A2z Cust2mate Solutions Corp 6-K, filed Aug 12, 2026
A2z Cust2mate Solutions Corp. (AZ)
About this 6-K
A2z Cust2mate Solutions Corp filed this 6-K on August 12, 2026.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
OF THE SECURITIES EXCHANGE ACT OF 1934
For the month of August 2026
Commission
File Number:
(Registrant)
(Address of Principal Executive Offices)
Indicate by check mark whether the Registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F ☒ Form 40-F ☐
Exhibit 99.1 and Exhibit 99.2 are hereby incorporated by reference into the registrant’s Registration Statement on Form F-3 (File No. 333-295138), to be a part thereof from the date on which this report is submitted, to the extent not superseded by documents or reports subsequently filed or furnished.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| A2Z CUST2MATE SOLUTIONS CORP. | ||
| (Registrant) | ||
| Date August 12, 2026 | By | /s/ Gadi Graus |
| Gadi Graus | ||
| Chief Executive Officer | ||
EXHIBIT INDEX
| Exhibit | Description of Exhibit | |
| 99.1 | Unaudited Condensed Consolidated Interim Financial Statements for the three and six months ended June 30, 2026 | |
| 99.2 | Management’s Discussion and Analysis for the three and six months ended June 30, 2026 | |
| 99.3 | Certificate of Interim Filings CEO dated August 12, 2026 | |
| 99.4 | Certificate of Interim Filings CFO dated August 12, 2026 | |
| 101.INS | Inline XBRL Instance Document | |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
Exhibit 99.1
A2Z Cust2Mate Solutions Corp.
CONDENSED CONSOLIDATED INTERIM
FINANCIAL STATEMENTS
FOR THE THREE AND SIX MONTHS ENDED
JUNE 30, 2026
(Unaudited)
(Expressed in US Dollars)
A2Z CUST2MATE SOLUTIONS CORP.
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2026
(Unaudited)
(Expressed in US Dollars)
INDEX
| 2 |
A2Z CUST2MATE SOLUTIONS CORP.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION
(Unaudited)
(Expressed in Thousands of US Dollars, except per share data)
June 30, 2026 | December 31, 2025 | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Restricted cash (note 5) | ||||||||
| Financial assets at fair value (note 3) | ||||||||
| Inventories (note 4) | ||||||||
| Trade receivables, net | ||||||||
| Other accounts receivable | ||||||||
| Total current assets | ||||||||
| Non-current assets | ||||||||
| Intangible asset | ||||||||
| Long term financial assets at fair value | ||||||||
| Long-term trade receivables (note 9) | ||||||||
| Property, equipment and right of use assets, net | ||||||||
| Total non-current assets | ||||||||
| Total Assets | $ | $ | ||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current liabilities | ||||||||
| Current portion of long-term loan (note 5) | $ | $ | ||||||
| Lease liability | ||||||||
| Trade payables | ||||||||
| Other accounts payable | ||||||||
| Warrant Liability (note 6) | ||||||||
| Total current liabilities | ||||||||
| Non-current liabilities | ||||||||
| Lease liability | ||||||||
| Long term loan (note 5) | ||||||||
| Total non-current liabilities | ||||||||
| Total liabilities | ||||||||
| Equity | ||||||||
| Share capital and additional paid in capital (note 7) | ||||||||
| Warrant Reserve | ||||||||
| Accumulated other comprehensive income (loss) | ( | ) | ||||||
| Reserve with respect to transactions with non-controlling interests | ||||||||
| Treasury stock (note 7) | ( | ) | ||||||
| Accumulated losses | ( | ) | ( | ) | ||||
| Total equity attributable to Company shareholders | ||||||||
| Non-controlling interests | ( | ) | ( | ) | ||||
| Total equity | ||||||||
| Total liabilities and equity | $ | $ | ||||||
| August 12, 2026 | “Yonathan De Yonge” | “Gadi Graus” | ||
| Date of approval of the financial statements | Yonathan De Yonge - Director | Gadi Graus Chief Executive Officer |
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
| 3 |
A2Z CUST2MATE SOLUTIONS CORP.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF LOSS AND COMPREHENSIVE LOSS
(Unaudited)
(Expressed in Thousands of US Dollars, except per share data)
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Revenues (note 9) | $ | $ | $ | $ | ||||||||||||
| Cost of revenues | ||||||||||||||||
| Gross profit | ||||||||||||||||
| Expenses: | ||||||||||||||||
| Research and development costs | $ | $ | $ | $ | ||||||||||||
| Sales and marketing costs | ||||||||||||||||
| General and administration expenses | ||||||||||||||||
| Operating loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Loss on revaluation of warrant Liabilities (note 6) | ( | ) | ( | ) | ||||||||||||
| Financial income (expense), net | ( | ) | ||||||||||||||
| Net loss for the period from continuing operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net loss for the period from discontinued operations | ( | ) | ( | ) | ||||||||||||
| Net loss for the period | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Less: Net loss attributable to non-controlling interests | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net loss attributable to controlling shareholders | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net loss for the period | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Other comprehensive income | ||||||||||||||||
| Item that will not be reclassified to profit or loss: | ||||||||||||||||
| Adjustments arising from translating financial statements of foreign operations | ( | ) | ||||||||||||||
| Other comprehensive income | ( | ) | ||||||||||||||
| Total comprehensive loss for the period | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Less: Comprehensive loss attributable to non-controlling interests | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Comprehensive loss attributable to the Company’s shareholders | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Total comprehensive loss for the period | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Basic and diluted loss per share from continuing operations | $ | ) | $ | ) | $ | ) | $ | ) | ||||||||
| Basic and diluted loss per share from discontinued operations | $ | $ | ) | $ | $ | ) | ||||||||||
| Weighted average number of shares outstanding | ||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
| 4 |
A2Z CUST2MATE SOLUTIONS CORP.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(Unaudited)
(Expressed in Thousands of US Dollars, except per share data)
Number of shares | Additional
paid in capital | Warrant reserve | Other Comprehensive Loss | with non-controlling interests | Accumulated deficit | Treasury stock | Non-controlling interest | Total Equity | ||||||||||||||||||||||||||||
| Ordinary share capital | Accumulated | Transactions | ||||||||||||||||||||||||||||||||||
Number of shares | Additional
paid in capital | Warrant reserve | Other Comprehensive Loss | with non-controlling interests | Accumulated deficit | Treasury stock | Non-controlling interest | Total Equity | ||||||||||||||||||||||||||||
| Balance – December 31, 2025 | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||||||||||||||||
| Net loss for the period | - | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Adjustments arising from translating financial statements of foreign operations | - | |||||||||||||||||||||||||||||||||||
| Net
comprehensive profit (loss) for the period | - | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Exercise of options (note 7(b)) | ||||||||||||||||||||||||||||||||||||
| Exercise of RSUs (note 7(a)) | ||||||||||||||||||||||||||||||||||||
| Exercise of warrants (note 7(c)) | ||||||||||||||||||||||||||||||||||||
Expiration of warrants | - | ( | ) | |||||||||||||||||||||||||||||||||
| Purchase of treasury stock (note 7(d)) | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||
| Share based compensation (notes 8(b, c)) | - | |||||||||||||||||||||||||||||||||||
| Balance – June 30, 2026 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||||||
| 5 |
A2Z CUST2MATE SOLUTIONS CORP.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIT)
(Unaudited)
(Expressed in Thousands of US Dollars, except per share data)
| Number of shares | Additional paid in capital | Warrant reserve | Other Comprehensive Income | with non-controlling parties | Accumulated deficit | Non-
controlling interest | of
the Company (Deficit) | |||||||||||||||||||||||||
| Ordinary share capital | Accumulated | Transactions | Total Equity of shareholder | |||||||||||||||||||||||||||||
| Number of shares | Additional paid in capital | Warrant reserve | Other Comprehensive Income | with non-controlling parties | Accumulated deficit | Non-
controlling interest | of
the Company (Deficit) | |||||||||||||||||||||||||
| Balance - January 1, 2025 | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||
| Balance | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||
| Net loss for the period | - | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||
| Adjustments arising from translating financial statements of foreign operations | - | |||||||||||||||||||||||||||||||
| Comprehensive loss for the period | - | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||
| Net
comprehensive profit (loss) for the period | - | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||
| Issuance of shares in January 2025 private placement | ||||||||||||||||||||||||||||||||
| Transactions with non-controlling interests | - | ( | ) | ( | ) | |||||||||||||||||||||||||||
| Exercise of RSUs | ||||||||||||||||||||||||||||||||
| Exercise of warrants | ( | ) | ||||||||||||||||||||||||||||||
| Exercise of options | ||||||||||||||||||||||||||||||||
| Share based compensation | ||||||||||||||||||||||||||||||||
| Balance – June 30, 2025 | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Balance | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
| 6 |
A2Z CUST2MATE SOLUTIONS CORP.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS
(Unaudited)
(Expressed in Thousands of US Dollars, except per share data)
| 2026 | 2025 | |||||||
| For the period of six months ended | ||||||||
| June 30, | ||||||||
| 2026 | 2025 | |||||||
| Cash flows from operating activities | ||||||||
