairment to its patent in the amount of $1,727 in the consolidated statement of comprehensive
loss for the year ended December 31, 2024.

(b) During the year, the Company identified development costs in
the amount $637 in respect of the model 3.0 smart cart.

**NOTE 10** – **LONG TERM FINANCIAL ASSETS AT FAIR VALUE**

On September 30, 2023, the Company entered into a Share Purchase Agreement (the "Agreement") with Shelfie-Tech Ltd. ("Shelfie") an Israeli company organized under the laws of the State of Israel, developing an innovative patented technology, a robotic retail shelf monitoring system using advanced machine learning and image processing algorithms to automatically optimize inventory management. At the closing and upon the terms and conditions set forth in the Agreement, the Company invested $158 in cash, in exchange for 237,897 ordinary shares, NIS 0.001 par value of Shelfie (the "Shelfie Shares") based on a price per share of $0.66, during the year 2024, the Company invested $42 in cash, in exchange for 65,548 ordinary shares, NIS 0.001 par value of Shelfie based on a price per share of $0.65, resulting in the Company holding 1.3% of the issued and outstanding shares of Shelfie. As of December 31, 2025, fair value of the Shelfie Shares is $333 and the Company has recorded a financial gain in the amount of $133 for the year ended December 31, 2025.

**A2Z CUST2MATE SOLUTIONS CORP.**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**

**(Expressed in Thousands of US Dollars, except per share data)**

**NOTE 11** - **PROPERTY, EQUIPMENT AND RIGHT OF USE ASSETS, NET:**

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | Computers and electronic equipment | Machines and manufacturing equipment | Furniture and equipment | Vehicles | ERP system | Leasehold improvements | Right of use asset | Total |
| Cost: |  |  |  |  |  |  |  |  |
| As of January 1, 2025 | $466 | $2228 | $366 | $889 | 213 | $398 | $1430 | $5990 |
| Additions | 30 | 77 | 27 | 132 | 51 | 135 | 2381 | 2833 |
| Discontinued operation | (436) |  | (186) | (774) |  | (63) | (391) | (1850) |
| Translation adjustments | 43 | 327 | 44 | 53 | 34 | 64 | 193 | 758 |
| As of December 31, 2025 | $103 | $2632 | $251 | $300 | 298 | $534 | $3613 | $7731 |
| Accumulated depreciation: |  |  |  |  |  |  |  |  |
| As of January 1, 2025 | $369 | $1750 | $306 | $505 | $116 | $367 | $1032 | $4445 |
| &nbsp;&nbsp;&nbsp;Additions | 30 | 110 | 5 | 48 | 62 | 4 | 556 | 815 |
| Discontinued operation | (357) |  | (158) | (473) |  | (56) | (348) | (1392) |
| Translation adjustments | 30 | 262 | 32 | 7 | 17 | 54 | (95) | 307 |
| As of December 31, 2025 | $72 | $2122 | $185 | $87 | $195 | $369 | $1145 | $4175 |
| Net Book Value: |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;As of December 31, 2025 | $31 | $510 | $66 | $213 | 103 | $165 | $2468 | $3556 |

---

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | Computers and electronic equipment | Machines and manufacturing equipment | Furniture and equipment | Vehicles | ERP system | Leasehold improvements | Right of use asset | Total |
| Cost: |  |  |  |  |  |  |  |  |
| As of January 1, 2024 | $462 | $2152 | $362 | $868 | $206 | $394 | $1144 | $5588 |
| Additions | 11 | 100 | 4 | 24 |  |  | 283 | 422 |
| Translation adjustments | (7) | (24) | - | (3) | 7 | 4 | 3 | (20) |
| As of December 31, 2024 | $466 | $2228 | $366 | $889 | 213 | $398 | $1430 | $5990 |
| Accumulated depreciation: |  |  |  |  |  |  |  |  |
| As of January 1, 2024 | $326 | $1678 | $287 | $412 | $53 | $359 | $612 | $3727 |
| &nbsp;&nbsp;&nbsp;Additions | 50 | 94 | 13 | 92 | 55 | 5 | 417 | 726 |
| Translation adjustments | (7) | (22) | 6 | 1 | 8 | 3 | 3 | (8) |
| As of December 31, 2024 | $369 | $1750 | $306 | $505 | $116 | $367 | $1032 | $4445 |
| Net Book Value: |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;As of December 31, 2024 | $97 | $478 | $60 | $384 | 97 | $31 | $398 | $1545 |

---

**A2Z CUST2MATE SOLUTIONS CORP.**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**

**(Expressed in Thousands of US Dollars, except per share data)**

**NOTE 12 – SHORT TERM LOANS AND CURRENT PORTION OF LONG-TERM LOANS:**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Linked to** | **Interest rate** | **December 31,<br> 2025** | **December 31,<br> 2024** |
| Short term loans | NIS | 3.2%-7.5 | $**-** | $715 |
| Current portion of long-term loans |  |  | **9** | 111 |
| Short term loans and current portion of long-term loans |  |  | $**9** | $826 |

---

**NOTE 13 – LEASE LIABILITY:**

The Company has lease contracts for working areas and office facilities used in its operations. Leases of working areas and office facilities generally have lease terms of between 2 and 5 years. The Company has three lease contracts that include termination option, which are valid after a minimal lease period. The Company has three lease contracts that include extension options. One of the Company's Israeli subsidiaries leases office space with the lease expiring on March 31, 2029. Lease payments are approximately $48 thousand per month ($576 thousand annually). Another one of the Company's Israeli subsidiaries leases warehouse space, with the lease expiring on March 31, 2027. Lease payments are approximately $18 thousand per month ($216 thousand annually). Another one of the Company's Israeli subsidiaries leases its factory space with the lease expiring on March 31, 2027. Lease payments are approximately $19 thousand per month ($228 thousand annually).

Set out below are the carrying amounts of lease liabilities recognized and the movements during the period:

---

| | |
|:---|:---|
|  | **working areas and**<br> **office facilities** |
| **Balance January 1, 2024** | $600 |
| Additions | 283 |
| Accretion | (482) |
| Accumulated interest | 58 |
| Exchange rate differences | (1) |
| **Balance December 31, 2024** | $458 |
| Additions | 2381 |
| Accretion | (745) |
| Accumulated interest | 185 |
| Discontinued operation | (7) |
| Exchange rate differences | 305 |
| **Balance December 31, 2025** | $2577 |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **Linked to** | **December 31,**<br> **2025** | **December 31,**<br> **2024** |
| Long Term leases | NIS | $**1758** | $458 |
| Current portion of long-term leases |  | **819** | 217 |
| Non-current portion of long-term leases |  | $**2577** | $241 |

---

**NOTE 14 - OTHER ACCOUNTS PAYABLE:**

---

| | | |
|:---|:---|:---|
|  | **December 31,**<br>**2025** | **December 31,**<br>**2024** |
| Employees and government authorities | $**1355** | $874 |
| Related parties (note 29) | **845** | 44 |
|  | $**2200** | $918 |

---

**NOTE 15 - LONG TERM LOANS:**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Linked to** | **Interest rate** | **December 31,<br> 2025** | **December 31,<br> 2024** |
| Long term loans | NIS | 1.8%-6.1 | $**38** | $219 |
| Less- current portion |  |  | **(9)** | (111) |
| Non current long term loans |  |  | $**29** | $108 |

---

The loans are from leading Israeli financial institutions and bear interest of between 1.8% - 6.1%.

**A2Z CUST2MATE SOLUTIONS CORP.**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**

**(Expressed in Thousands of US Dollars, except per share data)**

**NOTE 16 – WARRANT LIABILITY:**

Certain warrants issued between November 2, 2022 and January 4, 2024, were issued with an exercise price denominated in US Dollars rather than the functional currency of the Company – New Israeli Shekels (NIS). As of December 31, 2025, there are 1,286,808 such warrants outstanding ("Liability Warrants"), see note 19 (a)(ii).<br>Under IAS 32 *Financial Instruments: Presentation*, a contract that will be settled by the exchange of a fixed number of the Company's own equity instruments for a fixed amount of cash qualifies as an equity instrument. This is commonly referred to as the "fixed-for-fixed" criterion.<br>Because the exercise price of the warrants is denominated in a currency different from the Company's functional currency, the amount of functional currency cash to be received upon exercise varies as a result of changes in foreign exchange rates. Accordingly, the warrants do not meet the fixed-for-fixed criterion and are classified as derivative financial liabilities.<br>The warrants are initially recognized at fair value and subsequently remeasured at fair value at each reporting date in accordance with IFRS 9 *Financial Instruments*. Changes in fair value are recognized in profit or loss within finance income (expense).<br>The fair value of the warrants is determined using an option pricing model that incorporates assumptions including share price, exercise price, expected volatility, expected life, risk-free interest rate and foreign exchange rates<br>The Black-Scholes option pricing model was used to measure the warrant liability with the following assumptions: volatility of 93%-110% using the historical prices of the Company, risk-free interest rate of 3.62%-4.45%, expected life of 2.00 years and exercise price of CAD$3.90-CAD$7.475.<br>

Level 3 for the period ended on December 31, 2025:

---

| | |
|:---|:---|
| Balance at December 31, 2023 | $3075 |
| Issuance of warrants | 1027 |
| Warrant exercise | (450) |
| Revaluation at December 31, 2024 | 4384 |
| Effect of changes in foreign exchange rates | (293) |
| Balance at December 31, 2024 | $7743 |
| Expiration of warrants | (816) |
| Warrant exercise | (5592) |
| Revaluation at December 31, 2025 | 2218 |
| Effect of changes in foreign exchange rates | (2977) |
| Balance at December 31, 2025 | $576 |

---

For the year ended December 31, 2025, the Company recorded a loss on the revaluation of Liability Warrants in the amount of $998 (for the year ended December 31, 2024 - $4,384).

**A2Z CUST2MATE SOLUTIONS CORP.**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**

**(Expressed in Thousands of US Dollars, except per share data)**

**NOTE 17 – LIENS, COMMITMENTS AND PROVISIONS:**

The Company's Israeli subsidiary's fixed assets (motor vehicles) are secured against bank borrowings.

**NOTE 18 – SHAREHOLDERS' EQUITY:**

A. On March 20, 2023, the Company closed a private placement for gross proceeds of $2,604 through the issuance of 713,424 units ("March 2023 Units") at a price per March 2023 Unit of US$3.65 (CAD$4.875). Each March 2023 Unit consists of one Common Share and one half of one Common Share purchase warrant (each whole such warrant a "Warrant"). An aggregate of 356,711 Warrants were issued with an exercise price of CAD$5.875 (US$4.375) The Warrants have a term of two years and if fully exercised, will result in the issuance of an additional 356,711 Common Shares ("March 2023 Private Placement Warrants"). A finder's fee of $208 (CAD$290) was paid and 57,074 March 2023 Private Placement Warrants were issued in connection with the private placement.

B. On June 15 and June 20, 2023, the Company closed a registered direct offerings for gross proceeds of $6,873 through the issuance of 1,527,310 units ("June 2023 Units") at a price per Unit of US$2.875 (CAD$3.90). Each December 2023 Unit consists of one Common Share and one half of one Common Share purchase warrant (each whole such warrant a "Warrant"). An aggregate of 763,654 Warrants were issued with an exercise price of CAD$7.325 (US$5.50) The Warrants have a term of two years and if fully exercised, will result in the issuance of an additional 763,654 Common Shares ("June 2023 Registered Direct Offerings Warrants"). A finder's fee of $550 (CAD$733) was paid and 122,185 non-registered warrants were issued in connection with the Registered Direct Offerings. The cash finders' fees are charged against Share Capital and Additional Pain In Capital in the Statement of Chanes in Shareholder Equity and the fair value of the warrants is credited to the Warrant Reserve on the Statement of Chanes in Shareholder Equity.

C. On December 13, 2023, the Company closed registered direct offerings for gross proceeds of $1,490 through the issuance of 518,313 units ("December 2023 Units") at a price per Unit of US$2.875 (CAD$3.40). Each December 2023 Unit consists of one Common Share and one half of one Common Share purchase warrant (each whole such warrant a "Warrant"). An aggregate of 259,156 Warrants were issued with an exercise price of CAD$5.125 (US$3.75) The Warrants have a term of two years and if fully exercised, will result in the issuance of an additional 259,156 Common Shares ("December 2023 Registered Direct Offerings Warrants"). A finder's fee of $119 (CAD$162) was paid and 41,465 non-registered warrants were issued in connection with the Registered Direct Offerings.

D. During the year ended December 31, 2023, the Company issued 36,800 Common Shares in respect of 36,800 warrants that were exercised for gross proceeds of $140.

E. During the year ended December 31, 2023, the Company issued 185,800 Common Shares in respect of 185,800 RSUs that were exercised.

**A2Z CUST2MATE SOLUTIONS CORP.**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**

**(Expressed in Thousands of US Dollars, except per share data)**

**NOTE 18 – SHAREHOLDERS' EQUITY (CONTINUED):**

F. On
 January 4, 2024, the Company closed a registered direct offering for gross proceeds of $3,227 through the issuance of 1,122,521 units
 ("January 2024 Units") at a price per Unit of $2.88 (CAD$3.40). Each January 2024 Unit consists of one Common Share and
 one half of one Common Share purchase warrant (each whole such warrant a "January 2024 Warrant"). An aggregate of 561,260 January 2024 Warrants were issued with an exercise price of CAD$5.13 ($3.75) per share. The Warrants have a term of two years and
 if fully exercised, will result in the issuance of an additional 561,260 Common Shares ("January 2024 Registered Direct Offerings
 Warrants"). A finder's fee of $258 (CAD$348 thousand) was paid and 89,802 January 2024 Registered Direct Offerings Warrants
 were issued in connection with the registered direct Offering.

G. On
 April 2, 2024, the Company closed a registered direct offering for gross proceeds of approximately $3,300 at a purchase price of
 $0.875 per share and issued an aggregate of 3,792,200 common shares in the registered direct offering. The Company issued 293,776 common shares as finders' fee.

H. On
 August 12, 2024, the Company closed its previously announced private placement for gross proceeds of approximately $2,502 , at a purchase
 price of $0.875 per common share and $0.875 per pre-funded warrant. The Company issued a total of 1,839,554 common shares and pre-funded
 warrants to purchase up to 1,200,000 common shares, with each pre-funded warrant having an exercise price of $0.0001 per share. Each
 pre-funded warrant has an exercise price of $0.00025 per share and will expire when exercised in full.

Certain directors and officers of the Company purchased $420 value of common shares in the private placement. In connection with the closing, the Company has issue certain non-U.S. residents 180,624 common shares as finders fees.

I. On
 October 2, 2024, the Company closed its previously announced securities purchase agreement with certain accredited investors to issue,
 in a registered direct offering, 2,165,200 common shares at a purchase price of US$1.875 per share, for gross proceeds of $4,060 .
 The Company paid $325 and issued 134,720 common shares and 21,333 warrants as finders' fees.

J. On
 October 15, 2024, the Company closed its previously announced securities purchase agreement with certain accredited investors to
 issue, in a registered direct offering, 642,858 common shares at a purchase price of US$2.80 per share, for gross proceeds of $1,800 ,
 The Company paid $144 and issue 51,428 common shares as finders' fees.

K. On
 December 16, 2024, the Company issued in a registered direct offering 1,947,000 common shares at a purchase price of $6.40 per share,
 for gross proceeds of $12,460 . The Company paid $997 in cash and issued 146,940 common shares as finders' fees.

L. During
 the year ended December 31, 2024, the Company issued 1,330,300 Common Shares in respect of 1,330,300 warrants that were exercised
 for gross proceeds of $576 (note 19 (a)).

M. During
 the year ended December 31, 2024, the Company issued 764,001 Common Shares in respect of 764,001 RSUs that were exercised (note 19
 (c)).

**A2Z CUST2MATE SOLUTIONS CORP.**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**

**(Expressed in Thousands of US Dollars, except per share data)**

**NOTE 18 – SHAREHOLDERS' EQUITY (CONTINUED):**

N. On
 January 29, 2025, the Company announced the pricing of an underwritten public offering of 3,281,250 Common Shares at a public offering
 price of $6.40 per share. The Company concurrently announced the pricing of a registered direct offering of 1,406,250 Common Shares
 at a purchase price of $6.40 per share. The offerings closed on January 29, 2025. The total gross proceeds from the offerings to
 the Company were $30,000 . Titan Partners Group LLC, a division of American Capital Partners LLC, acted as sole bookrunner for the
 underwritten public offering. The Company paid $2,400 in cash and issued 60,650 Common Shares and 229,688 warrants as finders'
 fees. The warrants expire on January 29, 2030 and the fair value of the warrants is credited to the Warrant reserve on
the Statement of Chanes in Shareholder Equity.

O. On
 September 16, 2025, the Company entered into an Underwriting Agreement (the "Underwriting Agreement") with Titan
 Partners Group LLC, a division of American Capital Partners LLC, as sole bookrunner (the "Underwriter"), relating to an
 underwritten public offering (the "Offering") of 5,625,000 of its common shares, no par value per share (the "Common Shares"), with each Common Share sold at a public offering
 price of $8.00 .
 The offering closed on September 18, 2025. The total gross proceeds from the offerings to the Company were $45,000 .
 The Company paid $3,150 in cash and issued 324,625 warrants as finders' fees. The warrants expire on September 16, 2030 and the fair value of the warrants is credited to the Warrant reserve in
the Statement of Changes in Shareholder Equity. The warrants expire on September 16, 2030 and the fair value of the warrants is credited
to the Warrant reserve on the Statement of Chanes in Shareholder Equity.