| Net loss for the period | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||
| Amortization and depreciation | ||||||||
| Amortization of intangible assets | ||||||||
| Share based compensation | ||||||||
| Loss on divestment of subsidiary | ||||||||
| Loss on revaluation of warrant liability | ||||||||
| Gain from revaluation of investment in associate | ( | ) | ||||||
| Proceeds from financial assets | ( | ) | ||||||
| Change in long-term trade receivables | ( | ) | ( | ) | ||||
| Change in severance liability | ||||||||
| Change in inventory | ( | ) | ( | ) | ||||
| Change in trade receivables | ( | ) | ( | ) | ||||
| Change in other accounts receivables | ( | ) | ( | ) | ||||
| Accrued interest on loans and leases | ||||||||
| Change in accounts payable | ||||||||
| Change in other accounts payable | ( | ) | ||||||
| Net cash used in operating activities: | ( | ) | ( | ) | ||||
| Cash flows from investing activities | ||||||||
| Investment in restricted cash | ( | ) | ( | ) | ||||
| Divestment of a subsidiary | ( | ) | ||||||
| Proceeds from disposal of financial assets | ||||||||
| Purchase of property, plant and equipment | ( | ) | ( | ) | ||||
| Net of cash flows from investing activities | ( | ) | ||||||
| Cash flows from financing activities | ||||||||
| Proceeds from the issuance of shares and warrants, net | ||||||||
| Exercise of warrants | ||||||||
| Lease payments | ( | ) | ( | ) | ||||
| Proceeds from exercise of options | ||||||||
| Purchase of treasury stock | ( | ) | ||||||
| Repayment of loans | ( | ) | ( | ) | ||||
| Proceeds from receipt of loans | ||||||||
| Transactions with non-controlling interests | ( | ) | ||||||
| Net of Cash flows from financing activities | ( | ) | ||||||
| Increase (decrease) in cash and cash equivalents | ( | ) | ||||||
| Effect of changes in foreign exchange rates | ||||||||
| Cash and cash equivalents at beginning of period | ||||||||
| Cash and cash equivalents at end of period | $ | $ | ||||||
| Interest paid during the period | ||||||||
| APPENDIX A: NON-CASH ACTIVITIES | ||||||||
| Recognition of a lease liability and right-of-use asset | $ | $ | ||||||
| Fair value of warrants exercise during the period | ||||||||
| APPENDIX A: NON-CASH ACTIVITIES – DIVESTMENT OF SUBSIDIARY | ||||||||
| Working capital other than cash and cash equivalents | ||||||||
| Property, plant and equipment | ||||||||
| Lease liability | ( | ) | ||||||
| Loans | ( | ) | ||||||
| Severance liability | ( | ) | ||||||
| Loss on divestment of subsidiary | ( | ) | ||||||
| Total cash and cash equivalents from divestment of a subsidiary | ( | ) | ||||||
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
| 7 |
A2Z CUST2MATE SOLUTIONS CORP.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2026
(Unaudited)
(Expressed in Thousands of US Dollars, except per share data)
NOTE 1 – NATURE AND CONTINUANCE OF OPERATIONS
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 Company 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.
As of the date of this report, the Company has 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 July 13, 2023, Cust2mate incorporated a wholly owned subsidiary, Cust2mate USA Inc. under the laws of Delaware.
The
Company owns
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. Further, the Cust2Mate system creates a retail media platform to engage shoppers at the point of purchase and to provide customer targeted advertising. (“The Cust2Mate Platform”).
In addition, Cust2Mate has a dedicated Retail Media Division to advance a business model that combines smart cart subscriptions with retail media and digital commerce services. Through the Cust2Mate Platform, the Company monetizes its technology through two primary revenue streams: (i) recurring smart cart subscriptions and (ii) retail media and related digital services.
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 war has had no material effect on the Company’s financial situation and on the results of the Company’s activities. Also, the Company managed to maintain operational and functional continuity, including maintaining an effective staff volume and effective ongoing operations with its customers and suppliers.
These Condensed Consolidated Interim financial statements were authorized for issue by the Board of Directors on August 12, 2026.
| 8 |
A2Z CUST2MATE SOLUTIONS CORP.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2026
(Unaudited)
(Expressed in Thousands of US Dollars, except per share data)
NOTE 2 – BASIS OF PREPARATION
| 1. | Significant accounting policy |
Statement of Compliance
These unaudited condensed consolidated interim financial statements of the Company are as of June 30, 2026, and presented in US dollars which is the Company’s reporting currency. The Company’s functional currency is the New Israeli Shekel. These unaudited condensed consolidated interim financial statements have been prepared in accordance with the requirements of International Accounting Standard IAS 34 “Interim Financial Reporting” as issued by the IASB. They do not include all the information required in annual financial statements in accordance with IFRS accounting standards and should be read in conjunction with the annual financial statements of the Company for the year ended December 31, 2025.
The policies applied in these condensed consolidated interim financial statements are based on IFRS accounting standards effective as of January 1, 2025, and are consistent with those included in the Company’s annual financial statements for the year ended December 31, 2025.
Basis of Consolidation
The financial results of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. Intercompany balances and transactions and any unrealized income and expenses arising from such transactions are eliminated upon consolidation.
Basis of measurement
These condensed consolidated interim financial statements have been prepared on a going concern basis, under the historical cost basis, except for financial instruments which have been measured at fair value.
Financial assets
Financial assets are recognized when the Company becomes a party to the contractual provisions of the instrument and are initially measured at fair value. Transaction costs are added to or deducted from the fair value of financial assets that are not measured at FVTPL. Subsequent measurement depends on the Company’s business model and contractual cash flow characteristics. Investments in marketable equity securities are classified at FVTPL. Changes in fair value, including realized and unrealized gains and losses on disposal or remeasurement, are recognized in profit or loss. Purchases and sales are recognized on the trade date. Financial assets are derecognized when contractual rights expire or substantially all risks and rewards are transferred.
| 2. | Critical Estimates and Assumptions |
The preparation of the Company’s financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of expenses during the reporting period. Actual outcomes could differ from these estimates. The Company’s financial statements include estimates which, by their nature, are uncertain. The impacts of such estimates are pervasive throughout the Company’s financial statements and may require accounting adjustments based on future occurrences. Revisions to accounting estimates are recognized in the period in which the estimate is revised and also in future periods when the revision affects both current and future periods.
The functional currency for each of the Company’s subsidiaries is the currency of the primary economic environment in which the respective entity operates; the Company has determined the functional currency of each entity to be the New Israeli Shekel. Such determination involves certain judgements to identify the primary economic environment. The Company reconsiders the functional currency of its subsidiaries if there is a change in events and/or conditions which determine the primary economic environment. During the six months ended June 30, 2026, there have been no such changes. The Company’s presentation currency is the US dollar.
| 9 |
A2Z CUST2MATE SOLUTIONS CORP.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2026
(Unaudited)
(Expressed in Thousands of US Dollars, except per share data)
NOTE 2 – BASIS OF PREPARATION (CONTINUED)
| 3. | Standards-issued-but-not-yet-effective disclosure |
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.
In April 2024, the IASB issued IFRS 18 Presentation and Disclosure in Financial Statements. This standard aims to improve the consistency and clarity of financial statement presentation and disclosures by providing updated guidance on the structure and content of financial statements. Key changes include enhanced requirements for the presentation of financial performance, financial position, and cash flows, as well as additional disclosures to improve transparency and comparability. In addition, IFRS 18 requires entities to classify income and expenses into five categories, three of which are new – i.e. operating, investing and financing – and the income tax and discontinued operation categories. The new standard sets out detailed requirements for classifying income and expenses into each category. These amendments are effective for annual periods beginning on or after January 1, 2027. The Company is currently assessing the impact that the adoption of IFRS 18 will have on its consolidated financial statements.
The Company is currently assessing the impact of this new accounting standard since it has not adopted yet.
| 10 |
A2Z CUST2MATE SOLUTIONS CORP.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2026
(Unaudited)
(Expressed in Thousands of US Dollars, except per share data)
NOTE 3 – FINANCIAL ASSETS AT FAIR VALUE
Financial assets not measured at fair value include cash and cash equivalents, loans to others, trade and other receivables and trade payables. Due to their short-term nature, the carrying value of cash and cash equivalents, loans to others and trade and other receivables approximates their fair value.
The reconciliation of the opening and closing fair value balance of financial instruments is provided below:
SCHEDULE OF RECONCILIATION OF FAIR VALUE BALANCE OF FINANCIAL INSTRUMENTS
| Financial assets at fair value | Level 1 | |||
| December 31, 2024 | $ | |||
| Purchases | ||||
| Disposals | ||||
| Gain | ||||
| December 31, 2025 | $ | |||
| Financial assets at fair value, beginning balance | $ | |||
| Purchases | ||||
| Disposals | ( | ) | ||
| Gain | ||||
| June 30, 2026 | $ | |||
| Financial assets at fair value, ending balance | $ | |||
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
NOTE 4 - INVENTORIES:
SCHEDULE OF INVENTORIES
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Raw materials | $ | $ | ||||||
| Smart cart parts | ||||||||
| Inventory in transit | ||||||||
| Finished goods | ||||||||
| Inventories | $ | $ | ||||||
| 11 |
A2Z CUST2MATE SOLUTIONS CORP.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2026
(Unaudited)
(Expressed in Thousands of US Dollars, except per share data)
NOTE 5 – LOAN FROM BANK
On
June 14, 2026, Cust2Mate signed a financing arrangement with a leading Israeli Bank Leumi le-Israel B.M (“Bank Leumi”),
pursuant to which the Bank Leumi has committed to provide aggregate facilities of up to NIS
65%
of the facility is available for 12 months and the balance for a 24-month period, subject to customary terms and conditions. Drawdowns will be repaid over periods of up to 36 months. Borrowings bear interest at a rate of prime +4% per annum. The Company
incurred a one-time arrangement fee of NIS
Cust2Mate
has a NIS
As
at June 30, 2026, Cust2Mate received a drawdown of NIS
The agreements contain customary affirmative and negative covenants, including requirements to provide periodic financial information, maintain legal existence and operating licenses, preserve insurance coverage, comply with applicable laws and regulations, and refrain from granting additional liens or encumbrances without prior approval. In addition, the Company has also granted a lien over certain customer agreements in favor of the Bank Leumi.
Management determined that the Company was in compliance with all applicable covenants as at June 30, 2026.
Management believes that the facilities provide significant additional liquidity and financial flexibility to support anticipated growth in customer inventory programs. The availability of the undrawn commitments is monitored as part of the Company’s overall liquidity risk management framework.
NOTE 6 – WARRANT LIABILITY
Certain warrants were issued on November 2, 2022 and January 4, 2024, with an exercise price denominated in Canadian dollars rather than the functional currency of the Company – New Israeli Shekels (NIS). During the six months ended June 30, 2026, the balance of these warrants was exercised (see note 7(c)) and as such, as of June 30, 2026, there are no outstanding warrants accounted for as a liability.
The fair value of the warrants is determined by 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.
The
Black-Scholes option pricing model was used to measure the warrant liability as of December 31, 2025 with the following assumptions (Level 3): volatility of
SCHEDULE OF FAIR VALUE OF WARRANTS
| Balance at December 31, 2025 | $ | |||
| Warrant exercise | ( | ) | ||
| Revaluation at June 30, 2026 | ||||
| Balance at June 30, 2026 | $ |
Level 3 for the period ended on June 30, 2026:
For
the three and six months ended June 30, 2026, the Company recorded a loss on revaluation of warrant liabilities in the amount of $
(for the three and six months ended June 30, 2025 - $
| 12 |
A2Z CUST2MATE SOLUTIONS CORP.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2026
(Unaudited)
(Expressed in Thousands of US Dollars, except per share data)
| a) | During the period ended June 30, 2026, the Company issued Common Shares in respect of the exercise of vested RSUs (note 8 (c)). | |
| b) | During the period ended June 30, 2026, the Company issued Common Shares in respect of the exercise of share options for proceeds of $ (note 8 (b)). | |
| c) | During the period ended June 30, 2026, the Company issued Common Shares in respect of the exercise of warrants for proceeds of $ (note 8 (a)). | |
| d) | Share repurchase program
On
January 7, 2026, the Board of Directors of the Company approved a repurchase program allowing the Company to purchase through the
facilities of the NASDAQ, $
of Common Shares of the Company up to a value of $
but not to represent more than 20% of the “public float”, through to April 7, 2026, which was extended on March 27, 2026
to July 6, 2026 and on July 6, 2026 to December 31, 2026 (the “Buyback”). Oppenheimer & Co. Inc. will act as the
Company’s advisor and dealer manager in respect of the Buyback. As of June 30, 2026, the Company repurchased a total of
shares with a value of $ |
NOTE 8 - WARRANTS AND OPTIONS
a) Warrants
| (i) | Warrant transactions for the six months ended June 30, 2026, and for the year ended December 31, 2025, are as follows: |
SCHEDULE OF WARRANTS TRANSACTIONS
| Number | Weighted Average Exercise Price | |||||||
| Balance, January 1, 2025 | $ | |||||||
| Expiry of warrants | ( | ) | ||||||
| Exercise of warrants | ( | ) | ||||||
| Warrants issued in the January 2025 Registered Direct Offering and September 2025 underwritten public offering | ||||||||
| Balance, December 31, 2025 | $ | |||||||
| Exercise of warrants (a) | ( | ) | ||||||
| Expiry of warrants | ( | ) | ||||||
| Balance, June 30, 2026 | $ | |||||||
| (a) |
| (ii) | As at June 30, 2026, the Company had outstanding warrants, enabling the holders to acquire Common Shares as follows: |
SCHEDULE OF OUTSTANDING WARRANTS
June 30, 2026 | Expiry date | Exercise price | Exercise price (USD) | |||||||||
| USD | $ | |||||||||||
| USD | $ | |||||||||||
| USD | $ | |||||||||||
| 13 |
A2Z CUST2MATE SOLUTIONS CORP.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2026
(Unaudited)
(Expressed in Thousands of US Dollars, except per share data)
NOTE 8 - WARRANTS AND OPTIONS (CONTINUED)
b) Stock Options
| (i) | Stock option transactions for the six months ended June 30, 2026, and for the year ended December 31, 2025, are as follows: |
| Number | Weighted Average Exercise Price (CAD) | Weighted Average Exercise Price (USD) | ||||||||||
| Balance January 1, 2025 | $ | $ | ||||||||||
| Options cancelled | ( | ) | ||||||||||
| Options exercised | ( | ) | ||||||||||
| Options granted | ||||||||||||
| Balance December 31, 2025 | $ | $ | ||||||||||
| Options cancelled | ( | ) | ||||||||||
| Options exercised | ( | ) | ||||||||||
| Options granted | ||||||||||||
| Balance June 30, 2026 | $ | $ | ||||||||||
| (ii) | As at June 30, 2026, the Company had outstanding stock options, enabling the holders to acquire Common Shares as follows: |
Outstanding as of June 30, 2026 | Exercisable as of June 30, 2026 | Expiry date | Exercise price (CAD) | Exercise price (USD) | ||||||||||||
| CAD | $ | |||||||||||||||
| CAD | $ | |||||||||||||||
| CAD | $ | |||||||||||||||
| CAD | $ | |||||||||||||||
| CAD | $ | |||||||||||||||
| CAD | $ | |||||||||||||||
| CAD | $ | |||||||||||||||
| CAD | $ | |||||||||||||||
| CAD | $ | |||||||||||||||
| CAD | $ | |||||||||||||||
| CAD | $ | |||||||||||||||
| CAD | $ | |||||||||||||||
| CAD | $ | |||||||||||||||
| CAD | $ | |||||||||||||||
| CAD | $ | |||||||||||||||
| CAD | $ | |||||||||||||||
Share-based compensation expense is recognized over the vesting period of options. During the three and six months ended June 30, 2026, share-based compensation of $ and $, respectively, were recognized and charged to the Consolidated Statement of Comprehensive Loss (three and six months ended June 30, 2025, share-based compensation of $ and $, respectively).
| 14 |
A2Z CUST2MATE SOLUTIONS CORP.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2026
(Unaudited)
(Expressed in Thousands of US Dollars, except per share data)
NOTE 8 - WARRANTS AND OPTIONS (CONTINUED)
c) RSUs
SCHEDULE OF RSU’S TRANSACTIONS
| Number | ||||
| Balance, January 1, 2025 | ||||
| RSUs granted | ||||
| Expiry of RSUs | ( | ) | ||
| Exercise of RSUs | ( | ) | ||
| Balance, December 31, 2025 | ||||
| Exercise of RSUs | ( | ) | ||
| Balance, June 30, 2026 | ||||
As of June 30, 2026, RSU’s are milestone based RSU’s for which the milestones have not yet been achieved. During the three and six months ended June 30, 2026, share-based compensation of $ and $, respectively, were recognized and charged to the Consolidated Statement of Comprehensive Loss (during the three and six months ended June 30, 2025, share-based compensation of $ and $, respectively).