P. During
 the year ended December 31, 2025, the Company issued 219,667 Common Shares in respect of the exercise of 219,667 vested RSUs (note
 19 (c)).

Q. During
 the year ended December 31, 2025, the Company issued 225,332 Common Shares in respect of the exercise of 225,332 share options for
 proceeds of $548 (note 19 (b)).

R. During
 the year ended December 31, 2025, the Company issued 3,474,596 Common Shares in respect of the exercise of 3,474,596 warrants for
 proceeds of $17,149 (note 19 (a)).

S. During
the year ended December 31, 2025, the Company issued 5,000 Common Shares in respect of services rendered in the amount of $35 .

**A2Z CUST2MATE SOLUTIONS CORP.**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**

**(Expressed in Thousands of US Dollars, except per share data)**

**NOTE 19 – WARRANTS AND OPTIONS:**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**a) Warrants**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Warrant
 transactions for the years ended December 31, 2025, and 2024 are as follows:

---

| | | |
|:---|:---|:---|
|  | **Number** | **Weighted Average**<br> **Exercise Price** |
| **Balance, January 1, 2024** | **4386234** | $6.58 |
| Warrants issued in the January 2024 Registered Direct Offering | 651062 |  |
| Warrants issued in the July 2024 Private Placement | 1200000 |  |
| Exercise of warrants | (1330300) |  |
| Warrants issued in the October 2024 Private Placement | 21333 |  |
| **Balance, December 31, 2024** | **4928329** | $6.17 |
| Expiry of warrants | (721239) |  |
| Exercise of warrants | (3474595) |  |
| Warrants issued in the January 2025 Registered Direct Offering and September 2025 underwritten public offering | 554313 |  |
| **Balance, December 31, 2025** | **1286808** | $13.39 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) As
 of December 31, 2025, the Company had outstanding warrants, enabling the holders to acquire common shares as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **December 31,**<br> **2025** | **Expiry date** | **Exercise price** | **Exercise price** | **Exercise price**<br> **(USD)** |
| 88440 | April 18, 2026 | ILS | 72.563 | $22.75 |
| 433825 | May 28, 2026 | ILS | 72.563 | $22.75 |
| (\*) 252,967 | January 4, 2026 | CAD | 5.13 | $3.75 |
| 3200 | October 2, 2026 | CAD | 2.70 | $1.88 |
| 183751 | January 29, 2030 | USD | 8.00 | $8.00 |
| 324625 | September 16, 2030 | USD | 10.00 | $10.00 |
| 1286808 |  |  |  |  |

---

(\*) Liability Warrants – see note 16.

**A2Z CUST2MATE SOLUTIONS CORP.**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**

**(Expressed in Thousands of US Dollars, except per share data)**

**NOTE 19 – WARRANTS AND OPTIONS (CONTINUED):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**b) Stock Options**

Stock option transactions for the years ended December 31, 2025, and 2024 are as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **Number** | **Weighted**<br> **Average**<br> **Exercise Price**<br> **(CAD)** | **Weighted**<br> **Average**<br> **Exercise Price**<br> **(USD)** |
| **Balance January 1, 2024** | 1411170 | $6.33 | $4.78 |
| Options granted (i) | 552000 |  |  |
| Expiry of options | (206500) |  |  |
| **Balance December 31, 2024** | 1756670 | $5.39 | $3.75 |
| Options cancelled | (127668) |  |  |
| Options exercised | (225332) |  |  |
| Options granted (ii)(iii)(iiii)(iv) | 2863500 |  |  |
| **Balance December 31, 2025** | 4267170 | $6.14 | $8.41 |

---

(i) On
 August 14, 2024, 552,000 stock options were issued to employees, consultants and officers with an exercise price of $1.78 . The options
 expire on August 13, 2029 . The fair value of the options granted was estimated at $779 using the Black-Scholes option pricing model,
 using the following assumptions: Share Price: $1.78 ; Expected option life 5 years; Volatility 109 %; Risk-free interest rate 3.67 %;
 Dividend yield 0 %.

(ii) On
 January 15, 2025, the Company granted an employee 105,000 share options to purchase Common Shares of the company with an exercise
 price of $6.40 per share. The share options vest quarterly starting on January 15, 2026 , and expire on January 15, 2035 . The fair
 value of the options granted was estimated at $627 using the Black-Scholes option pricing model, using the following assumptions:
 Share Price: $6.38 ; Expected option life 10 years; Volatility 110 %; Risk-free interest rate 4.65 %; Dividend yield 0 %.

(iii) On
 February 12, 2025, the Company granted the CEO 500,000 share options to purchase Common Shares with an exercise price of $6.40 per
 share, vesting immediately and expiring on February 2, 2035 . The fair value of the options granted was estimated at $3,092 using
 the Black-Scholes option pricing model, using the following assumptions: Share Price: $6.61 ; Expected option life 10 years; Volatility 110 %; Risk-free interest rate 4.64 %; Dividend yield 0 %.

(iii) On
June 20, 2025, 229,000 share options were granted to employees. 30,000 share options have an exercise price of $1.775 per share and their
vesting schedule is as follows: a third vest on June 30, 2025, a third on June 30, 2026, and a third on June 30, 2027. The remaining 199,000 share options have an exercise price of $6.40 per share and their vesting schedule is as follows: a third vest on June 30, 2026,
a third on June 30, 2027, and a third on June 30, 2028. The options expire on June 20, 2035 . The fair value of the options granted was
estimated at $2,252 using the Black-Scholes option pricing model, using the following assumptions: Share Price: $10.36 ; Expected option
life 10 years; Volatility 108 %; Risk-free interest rate 4.38 %; Dividend yield 0 %.

(iv) On
October 9, 2025, 239,000 share options were granted to employees. 215,000 share options have an exercise price of $8.00 per share, 24,000 share options have an exercise price of $6.40 per share. The vesting schedule is as follows: a third vest on September 30, 2026, a third
on September 30, 2027, and a third on September 30, 2028. The options expire on October 9, 2035 . The fair value of the options granted
was estimated at $1,644 using the Black-Scholes option pricing model, using the following assumptions: Share Price: $7.33 ; Expected option
life 10 years; Volatility 113 %; Risk-free interest rate 4.15 %; Dividend yield 0 %.

(iv) On
 December 30, 2025, 1,790,500 share options were granted to employees. 474,500 share options have an exercise price of $8.00 per share
 and their vesting schedule is as follows: a third vest on December 30, 2025, a third on December 30, 2027, and a third on December
 30, 2028. 800,000 share options have an exercise price of $8.00 per share and vest immediately. 1,000 share options have an exercise
 price of $6.40 per share and their vesting schedule is as follows: a third vest on June 30, 2026, a third on June 30, 2027, and a
 third on June 30, 2028. 15,000 share options have an exercise price of $8.00 per share and their vesting schedule is as follows:
 a third vest immediately, a third on December 30, 2026, and a third on December 30, 2027. The remaining 500,000 share options have
 an exercise price of $6.00 per share and vest immediately. The options expire on December 30, 2035 . The fair value of the options
 granted was estimated at $7,747 using the Black-Scholes option pricing model, using the following assumptions: Share Price: $6.43 ;
 Expected option life 10 years; Volatility 105 %; Risk-free interest rate 4.13 %; Dividend yield 0 %.

**A2Z CUST2MATE SOLUTIONS CORP.**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**

**(Expressed in Thousands of US Dollars, except per share data)**

**NOTE 19 – WARRANTS AND OPTIONS (CONTINUED):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**b) Stock Options (continued)**

&nbsp;&nbsp;&nbsp;&nbsp;(vi) As
 of December 31, 2025, the Company had outstanding stock options, enabling the holders to acquire common shares as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Outstanding as**<br> **of December 31,**<br> **2025** | **Exercisable as**<br> **of December 31,**<br> **2025** | **Expiry date** | **Exercise price**<br> **(CAD)** | **Exercise price**<br> **(USD)** |
| 20000 | 20000 | June 3, 2026 CAD | 21.00 | $15.32 |
| 6670 | 6670 | October 28, 2026 CAD | 20.00 | $14.59 |
| 360000 | 360000 | August 2, 2032 CAD | 8.90 | $6.49 |
| 120000 | 120000 | August 21, 2032 CAD | 10.00 | $7.30 |
| 220000 | 220000 | January 4, 2033 CAD | 4.13 | $3.01 |
| 100000 | 100000 | January 4, 2033 CAD | 4.13 | $3.01 |
| 40000 | 40000 | November 25, 2027 CAD | 5.03 | $3.67 |
| 103000 | 91000 | April 18, 2033 CAD | 4.00 | $2.92 |
| 441000 | 146333 | August 14, 2034 CAD | 2.43 | $1.78 |
| 105000 |  | January 15, 2035 CAD | 8.77 | $6.40 |
| 500000 | 500000 | February 2, 2035 CAD | 8.77 | $6.40 |
| 30000 | 10000 | June 20, 2035 CAD | 2.43 | $1.775 |
| 192000 |  | June 20, 2035 CAD | 8.77 | $6.40 |
| 239000 | 6667 | October 9, 2035 CAD | 10.96 | $8.00 |
| 500000 | 500000 | December 30, 2035 CAD | 8.22 | $6.00 |
| 1290500 | 805000 | December 30, 2035 CAD | 10.96 | $8.00 |
| 4267170 | 2925670 |  |  |  |

---

&nbsp;&nbsp;&nbsp;&nbsp;(vii) Share-based
 compensation expense is recognized over the vesting period of options. During the year ended December 31, 2025, share-based compensation
 of $12,703 was recognized and charged to the Consolidated Statement of Comprehensive Loss (December 31, 2024 - $729 , December 31,
 2023 – $4,245).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**c) RSU's**

On January 4, 2023, the Company granted 410,800 RSUs to directors, officers and advisers, of which 104,000 RSUs are to executives and directors, pursuant to the Company's RSU Plan and in acknowledgment of the Company's management recent success and increased future workload. The RSUs will vest at each recipient's discretion and taking into account personal tax implications and convert into 410,800 common shares of no-par value in the Company.

On April 18, 2023, the Company granted 46,500 RSUs to employees, pursuant to the Company's RSU Plan. The RSUs will vest at each recipient's discretion and taking into account personal tax implications and convert into 46,500 common shares of no-par value in the Company.

On June 28, 2023, the Company granted 66,000 Restricted Share Units ("RSUs") to officers pursuant to the Company's RSU Plan. The RSUs will vest at each recipient's discretion and taking into account personal tax implications and convert into 66,000 common shares of no-par value in the Company ("Common Shares").

On August 14, 2024, the Company granted 326,000 Restricted Share Units ("RSUs") to officers and advisors, pursuant to the Company's RSU Plan. The RSUs will vest at each recipient's discretion and taking into account personal tax implications and convert into 326,000 common shares of no-par value in the Company.

On January 15, 2025, the Company granted an employee 20,000 Restricted Share Units ("RSUs") pursuant to the Company's RSU plan and in acknowledgement of the Company's recent success and future workload. The RSUs will vest immediately.

On February 12, 2025, the Company granted the CEO 400,000 RSUs pursuant to the Company's RSU plan and in acknowledgement of the Company's recent success and future workload. The RSUs will vest upon the Company entering into one or more agreements for the binding supply of at least 10,000 smart carts.

On June 20, 2025, the Company granted 125,000 RSUs to an advisor. The RSUs vest immediately.

On December 28, 2025, the Company granted the CEO 500,000 RSUs pursuant to the Company's RSU plan and in acknowledgement of the Company's recent success and future workload. The RSUs will vest upon the Company entering into one or more agreements for the binding supply of at least 30,000 smart carts.

On December 30, 2025, the Company granted 500,000 RSUs to an advisor. The RSUs vest immediately.

RSU's transactions for the year ended December 31, 2025, and for the year ended December 31, 2024, are as follows:

---

| | |
|:---|:---|
|  | Number |
| Balance, January 1, 2024 | 588834 |
| RSUs granted | 326000 |
| Expiry of RSUs | (40166) |
| Exercise of RSUs | (764001) |
| Balance, December 31, 2024 | 110667 |
| RSUs granted | 1545000 |
| Expiry of RSUs | (6000) |
| Exercise of RSUs | (219667) |
| Balance, December 31, 2025 | 1430000 |

---

Total exercisable RSU's as at December 31, 2025, are 930,000. During the year ended December 31, 2025, share-based compensation in respect of RSU's of $7,619 was charged to the Consolidated Statement of Comprehensive Loss (December 31, 2024 – $1,184, December 31, 2023 – $1,079).

**A2Z CUST2MATE SOLUTIONS CORP.**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**

**(Expressed in Thousands of US Dollars, except per share data)**

**NOTE 20 – NON-CONTROLLING INTERESTS**

The following Company subsidiaries which have non-controlling interests:

---

| | | |
|:---|:---|:---|
|  | **December 31,**<br>**2025** | **December 31,**<br>**2024** |
| Cust2mate | $(1547) | $(7065) |
|  | $(1547) | $(7065) |

---

SCHEDULE OF SUBSIDIARIES OF NON-CONTROLLING INTERESTS

---

| | |
|:---|:---|
|  | Non-controlling interests |
| Balance, December 31, 2024 | (7065) |
| &nbsp;&nbsp;&nbsp;Increase in holding of Cust2mate | 6267 |
| &nbsp;&nbsp;&nbsp;Non-controlling interest share of losses | (749) |
| Balance, December 31, 2025 | (1547) |

---

**NOTE 21 – REVENUES:**

**Revenue streams:**

---

| | | | |
|:---|:---|:---|:---|
|  | **Year Ended December 31** | **Year Ended December 31** | **Year Ended December 31** |
|  | **2025** | **2024** | **2023** |
| Revenues from sales of precision metal parts | $4693 | $4844 | $3084 |
| **Smart Carts:** |  |  |  |
| &nbsp;&nbsp;&nbsp;Product | 2386 |  | 5628 |
| &nbsp;&nbsp;&nbsp;Services | 822 | 532 | 500 |
| Revenues from smart carts project | 3208 | 532 | 6128 |
|  | $7901 | $5376 | $9212 |

---

**NOTE 22 – COST OF REVENUES:**

---

| | | | |
|:---|:---|:---|:---|
|  | **Year Ended December 31** | **Year Ended December 31** | **Year Ended December 31** |
|  | **2025** | **2024** | **2023** |
| Payroll and related expenses | $1812 | $1583 | $1412 |
| Share-based compensation | 315 |  |  |
| Subcontractor and outsourced work | 135 | 3 | 116 |
| Materials and components consumed | 3675 | 1566 | 5701 |
| Depreciation | 321 | 117 | 118 |
| Smart cart maintenance | 514 | 41 | 429 |
| Other | 35 | 177 | 183 |
|  | $6807 | $3487 | $7959 |

---

**NOTE 23 – RESEARCH AND DEVELOPMENT EXPENSES:**

---

| | | | |
|:---|:---|:---|:---|
|  | **Year Ended December 31** | **Year Ended December 31** | **Year Ended December 31** |
|  | **2025** | **2024** | **2023** |
| Payroll and related expenses | $4610 | $2417 | $1758 |
| Subcontractor and outsourced work | 935 | 1081 | 1683 |
| Share-based compensation | 4154 | 191 | 532 |
| Pilot expenses and other | 245 | 164 | 130 |
|  | $9944 | $3853 | $4103 |

---

**NOTE 24 – SALES AND MARKETING:**

---

| | | | |
|:---|:---|:---|:---|
|  | **Year Ended December 31** | **Year Ended December 31** | **Year Ended December 31** |
|  | **2025** | **2024** | **2023** |
| Payroll and related expenses | $338 | $686 | $363 |
| Professional fees | 1181 | 434 | 776 |
| Share-based compensation | 2338 | 96 | 238 |
|  | $3857 | $1216 | $1377 |

---

**A2Z CUST2MATE SOLUTIONS CORP.**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**

**(Expressed in Thousands of US Dollars, except per share data)**

**NOTE 25 – GENERAL AND ADMINISTRATIVE EXPENSES:**

---

| | | | |
|:---|:---|:---|:---|
|  | **Year Ended December 31** | **Year Ended December 31** | **Year Ended December 31** |
|  | **2025** | **2024** | **2023** |
| Payroll and related | $2956 | $2891 | $4007 |
| Professional fees | 2525 | 1470 | 1966 |
| Share-based compensation | 13550 | 1632 | 4531 |
| Depreciation and amortization | 494 | 395 | 414 |
| Office maintenance | 951 | 367 | 252 |
| Investor relations | 1298 | 258 |  |
| Rent and related expenses | 244 | 200 | 360 |
| Travel | 349 | 184 | 129 |
| Public company related expenses | 173 | 144 | 824 |
| Directors & officers' insurance | 350 | 228 | 253 |
| Other | 859 | 179 | 331 |
|  | $23749 | $7948 | $13067 |

---

**NOTE 26** - **LOSS PER SHARE:**

Both the basic and diluted loss per share have been calculated using the weighted average number of shares in issue during the relevant financial periods, the weighted average number of equity shares in issue and loss for the period as follows:

SCHEDULE OF LOSS PER SHARE

---

| | | | |
|:---|:---|:---|:---|
|  | **Year Ended December 31** | **Year Ended December 31** | **Year Ended December 31** |
|  | **2025** | **2024** | **2023** |
| Net loss for the year attributable to A2Z's shareholders | $37735 | $16996 | $16061 |
| Weighted average number of ordinary shares | 36958606 | 21369527 | 13899212 |
| Basic and diluted loss per share from continued operations | $0.96 | $0.71 | $1.10 |
| Basic and diluted loss per share from discontinued operations | $0.07 | $0.09 | $0.06 |

---

**NOTE 27 – FINANCIAL EXPENSES, NET:**

SCHEDULE OF FINANCIAL EXPENSES

---

| | | | |
|:---|:---|:---|:---|
|  | **Year Ended December 31** | **Year Ended December 31** | **Year Ended December 31** |
|  | **2025** | **2024** | **2023** |
| Bank fees and interest | $20 | $136 | $124 |
| Interest expenses from lease liabilities | 185 | 47 | 62 |
| Revaluation of financial asset at fair value | 1014 | 153 | 70 |
| Finance income | (618) | (158) | (85) |
| Financial expenses | $601 | $178 | $171 |

---

**NOTE 28 – INCOME TAX EXPENSE:**

**A. Taxes on income:**

The combined Canadian federal and provincial statutory income tax rate is 26.5% in 2025, 2024 and 2023.