| 15 |
A2Z CUST2MATE SOLUTIONS CORP.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2026
(Unaudited)
(Expressed in Thousands of US Dollars, except per share data)
NOTE 9 - REVENUES:
Revenue streams:
SCHEDULE OF REVENUE FROM SERVICES
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Revenues from sales of precision metal parts | $ | $ | $ | $ | ||||||||||||
| Smart Carts: | ||||||||||||||||
| Products | | | ||||||||||||||
| Services | | | | | ||||||||||||
| Revenues from the Cust2Mate Platform (*) | ||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||
For
the three and six months ended June 30, 2026, the Company recognized revenues of $ and $
| (*) | 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. As of June 30, 2026, long-term trade receivables amounted to
$ |
NOTE 10 – COMMITMENTS
Cust2Mate
leases office space with the lease expiring on
NOTE 11 – 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 ILS. The purchaser is related to a director of the Company at the time of sale. 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 the condensed consolidated interim financial statements of the Company in the prior period.
| 16 |
A2Z CUST2MATE SOLUTIONS CORP.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2026
(Unaudited)
(Expressed in Thousands of US Dollars, except per share data)
NOTE 11 – DISCONTINUED OPERATIONS (CONTINUED)
The below are the data of operating results attributed to the discontinued operations:
SCHEDULE OF DISCONTINUED OPERATIONS
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Revenues | $ | $ | $ | $ | ||||||||||||
| Cost of revenues | ||||||||||||||||
| Gross profit | ||||||||||||||||
| Expenses: | ||||||||||||||||
| Research and development costs | $ | $ | $ | $ | ||||||||||||
| General and administration expenses | ||||||||||||||||
| Operating loss | ( | ) | ( | ) | ||||||||||||
| Financial (income) expense | ( | ) | ||||||||||||||
| Loss before taxes on income | ( | ) | ( | ) | ||||||||||||
| Loss on disposal of discontinued operations* | ( | ) | ( | ) | ||||||||||||
| Net loss for the period from discontinued operations | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||
| (*) |
| 2026 | 2025 | |||||||
Six months ended June 30 | ||||||||
| 2026 | 2025 | |||||||
| Consideration received on disposal of discontinued operations | $ | $ | ||||||
| Cash disposed of | ( | ) | ||||||
| Net cash outflow on disposal of discontinued operations | ( | ) | ||||||
| Net assets disposed (other than cash): | ||||||||
| Property, equipment and right of use assets, net | ( | ) | ||||||
| Trade and other receivables | ( | ) | ||||||
| Trade and other payables | ||||||||
| Loans | ||||||||
| Severance payments, net | ||||||||
| Net assets disposed | $ | $ | ( | ) | ||||
| 2026 | 2025 | |||||||
| Six months ended | ||||||||
| June 30 | ||||||||
| 2026 | 2025 | |||||||
| Net cash flows provided by (used by) discontinued operations | ||||||||
| From operating activities | $ | $ | ||||||
| From investing activities | ( | ) | ||||||
| From financing activities | ( | ) | ||||||
| Net cash flows provided by (used by) discontinued operations | $ | $ | ||||||
| 17 |
A2Z CUST2MATE SOLUTIONS CORP.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2026
(Unaudited)
(Expressed in Thousands of US Dollars, except per share data)
NOTE 12 – OPERATING SEGMENTS AND MAJOR CUSTOMERS:
| a) | Operating segments |
The Company and its subsidiaries are engaged in the following two segments, currently in one geographical location (Israel):
| 1. | Retail automation solutions – Smart Carts (“Smart Carts”) | |
| 2. | Manufacturing and selling of precision metal parts – “Precision Metal Parts” |
SCHEDULE OF OPERATING SEGMENTS
| Six Months Ended June 30, 2026 | ||||||||||||
| Precision Metal Parts | Smart Carts | Total | ||||||||||
| Revenues | ||||||||||||
| External | $ | $ | $ | |||||||||
| Total | ||||||||||||
| Cost of revenues | ||||||||||||
| External | ||||||||||||
| Total | ||||||||||||
| Segment operational loss (gain) | ( | ) | ||||||||||
| Loss on revaluation of warrant liability | ||||||||||||
| Financial expenses (income), net | ||||||||||||
| Tax expenses | ||||||||||||
| Net loss | $ | |||||||||||
| 18 |
A2Z CUST2MATE SOLUTIONS CORP.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2026
(Unaudited)
(Expressed in Thousands of US Dollars, except per share data)
NOTE 12 – OPERATING SEGMENTS AND MAJOR CUSTOMERS (CONTINUED)
| Precision
Metal Parts | Smart Carts | Total | ||||||||||
| Six Months Ended June 30, 2025 | ||||||||||||
| Precision Metal Parts | Smart Carts | Total | ||||||||||
| Revenues | ||||||||||||
| External | $ | $ | $ | |||||||||
| Total | ||||||||||||
| Cost of revenues | ||||||||||||
| External | ||||||||||||
| Total | ||||||||||||
| Segment operational loss | ||||||||||||
| Loss on revaluation of warrant liability | ||||||||||||
| Financial expenses (income), net | ( | ) | ||||||||||
| Tax expenses | ||||||||||||
| Net loss | $ | |||||||||||
| Three Months Ended June 30, 2026 | ||||||||||||
| Precision Metal Parts | Smart Carts | Total | ||||||||||
| Revenues | ||||||||||||
| External | $ | $ | $ | |||||||||
| Total | ||||||||||||
| Cost of revenues | ||||||||||||
| External | ||||||||||||
| Total | ||||||||||||
| Segment operational loss | ( | ) | ||||||||||
| Loss on revaluation of warrant liability | ||||||||||||
| Financial expenses (income), net | ( | ) | ||||||||||
| Tax expenses | ||||||||||||
| Net loss | $ | |||||||||||
| Three Months Ended June 30, 2025 | ||||||||||||
| Precision Metal Parts | Smart Carts | Total | ||||||||||
| Revenues | ||||||||||||
| External | $ | $ | $ | |||||||||
| Total | ||||||||||||
| Revenues | ||||||||||||
| Cost of revenues | ||||||||||||
| External | ||||||||||||
| Total | ||||||||||||
| Cost of revenues | ||||||||||||
| Segment operational loss | ||||||||||||
| Loss on revaluation of warrant liability | ||||||||||||
| Financial expenses, net | ||||||||||||
| Tax expenses | ||||||||||||
| Net loss | $ | |||||||||||
| 19 |
A2Z CUST2MATE SOLUTIONS CORP.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2026
(Unaudited)
(Expressed in Thousands of US Dollars, except per share data)
NOTE 12 - OPERATING SEGMENTS AND MAJOR CUSTOMERS (CONTINUED)
| As at June 30, 2026 | ||||||||||||
| Precision Metal Parts | Smart Carts | Total | ||||||||||
| Segment assets | $ | $ | $ | |||||||||
| Segment liabilities | $ | $ | $ | |||||||||
| As at December 31, 2025 | ||||||||||||
Precision Metal Parts | Smart Carts | Total | ||||||||||
| Segment assets | $ | $ | $ | |||||||||
| Segment liabilities | $ | $ | $ | |||||||||
| b) | Major customer data as a percentage of total revenues: |
The following table sets forth the customers that represented 10% or more of the Company’s total revenues in each of the periods set forth below:
SCHEDULE OF MAJOR CUSTOMER
| Six months ended | ||||||||
| June 30 | ||||||||
| 2026 | 2025 | |||||||
| Customer A | % | % | ||||||
| Customer B | 46 | % | - | |||||
NOTE 13 - 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.
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
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Cash and Cash Equivalents | $ | $ | ||||||
| Restricted cash | ||||||||
| Investment in financial assets | ||||||||
| Short term and long term trade receivables | ||||||||
| Long term financial assets at fair value | ||||||||
| Other accounts receivable | ||||||||
| Total | $ | $ | ||||||
| 20 |
A2Z CUST2MATE SOLUTIONS CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Thousands of US Dollars, except per share data)
NOTE 13 - 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 | ||||||||||||
| Carrying amounts | Within 1 year | over 1 year | ||||||||||
| Trade payables | $ | $ | $ | |||||||||
| Other accounts payable | $ | $ | $ | |||||||||
| Loans | $ | $ | $ | |||||||||
| Lease liability | $ | $ | $ | |||||||||
| 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.
As
of June 30, 2026, 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 six month period would decrease /increase by approximately $
| 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 has incurred recurring losses and negative cash flows from operating activities since inception, such that as of June 30, 2026,
the Company had accumulated losses of $
The Company’s main use for liquidity is to fund the development of its programs and working capital purposes. These activities include research and development, product development, sales and marketing 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. 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.
NOTE 14 – EVENTS SUBSEQUENT TO THE REPORTING PERIOD
| a) | From July 1, 2026 through the date of the report, the Company repurchased an additional shares with a value of $
As of August 12, 2026, issued and outstanding shares were reduced from to . | |
| b) | From July 1, 2026 through the date of the report, the Company issued RSU’s to an officer. |
| 21 |
Exhibit 99.2
A2Z Cust2Mate Solutions Corp.
MANAGEMENT’S DISCUSSION AND ANALYSIS
For the Three and Six Months Ended June 30, 2026
(Expressed in U.S. Dollars)
August 12, 2026
| 1 |
The following Management’s Discussion and Analysis (“MD&A”) for A2Z Cust2Mate Solutions Corp (“A2Z” or the “Company”) is prepared as of August 12, 2026, and relates to the financial condition and results of operations of the Company for the three and six months ended June 30, 2026. Past performance may not be indicative of future performance. This MD&A should be read in conjunction with the Company’s audited consolidated annual financial statements for the year ended December 31, 2025, and with the Company’s unaudited condensed consolidated interim financial statements for the three and six months ended June 30, 2026, which have been prepared using accounting policies consistent with International Financial Reporting Standards as issued by the International Accounting Standards Board (“collectively IFRS Accounting Standards or IFRS”).
The unaudited condensed consolidated interim financial statements have been prepared in accordance with the requirements of International Accounting Standard IAS 34 “Interim Financial Reporting”.
All amounts are presented in United States dollars (“USD” or “$”), the Company’s presentation currency, unless otherwise stated.
Statements are subject to the risks and uncertainties identified in the “Risks and Uncertainties”, and “Cautionary Note Regarding Forward-Looking Statements” sections of this document. Readers are cautioned not to put undue reliance on forward-looking statements.
Overview
A2Z CUST2MATE SOLUTIONS CORP. (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 Shahar Tower, 4 Ariel Sharon St., Givatayim, Israel.
Our website address is www.cust2mate.com. Information contained on, or accessible through, our website is not a part of this interim report and the inclusion of our website address in this interim 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/.
| 2 |
| B. | Business Overview |
Business of the Company
We are an innovative technology company operating the following complementary business lines through our subsidiaries:
(i) development and commercialization of a connected in-store commerce platform for retailers, including smart cart-based shopper engagement, retail media and in-store intelligence capabilities, designed primarily for grocery stores and supermarkets (the “Cust2Mate Platform”);
(ii) manufacture of precision metal parts;
In 2020, we began to 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 platform, 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 interim 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., its subsidiary incorporated on July 12, 2023, under the laws of Delaware.
Smart Cart Products and Services
The Cust2Mate Platform is a connected in-store commerce platform that enables retailers to digitize the in-store shopping journey through smart cart-based shopper engagement, centralized platform management, retail media and in-store intelligence. The platform combines connected shopper technology, software, infrastructure and retailer integrations to support product identification, basket management, flexible checkout, personalized shopper engagement and real-time operational visibility, while helping retailers improve operational efficiency and generate actionable shopper insights.
The Cust2Mate Platform combines scanning, computer vision, security scales and AI-based basket validation technologies with a detachable, large screen SmartPanel that provides shoppers with real-time shopping information, personalized engagement, retail media and flexible checkout capabilities. The platform is designed to support accurate product identification, reduce operational friction and integrate with retailers’ existing technology infrastructure.
For retailers, the Cust2Mate Platform provides centralized operational visibility, supports efficient store operations, strengthens product identification and loss prevention, enables retail media and in-store intelligence, and generates actionable data insights into shopper behavior. The platform is designed to help retailers increase shopper engagement, support larger basket sizes and improved product mix through personalized digital interactions, and integrate with existing technology infrastructure, including point-of-sale, product, pricing, loyalty and payment systems.
The Cust2Mate Platform also supports retail media, enabling retailers and brand partners to deliver targeted promotions, advertisements and other digital content throughout the shopping journey, while creating additional revenue opportunities and enhancing shopper engagement.
| 3 |
During the quarter, we unveiled our next-generation Connected In-Store Commerce Platform, marking a significant evolution from a product-centric offering to a unified enterprise platform for modern retail. The platform connects shopper engagement, store operations, retail media and in-store intelligence through a scalable architecture designed for efficient manufacturing, large-scale deployment and chain-wide operations. Built on four connected platform elements and three integrated solutions—ShopMate, MediaMate and InsightMate—the platform is designed to support retailers’ digital transformation while creating new recurring revenue opportunities.
The Cust2Mate Platform supports multiple cart configurations, ranging from 75-liter to 275-liter formats, allowing retailers to deploy a consistent technology platform across different store formats and shopping missions. All configurations are built on the same detachable SmartPanel architecture, software platform and security capabilities, providing flexibility to meet the operational needs of supermarkets, urban grocery stores, drugstores, duty-free shops and other retail environments.
The Company utilizes third-party manufacturing partners and dedicated production facilities to manufacture its products, enabling scalable production and supply chain and supporting global customer deployments.
In September 2025, we launched a dedicated Retail Media Division to advance a business model that combines smart cart subscriptions with retail media and digital commerce services. Through the Cust2Mate Platform, the Company monetizes its technology through two primary revenue streams: (i) recurring smart cart subscriptions and (ii) retail media and related digital services.
The Company generates revenue through a combination of platform hardware sales and recurring subscription fees under multi-year customer agreements. In addition, the Company expects to generate recurring revenue from retail media and related digital services delivered through the Cust2Mate Platform, serving both existing platform customers and additional retail media customers.
Significant developments during the period
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.
On January 5, 2026, we announced that the Company’s smart carts will be available at select stores of Migros Ticaret A.S. Company expects the carts to be available Q1, 2027.
On January 7, 2026, the Board of Directors of the Company approved a repurchase program allowing the Company to purchase through the facilities of the NASDAQ, $20 million of Common Shares of the Company up to a value of $20,000 but not to represent more than 20% of the “public float”, through to April 7, 2026, which was extended on March 27, 2026 to July 6, 2026 and on July 6, 2026 to December 31, 2026 (the “Buyback”). Oppenheimer & Co. Inc. will act as the Company’s advisor and dealer manager in respect of the Buyback. As of the date of this report, the Company repurchased a total of 1,066,541 shares with a value of $6.7 million (net of commissions). On July 30, 2026, the 1,066,541 were cancelled.
| 4 |
On January 12, 2026, the Company announced its expansion into the toy retail sector with purchase orders from Toys “R” Us Israel and The Red Pirate, two leading Israeli toy retail chains. The retailers have ordered a total of 2,000 A2Z Cust2Mate smart carts, paying monthly fees over a 60 month period, with a minimum contract value of $15 million, not including additional retail media revenues. Deployment is scheduled to commence Q3, 2026.
On January 14, 2026, the Company announced the launch of a dedicated Retail Media Division.
On April 6, 2026, the Company entered a five-year strategic agreement, valued at approximately $50 million, to deploy 4000 smart carts across Carrefour Israel stores, alongside a comprehensive data, retail media and digital services collaboration. 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. No later than May 30, 2026 a detailed Service Level Agreement is expected to be finalized, including the key performance indicators that the smart carts are required to meet.
On April 7, 2026, the Company received formal notice from the Nasdaq Stock Market LLC (“Nasdaq”) that the Company has regained compliance with the annual meeting requirement for continued listing set forth in Nasdaq’s Listing Rule 5620.
On April 30, 2026, the Company and HaStock, a leading and fast-growing home goods retail chain in Israel, with over 50 stores nationwide, announced the deployment of 2,000 Cust2Mate smart shopping carts, at three key stores in Haifa, Beer Sheba, and Petach Tikva. Over the five-year agreement, smart cart revenues are expected to exceed US$21M. In addition, the agreement includes a comprehensive collaboration across data, retail media, and digital services to be managed by A2Z Cust2mate. The companies will share in the resulting revenue. During the second quarter of 2026 we were able to deliver 950 units.
On May 5, 2026, the Company announced new retail media agreements to advertise leading brands Under Armor, Santa Barbara Polo Club, Slazenger, Rollox and SwissBrand on its smart cart shopping platform in Israel, further accelerating the expansion of its Retail Media business.
On May 14, 2026, the Company announced that it had received a firm proposal from one of Israel’s largest commercial banks, to provide a $30 million line of credit to support the large-scale manufacturing and deployment of its smart shopping carts. The financing facility, provided under standard commercial terms, will allow Cust2Mate to manufacture its smart carts at scale without the need to raise additional equity capital or utilize existing cash reserves, supporting the Company’s continued expansion into global markets.
On June 11, 2026, the Company announced that its dedicated mass production facilities in China had become fully operational, with large-scale manufacturing now underway. This milestone significantly expands the Company’s production capacity, shortens lead times and enhances manufacturing efficiency, providing the capability to support increasing customer demand and larger-scale deployments across multiple markets. With manufacturing now operating at scale, the Company has commenced shipments to support both existing customer rollouts and new deployments.
On July 13, 2026, the Company announced the appointment of Gadi Levin as the new CFO, Mr. Levin brings a wealth of public company experience and a proven track record of disciplined financial management and corporate development.
In late July 2026, the Company commenced an organizational realignment designed to align its cost structure with the next phase of its commercial growth. As development of its next-generation platform reaches maturity, the Company is reducing resources in certain research and development and administrative functions while expanding its deployment, sales and customer-facing capabilities. Once fully implemented, management expects these initiatives to reduce annual operating expenses by approximately $7 million, while preserving the Company’s core technology, customer support and delivery capabilities.