Israeli corporate tax rates is 23% in 2025, 2024 and 2023.

**B. Tax reconciliation:**

SCHEDULE OF TAX RECONCILIATION

---

| | | | |
|:---|:---|:---|:---|
|  | **Year Ended December 31** | **Year Ended December 31** | **Year Ended December 31** |
|  | **2025** | **2024** | **2023** |
| Loss before income tax | $(38484) | $(19263) | $(18057) |
| Statutory tax rate | 23% | 23% | 23% |
| Income tax benefit at the statutory tax rate | 8851 | 4430 | 4153 |
| Current period tax losses carried forward (unrecognized) | (8851) | (4430) | (4153) |
| Income tax expense | $- | $- | $- |

---

**A2Z CUST2MATE SOLUTIONS CORP.**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**

**(Expressed in Thousands of US Dollars, except per share data)**

**NOTE 29- RELATED PARTIES AND SHAREHOLDERS:**

**The following transactions arose with related parties:**

SCHEDULE OF TRANSACTIONS WITH RELATED PARTIES

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Year ended December 31, 2025** | **Year ended December 31, 2025** | **Year ended December 31, 2025** | **Year ended December 31, 2025** | |
|  | **Directors Fees** | **Consulting Fees/Salaries** | **Share based awards** | **Total** | **Amounts owing by (to) as of**<br>**December 31,**<br> **2025** |
| Chairman and former CEO | $- | $578 | $- | $578 | $(61) |
| Director and CEO |  | 1161 | 9035 | 10196 | (63) |
| CFO |  | 34 | 8 | 42 | (3) |
| Directors | 21 | - | 21 | 42 | (2) |
|  | $21 | $1773 | $9064 | $10858 | $(129) |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Year ended December 31, 2024** | **Year ended December 31, 2024** | **Year ended December 31, 2024** | **Year ended December 31, 2024** | |
|  | **Directors Fees** | **Consulting Fees/Salaries** | **Share based awards** | **Total** | **Amounts owing by (to) as of**<br>**December 31,**<br> **2024** |
| Chairman and former CEO | $- | $730 | $- | $730 | $(44) |
| Director and CEO |  | 543 | 249 | 792 | (27) |
| Former CFO |  | 90 |  | 90 |  |
| CFO | 14 | 19 | 34 | 67 | (2) |
| Directors | 19 | - | 63 | 82 | (4) |
|  | $33 | $1382 | $346 | $1761 | $(76) |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Year ended December 31, 2023** | **Year ended December 31, 2023** | **Year ended December 31, 2023** | **Year ended December 31, 2023** | |
|  | **Directors Fees** | **Consulting Fees/Salaries** | **Share<br> based awards** | **Total** | **Amounts owing by (to) as of**<br>**December 31,**<br> **2023** |
| Director and CEO | $- | $- | $- | $- | $462 |
| Company controlled by CEO |  | 1235 |  | 1235 | (103) |
| CFO |  | 96 |  | 96 | (9) |
| Directors | 32 | 325 | 263 | 620 | (30) |
|  | $32 | $1656 | $263 | $1951 | $(142) |

---

(1) The
 Company's former CEO has a consulting agreement with the Company pursuant to which he earns $27 per month.

(2) The
 Company's CFO has a consulting agreement with the Company pursuant to which he earns $3 (CAD$4) per month.

(3) The
 Company's CEO has a consulting agreement with the Company pursuant to which he earns $50 per month.

(4) Three
 non-executive directors, of which two earn directors' fees of $1 per month.

**A2Z CUST2MATE SOLUTIONS CORP.**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**

**(Expressed in Thousands of US Dollars, except per share data)**

**NOTE 30 - FINANCIAL INSTRUMENTS AND RISK MANAGEMENT:**

The Company is exposed to a variety of financial risks, which results from its financing, operating and investing activities. The objective of financial risk management is to contain, where appropriate, exposures in these financial risks to limit any negative impact on the Company's financial performance and position.

The Company's financial instruments are its cash, trade and other receivables, payables, other payables and loans in different currencies (NIS, CAD and USD). The main purpose of these financial instruments is to raise finance for the Company's operation. The Company actively measures, monitors and manages its financial risk exposures by various functions pursuant to the segregation of duties and principals. The risks arising from the Company's financial instruments are mainly credit risk and currency risk. The risk rate on loans is fixed. The risk management policies employed by the Company to manage these risks are discussed below.

**A.** **Credit risk:** 

Credit risk arises when a failure by counterparties to discharge their obligations could reduce the amount of future cash inflows from financial assets on hand at the balance sheet date. The Company closely monitors the activities of its counterparties and controls access to its intellectual property which enables it to ensure the prompt collection of customers' balances.

Credit risk arises when a failure by counterparties to discharge their obligations could reduce the amount of future cash inflows from financial assets on hand at the balance sheet date. The Company closely monitors the activities of its counterparties and controls access to its intellectual property which enables it to ensure the prompt collection of customers' balances.

The Company's main financial assets are cash and cash equivalents and trade accounts receivable and represent the Company's maximum exposure to credit risk in connection with its financial assets. Wherever possible and commercially practical the Company holds cash with major financial institutions In Israel.

SCHEDULE OF FINANCIAL ASSET WITH CASH AND TRADE ACCOUNTS RECEIVABLE

---

| | | |
|:---|:---|:---|
|  | **December 31,**<br>**2025** | **December 31,**<br>**2024** |
| Cash and Cash Equivalents | $**13525** | $13526 |
| Deposits | **384** | 206 |
| Investment in financial assets | **55642**  |  |
| Short term and long term trade receivables | **4255**  | 2024 |
| Long term financial assets at fair value | **333** | 200 |
| Other accounts receivable | **2937** | 581 |
| **Total** | $**77076** | $16537 |

---

**A2Z CUST2MATE SOLUTIONS CORP.**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**

**(Expressed in Thousands of US Dollars, except per share data)**

**NOTE 30 - FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (CONTINUED):**

**B.** **Liquidity risks:** 

Liquidity risk is the risk that arises when the maturity of assets and the maturity of liabilities do not match. An unmatched position potentially enhances profitability but can also increase the risk of loss. The Company has procedures with the object of minimizing such loss by maintaining sufficient cash and other highly liquid current assets and by having an available adequate amount of committed credit facilities. The following tables detail the Company's remaining contractual maturity for its financial liabilities. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay

SCHEDULE OF LIQUIDITY RISKS

---

| | | | |
|:---|:---|:---|:---|
|  | **Contractual** | **Contractual** | **Contractual** |
|  | **Carrying amounts** | **Within 1 year** | **over 1 year** |
| Trade payables | $3348 | $3348 | $- |
| Other accounts payable | $2200 | $2200 | $- |
| Loans | $38 | $9 | $29 |
| Lease liability | $2577 | $1030 | $1959 |

---

**C.** **Market risks:** 

The Company's' business of maintenance services of various electronic systems is highly competitive and involves a certain degree of risk. The Company's business operations will depend largely upon the outcome of continued sales and services to security establishments and the initiation of sales of their products to the civilian markets.

The Company's Cust2Mate business is new, and the Company is aware of competitors in the market. In addition to the regular management oversight and skills required, success in this segment will require the Company to penetrate the market as rapidly as possible.

Foreign exchange risk arises when the Company enters into transactions denominated in a currency other than its functional currency. The Company buys its inventories mostly in USD and sells its products in NIS. Foreign exchange exposures are managed within utilizing forward foreign exchange contracts**.**

As of December 31, 2025, if the Company's functional currency (ILS) had strengthened/ weakened by 5% against the USD, with all other variables held constant, the loss for the year would decrease /increase by approximately $838.

**D.** **Interest rate risks:** 

The Company's exposure to cash flow interest rate risk from long-term borrowings at variable rate, which is immaterial.

**E.** **Capital management** 

The Company considers its capital to be comprised financial assets and inventory net of financial liabilities excluding warrant liabilities. The Company's objectives in managing its capital are to maintain its ability to continue as a going concern and to further develop its business. To effectively manage the Company's capital requirements, the Company has a planning and budgeting process in place to meet its strategic goals. In order to facilitate the management of its capital requirements, the Company prepares expenditure budgets that are updated as necessary depending on various factors, including successful capital deployment and general industry conditions. Management reviews the capital structure on a regular basis to ensure the above objectives are met. There have been no changes to the Company's approach to capital management during the year ended December 31, 2025. There are no externally imposed restrictions on the Company's capital.

**A2Z CUST2MATE SOLUTIONS CORP.**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**

**(Expressed in Thousands of US Dollars, except per share data)**

**NOTE 31 – COMMITMENTS**

One of the Company's Israeli subsidiaries leases office space with the lease expiring on March 31, 2029. Lease payments are approximately $48 per month ($576 annually). Another one of the Company's Israeli subsidiaries leases warehouse space, with the lease expiring on March 31, 2029. Lease payments are approximately $18 thousand per month ($216 thousand annually). Another one of the Company's Israeli subsidiaries leases its factory space with the lease expiring on March 31, 2027. Lease payments are approximately $19 thousand per month ($228 thousand annually).

**NOTE 32 – DISCONTINUED OPERATIONS**

On June 30, 2025, the Company entered into a share purchase agreement (the "A2ZMS Agreement") pursuant to which it sold its wholly-owned subsidiary A2ZMS Advanced Military Solutions Ltd., a company organized under the laws of Israel ("A2ZMS"), to a purchaser residing in Israel for a purchase price of 500,000 ILS. The purchaser is related to a director of the Company. The A2ZMS Agreement was approved by all of the independent directors of the Company. The Company received an independent valuation of A2ZMS in connection with this transaction.

The results of operations of A2ZMS were classified as discontinued operations in these consolidated financial statements of the Company as of December 31, 2025.

The below are the data of operating results attributed to the discontinued operations:

---

| | | | |
|:---|:---|:---|:---|
|  | **Yeat ended December 31,** | **Yeat ended December 31,** | **Yeat ended December 31,** |
|  | **2025** | **2024** | **2023** |
| **Revenues** | $**824** | $1790 | $2163 |
| &nbsp;&nbsp;&nbsp;Cost of revenues | **767** | 1692 | 1423 |
| **Gross profit** | **57** | 98 | 740 |
| **Expenses:** |  |  |  |
| &nbsp;&nbsp;&nbsp;Research and development costs | **9** | 164 | 648 |
| &nbsp;&nbsp;&nbsp;General and administration expenses | **1455** | 1714 | 866 |
| **Operating loss** | **(1407)** | (1780) | (774) |
| &nbsp;&nbsp;&nbsp;Other expense | **-** |  |  |
| &nbsp;&nbsp;&nbsp;Financial (income) expense | **9** | 61 | 46 |
| &nbsp;&nbsp;&nbsp;**Loss before taxes on income** | **(1416)** | (1841) | (820) |
| &nbsp;&nbsp;&nbsp;Income tax expense | **-** |  |  |
| &nbsp;&nbsp;&nbsp;Loss on disposal of discontinued operations\* | **(1009)** |  |  |
| &nbsp;&nbsp;&nbsp;**Net loss for the year from discontinued operations** | $**(2425)** | $(1841) | $(820) |

---

(\*) The loss on disposal of discontinued operations was determined as follows:

**A2Z CUST2MATE SOLUTIONS CORP.**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**

**(Expressed in Thousands of US Dollars, except per share data)**

**NOTE 32 – DISCONTINUED OPERATIONS (CONTINUED)**

---

| | | |
|:---|:---|:---|
|  | **Year ended**<br> **December 31,** | **Year ended**<br> **December 31,** |
|  | **2025** | **2024** |
| Consideration received on disposal of discontinued operations | $148 | $- |
| Cash disposed of | (549) | - |
| Net cash outflow on disposal of discontinued operations | (401) |  |
| &nbsp;&nbsp;&nbsp;Net assets disposed (other than cash): |  |  |
| &nbsp;&nbsp;&nbsp;Property, equipment and right of use assets, net | (416) |  |
| &nbsp;&nbsp;&nbsp;Trade and other receivables | (668) |  |
| &nbsp;&nbsp;&nbsp;Trade and other payables | 223 |  |
| &nbsp;&nbsp;&nbsp;Loans | 94 |  |
| &nbsp;&nbsp;&nbsp;Severance payments, net | 159 | - |
|  | $(1009) | $- |

---

---

| | | |
|:---|:---|:---|
|  | **Year ended** | **Year ended** |
|  | **December 31,** | **December 31,** |
|  | **2025** | **2024** |
| **Net cash flows provided by (used by) discontinued operations** |  |  |
| &nbsp;&nbsp;&nbsp;From operating activities | $514 | $338 |
| &nbsp;&nbsp;&nbsp;From investing activities | (47) | (94) |
| &nbsp;&nbsp;&nbsp;From financing activities | (134) | (255) |
|  | $333 | $11 |

---

**A2Z CUST2MATE SOLUTIONS CORP.**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**

**(Expressed in Thousands of US Dollars, except per share data)**

**NOTE 33 – OPERATING SEGMENTS:**

The Company and its subsidiaries are engaged in the following two segments, currently in one graphical location (Israel):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Retail
 automation solutions – Smart Carts ("Smart Carts")

b. Manufacturing
 and selling of precision metal parts – "Precision Metal Parts"

SCHEDULE OF OPERATING SEGMENTS

---

| | | | |
|:---|:---|:---|:---|
|  | **Year Ended December 31, 2025** | **Year Ended December 31, 2025** | **Year Ended December 31, 2025** |
|  | Precision Metal Parts | Smart Carts | **Total** |
| *Revenues* |  |  |  |
| External | $4693 | $3208 | $7901 |
| *Cost of revenues* |  |  |  |
| External | 4163 | 2644 | 6807 |
| Inter-segment |  |  |  |
| *Total* | 4163 | 2644 | 6807 |
| *Segment operational loss* | 392 | 36064 | 36456 |
| Loss on revaluation of warrant liability |  |  | (998) |
| Finance expense, net |  |  | 601 |
| Tax expenses |  |  | - |
| Loss |  |  | $36059 |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **Year Ended December 31, 2024** | **Year Ended December 31, 2024** | **Year Ended December 31, 2024** |
|  | Precision Metal Parts | Smart Carts | **Total** |
| *Revenues* |  |  |  |
| External | $4844 | $532 | $5376 |
| *Cost of revenues* |  |  |  |
| External | 3258 | 275 | 3533 |
| Inter-segment |  | (46) | (46) |
| *Total* | 3258 | 229 | 3487 |
| *Segment operational loss (gain)* | (182) | 13037 | 12855 |
| *Loss on revaluation of warrant liability* |  |  | 4389 |
| Finance expense, net |  |  | 178 |
| Tax expenses |  |  | - |
| Loss |  |  | $17422 |

---

**A2Z CUST2MATE SOLUTIONS CORP.**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**

**(Expressed in Thousands of US Dollars, except per share data)**

**NOTE 33 – OPERATING SEGMENTS (CONTINUED):**

---

| | | | |
|:---|:---|:---|:---|
|  | **Year Ended December 31, 2023** | **Year Ended December 31, 2023** | **Year Ended December 31, 2023** |
|  | Precision Metal Parts | Smart Carts | **Total** |
| *Revenues* |  |  |  |
| External | $3084 | $6128 | $9212 |
| *Cost of revenues* |  |  |  |
| External | 2867 | 5548 | 8415 |
| Inter-segment |  | (456) | (456) |
| *Total* | 2867 | 5092 | 7959 |
| *Segment operational loss* | 2416 | 15905 | 18321 |
| *Gain on revaluation of warrant liability* |  |  | (1255) |
| Finance expense, net |  |  | 171 |
| Tax expenses |  |  | - |
| Loss |  |  | $17237 |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **As at December 31, 2025** | **As at December 31, 2025** | **As at December 31, 2025** |
|  | Precision Metal Parts | Smart Carts | Total |
| Segment assets | $2871 | $82289 | $85160 |
| Segment liabilities | $1138 | $7601 | $8739 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **As at December 31, 2024** | **As at December 31, 2024** | **As at December 31, 2024** | **As at December 31, 2024** |
|  | Precision Metal Parts | Discontinued <br>operations | Smart Carts | Total |
| Segment assets | $3017 | $1043 | $14818 | $18878 |
| Segment liabilities | $2138 | $717 | $9179 | $12034 |

---

**NOTE 34 – SUBSEQUENT EVENTS:**

During January 2026, the Company issued 400,000 Common Shares in respect of the exercise of 400,000 vested RSUs.