On August 11, 2026, the Company announced a follow-on purchase order from Sapir Group, for an additional 4,000 Cust2Mate smart shopping carts, expanding Sapir Group’s total commitment to 7,000 smart carts. The follow-on order brings the total value of Sapir Group’s orders to approximately $84 million over the life of the agreements.
The expanded order follows significant growth in Sapir Group’s retail footprint. Over the past two years, the group has acquired approximately 20 stores previously operated by Carrefour Israel, substantially expanding its store network and increasing the potential scale of the Cust2Mate deployment.
The increased commitment from Sapir Group further strengthens A2Z Cust2Mate’s contracted deployment pipeline and reflects the Company’s strategy of expanding with retail partners as they scale their store networks and deepen adoption of the Cust2Mate platform.
In addition, the Company announces that it is currently renegotiating with Carrefour Israel the terms and conditions of its previously announced Carrefour Israel purchase order.
Commercial Execution and Growth Initiatives
During the first half of 2026, the Company continued to make progress in executing its commercial growth strategy through increased customer deployments, expansion of its operational capabilities and continued investment in its commercialization infrastructure.
During the second quarter, the Company delivered approximately 950 Smart Carts, compared to approximately 500 units during the first quarter of 2026, bringing cumulative deliveries to approximately 3,350 units as at June 30, 2026. Based on its existing contracted backlog and purchase orders, the Company continues to expect to deliver approximately 10,000 Smart Carts by the end of 2026 and approximately 19,000 Smart Carts by the end of 2027.
These targets are based on existing customer commitments and do not include potential future customer contracts or order expansions. (Forward-looking information.)
The Company also continued to expand deployments with both new and existing customers. During the quarter, the Company commenced deliveries to HaStock, one of Israel’s largest home goods retailers, and delivered approximately half of the 2,000 Smart Carts covered under the customer’s initial order. Following quarter end, the Company also commenced deliveries to the Sapir Group under its previously announced order for approximately 3,000 Smart Carts. In addition, the Company expects to continue deliveries during the second half of 2026 to previously announced customers, including Toys “R” Us Israel and The Red Pirate, supporting continued growth in its installed base.
To support increasing deployment activity, the Company continued to strengthen its operational infrastructure. During the quarter, further progress was made in developing the Company’s regional operational hubs in Panama and Bulgaria, including enhancements to deployment processes, customer support capabilities and regional logistics. These hubs are expected to support future international deployments and improve execution as customer rollouts continue to expand.
Looking ahead, the Company continues to pursue opportunities outside Israel and expects to commence deployments with two or more retailers outside Israel by the end of 2026. Management believes that its expanded manufacturing capacity, strengthened operational infrastructure and growing installed customer base position the Company to support continued commercial expansion across multiple markets.
| 5 |
Results of operations for the three and six months ended June 30, 2026, and 2025 (in thousands of U.S. Dollars, (unaudited):
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Revenues | $ | 5,904 | $ | 1,160 | $ | 9,221 | $ | 2,707 | ||||||||
| Cost of revenues | 3,392 | 890 | 6,570 | 1,857 | ||||||||||||
| Gross profit | 2,512 | 270 | 2,651 | 850 | ||||||||||||
| Expenses: | ||||||||||||||||
| Research and development costs | $ | 3,991 | $ | 3,919 | $ | 6,921 | $ | 5,230 | ||||||||
| Sales and marketing costs | 2,676 | 828 | 4,870 | 1,256 | ||||||||||||
| General and administration expenses | 3,435 | 2,320 | 6,477 | 7,736 | ||||||||||||
| Operating loss | (7,590 | ) | (6,797 | ) | (15,617 | ) | (13,372 | ) | ||||||||
| Loss on revaluation of warrant Liabilities | - | (4,135 | ) | - | (3,735 | ) | ||||||||||
| Financial income (expense), net | 254 | (223 | ) | - | 187 | |||||||||||
| Net loss for the period from continuing operations | (7,336 | ) | (11,155 | ) | (15,617 | ) | (16,920 | ) | ||||||||
| Net loss for the period from discontinued operations | - | (1,436 | ) | - | (2,425 | ) | ||||||||||
| Net loss for the period | $ | (7,336 | ) | $ | (12,591 | ) | $ | (15,617 | ) | $ | (19,345 | ) | ||||
| Less: Net loss attributable to non-controlling interests | (179 | ) | (76 | ) | (388 | ) | (408 | ) | ||||||||
| Net loss attributable to controlling shareholders | (7,157 | ) | (12,515 | ) | (15,229 | ) | (18,937 | ) | ||||||||
| Net loss for the period | $ | (7,336 | ) | $ | (12,591 | ) | $ | (15,617 | ) | $ | (19,345 | ) | ||||
| Other comprehensive income | ||||||||||||||||
| Item that will not be reclassified to profit or loss: | ||||||||||||||||
| Adjustments arising from translating financial statements of foreign operations | 2,075 | (274 | ) | 2,651 | 536 | |||||||||||
| Other comprehensive income | 2,075 | (274 | ) | 2,651 | 536 | |||||||||||
| Total comprehensive loss for the period | (5,261 | ) | (12,865 | ) | (12,966 | ) | (18,809 | ) | ||||||||
| Less: Comprehensive loss attributable to non-controlling interests | (179 | ) | (76 | ) | (388 | ) | (408 | ) | ||||||||
| Comprehensive loss attributable to the Company’s shareholders | (5,082 | ) | (12,789 | ) | (12,578 | ) | (18,401 | ) | ||||||||
| Total comprehensive loss for the period | $ | (5,261 | ) | $ | (12,865 | ) | $ | (12,966 | ) | $ | (18,809 | ) | ||||
| Basic and diluted loss per share from continuing operations | $ | (0.16 | ) | $ | (0.31 | ) | $ | (0.34 | ) | $ | (0.48 | ) | ||||
| Basic and diluted loss per share from discontinued operations | $ | - | $ | (0.04 | ) | $ | - | $ | (0.07 | ) | ||||||
| Weighted average number of shares outstanding | 44,749,055 | 35,304,220 | 44,155,780 | 34,177,189 | ||||||||||||
Three months ended June 30, 2026, compared to the three months ended June 30, 2025 (unaudited, in thousands of U.S. Dollars):
Revenues
| Three months ended | ||||||||
| June 30, | ||||||||
| 2026 | 2025 | |||||||
| Smart Carts | $ | 4,413 | $ | 181 | ||||
| Precision Metal Parts | 1,491 | 979 | ||||||
| $ | 5,904 | $ | 1,160 | |||||
Revenues for the three months ended June 30, 2026, were $5,904 thousand as compared to $1,160 thousand for the three months ended June 30, 2025. The increase is due primarily to the increase in sales from the Company’s smart carts segment.
While revenues from the smart cart division are currently derived from only a few customers, revenues from the Company’s precision metal parts segments are derived from hundreds of customers.
Cost of revenues
Cost of revenues for the three months ended June 30, 2026, was $3,392 thousand as compared to $890 thousand for the three months ended June 30, 2025. The increase is due primarily to the increase in cost of revenues from the Cust2Mate division (increased production costs) and the Company’s Smart carts (increased payroll costs).
| 6 |
Research and development expenses
Research and development expenses relate to the Company’s Cust2Mate product. Most of these expenses relate to payroll and outsourced software engineers who work on integrating future customers’ point of sales systems to the Company’s software.
Research and development expenses were $3,991 thousand for the three months ended June 30, 2026, as compared to $3,919 thousand for the three months ended June 30, 2025. The increase is due mainly to the increase in payroll and related expenses and subcontractor and outsourced work in the three months ended June 30, 2026 and decrease in share-based expenses in the three months ended June 30, 2026.
Sales and marketing expenses
Sales and marketing expenses were $2,676 thousand for the three months ended June 30, 2026, as compared to $828 thousand for the three months ended June 30, 2025. The increase is due mainly to the increase in payroll and related expenses and in share-based expenses in the three months ended June 30, 2026.
General and administrative expenses
General and administrative expenses were $3,435 thousand for the three months ended June 30, 2026, as compared to $2,320 thousand for the three months ended June 30, 2025. The increase is primarily due to the increase in investor relations which amounted to $741 thousand for the three months ended June 30, 2026, compared to $24 thousand for the three months ended June 30, 2025.
Loss on revaluation of warrant liability
Loss on revaluation of warrant liability for the three months ended June 30, 2026, was $Nil thousand as compared to a loss of $4,135 thousand for the three months ended June 30, 2025.
| 7 |
Financial income (expenses), net
Financial income for the three months ended June 30, 2026 were $254 thousand as compared to financial expenses of $(223) thousand for the three months ended June 30, 2025. Financial income comprises mainly of interest gains from short-term deposits and unrealized gains. Financial expenses comprise of interest on loans, lease liabilities, and credit card charges.