During January 2026, the Company issued 4,000 Common Shares in respect of the exercise of 4,000 share options for proceeds of $11.

During January 2026, the Company issued 252,967 Common Shares in respect of the exercise of 252,967 warrants for proceeds of $945.

## Exhibit 1.4

**Exhibit 1.4**

![](ex1-4_001.jpg)

![](ex1-4_002.jpg)

![](ex1-4_003.jpg)

![](ex1-4_004.jpg)

![](ex1-4_005.jpg)

## Exhibit 4.31

**Exhibit 4.31**

**CONSULTING AGREEMENT**

**THIS AGREEMENT** made effective as of the 10th day of August, 2024

**BETWEEN:** 

**A2Z CUST2MATE SOLUTIONS CORP.**, a company incorporated in Canada under the *Business Corporations Act* (British Columbia).

**AND:**

**ALAN ROOTENBERG,** an individual residing at 559 Briar Hill Avenue, Toronto, Ontario, M5N 1N1 and doing business as **The M&S Group**

(the "**Consultant**")

**WHEREAS:**

A. The
 Company desires to retain the Consultant to provide his services as the Company's Chief
 Financial Officer upon the terms and conditions set forth herein ()"**Services** ").

B. The Consultant provides public company Chief Financial Officer services.

**NOW THEREFORE** this Agreement witnesses that in consideration of the mutual covenants between the parties and for other good and valuable consideration, the receipt and sufficiency of which consideration is hereby acknowledged by each party, the parties do hereby agree, each with the other, as follows:

**1.** **DESCRIPTION OF RELATIONSHIP** 

**1.1** **Engagement by Company** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The
 Company hereby engages the Consultant to provide duties and responsibilities associated with
 the role of Chief Financial Officer of the Company as is applicable to the size and stage
 of development of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The
 Consultant represents and warrants that he is knowledgeable of Canadian and U.S. securities
 laws as such relate to the financial continued reporting obligations of companies and has
 the requisite knowledge regarding applicable accounting standards.

**1.2** **Standard of Care** 

In carrying out his duties hereunder, the Consultant shall:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) act
 honestly, in good faith and with a view to the best interests of the Company's business;

(b) exercise
 the care, diligence and skill of a reasonably prudent person in comparable circumstances;

(c) act
 in accordance with generally accepted industry standards; and

(d) comply
 with all rules, regulations, policies and procedures of the Company.

**1.3** **Indemnity** 

The Consultant and the Company will protect, defend, indemnify and hold each other harmless from any losses, costs or liabilities arising as a result of any material breaches of covenants or representations made pursuant to this Agreement, and for any negligence or willful misconduct or for any breaches of applicable law, including but not limited to corporate and securities laws, committed by one party that causes harm to the other party.

**1.4** **Provision of Office Space** 

The Consultant shall utilize its own office facilities when carrying out its duties to the Company hereunder.

**1.5** **Agreement on Services** 

The Consultant will carry out the Services herein contemplated to be performed in accordance with the intent of this Agreement, subject always to the reasonable requests of the Company.

**2.** **FEES AND REIMBURSEMENTS** 

**2.1** **Remuneration** 

The Company shall pay the Consultant fees of **CDN$4,000** per month for the Services as the Chief Financial Officer of the Company.

All amounts paid a as fees are exclusive of the imposition of Canadian G.S.T.

**2.2** **Reimbursement for Expenses** 

Upon receipt of valid receipts and invoices from the Consultant, the Company will reimburse the Consultant for reasonable expenses, including travel, incurred by or on behalf of the Consultant, in the promotion of the business of the Company, or in providing consulting services to the Company, subject to the rules, policies and practices now or hereinafter established by the Company from time to time, as the same may be amended and/or restated from time to time.

**2.3** **Stock Option Plan and Other Incentive Plans** 

The Consultant will be eligible, subject to the approval of the board of directors of the Company, to participate, from time to time, in any stock option plan and any other long-term incentive plan or benefit plan provided by the Company to senior executive officers of the Company, as the same may be amended in accordance with its terms during the Term (as defined below).

**2.4** **Director's and Officer's Insurance** 

The Company will use its best efforts to obtain and maintain for the Consultant, industry standard directors and officers' insurance at such levels as are standard for companies listed on a public stock exchange.

**3.** **CONFIDENTIAL INFORMATION & COMPANY PROPERTY** 

**3.1** **Confidential Information** 

The Consultant acknowledges that while fulfilling his duties hereunder, he will acquire information about certain matters and things which are confidential to the Company or its affiliates, and which information is the exclusive property of the Company or affiliates, as applicable, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) financial
 information with respect to the Company and its Business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) business
 plans and strategies of the Company; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) trade
 secrets;

(all of which are hereinafter called the "**Confidential Information**").

**3.2** **Covenant Not to Disclose Confidential Information** 

The Consultant acknowledges the Confidential Information as referred to in paragraph 3.1 above could be used to the detriment of the Company. Accordingly, he undertakes not to disclose any of the Confidential Information acquired by him in the course of his performance of his duties hereunder to any third party either during the Term (as defined below), or after the Term (as defined below), however caused, except as may be necessary in the proper discharge of its obligations under this Agreement, or with the written permission of the Company. For greater certainty, this paragraph 3.2 will not apply to any information which is available to the parties hereto, either publicly or from other sources.

**4.** **TERM AND TERMINATION** 

**4.1** **Term** 

This Agreement will commence on the date of this Agreement and continue until the date that is **one calendar year** from the date hereof (the "**Initial Term**") subject to early termination in accordance with the terms of this Agreement. Unless either Party has provided notice to the other at least **one (1) month** prior to the end of the Initial Term, upon completion of the Initial Term, this Agreement shall automatically be renewed and shall continue until terminated by either the Company or the Consultant in accordance with the terms of this Agreement. The Initial Term and any renewal term shall be collectively referred to herein as the "**Term**".

**4.2** **Termination** 

This Agreement may be terminated in any of the following circumstances:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) By
 either the Company or the Consultant:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) at
 any time upon thirty (30) days' prior written notice; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) upon
 any material breach of this Agreement by the other party, provided that such breach has not
 been cured within 25 days of receiving written notice thereof from the non-breaching party

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) By
 the Company at any time, on written notice from the Company to the Consultant, if the Consultant:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) fails
 to act in the best interests of the Company or its subsidiaries or affiliates;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) fails
 in any material respect to perform or carry out the duties hereunder;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) intentionally
 or negligently engages in any act that is materially injurious to the Company or its subsidiaries
 whether financially or otherwise; or,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) is
 adjudicated to be a bankrupt, is dishonest in their dealings with the Company, or the customers,
 suppliers, officers or shareholders of the Company, misappropriates assets of the Company
 or is convicted of an indictable criminal offence.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Automatically
 upon the death of the Consultant.

**4.3** **Effect of Termination** 

Upon the expiration or termination of this Agreement by either party, for any reason:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the
 parties will be released from all obligations and duties imposed or assumed hereunder, except
 as expressly provided by this Agreement;

(b) the
 parties shall cooperate to provide for an orderly cessation of the Services and any other
 duties performed by the Consultant hereunder; and

(c) the
 Consultant shall, within thirty (30) days, issue to the Company a final invoice with respect
 to any amounts theretofore accrued under this Agreement. Upon payment of approved accrued
 amounts so invoiced, the Company shall thereafter have no further liability or obligation
 to the Consultant whatsoever for any further amounts.

(d) Expiration
 or earlier termination of this Agreement will not relieve either party of its obligations
 incurred prior to such expiration or earlier termination.

**5.** **ASSIGNMENT** 

**5.1** **No Assignment by Consultant.** 

The Consultant shall not have the right to assign this Agreement or any of its rights and privileges hereunder to any other person, firm or corporation without the prior written consent of the Company.

**6.** **GENERAL** 

**6.1** **No Partnership.** 

The Consultant shall not be considered to be a partner of the Company.

**6.2** **Independent Contractor.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The
 Consultant enters into this Agreement as an independent contractor.

(b) The
 Consultant need only devote such portion of the Consultant's time as is necessary to
 complete his duties hereunder.

**6.3** **Headings.** 

The headings in this Agreement form no part of this contract and shall be deemed to have been inserted for convenience only.

**6.4** **Governing Law.** 

This Agreement and all matters arising out of or related to this Agreement shall be governed by and construed in accordance with the laws of the Province of British Columbia, Canada.

**6.5** **Severability.** 

If any provision of this Agreement is determined by a court of competent jurisdiction to be invalid, illegal or unenforceable in any respect, such determination shall not impair or affect the validity, legality or enforceability of the remaining provisions of this Agreement.

**6.6** **Notices.** 

Any notice to be given by either party hereunder may be validly given if sent by registered mail, postage prepaid, addressed to the other at the respective addresses of the parties as first set out or to such addresses as may be provided by notice from a party to another, from time to time.

**6.7** **Currency.** 

All dollar amounts referred to in this Agreement shall be in Canadian Dollars.

*[The remainder of this page is intentionally left blank]*

 

 

**6.8** **Counterparts.** 

This Agreement may be executed in as many counterparts as may be necessary or by facsimile and each such counterpart agreement or facsimile so executed shall be deemed to be an original and such counterparts and facsimile copies together shall constitute one and the same instrument.

**IN WITNESS WHEREOF** this Agreement has been executed by the parties hereto as of the year and day first written above.

---

| | |
|:---|:---|
| **A2Z CUST2MATE SOLUTIONS CORP.**, | **A2Z CUST2MATE SOLUTIONS CORP.**, |
| Per: | ![](ex4-31_001.jpg) |
|  | Authorized Signatory |
| **Alan rootenberg D/B/A THE M&S GROUP.** | **Alan rootenberg D/B/A THE M&S GROUP.** |
| Per: | ![](ex4-31_002.jpg) |
|  | Authorized Signatory |

---

## Exhibit 4.32

**Exhibit 4.32**

**INDEMNITY AGREEMENT**

**THIS AGREEMENT** is made as of the 17 day of March, 2025.

**BETWEEN:**

**A2Z CUST2MATE SOLUTIONS CORP.**, a corporation governed by the laws of British Columbia (the "**Company**")

- and -

**_______________**, an individual residing at ____________ and providing services to the Company as an individual, and/or through a company, and its representatives providing consulting and advisory and management services for the Company or a Group Entity (as defined below) (collectively, hereinafter referred to as the "**Indemnified Party**")

**RECITALS:**

A. The
 Indemnified Party is a duly elected or appointed director or officer or service provider
 of the Company or of a Group Entity (as defined below);

B. the
 Company believes it is in the best interests of the Company to attract and retain competent
 persons to serve as directors, or officers or as advisors, or in similar capacities, and
 the entering into of an agreement containing indemnification provisions of the kind contained
 in this Agreement is reasonable and necessary to achieving those goals

C. the
 Indemnified Party is willing to act or to continue to act as a director and service provider
 of the Company or is currently or may, in the future, be willing to act or to continue to
 act, at the request of the Company, as a director or officer and service provider , or an
 individual acting in a similar capacity or holding a position equivalent to that of a director
 or officer, and service provider of a Group Entity, if, among other things, the Company provides
 the Indemnified Party with contractual assurance that the protection against personal liability
 contemplated in this Agreement will be available to the Indemnified Party to the fullest
 extent permitted by applicable law;

D. the
 by-laws of the Company contemplate that the Indemnified Party will be indemnified in certain
 circumstances; and

E. the
 Company considers it desirable and in the best interests of the Company to enter into this
 Agreement to set out the circumstances and manner in which the Indemnified Party may be indemnified
 in respect of certain liabilities or expenses which the Indemnified Party may incur because
 of other association with the Company or Group Entity.

**NOW THEREFORE**, in consideration of the premises and the covenants and agreements herein contained, the parties agree as follows:

**Article 1**

**DEFINITIONS AND PRINCIPLES OF INTERPRETATION**

**1.01** **Definitions** 

Whenever used in this Agreement, the following words and terms have the meanings set out below:

"**Act**" means the *Business Corporations Act* (British Columbia), as the same exists on the date hereof or may hereafter be amended.

"**Adverse Insurance Event**" means a threatened or actual rescission, cancellation or non-renewal of any directors' and officers' liability insurance policy, a denial of coverage by the insurers for any Claims reported under any such policy or circumstances where the Board of Directors have reasonably concluded that coverage will be denied by its insurers in respect of a reported Claim.

"**Agreement**" means this agreement, and all amendments or restatements as permitted, and references to "Article" or "Section" mean the specified Article or Section of this Agreement.

"**Board of Directors**" means the duly constituted board of directors of the Company.

"**Claim**" includes any current, threatened, pending, commenced, continuing or completed action, suit, proceeding, hearing, inquiry, regulatory, investigation, arbitration or alternative dispute resolution mechanism or procedure, of any nature or kind, howsoever arising, whether civil, criminal, administrative, investigative or other, and whether arising in law, equity or under statute, rule, regulation or ordinance of any governmental or administrative body or otherwise, and whether made or commenced by the Company or any Group Entity and any appeal or appeals therefrom, in which the Indemnified Party is, has been or may be involved (including, without limitation, as a party, or otherwise) because of the Indemnified Party's association with the Company or Group Entity.

"**Group Entity**" means: (i) any corporation that is or was an "affiliate" or "subsidiary" (within the meaning of these terms as used in the Act) of the Company at a time the Indemnified Party is or was a director or officer of such corporation, (ii) any corporation of which the Indemnified Party is or was a director or officer at the request of the Company; or (iii) any partnership, trust, joint venture or other unincorporated entity of which the Indemnified Party is or was, or holds or held a position equivalent to that of, a director or officer, at the request of the Company.

"**Losses**" includes all costs, charges, expenses, losses, damages, fees (including any legal, professional or advisory fees or disbursements reasonably incurred), liabilities, amounts paid to settle or dispose of any Claim or satisfy any judgment, fines, penalties or liabilities, without limitation, and whether incurred alone or jointly with others, including any amounts which the Indemnified Party may reasonably suffer, sustain, incur or be required to pay in respect of the investigation, defence, settlement or appeal of or preparation for any Claim or in connection with any action to establish a right to indemnification under this Agreement to the fullest extent permitted by applicable law and any federal, provincial, state, local or foreign taxes imposed on the Indemnified Party as a result of the actual or deemed receipt of any payments under this Agreement. Losses shall also include a per diem calculated pursuant to Section 3.01(9) below for each day spent by the Indemnified Party dealing with, responding to or assisting the Company or Group Entity with the resolution, defence or appeal of any Claim relating to the Indemnified Party.

"**Parties**" means the Company and the Indemnified Party collectively and "**Party**" means any one of them.

"**Taxes**" includes any assessment, reassessment, claim or other amount for taxes, charges, duties, levies, imposts or similar amounts, including any interest and penalties in respect thereof.

**1.02** **Governing Law** 

This Agreement is a contract made under and is governed by and construed in accordance with the laws of the Province of British Columbia and the federal laws of Canada applicable in the Province of British Columbia. The Parties hereby irrevocably submit and attorn to the jurisdiction of the courts of the Province of British Columbia with respect to all matters arising out of or relating to this Agreement and all matters, agreements or documents contemplated by this Agreement. The Parties hereby waive any objections they may have to the venue being in such courts including, without limitation, any claim that any such venue is in an inconvenient forum.

**Article 2<br> REPRESENTATIONS**

**2.01** **Representations of the Company** 

The Company represents and warrants to the Indemnified Party that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) **Incorporation** – The Company is a corporation duly incorporated and validly existing under the laws
 of the Province of British Columbia.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) **Due Authorization** – The Company has all necessary corporate power, authority and capacity
 to enter into this Agreement and to carry out its obligations under this Agreement. The execution
 and delivery of this Agreement and the performance of the obligations contemplated by this
 Agreement have been duly authorized by all necessary corporate action on behalf of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) **No Conflict** – The Company is not a party to, bound or affected by or subject to any
 agreement, obligation, instrument, charter or by-law provision, statutory law or regulation,
 order, judgment, decree, licence or permit which would be violated, contravened, breached
 by, or under which default would occur as a result of the execution and delivery of this
 Agreement or the performance of any of the obligations provided for under this Agreement.

**Article 3<br> INDEMNIFICATION BY COMPANY AND OBLIGATIONS OF INDEMNIFIED PARTY**

**3.01** **Indemnification** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) **General Indemnity** – Except as prohibited under applicable law and subject to Section 3.01(4), the Company must indemnify and hold the Indemnified Party harmless, to the fullest extent permitted by applicable law, including but not limited to the indemnity under the Act, from and against any and all Losses which the Indemnified Party may reasonably suffer, sustain, incur or be required to pay in respect of any Claim, provided that the indemnity provided for in this Section 3.01(1) will only be available if:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the
 Indemnified Party acted honestly and in good faith with a view to the best interests of the
 Company or Group Entity, as the case may be, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) in
 the case of a criminal or administrative action or proceeding that is enforced by a monetary
 penalty, the Indemnified Party had reasonable grounds for believing that the Indemnified
 Party's conduct was lawful.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) **Taxes** – For greater certainty, a Claim subject to indemnification pursuant to Article 3 of this Agreement includes, to the fullest extent permitted by applicable law, any Taxes which the Indemnified Party may be subject to or suffer or incur as a result of, in respect of, arising out of or referable to any indemnification of the Indemnified Party by the Company pursuant to this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) **Right to Indemnity** – Without limiting anything in this Agreement, the Indemnified Party is entitled to an indemnity from the Company in respect of all Losses reasonably incurred by the Indemnified Party in connection with the defence of any Claim, to which the Indemnified Party is subject because of the Indemnified Party's association with the Company, if the Indemnified Party:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) was
 not judged by the court or other competent authority to have committed any material fault,
 and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) fulfils
 the conditions set out in Sections 3.01(1)(a) and 3.01(1)(b) above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) **Derivative Claims** – The Company shall make application, at its expense, for the approval of a court of competent jurisdiction to advance monies to an Indemnified Party under Section 3.01(8) below, in respect of any Claim by or on behalf of the Company or Group Entity to which the Indemnified Party is made a party because of the Indemnified Party's association with the Company or Group Entity, in respect of all costs, charges, expenses and other Losses reasonably incurred by the Indemnified Party in connection with such Claim provided the Indemnified Party shall repay such funds advanced if the Indemnified Party ultimately does not fulfil the conditions set out in Section 3.01(1)(a) and 3.01(1)(b) above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) **Incidental Expenses** – To the fullest extent permitted by applicable law, the Company will pay or reimburse the Indemnified Party for the Indemnified Party's reasonable and necessary travel, lodging or accommodation costs, charges or expenses paid or incurred by or on behalf of the Indemnified Party in connection with the defence by the Indemnified Party of any Claim, provided the Indemnified Party fulfills the conditions set out in Sections 3.01(1)(a) and 3.01(1)(b) above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) **Specific Indemnity for Statutory Obligations** – Without limiting the generality of the preceding Sections 3.01(1) through (5) of this Agreement, the Company agrees, to the extent permitted by law, to indemnify and save the Indemnified Party harmless from and against any and all Losses arising by operation of statute and reasonably incurred by or imposed upon the Indemnified Party in relation to the affairs of the Company or Group Entity in the Indemnified Party's capacity as a director or officer or service provider thereof, including but not limited to all statutory obligations to creditors, employees, suppliers, contractors, subcontractors, and any government or any agency or division of any government, whether federal, provincial, state, regional or municipal, provided that the indemnity provided for in this Section 3.01(6) will only be available if the Indemnified Party fulfils the conditions in Sections 3.01(1)(a) and 3.01(1)(b) above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7) **Partial Indemnification** – If the Indemnified Party is determined to be entitled under any provisions of this Agreement to indemnification by the Company for some or a portion of the Losses incurred in respect of any Claim but not for the total amount thereof, the Company will nevertheless indemnify the Indemnified Party for the portion thereof to which the Indemnified Party is determined by a court of competent jurisdiction to be so entitled.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(8) **Advance of Expenses** – Subject to Section 3.01(4) of this Agreement, the Company shall, at the request of the Indemnified Party, advance to the Indemnified Party, to the extent permitted by applicable law, sufficient funds, or arrange to pay on behalf of or reimburse the Indemnified Party for any costs, charges or expenses reasonably incurred by the Indemnified Party in investigating, defending, appealing, preparing for, providing evidence in or instructing and receiving the advice of the Indemnified Party's counsel or other professional advisors in regard to any Claim or other matter for which the Indemnified Party may be entitled to an indemnity or reimbursement hereunder, and such amounts will be treated as a non-interest bearing advance or loan to the Indemnified Party. All advances shall be made within five (5) business days of a request from the Indemnified Party. In the event it is ultimately determined by a court of competent jurisdiction that the Indemnified Party did not fulfil the conditions set out in Sections 3.01(1)(a) and 3.01(1)(b) above such loan or advance, or the appropriate portion thereof will, upon written notice of such determination being given by the Company to the Indemnified Party detailing the basis for such determination, be repayable on demand and will bear interest from the date of such notice at the prime rate prescribed from time to time by the Royal Bank of Canada.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(9) **Per Diem Charge** – In addition to any other amount payable to an Indemnified Party under this Agreement, the Indemnified Party shall be entitled to receive from the Company a reasonable per diem payment (the "**Per Diem Charge**") for time spent with respect to any Claim for which the Indemnified Party is otherwise entitled to indemnification pursuant to any one of the foregoing provisions of Section 3.01 of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(10) **Gross-Up –** Should any payment made pursuant to this Agreement, including the payment of insurance premiums or any payment made by an insurer under an insurance policy, be deemed to constitute a taxable benefit or otherwise be or become subject to any tax or levy, then the Company shall pay any amount received by or on behalf of the Indemnified Party, after the payment of or withholding for such tax, fully reimburses the Indemnified Party for the actual cost, expense or losses incurred by or on behalf of the Indemnified Party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(11) **Directors and Officers Insurance**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Company confirms that it has purchased directors' and officers' liability insurance as previously approved by the board of directors of the Company covering its directors and officers containing such customary terms and conditions and in such amounts as are available to the Company on reasonable commercial terms, having regard to the nature and size of the business and operations of the Company from time to time, which insurance policy has been provided to the directors and officers for their review and which remains in full force and effect on the date hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Notwithstanding the foregoing, if: (i) liability insurance coverage for former directors and officers is no longer available on reasonable commercial grounds; or (ii) it is no longer industry practice among responsible companies to procure liability insurance for former directors and officers and the costs to the Company to do so would be commercially unreasonable (as determined by the Board of Directors of the Company), the Company will be relieved of its obligation to procure or cause to be procured liability insurance coverage for the former directors and officers provided that the Company procures, or causes to be procured, such level of insurance coverage, if any, as is available for former directors and officers at a commercially reasonable rate and adopts comparable measures to protects its former directors and officers in the circumstances as are adopted by other responsible companies. The onus is on the Company to establish that the circumstances described in the previous sentence exist.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(12) **Deductible or Retention under Directors and Officers Insurance** – If for any reason whatsoever, any directors' and officers' liability insurer asserts that the Indemnified Party is subject to a deductible or retention under any existing or future directors' and officers' liability insurance purchased and maintained by the Company for the benefit of the Indemnified Party and the Indemnified Party's heirs and legal representatives, the Company will, to the extent permitted by applicable law, pay the deductible or retention for and on behalf of the Indemnified Party, provided that the Company is satisfied at such time that the Indemnified Party fulfils the conditions set out in Sections 3.01(1)(a) and 3.01(1)(b) above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(13) **New Directors and Officers** – Any person who may hereafter be elected as a director or appointed as an officer of the Company may enter into an agreement with the Company for the purpose of becoming bound in a like manner as the Indemnified Party under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(14) **Subrogation** – In the event of payment by the Company under this Agreement, the Company shall be subrogated to the extent of such payment to all the rights of recovery of the Indemnified Party who agrees to execute all documents and instruments reasonably required and to do all such other acts and things that may be necessary on the part of the Indemnified Party to secure such rights, including the execution of documents necessary to enable the Company to bring suit to enforce such rights.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(15) **Directors' Trust –** In the event of an Adverse Insurance Event, the Company may, at its sole discretion, create a trust for the benefit of the Indemnified Party and from time to time fund such trust in such amounts and with such security as the Company's Board of Directors may, at its sole discretion, determine to satisfy Losses reasonably anticipated or proposed to be incurred or paid from time to time until the expiration of all applicable limitation periods in connection with any Claims. The terms of any trust established pursuant hereto shall provide that upon an Adverse Insurance Event: (i) the trust shall not be revoked or the principal thereof encroached upon, without the written consent of the Indemnified Party; (ii) the trustee shall advance (solely to the extent of trust assets), within two (2) business days of a request by the Indemnified Party, all costs, charges, expenses and other Losses to the Indemnified Party (and the Indemnified Party hereby agrees to reimburse the trust under the circumstances under which the Indemnified Party would be required to reimburse the Company under this Agreement); (iii) the trustee shall promptly pay (solely to the extent of trust assets) to the Indemnified Party all amounts for which the Indemnified Party shall be entitled to indemnification pursuant to the Agreement or otherwise; and (iv) all unexpended funds in such trust shall revert to the Company upon a final determination by a court of competent jurisdiction that the Indemnified Party has been fully indemnified (or if not, entitled to be indemnified) under the terms of this Agreement as to all Claims and after the expiration of all applicable limitation periods. The trustee shall be a person or entity, and shall be appointed upon such terms as are, reasonably satisfactory to the Indemnified Party. Nothing contained in this Section 3.01(15) shall relieve the Company of any of its obligations under any other provision of this Agreement.

**3.02** **Notice of Proceedings** 

The Indemnified Party will, as a condition precedent to his right to be indemnified under this Agreement, give prompt notice in writing to the Company, upon being served with any statement of claim, writ, notice of motion, indictment, subpoena, investigation order or other document threatening, commencing, threatening or continuing any Claim involving the Company or the Indemnified Party which may result in a claim for indemnification under this Agreement, and the Company agrees to give the Indemnified Party prompt notice in writing, upon it being served with any statement of claim, writ, notice of motion, indictment, subpoena, investigation order or other document commencing or continuing any Claim involving the Indemnified Party. Such notice will include a description of the Claim or threatened Claim, a summary of the facts giving rise to the Claim or threatened Claim and, if possible, an estimate of any potential liability arising under the Claim or threatened Claim. Failure by either party to so notify the other of any Claim will not relieve the Company from liability under this Agreement except and only to the extent that the failure materially prejudices the Indemnified Party, the Company or Group Entity, as the case may be.

**3.03** **Legal Counsel** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Subject to Section 3.01(4), after receiving written notice of any Claim or threatened Claim from the Indemnified Party, the Company may by notice in writing to the Indemnified Party, assume conduct of the defence thereof in a timely manner and retain counsel on behalf of the Indemnified Party, provided that such counsel is satisfactory to the Indemnified Party (acting reasonably), to represent the Indemnified Party in respect of the Claim; in which event, the reasonable fees and disbursements of such counsel will be paid by the Company on behalf of the Indemnified Party. On delivery of such notice by the Company, subject to Section 3.03(2), the Company will not be liable to the Indemnified Party under this Agreement for any fees and disbursements of other counsel, the Indemnified Party may subsequently incur with respect to the same matter. In the event the Company assumes conduct of the defence on behalf of the Indemnified Party, the Indemnified Party hereby consents to the conduct thereof and of any action taken by the Company, in good faith, in connection therewith, and the Indemnified Party will fully cooperate in such defence including, without limitation, the provision of documents, attending examinations for discovery, making affidavits, meeting with counsel, testifying and divulging to the Company all information reasonably required to defend or prosecute the Claim.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) In connection with any Claim or other matter for which the Indemnified Party may be entitled to indemnity hereunder, the Indemnified Party will have the right to employ separate counsel of the Indemnified Party's choosing and to participate in the defence thereof but the fees and disbursements of such counsel will be at the Indemnified Party's expense unless:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) employment
 of such other counsel has been authorized by the Company,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the
 Company has appointed counsel that is not satisfactory to the Indemnified Party, acting reasonably,
 or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) subject
 to Company agreeing to advance to the Indemnified Party sufficient funds, or arrange to pay
 on behalf of or reimburse the Indemnified Party for any costs, charges or expenses reasonably
 incurred by the Indemnified Party in accordance with Section 3.01(8), the Indemnified Party
 considers, acting reasonably, that there has been a divergence of interests between the Indemnified
 Party and the Company such that the Indemnified Party requires separate legal counsel,

in which events, the reasonable fees and disbursements of such counsel will be paid by the Company on behalf of the Indemnified Party to the fullest extent permitted by applicable law.

**3.04** **No Presumption as to Absence of Good Faith** 

Unless a court of competent jurisdiction otherwise has held or decided that the Indemnified Party is not entitled to be fully or partially indemnified hereunder, the determination of any Claim by judgment, order, settlement or conviction, or upon a plea of *nolo contendere* or its equivalent, will not, of itself, create any presumption for the purposes of this Agreement that the Indemnified Party is not entitled to indemnity hereunder.

**3.05** **Settlement of Claim** 

No admission of liability and no settlement of any Claim in a manner adverse to the Indemnified Party will be made without the consent of the Indemnified Party (unless, in the case of a settlement by the Company, such settlement (i) includes an unconditional release of the Indemnified Party from all liability arising out of such Claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act, by or on behalf of the Indemnified Party).

**3.06** **Determination of Right to Indemnification** 

If the payment of an indemnity or the advancement of funds under this Agreement requires the approval of a court, under the provisions of the Act or otherwise, either the Company or the Indemnified Party may apply to a court of competent jurisdiction for an order approving such indemnity or the advancement of such funds by the Company pursuant to this Agreement.

**3.07** **Other Rights and Remedies Unaffected** 

The rights to indemnification and payment provided in this Agreement will not derogate from or exclude any other rights to which the Indemnified Party may be entitled under any provision of the Act or otherwise at law, the articles or by-laws of the Company, any applicable policy of insurance, guarantee or third-party indemnity, any vote of shareholders of the Company, or otherwise, both as to matters arising out of the Indemnified Party's capacity as a director or officer of the Company, or as to matters arising out of any other capacity in which the Indemnified Party may act for or on behalf of the Company.

**3.08** **Setoff** 

The Company grants to the Indemnified Party a right to set off any amounts owing by the Company hereunder to the Indemnified Party against any amounts that the Indemnified Party may owe the Company from time to time.

**Article 4<br> MISCELLANEOUS MATTERS**

**4.01** **Company and Indemnified Party to Cooperate** 

The Company and the Indemnified Party will, from time to time, provide such information and cooperate with the other, as the other may reasonably request, in respect of all matters under this Agreement.

**4.02** **Effective Time** 

This Agreement will be deemed to have effect as and from the first date that the Indemnified Party became a director or officer or service provider of the Company.

**4.03** **Insolvency** 

The liability of the Company under this Agreement will not be affected, discharged, impaired, mitigated or released by reason of the discharge or release of the Indemnified Party in any bankruptcy, insolvency, receivership or other similar proceeding of creditors.

**4.04** **Multiple Proceedings** 

No action or proceeding brought or instituted under this Agreement and no recovery pursuant thereto will be a bar or defence to any further action or proceeding which may be brought under this Agreement.

**4.05** **Benefit of the Agreement** 

This Agreement will enure to the benefit of and be binding upon the respective heirs, executors, administrators, other legal representatives, successors and permitted assigns of the parties hereto. In the event that the Company proposes to: (i) amalgamate, consolidate with or merge or wind up into any other person and the Company will cease to exist as a legal entity or will not be the continuing or surviving Company or entity of such amalgamation, consolidation, merger or winding up; or (ii) transfer or dispose of all or substantially all of its properties and assets to any person or persons (including a lease, licence, long term supply agreement or other arrangement having the same economic effect as a transfer or other disposition), then in each such case the Company will ensure that proper provision is made so that the obligations of the Company set forth in this Agreement will continue in full force, including providing for the assumption of the obligations under this Agreement by any Company or other entity continuing following an amalgamation, merger, consolidation or winding-up of the Company with or into one or more other entities (pursuant to a statutory procedure or otherwise), or by the person or persons acquiring all or substantially all of the properties and assets of the Company, as the case may be, in each case without prejudice to the Indemnified Party by written agreement in form and substance satisfactory to the Indemnified Party, acting reasonably and without undue delay expressly assuming and agreeing to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no amalgamation, consolidation, merger, winding-up or transfer of properties and assets had taken place. In the event of: (i) any acquisition (by way of take-over bid, share exchange, purchase of shares or otherwise, and whether in a single transaction or series of related transactions) by any person, or two or more persons acting "jointly or in concert" (within the meaning of that expression as used in applicable securities laws), of beneficial ownership of fifty percent or more of the outstanding voting or equity securities of the Company entitled to vote generally in the election of directors of the Company; or (ii) a plan of arrangement, amalgamation, merger, consolidation, recapitalization, liquidation, dissolution or other business combination or reorganization or similar corporate transaction, in each case where the Company does not cease to exist as a legal entity and is not a continuing or surviving Company in such transaction, that results in the voting securities of the Company outstanding immediately prior to the consummation of such transaction no longer continuing to represent (either by remaining outstanding or by being converted into or exchanged for securities of another entity) at least fifty percent of the combined voting power of the voting securities of the Company outstanding immediately after consummation of such transaction, then in each such case the Company will ensure that proper provision will be made so that the obligations of the Company set forth in this Agreement will continue in full force, including providing that any entity that so acquires voting or equity securities of the Company, or any entity which is a surviving Company or entity in any such arrangement, amalgamation, merger, consolidation, recapitalization, liquidation, dissolution, business combination or reorganization or other transaction, as the case may be, agrees to cause the Company to fulfil and honour in all respects all of its obligations under this Agreement and, to the extent necessary, make available to the Company, or any successor to the Company, any funding required in order for the Company, or such successor, to fulfil and honour all obligations under this Agreement in each case without prejudice to the Indemnified Party.

**Article 5<br> GENERAL**

**5.01** **Term** 

This Agreement and any obligations hereunder will survive until six (6) years after the Indemnified Party has ceased to act as a director or officer of the Company or Group Entity.