Six months ended June 30, 2026, compared to the six months ended June 30, 2025 (unaudited, in thousands of U.S. Dollars):
Revenues
| Six months ended | ||||||||
| June 30, | ||||||||
| 2026 | 2025 | |||||||
| Smart Carts | $ | 6,863 | $ | 375 | ||||
| Precision Metal Parts | 2,358 | 2,332 | ||||||
| $ | 9,221 | $ | 2,707 | |||||
Revenues for the six months ended June 30, 2026, were $9,221 thousand as compared to $2,707 thousand for the six months ended June 30, 2025. The increase is due primarily to the increase in sales from the Company’s smart carts segment.
While revenues from the smart cart division are currently derived from a few customers, revenues from the Company’s precision metal parts segments are derived from hundreds of customers.
Cost of revenues
Cost of revenues for the six months ended June 30, 2026, was $6,570 thousand as compared to $1,857 thousand for the six months ended June 30, 2025. The increase is due primarily to the increase in cost of revenues from the Cust2Mate division (increased productions costs) and the Company’s Smart carts (increased payroll costs).
| 8 |
Research and development expenses
Research and development expenses related to the Company’s Cust2Mate product. Most of these expenses relate to payroll and outsourced software engineers who work on integrating future customers’ point of sales systems to the Company’s software.
Research and development expenses were $6,921 thousand for the six months ended June 30, 2026, as compared to $5,230 thousand for the six months ended June 30, 2025. The increase is due mainly to the increase in payroll and related expenses in the six months ended June 30, 2026.
Sales and marketing expenses
Sales and marketing expenses were $4,870 thousand for the six months ended June 30, 2026, as compared to $1,256 thousand for the six months ended June 30, 2025. The increase is due mainly to the increase in payroll and related expenses in the six months ended June 30, 2026.
General and administrative expenses
General and administrative expenses were $6,477 thousand for the six months ended June 30, 2026, as compared to $7,736 thousand for the six months ended June 30, 2025. The decrease is primarily due to the decrease in share-based compensation which amounted to $1,244 thousand for the six months ended June 30, 2026, compared to $3,550 thousand for the six months ended June 30, 2025.
Loss on revaluation of warrant liability
Loss on revaluation of warrant liability for the six months ended June 30, 2026, was $Nil thousand as compared to a loss of $3,735 thousand for the six months ended June 30, 2025.
Financial income (expenses), net
Financial income for the six months ended June 30, 2026 were $nil thousand as compared to financial income of $187 thousand for the six months ended June 30, 2025. Financial income comprises mainly of interest gains from short-term deposits and unrealized gains. Financial expenses comprise of interest on loans, lease liabilities, and credit card charges.
REVIEW OF QUARTERLY RESULTS
| (In thousands, unaudited) | 30/06/2026 | 31/03/2026 | 31/12/2025 | 30/09/2025 | ||||||||||||
| Total revenues | $ | 5,904 | $ | 3,317 | $ | 3,647 | $ | 1,547 | ||||||||
| Gross profit (loss) | $ | 2,512 | $ | 139 | $ | (282 | ) | $ | 526 | |||||||
| Total comprehensive loss | $ | (5,261 | ) | $ | (7,705 | ) | $ | (18,303 | ) | $ | (2,695 | ) | ||||
| Basic and diluted loss per share | $ | (0.16 | ) | $ | (0.18 | ) | $ | (0.42 | ) | $ | (0.07 | ) | ||||
| (In thousands, unaudited) | 30/06/2025 | 31/03/2025 | 31/12/2024 | 30/09/2024 | ||||||||||||
| Total revenues | $ | 1,160 | $ | 1,547 | $ | 1,420 | $ | 1,572 | ||||||||
| Gross profit | $ | 270 | $ | 580 | $ | 790 | $ | 690 | ||||||||
| Total comprehensive loss | $ | (12,865 | ) | $ | (5,944 | ) | $ | (11,879 | ) | $ | (3,399 | ) | ||||
| Basic and diluted loss per share | $ | (0.31 | ) | $ | (0.16 | ) | $ | (0.40 | ) | $ | (0.16 | ) | ||||
Planned transition from IFRS to U.S. GAAP
The Company prepares its financial statements in accordance with IFRS Accounting Standards, as issued by the International Accounting Standards Board (IASB), as permitted in the United States based on the Company’s qualification as a “foreign private issuer” under the rules and regulations of the U.S Securities and Exchange Commission (the “SEC”). As announced in our press release dated April 15, 2026, the Company intended to commence financial reporting in accordance with US Generally Accepted Accounting Principles (U.S. GAAP) instead of IFRS Accounting Standards (IFRS), effective beginning with its first quarter of 2026 financial reporting, subject to the completion of the transition process and any applicable regulatory requirements.
We are currently in the process of identifying any significant differences between IFRS and U.S. GAAP as they relate to our financial statements and we intend to report our audited financial statements for the year ended December 31, 2026 in accordance with U.S. GAAP, and not to make this change during the financial year.
Liquidity, Capital Resources and Going Concern
The Company has incurred recurring losses and negative cash flows from operating activities since inception, such that as of June 30, 2026, the Company had accumulated losses of $153,416 thousand and a net loss in the amount of $15,617 thousand for the six months ended June 30, 2026. As of the date of the issuance of the accompanied condensed consolidated interim 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.
Borrowings
On June 14, 2026, Cust2Mate signed a financing arrangement with a leading Israeli Bank Leumi le-Israel B.M (“Bank Leumi”), pursuant to which the Bank Leumi has committed to provide aggregate facilities of up to NIS 92 million ($30.893 million) to finance inventory purchases for specified strategic customers.
| 9 |
65% of the facility is available for 12 months and the balance for a 24-month period, subject to customary terms and conditions. Drawdowns will be repaid over periods of up to 36 months. Borrowings bear interest at a rate of prime +4% per annum. The Company incurred a one-time arrangement fee of NIS 368,000 ($124 thousand) upon establishment of the facility.
Cust2Mate has a NIS 10 million ($3.875 million) security deposit (classified as Restricted Cash in the Consolidated Statement of Position) pledged in favor of Bank Leumi as collateral for secured inventory financing arrangements. The restricted cash is not available for general corporate purposes without the lender’s consent and has been presented as a current asset because it supports the Company’s ordinary working-capital cycle and revolving inventory financing activities.
As at June 30, 2026, Cust2Mate received a drawdown of NIS 6.6 million ($2.217 million) under the facility. $843 thousand is recorded as a short-term liability and $1,374 is recorded as a long term liability. The net committed amount of NIS 85.4 million ($28.677 million) remains available to support future working-capital requirements.
The agreements contain customary affirmative and negative covenants, including requirements to provide periodic financial information, maintain legal existence and operating licenses, preserve insurance coverage, comply with applicable laws and regulations, and refrain from granting additional liens or encumbrances without prior approval. In addition, the Company has also granted a lien over certain customer agreements in favor of the Bank Leumi.
Following the equity raised during the year ended December 31, 2025, and the above mentioned debt financing, the Company has sufficient working capital for at least the next 12 months from the date of this report.
Cash flows
During the six months ended June 30, 2026, the Company’s overall position of cash decreased by $1,369 thousand (before the effects of foreign exchange movements) as compared to an increase of $14,241 thousand for the six months ended June 30, 2025. This decrease can be attributed to the following activities:
Operating activities - The Company’s net cash used in operating activities during the six months ended June 30, 2026, was $21,776 thousand as compared to $9,687 thousand for the six months ended June 30, 2025. The increase is due to the increase in the long-term trade receivables.
Investing activities - Cash provided from investing activities for the six months ended June 30, 2026, was $23,659 thousand as compared to $8,128 thousand used in investing activities during the six months ended June 30, 2025.
Financing activities - Cash used in financing activities for the six months ended June 30, 2026, was $3,252 thousand, and was mainly due to the purchase of treasury stock in the amount of $5,820 thousand, offset against the receipt of loans in the amount of $2,199 thousand and the exercise of warrants in the amount of $946 thousand. Cash provided from financing activities for the six months ended June 30, 2025, was $32,056 thousand, and was mainly due to the issuance of shares and warrants in the amount of $27,395 thousand, the exercise of options in the amount of $337 thousand and transactions with non-controlling interests of $1,850 thousand, offset by repayment of loans in the amount of $849 thousand.
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 research and development, product development, sales and marketing 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. 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
None.
Tabular Disclosure of Contractual Obligations
The Company has contractual obligations arising in the ordinary course of business, including lease obligations, financing arrangements and purchase commitments. There have been no material changes from those disclosed in the Annual Report other than those described elsewhere in this MD&A.