**5.02** **Deeming Provision** 

The Indemnified Party will be deemed to have acted or be acting at the specific request of the Company upon the Indemnified Party's being appointed or elected as a director or officer or contracted as a service provider of the Company or Group Entity.

**5.03** **Assignment** 

Neither Party may assign this Agreement or any rights or obligations under this Agreement without the prior written consent of the other Party (which consent will not be unreasonably withheld).

**5.04** **Amendments and Waivers** 

No supplement, modification, amendment or waiver or termination of this Agreement and, unless otherwise specified, no consent or approval by any Party, will be binding unless executed in writing by the Party to be bound thereby. For greater certainty, the rights of the Indemnified Party under this Agreement will not be prejudiced or impaired by permitting or consenting to any assignment in bankruptcy, receivership, insolvency or any other creditor's proceedings of or against the Company or by the winding-up or dissolution of the Company.

**5.05** **Severability** 

Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction will not invalidate the remaining provisions hereof and any such prohibition or unenforceability in any jurisdiction will not invalidate or render unenforceable such provision in any other jurisdiction.

**5.06** **Mandatory Obligation to Indemnify** 

Nothing in this Agreement shall in any way adversely affect or diminish the obligation of the Company to indemnify the Indemnified Party pursuant to section 161 of the Act.

**5.07** **Notices** 

Any notice, consent or approval required or permitted to be given in connection with this Agreement (in this Section referred to as a "**Notice**") will be in writing and will be sufficiently given if delivered (whether in person, by courier service or other personal method of delivery), or if transmitted by facsimile or e-mail:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) in
 the case of a Notice to the Indemnified Party at:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● Attention: ●

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) in
 the case of a Notice to the Company at:

A2Z Cust2mate Solutions Corp.

Attention: Chief Executive Officer

Any Notice delivered or transmitted to a Party as provided above will be deemed to have been given and received on the day it is delivered or transmitted, provided that it is delivered or transmitted on a Business Day prior to 5:00 p.m. local time in the place of delivery or receipt. However, if the Notice is delivered or transmitted after 5:00 p.m. local time or if such day is not a Business Day then the Notice will be deemed to have been given and received on the next Business Day.

Any Party may, from time to time, change its address by giving Notice to the other Party in accordance with the provisions of this Section.

**5.08** **Further Assurances** 

The Company and the Indemnified Party will, with reasonable diligence, do all such further acts, deeds or things and execute and deliver all such further documents as may be necessary or advisable for the purpose of assuring and conferring on the Indemnified Party the rights hereby created or intended, and of giving effect to and carrying out intention or facilitating the performance of the terms of this Agreement or to evidence any loan or advance made pursuant to Section 3.01(4) hereof.

**5.09** **Execution and Delivery** 

This Agreement may be executed by the Parties in counterparts and may be executed and delivered by facsimile and all such counterparts and facsimiles together will constitute one and the same agreement.

**IN WITNESS WHEREOF** the Parties have executed this Agreement.

---

| | |
|:---|:---|
| **A2Z CUST2MATE SOLUTIONS CORP.** | **A2Z CUST2MATE SOLUTIONS CORP.** |
| By: |  |
|  | Authorized Officer |

---

---

| |
|:---|
| **INDEMNIFIED PARTY** |
| Name: |

---

## Exhibit 8.1

**Exhibit 8.1**

**Subsidiaries of A2Z Cust2Mate Solutions Corp.**

---

| | |
|:---|:---|
| **Legal Name of Subsidiary** | **Jurisdiction of Organization** |
| A2Z Csut2Mate Solutions Corp. | British Columbia |
| 1219054 B.V Ltd. | British Columbia |
| A2Z Advanced Solutions Ltd. | Israel |
| AAI Advanced Automotive Innovations Inc. | Ontario |
| Isramat Ltd. | Israel |
| Cust2Mate Ltd. | Israel |
| Cust2Mate USA Inc. | USA |

---

## Exhibit 11.2

**Exhibit 11.2**

**A2Z CUST2MATE SOLUTIONS CORP.**

**INSIDER TRADING COMPLIANCE POLICY**

---

| | | |
|:---|:---|:---|
| **CONTENTS** | **CONTENTS** | **Page** |
| I. | SUMMARY | 1 |
| II. | STATEMENT OF POLICIES PROHIBITING INSIDER TRADING | 1 |
| III. | EXPLANATION OF INSIDER TRADING | 3 |
| IV. | STATEMENT OF PROCEDURES PREVENTING INSIDER TRADING | 7 |
| V. | ADDITIONAL PROHIBITED TRANSACTIONS | 10 |
| VI. | RULE 10b5-1 TRADING PLANS, SECTION 16 AND RULE 144 | 11 |
| VII. | EXECUTION AND RETURN OF CERTIFICATION OF COMPLIANCE | 15 |
| <u>SCHEDULE I</u>: INDIVIDUALS SUBJECT TO QUARTERLY TRADING BLACK-OUTS AND PRE-CLEARANCE REQUIREMENT | <u>SCHEDULE I</u>: INDIVIDUALS SUBJECT TO QUARTERLY TRADING BLACK-OUTS AND PRE-CLEARANCE REQUIREMENT | 16 |
| <u>ATTACHMENT A</u>: SHORT-SWING PROFIT RULE SECTION 16(B) CHECKLIST | <u>ATTACHMENT A</u>: SHORT-SWING PROFIT RULE SECTION 16(B) CHECKLIST | 17 |
| <u>ATTACHMENT B</u>: CERTIFICATION OF COMPLIANCE | <u>ATTACHMENT B</u>: CERTIFICATION OF COMPLIANCE | 18 |

---

i

**INSIDER TRADING COMPLIANCE POLICY**

&nbsp;&nbsp;&nbsp;&nbsp;I. <u>SUMMARY</u> 

Preventing insider trading is necessary to comply with securities laws and to preserve the reputation and integrity of A2Z Cust2Mate Solutions Corp.(together with its subsidiaries, the "Company") as well as that of all persons affiliated with the Company. "Insider trading" occurs when any person uses material non-public information obtained through involvement with the Company to make decisions to purchase, sell, give away or otherwise trade the Company's securities or to provide that information to others outside the Company. The prohibitions against insider trading apply to trades, tips and recommendations by virtually any person, including all persons associated with the Company, if the information involved is "material" and "non-public." These terms are defined in this this Insider Trading Compliance Policy (this "Policy") under Section III, below. Insider trading is a crime. The penalties, both civil and criminal, for violating insider trading laws can be significant, and can include, among other things, a criminal fine of up to $5 million for individuals and up to $25 million for corporations and other non-natural persons as well as a jail term of up to 20 years. Insider trading is also prohibited by this Policy, and violation of this Policy may result in Company-imposed sanctions, including removal or dismissal for cause.

This Policy only addresses compliance with United States securities laws, and does not address compliance with securities laws in Canada or any other foreign jurisdiction. This Policy applies to all officers, directors, and employees of the Company, in addition to all independent contractors or consultants who have access to material non-public information of the Company. Individuals subject to this Policy are responsible for ensuring that members of their households also comply with this Policy. This Policy also applies to any entities controlled by individuals subject to the Policy, including any corporations, partnerships or trusts, and transactions by these entities should be treated for the purposes of this Policy and applicable securities laws as if they were for the individual's own account. This Policy extends to all activities within and outside an individual's Company duties. Every officer, director and employee must review this Policy.

Questions regarding the Policy should be directed to the Company's CFO.

&nbsp;&nbsp;&nbsp;&nbsp;II. <u>STATEMENT OF POLICIES PROHIBITING INSIDER TRADING</u> 

No officer, director, employee, independent contractor or consultant may purchase or sell any type of security while in possession of material non-public information relating to the security, whether the issuer of such security is the Company or any other company. For the purposes of this Policy, "securities" include common shares, options, warrants and any other securities that may be issued, such as preferred stock, warrants, notes, bonds, debentures and convertible securities, as well as to derivative securities relating to any of such securities, whether or not issued by the Company.

**Additionally, no officer, director or employee listed on Schedule I (as amended from time to time) shall purchase or sell any security of the Company during the period beginning ten (10) full trading days before the end of any fiscal quarter of the Company and ending upon the completion of the 2nd full trading day after the public release of earnings data for such fiscal quarter. Certain individuals may be subject to a trading suspension period declared by the Company. For the purposes of this Policy, a "trading day" is a day on which national stock exchanges are open for trading.**

The following are certain limited exceptions to the restrictions imposed by the Company under this Policy. Please be aware that even if a transaction is subject to an exception to this Policy, you will need to separately assess whether the transaction complies with applicable law. For example, even if a transaction is indicated as exempt from this Policy, you may need to comply with the "short-swing" trading restrictions under Section 16 of the Securities Exchange Act of 1934, as amended ("1934 Act"), to the extent applicable. You are responsible for complying with applicable law at all times in the following situations:

● the acceptance or purchase of stock options, restricted stock, restricted stock units or stock appreciation rights issued or offered by the Company;

● the vesting, cancellation or forfeiture of stock options, restricted stock, restricted stock units or stock appreciation rights in accordance with applicable plans and agreements;

● the exercise of stock options for cash or the settlement of restricted stock units under the Company's equity incentive plans, or the exercise of stock options in a stock-for-stock exercise with the Company;

● the surrender of shares to the Company in satisfaction of any tax withholding obligations in a manner permitted by the applicable equity award agreement, or vesting of equity-based awards, that in each case do not involve a market sale of the Company's securities;

● *bona fide* gifts of the Company's securities or transfers by will or the laws of descent or distribution;

● transactions that merely involve a change in the form in which you own the securities (for example, the transfers to an *inter vivos* trust for which you are the sole beneficiary during your lifetime); or

● purchases or sales of the Company's securities made pursuant to any binding contract, specific instruction or written plan entered into outside of a black-out period (one cannot trade outside of the blackout period) and while the purchaser or seller, as applicable, was unaware of any material, non-public information and which contract, instruction or plan (i) meets all requirements of the affirmative defense provided by Rule 10b5-1 ("Rule 10b5-1") promulgated under the 1934 Act, (ii) was pre-cleared in advance pursuant to this Policy and (iii) has not been amended or modified in any respect after such initial pre-clearance without such amendment or modification being pre-cleared in advance pursuant to this Policy. For more information about Rule 10b5-1 trading plans, see Section VI below.

No officer, director, employee, independent contractor or consultant may directly or indirectly communicate (or "tip") material, non-public information to anyone outside the Company (except in accordance with the Company's policies regarding the protection or authorized external disclosure of Company information) or to anyone within the Company other than on a need-to-know basis.

&nbsp;&nbsp;&nbsp;&nbsp;III. <u>EXPLANATION OF INSIDER TRADING</u> 

 

*"Insider trading"* refers to the purchase or sale of a security while in possession of "material," "non-public" information relating to the security or its issuer.

*"Securities"* includes stocks, bonds, notes, debentures, options, warrants and other convertible securities, as well as derivative instruments including but not limited to future warrants and/or options.

*"Purchase"* is defined broadly under the federal securities laws. *"Purchase"* includes not only the actual purchase of a security, but any contract to purchase or otherwise acquire a security.

*"Margin Accounts and Pledges"* refers to securities held in a margin account that may be sold by the broker without the customer's consent if the customer fails to meet a margin call. Similarly, securities pledged (or hypothecated) as collateral for a loan may be sold in foreclosure if the borrower defaults on the loan. Because a margin sale or foreclosure sale may occur at a time when the pledgor is aware of material nonpublic information or otherwise is not permitted to trade in Company securities, directors, officers, employees, independent contractors and consultants are prohibited from holding Company securities in a margin account or pledging Company securities as collateral for a loan, without obtaining prior approval. An exception to this prohibition may be granted where a person wishes to pledge Company securities as collateral for a loan (not including margin debt) and clearly demonstrates the financial capacity to repay the loan without resort to the pledged securities. Any person who wishes to pledge Company securities as collateral for a loan must submit a written request for approval to the Chief Executive Officer at least two weeks prior to the proposed execution of documents evidencing the proposed pledge.

*"Sale"* is defined broadly under the federal securities laws. "*Sale*" includes not only the actual sale of a security, but any contract to sell or otherwise dispose of a security.

These definitions extend to a broad range of transactions, including conventional cash-for-stock transactions, conversions, and acquisitions and exercises of warrants or puts, calls or other derivative securities.

It is generally understood that insider trading includes the following:

● Trading by insiders while in possession of material, non-public information;

● Trading by persons other than insiders while in possession of material, non-public information, if the information either was given in breach of an insider's fiduciary duty to keep it confidential or was misappropriated; and

● Communicating or tipping material, non-public information to others, including recommending the purchase or sale of a security while in possession of such information.

&nbsp;&nbsp;&nbsp;&nbsp;A. <u>What Facts are Material?</u> 

The materiality of a fact depends upon the circumstances. A fact is considered "material" if disclosure of such fact is reasonably likely to affect a reasonable investor's decision to buy, sell or hold a security, or if the fact is likely to affect the market price of the security. Material information can be positive or negative and can relate to virtually any aspect of a company's business or to any type of security, debt, or equity.

Examples of material information include (but are not limited to) information about dividends; corporate earnings or earnings forecasts; possible mergers, acquisitions, tender offers or dispositions; important business developments, such as major new contracts or cancellations, developments regarding strategic collaborators or property acquisitions or sales; management or control changes; a change in auditors; significant borrowing or financing developments, including pending public sales or offerings of debt or equity securities; defaults on borrowings; bankruptcies; and significant litigation or regulatory actions. Moreover, material information does not have to be related to a company's business. For example, the contents of a forthcoming article, newspaper column or interview that is expected to affect the market price of a security can be material.

A good general rule of thumb: **When in doubt, do not trade.**

&nbsp;&nbsp;&nbsp;&nbsp;B. <u>What is Non-public?</u> 

Information is "non-public" if it is not available to the public. In order for information to be considered public, it must be widely disseminated in a manner making it generally available to investors, such as through media such as Dow Jones, Business Wire, Reuters, The Wall Street Journal, Associated Press (AP), or United Press International (UPI), a broadcast on widely available radio or television programs, publication in a widely available newspaper, magazine or news web site, a Regulation FD-compliant conference call, or public disclosure documents filed with the Securities and Exchange Commission ("SEC") that are available on the SEC's web site. The circulation of rumors, even if accurate and reported in the media, does not constitute effective public dissemination.

In addition, even after a public announcement, a reasonable period of time must lapse for the market to react to the information. Generally, one should allow two full trading days following publication as a reasonable waiting period before such information is deemed to be public.

Non-public information may include, without limitation:

&nbsp;&nbsp;&nbsp;&nbsp;(i) information
 available to a select group of analysts or brokers or institutional investors;

(ii) undisclosed
 facts that are the subject of rumors, even if the rumors are widely circulated; and

(iii) information
 that has been entrusted to the Company on a confidential basis until a public announcement
 of the information has been made and enough time has elapsed for the market to respond to
 a public announcement of the information (normally two or three days).

**As with questions of materiality, if you are not sure whether information is considered public, you should either consult with the Company's CFO or assume that the information is "non-public" and treat it as confidential.**

&nbsp;&nbsp;&nbsp;&nbsp;C. <u>Who is an Insider?</u> 

"Insiders" include officers, directors and employees consultants of a company and anyone else (including independent contractors and consultants) who has material inside information about a company. Insiders have independent fiduciary duties to their company and its stockholders not to trade on material, non-public information relating to the company's securities. All officers, directors and employees of the Company should consider themselves insiders with respect to material, non-public information about the Company's business, activities, and securities. Officers, directors, employees, independent contractors and consultants may not trade in the Company's securities while in possession of material, non-public information relating to the Company, nor may they tip such information to anyone outside the Company (except in accordance with the Company's policies regarding the protection or authorized external disclosure of Company information) or to anyone within the Company other than on a need-to-know basis.

Individuals subject to this Policy are responsible for ensuring that members of their households also comply with this Policy. This Policy also applies to any entities controlled by individuals subject to the Policy, including any corporations, limited liability companies, partnerships or trusts, and transactions by these entities should be treated for the purposes of this Policy and applicable securities laws as if they were for the individual's own account.

&nbsp;&nbsp;&nbsp;&nbsp;D. <u>Trading by Persons Other than Insiders</u> 

Insiders may be liable for communicating or tipping material, non-public information to a third party ("tippee"), and insider trading violations are not limited to trading or tipping by insiders. Persons other than insiders also can be liable for insider trading, including tippees who trade on material, non-public information tipped to them or individuals who trade on material, non-public information that has been misappropriated. Tippers can be subject to the same penalties and sanctions as the tippees, and the SEC has imposed large penalties even when the tipper did not profit from the transaction.

Tippees inherit an insider's duties and are liable for trading on material, non-public information illegally tipped to them by an insider. Similarly, just as insiders are liable for the insider trading of their tippees, so are tippees who pass the information along to others who trade. In other words, a tippee's liability for insider trading is no different from that of an insider. Tippees can obtain material, non-public information by receiving overt tips from others or through, among other things, conversations at social, business, or other gatherings.

&nbsp;&nbsp;&nbsp;&nbsp;E. <u>Penalties for Engaging in Insider Trading</u> 

Penalties for trading on or tipping material, non-public information can extend significantly beyond any profits made or losses avoided, both for individuals engaging in such unlawful conduct and their employers. The SEC and Department of Justice have made the civil and criminal prosecution of insider trading violations a top priority. Enforcement remedies available to the government or private plaintiffs under the federal securities laws include, without limitation:

● SEC administrative sanctions;

● Securities industry self-regulatory organization sanctions;

● Civil injunctions;

● Damage awards to private plaintiffs;

● Disgorgement of all profits;

● Civil fines for the violator of up to three times the amount of profit gained or loss avoided as a result of the violation;

● Civil fines for the employer or other controlling person of a violator (i.e., where the violator is an employee or other controlled person) of up to the greater of $1,000,000 or three times the amount of profit gained, or loss avoided by the violator as a result of the violation;

● Criminal fines for individual violators of up to $5,000,000 ($25,000,000 for an entity); and

● Jail sentences of up to 20 years.

In addition, insider trading could result in serious sanctions by the Company, including dismissal. Insider trading violations are not limited to violations of the federal securities laws. Other federal and state civil or criminal laws, such as the laws prohibiting mail and wire fraud and the Racketeer Influenced and Corrupt Organizations Act (RICO), also may be violated in connection with insider trading.

&nbsp;&nbsp;&nbsp;&nbsp;F. <u>Size of Transaction and Reason for Transaction Do Not Matter</u> 

The size of the transaction or the amount of profit received does not have to be significant to result in prosecution. The SEC has the ability to monitor even the smallest trades, and the SEC performs routine market surveillance. Brokers or dealers are required by law to inform the SEC of any possible violations by people who may have material, non-public information. The SEC aggressively investigates even small insider trading violations.

&nbsp;&nbsp;&nbsp;&nbsp;G. <u>Examples of Insider Trading</u> 

Examples of insider trading cases include actions brought against officers, directors, and employees who traded in a company's securities after learning of significant confidential corporate developments; friends, business associates, family members and other tippees of such officers, directors, and employees who traded in the securities after receiving such information; government employees who learned of such information in the course of their employment; and other persons who misappropriated, and took advantage of, confidential information from their employers.

The following are illustrations of insider trading violations. These illustrations are hypothetical and, consequently, not intended to reflect on the actual activities or business of the Company or any other entity.

<u>Trading by Insider</u>. An officer of X Corporation learns that earnings to be reported by X Corporation will increase dramatically. Prior to the public announcement of such earnings, the officer purchases X Corporation's stock. The officer, an insider, is liable for all profits as well as penalties of up to three times the amount of all profits. The officer also is subject to, among other things, criminal prosecution, including up to $5,000,000 in additional fines and 20 years in jail. Depending upon the circumstances, X Corporation and the individual to whom the officer reports also could be liable as controlling persons.

<u>Trading by Tippee</u>. An officer of X Corporation tells a friend that X Corporation is about to publicly announce that it has concluded an agreement for a major acquisition or sale of property. This tip causes the friend to purchase X Corporation's stock in advance of the announcement. The officer is jointly liable with his friend for all the friend's profits, and each is liable for all civil penalties of up to three times the amount of the friend's profits. The officer and his friend are also subject to criminal prosecution and other remedies and sanctions, as described above.

&nbsp;&nbsp;&nbsp;&nbsp;H. <u>Prohibition of Records Falsification and False Statements</u> 

Section 13(b)(2) of the 1934 Act requires companies subject to the 1934 Act to maintain proper internal books and records and to devise and maintain an adequate system of internal accounting controls. The SEC has supplemented the statutory requirements by adopting rules that prohibit (1) any person from falsifying records or accounts subject to the above requirements and (2) officers or directors from making any materially false, misleading, or incomplete statement to any accountant in connection with any audit or filing with the SEC. These provisions reflect the SEC's intent to discourage officers, directors, and other persons with access to the Company's books and records from taking action that might result in the communication of materially misleading financial information to the investing public.

&nbsp;&nbsp;&nbsp;&nbsp;IV. <u>STATEMENT OF PROCEDURES PREVENTING INSIDER TRADING</u> 

The following procedures have been established, and will be maintained and enforced, by the Company to prevent insider trading. Every officer, director and employee (as well as any independent contractor or consultant that has access to material, non-public information) are required to follow these procedures.

&nbsp;&nbsp;&nbsp;&nbsp;A. <u>Pre-Clearance of All Trades by All Officers, Directors and Certain Employees</u> 

**To provide assistance in preventing inadvertent violations of applicable securities laws and to avoid the appearance of impropriety in connection with the purchase and sale of the Company's securities, all transactions in the Company's securities (including without limitation, acquisitions and dispositions of Company stock) by officers, directors and certain other employees as are designated from time to time by the Board of Directors, CEO or the CFO as being subject to this pre-clearance process and as set forth on <u>Schedule I</u> (as amended from time to time) (each, a "Pre-Clearance Person") must be pre-cleared by the Company's CFO. Pre-clearance does not relieve anyone of his or her responsibility under SEC rules.**

A request for pre-clearance may be oral or in writing (including by e-mail), should be made at least two business days in advance of the proposed transaction and should include the identity of the Pre- Clearance Person, the type of proposed transaction (for example, an open market purchase, a privately negotiated sale, etc.), the proposed date of the transaction and the number of shares or other securities to be involved. In addition, the Pre-Clearance Person must execute a certification (in the form approved by the CFO) that he or she is not aware of material nonpublic information about the Company. The CFO shall have sole discretion to decide whether to clear any contemplated transaction. (The CEO shall have sole discretion to decide whether to clear transactions by the CFO or persons or entities subject to this policy as a result of their relationship with the CFO.) All trades that are pre-cleared must be affected within 5 business days of receipt of the pre-clearance unless a specific exception has been granted by the CFO. A pre-cleared trade (or any portion of a pre-cleared trade) that has not been affected during the 5-business day period must be pre-cleared again prior to execution.

Notwithstanding receipt of pre-clearance, if the Pre-Clearance Person becomes aware of material non-public information or becomes subject to a black-out period before the transaction is affected, the transaction may not be completed.

None of the Company, the CFO or the Company's other employees will have any liability for any delay in reviewing, or refusal of, a request for pre-clearance submitted pursuant to this Section IV.A. Notwithstanding any pre-clearance of a transaction pursuant to this Section IV.A, none of the Company, the CFO or the Company's other employees assumes any liability for the legality or consequences of such transaction to the person engaging in such transaction.

&nbsp;&nbsp;&nbsp;&nbsp;B. <u>Black-Out Periods</u> 

**Additionally, no officer, director or employee listed on Schedule I (as amended from time to time) shall purchase or sell any security of the Company during the period beginning on the 10th full trading day before the end of any fiscal quarter of the Company and ending upon completion of the 2nd full trading day after the public release of earnings data for such fiscal quarter or during any other trading suspension period declared by the Company, except for purchases and sales made pursuant to the permitted transactions described in Section II or otherwise pre-approved by the CFO.**

Exceptions to the black-out period policy may be approved only by the Company's CFO, or in the case of an exception for the CFO, the CEO.

From time to time, the Company, through the Board of Directors, the Company's disclosure committee or the CFO, may require that officers, directors, employees, or others suspend trading in the Company's securities because of developments that have not yet been disclosed to the public. Subject to the exceptions noted above, all those affected should not trade in the Company's securities while the suspension is in effect and should not disclose to others that the Company has suspended trading. Officers, directors, employees, or others impacted by such required suspension of trading will be notified once the trading suspension has been lifted.

The provisions of this Section IV.B apply regardless of whether or not officers or directors believe that they are in possession of material, non-public information during such black-out periods.

&nbsp;&nbsp;&nbsp;&nbsp;C. <u>Post-Termination Transactions</u> 

With the exception of the pre-clearance requirement, this Policy continues to apply to transactions in the Company's securities even after termination of service to the Company. If an individual is in possession of material, non-public information when his or her service terminates, that individual may not trade in the Company's securities until that information has become public or is no longer material.

&nbsp;&nbsp;&nbsp;&nbsp;D. <u>Information Relating to the Company</u> 

&nbsp;&nbsp;&nbsp;&nbsp;1. <u>Access to Information</u> 

Access to material, non-public information about the Company, including the Company's business, earnings, or prospects, should be limited to officers, directors, and employees of the Company on a need-to-know basis. In addition, such information should not be communicated to anyone outside the Company under any circumstances (except in accordance with the Company's policies regarding the protection or authorized external disclosure of Company information) or to anyone within the Company on an other than need-to-know basis.

In communicating material, non-public information to employees of the Company, all officers, directors, and employees must take care to emphasize the need for confidential treatment of such information and adherence to the Company's policies with regard to confidential information.

&nbsp;&nbsp;&nbsp;&nbsp;2. <u>Inquiries From Third Parties</u> 

Inquiries from third parties, such as industry analysts or members of the media, about the Company should be directed to Gal Ezrach Gindin at <u>gal.e@a2zas.com</u>.

&nbsp;&nbsp;&nbsp;&nbsp;E. <u>Limitations on Access to Company Information</u> 

The following procedures are designed to maintain confidentiality with respect to the Company's business operations and activities.

All officers, directors and employees should take all steps and precautions necessary to restrict access to, and secure, material, non-public information by, among other things:

● Maintaining the confidentiality of Company-related transactions;

● Conducting their business and social activities so as not to risk inadvertent disclosure of confidential information. Review of confidential documents in public places should be avoided to prevent access by unauthorized persons;

● Restricting access to documents and files (including computer files) containing material, non-public information to individuals on a need-to-know basis (including maintaining control over the distribution of documents and drafts of documents);

● Use of encryption when sending confidential information through email to persons both within and outside of the Company;

● Promptly removing and cleaning up all confidential documents and other materials from conference rooms following the conclusion of any meetings;

● Disposing of all confidential documents and other papers, after there is no longer any business or other legally required need, through shredders when appropriate;

● Restricting access to areas likely to contain confidential documents or material, non- public information;

● Safeguarding laptop computers, mobile devices, tablets, memory sticks, CDs and other items that contain confidential information; and

● Avoiding the discussion of material, non-public information in places where the information could be overheard by others such as in elevators, restrooms, hallways, restaurants, airplanes or taxicabs.

Personnel involved with material, non-public information, to the extent feasible, should conduct their business and activities in areas separate from other Company activities.

&nbsp;&nbsp;&nbsp;&nbsp;V. <u>ADDITIONAL PROHIBITED TRANSACTIONS</u> 

The Company has determined that there is a heightened legal risk and/or the appearance of improper or inappropriate conduct if the persons subject to this Policy engage in certain types of transactions. Therefore, officers, directors and employees shall comply with the following policies with respect to certain transactions in the Company securities:

&nbsp;&nbsp;&nbsp;&nbsp;A. <u>Short Sales</u> 

Short sales of the Company's securities evidence an expectation on the part of the seller that the securities will decline in value, and therefore signal to the market that the seller has no confidence in the Company or its short-term prospects. In addition, short sales may reduce the seller's incentive to improve the Company's performance. For these reasons, short sales of the Company's Securities are prohibited by this Policy. In addition, as noted below, Section 16(c) of the 1934 Act absolutely prohibits Section 16 reporting persons from making short sales of the Company's equity securities, i.e., sales of securities that the insider does not own at the time of sale, or sales of securities against which the insider does not deliver the securities within 20 days after the sale.

&nbsp;&nbsp;&nbsp;&nbsp;B. <u>Publicly Traded Options</u> 

A transaction in options is, in effect, a bet on the short-term movement of the Company's stock and therefore creates the appearance that an officer, director or employee is trading based on inside information. Transactions in options also may focus an officer's, director's, or employee's attention on short-term performance at the expense of the Company's long-term objectives. Accordingly, transactions in puts, calls or other derivative securities involving the Company's equity securities, on an exchange or in any other organized market, are prohibited by this Policy.

&nbsp;&nbsp;&nbsp;&nbsp;C. <u>Partnership Distributions</u> 

Nothing in this Policy is intended to limit the ability of a venture capital partnership or other similar entity with which a director is affiliated to distribute Company securities to its partners, members, or other similar persons. It is the responsibility of each affected director and the affiliated entity, in consultation with their own counsel (as appropriate), to determine the timing of any distributions, based on all relevant facts and circumstances and applicable securities laws.

&nbsp;&nbsp;&nbsp;&nbsp;D. <u>Trading on Margin</u> 

As discussed in Section III, above, this Policy prohibits holding Company securities in a margin account or pledging Company securities as collateral for a loan, unless pre-approved by the Company's Chief Executive Officer.

&nbsp;&nbsp;&nbsp;&nbsp;VI. <u>RULE 10b5-1 TRADING PLANS, SECTION 16 AND RULE 144</u> 

&nbsp;&nbsp;&nbsp;&nbsp;A. <u>Rule 10b5-1 Trading Plans</u> 

&nbsp;&nbsp;&nbsp;&nbsp;1. <u>Overview</u> 

Rule 10b5-1 will protect directors, officers, and employees from insider trading liability under Rule 10b5-1 for transactions under a previously established contract, plan, or instruction to trade in the Company's stock (a "Trading Plan") entered in good faith and in accordance with the terms of Rule 10b5-1 and all applicable state laws and will be exempt from the trading restrictions set forth in this Policy. The initiation of, and any modification to, any such Trading Plan will be deemed to be a transaction in the Company's securities, and such initiation or modification is subject to all limitations and prohibitions relating to transactions in the Company's securities. Each such Trading Plan, and any modification thereof, must be submitted to and pre-approved by the Company's CFO, or such other person as the Board of Directors may designate from time to time ("Authorizing Officer"), who may impose such conditions on the implementation and operation of the Trading Plan as the Authorizing Officer deems necessary or advisable. However, compliance of the Trading Plan to the terms of Rule 10b5-1 and the execution of transactions pursuant to the Trading Plan are the sole responsibility of the person initiating the Trading Plan, not the Company or the Authorizing Officer.

**Trading Plans do not exempt individuals from complying with Section 16 short- swing profit rules or liability.**

Rule 10b5-1 presents an opportunity for insiders to establish arrangements to sell (or purchase) Company securities without the restrictions of trading windows and black-out periods, even when an insider is in possession of undisclosed material information. A Trading Plan may also help reduce negative publicity that may result when key executives sell the Company's stock. Rule 10b5-1 only provides an "affirmative defense" in the event there is an insider trading lawsuit. However, it does not prevent someone from bringing a lawsuit.

A director, officer or employee may enter a Trading Plan only when he or she is not in possession of material, non-public information, and only during a trading window period outside of the trading black-out period. Although transactions effected under a Trading Plan will not require further pre-clearance at the time of the trade, any transaction (including the quantity and price) made pursuant to a Trading Plan of a Section 16 reporting person must be reported to the Company promptly on the day of each trade to permit the Company's filing coordinator to assist in the preparation and filing of a required Form 4. Such reporting may be oral or in writing (including by e-mail) and should include the identity of the reporting person, the type of transaction, the date of transaction, the number of securities involved and the purchase or sale price.

However, the ultimate responsibility, and liability, for timely filing remains with the Section 16 reporting person.

The Company reserves the right from time to time to suspend, discontinue, or otherwise prohibit any transaction in the Company's securities, even pursuant to a previously approved Trading Plan, if the Authorizing Officer or the Board of Directors, in its discretion, determines that such suspension, discontinuation or other prohibition is in the best interests of the Company. Any Trading Plan submitted for approval hereunder should explicitly acknowledge the Company's right to prohibit transactions in the Company's securities. Failure to discontinue purchases and sales as directed shall constitute a violation of the terms of this Section VI and result in a loss of the exemption set forth herein.

Officers, directors, and employees may adopt Trading Plans with brokers that outline a pre-set plan for trading of the Company's stock. Trades pursuant to a Trading Plan generally may occur at any time. However, the Company requires a cooling-off period of 30 days between the establishment of a Trading Plan and commencement of any transactions under such plan. An individual may adopt more than one Trading Plan.

Please review the following description of how a Trading Plan works.

Pursuant to Rule 10b5-1, an individual's purchase or sale of securities will not be "on the basis of" material, non-public information if:

● First, before becoming aware of the information, the individual enters a binding contract to purchase or sell the securities, provides instructions to another person to sell the securities or adopts a written plan for trading the securities (i.e., the Trading Plan).

● Second, the Trading Plan must either:

● specify the number of securities to be purchased or sold, the price at which the securities are to be purchased or sold and the date on which the securities are to be purchased or sold;

● include a written formula or computer program for determining the amount, price, and date of the transactions; or

● prohibit the individual from exercising any subsequent influence over the purchase or sale of the Company's stock under the Trading Plan in question.

● Third, the purchase or sale must occur pursuant to the Trading Plan and the individual must not enter a corresponding hedging transaction or alter or deviate from the Trading Plan.

&nbsp;&nbsp;&nbsp;&nbsp;2. <u>Revocation of and Amendments to Trading Plans</u> 

Revocation of Trading Plans should occur only in unusual circumstances. Effectiveness of any revocation or amendment of a Trading Plan will be subject to the prior review and approval of the Authorizing Officer. Once a Trading Plan has been revoked, the participant should wait at least 30 days before trading outside of a Trading Plan and 180 days before establishing a new Trading Plan. You should note that revocation of a Trading Plan can result in the loss of an affirmative defense for past or future transactions under a Trading Plan. You should consult with your own legal counsel before deciding to revoke a Trading Plan. In any event, you should not assume that compliance with the 180-day bar will protect you from possible adverse legal consequences of a Trading Plan revocation.