Critical Accounting Policies and Estimates
There have been no material changes to our critical accounting policies and estimates from the information provided in the MD&A section in our Annual Report.
| 10 |
MANAGEMENTS RESPONSIBILITY FOR FINANCIAL REPORTING
Evaluation of disclosure controls and procedures
Our Chief Executive Officer and Chief Financial Officer are responsible for establishing and maintaining disclosure controls and procedures for the Company. As such, we maintain a set of disclosure controls and procedures designed to ensure that information required to be disclosed in filings is recorded, processed, summarized, and reported within the time periods specified by the Canadian Securities Administrators rules and forms. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
Management’s report on internal controls over financial reporting
Our Chief Executive Officer and Chief Financial Officer are responsible for establishing and maintaining effective internal controls over financial reporting. Our internal controls over financial reporting are designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS. Because of their inherent limitations, internal controls over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.
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.
To remediate the material weakness in our internal controls noted above, we have commenced remedial measures and are taking additional measures to remediate this material weakness. First, during the first quarter of 2026, we rolled out an enhanced financial and accounting system. Second, we have hired additional personnel. Third, we have strengthened our controls over procurement to pay and inventory management and counts. Consistent with our stage of development, we continue to rely on risk-mitigating procedures during our financial closing process in order to provide comfort that the financial statements are presented fairly in accordance with IFRS. Improvements continued into the second quarter as well.
There were no other changes (other than what has been reported above) in internal control over financial reporting during the most recent interim period that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
| 11 |
CURRENT SHARE DATA
A2Z is authorized to issue an unlimited number of Common Shares. As of the date of this MD&A there were 44,026,467(*) Common Shares issued and outstanding. In addition, the following warrants and options were outstanding:
| Outstanding as of the date of this report | Date of expiry | Exercise price USD | ||||||||
| 3,200 | Warrants | October 2, 2026 | $ | 1.88 | ||||||
| 183,751 | Warrants | January 29, 2030 | $ | 8.00 | ||||||
| 324,625 | Warrants | September 16, 2030 | $ | 10.00 | ||||||
| 6,670 | Options | October 28, 2026 | $ | 14.07 | ||||||
| 360,000 | Options | August 2, 2032 | $ | 6.26 | ||||||
| 120,000 | Options | August 21, 2032 | $ | 7.04 | ||||||
| 220,000 | Options | January 4, 2033 | $ | 2.90 | ||||||
| 100,000 | Options | January 4, 2033 | $ | 2.90 | ||||||
| 40,000 | Options | November 25, 2027 | $ | 3.54 | ||||||
| 81,000 | Options | April 18, 2033 | $ | 2.81 | ||||||
| 431,000 | Options | August 14, 2034 | $ | 1.78 | ||||||
| 105,000 | Options | January 15, 2035 | $ | 6.40 | ||||||
| 500,000 | Options | February 2, 2035 | $ | 6.40 | ||||||
| 30,000 | Options | June 20, 2035 | $ | 1.775 | ||||||
| 153,666 | Options | June 20, 2035 | $ | 6.40 | ||||||
| 154,000 | Options | October 9, 2035 | $ | 8.00 | ||||||
| 500,000 | Options | December 30, 2035 | $ | 6.00 | ||||||
| 1,210,500 | Options | December 30, 2035 | $ | 8.00 | ||||||
| 25,000 | Options | March 27, 2036 | $ | 8.00 | ||||||
| 4,548,412 | ||||||||||
(*) On January 7, 2026, the Board of Directors of the Company approved a repurchase program allowing the Company to purchase through the facilities of the NASDAQ, $20 million of Common Shares of the Company up to a value of $20 million but not to represent more than 20% of the “public float”, through to April 7, 2026, which was extended on March 27, 2026 to July 6, 2026 and on July 6, 2026 to December 31, 2026 (the “Buyback”). Oppenheimer & Co. Inc. will act as the Company’s advisor and dealer manager in respect of the Buyback. As of the date of this report, all the shares purchased in the Buyback have been cancelled.
RISKS
Dilution
The Company has limited financial resources and has financed its operations primarily through the sale of securities such as Common Shares. The Company may need to continue its reliance on the sale of such securities for future financing, resulting in dilution to the Company’s existing shareholders.
Capital and Liquidity Risk
The Company may require additional financing in the future. There can be no assurance that additional debt or equity financing will be available on acceptable terms or at all.
Acquisition and Expansion Risk
The Company intends to expand its operations through organic growth, adaptation of its technology and products to the civilian markets, development of new technologies and depending on certain conditions, by identifying a proposed acquisition.
Dependence on Key Personnel
Loss of certain members of the executive team or key operational leaders of the company could have a disruptive effect on the implementation of the Company’s business strategy and the efficient running of day-to-day operations until their replacement is found. Recruiting personnel is time consuming and expensive and the competition for professionals is intense.
The Company may be unable to retain its key employees or attract, assimilate, retain or train other necessary qualified employees, which may restrict its growth potential.
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain of the statements made and information contained herein is “forward-looking information” within the meaning of the Ontario Securities Act. These statements relate to future events or the Company’s future performance. All statements, other than statements of historical fact, may be forward-looking statements. Generally, these forward-looking statements can be identified by the use of forward looking terminology such as “anticipates”, “plans”, “budget”, “scheduled”, “continue”, “estimates”, “forecasts”, “expect”, “is expected”, “project”, “propose”, “potential”, “targeting”, “intends”, “believes” or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “might”, or “will be taken”, “occur” or “be achieved” or the negative connotation thereof. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. The Company believes that the expectations reflected in those forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this MD&A should not be unduly relied upon by readers, as actual results may vary. These statements speak only as of the date of this MD&A and are expressly qualified, in their entirety, by this cautionary statement.
The Company’s actual results could differ materially from those anticipated in these forward-looking statements as a result of the risk factors set forth above. Although the Company has attempted to identify important factors that could cause results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Readers are cautioned that the foregoing lists of factors are not exhaustive. Forward looking statements are made as of the date hereof and accordingly are subject to change after such date. The forward-looking statements contained in this MD&A are expressly qualified by this cautionary statement. The Company does not undertake to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except in accordance with applicable securities laws.
OTHER INFORMATION
Additional information related to the Company is available for viewing on SEDAR+ at www.sedarplus.ca/home/.
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Exhibit 99.3
FORM 52-109F2 CERTIFICATION OF INTERIM FILINGS
FULL CERTIFICATE
I, Gadi Graus, Chief Executive Officer of A2Z CUST2MATE SOLUTIONS CORP., certify the following:
| 1. | Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of A2Z CUST2MATE SOLUTIONS CORP. (the “issuer”) for the interim period ended June 30, 2026. |
| 2. | No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings. |
| 3. | Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings. |
| 4. | Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer. |
| 5. | Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings |
| (a) | designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that |
| (i) | material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and | |
| (ii) | information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and |
| (b) | designed ICFR, or caused it 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 the issuer’s GAAP. |
| 5.1 | Control framework: The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is Internal Control – Integrated Framework (2013) published by the Committee of Sponsoring Organization of the Treadway Commission (“COSO”) |
| 5.2 | ICFR – material weakness relating to design: The issuer has disclosed in its interim MD&A for each material weakness relating to design existing at the interim period ended |
| (a) | a description of the material weakness; | |
| (b) | the impact of the material weakness on the issuer’s financial reporting and its ICFR; and | |
| (c) | the issuer’s current plans, if any, or any actions already undertaken, for remediating the material weakness. |
| 5.3 | Limitation on scope of design: N/A |
| 6. | Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on January 1, 2026, and ended on June 30, 2026 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR. |
| Date: August 12, 2026 | |
| “Gadi Graus” | |
| Gadi Graus | |
| Chief Executive Officer |
Exhibit 99.4
FORM 52-109F2 CERTIFICATION OF INTERIM FILINGS
FULL CERTIFICATE
I, Gadi Levin, Chief Financial Officer of A2Z CUST2MATE SOLUTIONS CORP., certify the following:
| 1. | Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of A2Z CUST2MATE SOLUTIONS CORP. (the “issuer”) for the interim period ended June 30, 2026. |
| 2. | No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings. |
| 3. | Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings. |
| 4. | Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer. |
| 5. | Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings |
| (a) | designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that |
| (i) | material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and | |
| (ii) | information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and |
| (b) | designed ICFR, or caused it 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 the issuer’s GAAP. |
| 5.1 | Control framework: The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is Internal Control – Integrated Framework (2013) published by the Committee of Sponsoring Organization of the Treadway Commission (“COSO”) |
| 5.2 | ICFR – material weakness relating to design: The issuer has disclosed in its interim MD&A for each material weakness relating to design existing at the interim period ended |
| (a) | a description of the material weakness; | |
| (b) | the impact of the material weakness on the issuer’s financial reporting and its ICFR; and | |
| (c) | the issuer’s current plans, if any, or any actions already undertaken, for remediating the material weakness. |
| 5.3 | Limitation on scope of design: N/A |
| 6. | Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on January 1, 2026, and ended on June 30, 2026 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR. |
| Date: August 12, 2026 | |
| “Gadi Levin” | |
| Gadi Levin | |
| Chief Financial Officer |