A person acting in good faith may amend a prior Trading Plan so long as such amendments are made outside of a quarterly trading black-out period and at a time when the Trading Plan participant does not possess material, non-public information. Plan amendments must not take effect for at least 30 days after the plan amendments are made.

Under certain circumstances, a Trading Plan *must* be revoked. This may include circumstances such as the announcement of a merger or the occurrence of an event that would cause the transaction either to violate the law or to have an adverse effect on the Company. The Authorizing Officer or administrator of the Company's equity plans is authorized to notify the broker in such circumstances, thereby insulating the insider in the event of revocation.

&nbsp;&nbsp;&nbsp;&nbsp;3. <u>Discretionary Plans</u> 

Although non-discretionary Trading Plans are preferred, discretionary Trading Plans, where the discretion or control over trading is transferred to a broker, are permitted if pre-approved by the Authorizing Officer.

The Authorizing Officer must pre-approve any Trading Plan, arrangement, or trading instructions, etc., involving potential sales or purchases of the Company's securities, including but not limited to, blind trusts, discretionary accounts with banks or brokers, or limit orders. The actual transactions effected pursuant to a pre-approved Trading Plan will not be subject to further pre-clearance for transactions in the Company's stock once the Trading Plan or other arrangement has been pre- approved.

&nbsp;&nbsp;&nbsp;&nbsp;4. <u>Reporting (if required)</u> 

If required, an SEC Form 144 will be filled out and filed by the individual/brokerage firm in accordance with the existing rules regarding Form 144 filings. A footnote at the bottom of the Form 144 should indicate that the trades "are in accordance with a Trading Plan that complies with Rule 10b5-1 and expires [EXPIRATION DATE]." For Section 16 reporting persons, Form 4s should be filed before the end of the second business day following the date that the broker, dealer, or plan administrator informs the individual that a transaction was executed, provided that the date of such notification is not later than the third business day following the trade date. A similar footnote should be placed at the bottom of the Form 4 as outlined above.

&nbsp;&nbsp;&nbsp;&nbsp;5. <u>Trades Outside of a Trading Plan</u> 

During an open trading window, trades differing from Trading Plan instructions that are already in place are allowed as long as the Trading Plan continues to be followed.

&nbsp;&nbsp;&nbsp;&nbsp;6. <u>Public Announcements</u> 

The Company may make a public announcement that Trading Plans are being implemented in accordance with Rule 10b5-1. It will consider in each case whether a public announcement of a particular Trading Plan should be made. It may also make public announcements or respond to inquiries from the media as transactions are made under a Trading Plan.

&nbsp;&nbsp;&nbsp;&nbsp;7. <u>Prohibited Transactions</u> 

The transactions prohibited under Section V of this Policy, including among others short sales and hedging transactions, may not be carried out through a Trading Plan or other arrangement or trading instruction involving potential sales or purchases of the Company's securities.

&nbsp;&nbsp;&nbsp;&nbsp;8. <u>No Section 16 Protection</u> 

The use of Trading Plans does not exempt participants from complying with the Section 16 reporting rules or liability for short-swing trades.

&nbsp;&nbsp;&nbsp;&nbsp;9. <u>Limitation on Liability</u> 

None of the Company, the Authorizing Officer or the Company's other employees will have any liability for any delay in reviewing, or refusal of, a Trading Plan submitted pursuant to this Section VI.A. Notwithstanding any review of a Trading Plan pursuant to this Section VI. A, none of the Company, the Authorizing Officer or the Company's other employees assumes any liability for the legality or consequences relating to such Trading Plan to the person adopting such Trading Plan.

&nbsp;&nbsp;&nbsp;&nbsp;B. <u>Section 16: Insider Reporting Requirements, Short-Swing Profits and Short Sales (Applicable to Officers, Directors and 10% Stockholders)</u> 

&nbsp;&nbsp;&nbsp;&nbsp;1. <u>Reporting Obligations Under Section 16(a): SEC Forms 3, 4 and 5</u> 

Section 16(a) of the 1934 Act generally requires all Section 16 officers, directors and 10% stockholders ("insiders"), within 10 days after the insider becomes a Section 16 officer, director, or 10% stockholder, to file with the SEC an "Initial Statement of Beneficial Ownership of Securities" on SEC Form 3 listing the amount of the Company's securities which the insider beneficially owns. Following the initial filing on SEC Form 3, changes in beneficial ownership of the Company's securities must be reported on SEC Form 4, generally within two business days after the date on which such change occurs, or in certain cases on Form 5, within 45 days after fiscal year end. The two-day Form 4 deadline begins to run from the trade date rather than the settlement date. A Form 4 must be filed even if, as a result of balancing transactions, there has been no net change in holdings. In certain situations, purchases or sales of Company securities made within six months *prior* to the filing of a Form 3 must be reported on Form 4. Similarly, certain purchases or sales of Company securities made within six months *after* an officer or director ceases to be an insider must be reported on Form 4.

&nbsp;&nbsp;&nbsp;&nbsp;2. <u>Recovery of Profits Under Section 16(b)</u> 

For the purpose of preventing the unfair use of information which may have been obtained by an insider, any profits realized by any officer, director or 10% stockholder from any "purchase" and "sale" of Company stock during a six-month period, so called "short-swing profits," may be recovered by the Company. When such a purchase and sale occur, good faith is no defense. The insider is liable even if compelled to sell for personal reasons, and even if the sale takes place after full disclosure and without the use of any inside information.

The liability of an insider under Section 16(b) of the 1934 Act is only to the Company itself. The Company, however, cannot waive its right to short swing profits, and any Company stockholder can bring suit in the name of the Company. Reports of ownership filed with the SEC on Form 3, Form 4 or Form 5 pursuant to Section 16(a) (discussed above) are readily available to the public, and certain attorneys carefully monitor these reports for potential Section 16(b) violations. In addition, liabilities under Section 16(b) may require separate disclosure in the Company's Annual Report on Form 20-F filed with the SEC or its proxy statement for its annual meeting of stockholders. No suit may be brought more than two years after the date the profit was realized. However, if the insider fails to file a report of the transaction under Section 16(a), as required, the two-year limitation period does not begin to run until after the transactions giving rise to the profit have been disclosed. Failure to report transactions and late filing of reports require separate disclosure in the Company's proxy statement.

Officers and directors should consult the attached "Short-Swing Profit Rule Section 16(b) Checklist" attached hereto as "Attachment A" in addition to consulting the CFO prior to engaging in any transactions involving the Company's securities, including without limitation, the Company's stock, options, or warrants.

&nbsp;&nbsp;&nbsp;&nbsp;3. <u>Short Sales Prohibited Under Section 16(c)</u> 

Section 16(c) of the 1934 Act prohibits insiders absolutely from making short sales of the Company's equity securities. Short sales include sales of stock which the insider does not own at the time of sale, or sales of stock against which the insider does not deliver the securities within 20 days after the sale. Under certain circumstances, the purchase or sale of put or call options, or the writing of such options, can result in a violation of Section 16(c). Insiders violating Section 16(c) face criminal liability.

The CFO should be consulted if you have any questions regarding reporting obligations, short-swing profits, or short sales under Section 16.

&nbsp;&nbsp;&nbsp;&nbsp;C. <u>Rule 144 (Applicable to Officers, Directors and 10% Stockholders)</u> 

Rule 144 provides a safe harbor exemption to the registration requirements of the Securities Act of 1933, as amended, for certain resales of "restricted securities" and "control securities." "Restricted securities" are securities acquired from an issuer, or an affiliate of an issuer, in a transaction or chain of transactions not involving a public offering. "Control securities" are *any* securities owned by directors, executive officers, or other "affiliates" of the issuer, including stock purchased in the open market. Sales of Company securities by affiliates (generally, directors, officers and 10% stockholders of the Company) must comply with the requirements of Rule 144, which are summarized below:

●  ***Current Public Information.*** The Company must have filed all SEC-required reports during the last 12 months.

●  ***Volume Limitations.*** Total sales of Company common shares by a covered individual for any three-month period may not exceed the *greater* of: (i) 1% of the total number of outstanding shares of Company common shares, as reflected in the most recent report or statement published by the Company, or (ii) the average weekly reported volume of such shares traded during the four calendar weeks preceding the filing of the requisite Form 144.

●  ***Method of Sale.*** The shares must be sold either in a "broker's transaction" or in a transaction directly with a "market maker." A "broker's transaction" is one in which the broker does no more than execute the sale order and receive the usual and customary commission. Neither the broker nor the selling person can solicit or arrange for the sale order. In addition, the selling person or Board member must not pay any fee or commission other than to the broker. A "market maker" includes a specialist permitted to act as a dealer, a dealer acting in the position of a block positioner, and a dealer who holds himself out as being willing to buy and sell Company common shares for his own account on a regular and continuous basis.

●  ***Notice of Proposed Sale.*** A notice of the sale (a Form 144) must be filed with the SEC at the time of the sale. Brokers generally have internal procedures for executing sales under Rule 144 and will assist you in completing the Form 144 and in complying with the other requirements of Rule 144.

If you are subject to Rule 144, you must instruct your broker who handles trades in Company securities to follow the brokerage firm's Rule 144 compliance procedures in connection with all trades.

&nbsp;&nbsp;&nbsp;&nbsp;VII. <u>EXECUTION AND RETURN OF CERTIFICATION OF COMPLIANCE</u> 

After reading this Policy, all officers, directors, and employees should execute and return to the Company's CFO the Certification of Compliance form attached hereto as "Attachment B."

<u>SCHEDULE I</u>

**INDIVIDUALS SUBJECT TO QUARTERLY TRADING BLACK-OUTS AND PRE-CLEARANCE REQUIREMENT**

● All officers of the Company

● All members of the Company's Board of Directors

● All employees of the Company in the finance, accounting and legal departments and the executive assistant to the CEO

<u>ATTACHMENT A</u>

**SHORT-SWING PROFIT RULE SECTION 16(B) CHECKLIST**

Note: ANY combination of PURCHASE AND SALE or SALE AND PURCHASE of Company securities within six months of each other by a Section 16 officer, director or 10% stockholder (or any family member living in the same household or certain affiliated entities) may result in a violation of Section 16(b), and "profit" must be recovered by A2Z Cust2Mate Solutions Corp. ("Company"). It makes no difference how long the securities being sold have been held or, for officers and directors, that you were an insider for only one of the two matching transactions. The highest priced sale will be matched with the lowest priced purchase within the six-month period.

**Sales**

If a sale of Company securities is to be made by a Section 16 officer, director or 10% stockholder (or any family member living in the same household or certain affiliated entities):

&nbsp;&nbsp;&nbsp;&nbsp;1. Have
 there been any purchases by the insider (or family members living in the same household or
 certain affiliated entities) within the past six months?

&nbsp;&nbsp;&nbsp;&nbsp;2. Are
 any purchases anticipated or required within the next six months?

&nbsp;&nbsp;&nbsp;&nbsp;3. Has
 a Form 4 been prepared?

Note: If a sale is to be made by an affiliate of the Company, has a Form 144 been prepared and has the broker been reminded to sell pursuant to Rule 144?

**Purchases**

If a purchase of Company securities is to be made:

&nbsp;&nbsp;&nbsp;&nbsp;1. Have
 there been any sales by the insider (or family members living in the same household or certain
 affiliated entities) within the past six months?

&nbsp;&nbsp;&nbsp;&nbsp;2. Are
 any sales anticipated or required within the next six months (such as tax- related or year-
 end transactions)?

&nbsp;&nbsp;&nbsp;&nbsp;3. Has
 a Form 4 been prepared?

**Before proceeding with a purchase or sale, consider whether you are aware of material inside information which could affect the price of the Company securities. All transactions in the Company's securities by officers and directors must be <u>pre-cleared</u> by contacting the Company's CFO.**

<u>ATTACHMENT B</u>

**CERTIFICATION OF COMPLIANCE**

RETURN BY [__________] *[insert return deadline]*

 

TO: _______________________, CFO

FROM: ____________________________

---

| | |
|:---|:---|
| **RE:** | **INSIDER TRADING COMPLIANCE POLICY** |

---

I have received, reviewed, and understand the above-referenced Insider Trading Compliance Policy and undertake, as a condition to my present and continued employment (or, if I am not an employee, affiliation with) A2Z Cust2Mate Solutions Corp., to comply fully with the policies and procedures contained therein.

I hereby certify, to the best of my knowledge, that during the calendar year ending December 31, 20 , I have complied fully with all policies and procedures set forth in the above-referenced Insider Trading Compliance Policy.

---

| | |
|:---|:---|
| SIGNATURE | DATE |
| TITLE |  |

---

## Exhibit 12.1

**Exhibit 12.1**

**CERTIFICATION**

I, Gadi Graus, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;1. I have reviewed this Annual
 Report on Form 20-F of A2Z Cust2Mate Solutions Corp.;

2. Based on my knowledge,
 this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements
 made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this
 report;

3. Based on my knowledge,
 the financial statements, and other financial information included in this report, fairly present in all material respects the financial
 condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's
 other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in
 Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f)
 and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Designed such disclosure
 controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material
 information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities,
 particularly during the period in which this report is being prepared;

b. Designed such internal
 control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision,
 to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for
 external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness
 of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness
 of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report
 any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent
 fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is
 reasonably likely to materially affect, the registrant's internal control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;5. The registrant's
 other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting,
 to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the
 equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. All significant deficiencies
 and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely
 affect the registrant's ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not
 material, that involves management or other employees who have a significant role in the registrant's internal control over
 financial reporting.

---

| | |
|:---|:---|
| March 31, 2026 | */s/ Gadi Graus* |
|  | Gadi Graus |
|  | Chief Executive Officer |

---

## Exhibit 12.2

**Exhibit 12.2**

**CERTIFICATION**

I, Alan Rootenberg, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;1. I have reviewed this Annual
 Report on Form 20-F of A2Z Cust2Mate Solutions Corp.;

2. Based on my knowledge,
 this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements
 made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this
 report;

3. Based on my knowledge,
 the financial statements, and other financial information included in this report, fairly present in all material respects the financial
 condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's
 other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in
 Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f)
 and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Designed such disclosure
 controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material
 information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities,
 particularly during the period in which this report is being prepared;

b. Designed such internal
 control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision,
 to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for
 external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness
 of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness
 of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report
 any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent
 fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is
 reasonably likely to materially affect, the registrant's internal control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;5. The registrant's
 other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting,
 to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the
 equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. All significant deficiencies
 and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely
 affect the registrant's ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not
 material, that involves management or other employees who have a significant role in the registrant's internal control over
 financial reporting.

---

| | |
|:---|:---|
| March 31, 2026 | */s/ Alan Rootenberg* |
|  | Alan Rootenberg |
|  | Chief Financial Officer |

---

## Exhibit 13.1

**Exhibit 13.1**

**CERTIFICATION PURSUANT TO**

**18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906**

**OF THE SARBANES-OXLEY ACT OF 2002**

In connection with the Annual Report on Form 20-F of A2Z Cust2Mate Solutions Corp. (the "Company") for the period ended December 31, 2025, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Gadi Graus, Chief Executive Officer of the Company, do hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

---

| | |
|:---|:---|
| March 31, 2026 | */s/ Gadi Graus* |
|  | Gadi Graus |
|  | Chief Executive Officer |

---

## Exhibit 13.2

**Exhibit 13.2**

**CERTIFICATION PURSUANT TO**

**18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906**

**OF THE SARBANES-OXLEY ACT OF 2002**

In connection with the Annual Report on Form 20-F of A2Z Cust2Mate Solutions Corp. (the "Company") for the period ended December 31, 2025, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Alan Rootenberg, Chief Financial Officer of the Company, do hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of knowledge:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

---

| | |
|:---|:---|
| March 31, 2026 | */s/ Alan Rootenberg* |
|  | Alan Rootenberg |
|  | Chief Financial Officer |

---

## Exhibit 15.1

**Exhibit 15.1**

![](ex15-1_001.jpg)

<u>Consent of Independent Registered Public Accounting Firm</u>

A2Z Cust2Mate Solutions Corp.

1600-609 Granville Street

Vancouver, British Columbia V7Y 1C3

Canada

We hereby consent to the incorporation by reference in the Registration Statement on Form F-3 (File No. 333-271226) of our report dated March 31, 2026, relating to the consolidated financial statements of A2Z Cust2Mate Solutions Corp. (the "Company"), appearing in the Company's Annual Report on Form 20-F for the year ended December 31, 2025.

---

| | |
|:---|:---|
| Tel-Aviv, Israel | */s/ Ziv haft* |
| March 31, 2026 | Certified Public Accountants (Isr.) |
|  | BDO Member Firm |

---

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| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Tel Aviv**<br> 03-6386868 | **Jerusalem**<br> 02-6546200 | **Haifa**<br> 04-8680600 | **Beer Sheva**<br> 077-7784100 | **Bnei Brak**<br> 073-7145300 | **Kiryat Shmona**<br> 077-5054906 | **Petah Tikva**<br> 077-7784180 | **Modiin Ilit**<br> 08-9744111 | **Nazrat Ilit**<br> 04-6555888 |

---

**Main office: Beit Amot BDO, 48 Menachem Begin Road, Tel Aviv, 6618001 Email: bdo@bdo,co.il Website: www.bdo.co.il**

BDO Israel, an Israeli partnership, is a member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms. BDO is the brand name for the BDO network and for each of the BDO Member Firm