Exhibit 99.1
A2Z Cust2Mate Solutions Corp.
CONDENSED CONSOLIDATED INTERIM
FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED
March 31, 2026
(Unaudited)
(Expressed in US Dollars)
A2Z CUST2MATE SOLUTIONSCORP.
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 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)
March 31, 2026 | December 31, 2025 | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Short-term deposits | ||||||||
| 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 asset at fair value | ||||||||
| Long-term trade receivables | ||||||||
| 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 loans | $ | $ | ||||||
| Lease liability | ||||||||
| Trade payables | ||||||||
| Other accounts payable | ||||||||
| Warrant Liability (note 5) | ||||||||
| Total current liabilities | ||||||||
| Non-current liabilities | ||||||||
| Lease liability | ||||||||
| Long term loans | ||||||||
| Total non-current liabilities | ||||||||
| Total liabilities | ||||||||
| Equity | ||||||||
| Share capital and additional paid in capital (note 6) | ||||||||
| Warrant Reserve | ||||||||
| Accumulated other comprehensive loss | ( | ) | ( | ) | ||||
| Reserve with respect to transactions with non-controlling interests | ||||||||
| Treasury stock | ( | ) | ||||||
| Accumulated losses | ( | ) | ( | ) | ||||
| Total equity attributable to Company shareholders | ||||||||
| Non-controlling interests | ( | ) | ( | ) | ||||
| Total equity | ||||||||
| Total liabilities and equity | $ | $ | ||||||
| May 14, 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)
For the period of three Months Ended March 31, | ||||||||
| 2026 | 2025 | |||||||
| Revenues (note 8) | $ | $ | ||||||
| Cost of revenues | ||||||||
| Gross profit | ||||||||
| Expenses: | ||||||||
| Research and development costs | $ | $ | ||||||
| Sales and marketing costs | ||||||||
| General and administration expenses | ||||||||
| Operating loss | ( | ) | ( | ) | ||||
| Gain on revaluation of warrant liabilities (note 5) | ||||||||
| Financial income | ||||||||
| Financial expenses | ( | ) | ( | ) | ||||
| Net loss for the period from continuing operations | ( | ) | ( | ) | ||||
| Net loss for the period from discontinued operations | ( | ) | ||||||
| Net loss for the period | $ | ( | ) | $ | ( | ) | ||
| 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 | $ | ( | ) | $ | ( | ) | ||
| Comprehensive loss attributable to non-controlling interests | ( | ) | ( | ) | ||||
| Comprehensive loss attributable to the Company’s shareholders | ( | ) | ( | ) | ||||
| $ | ( | ) | $ | ( | ) | |||
| 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)
| 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 6(b)) | ||||||||||||||||||||||||||||||||||||
| Exercise of RSUs (note 6(a)) | ||||||||||||||||||||||||||||||||||||
| Exercise of warrants (note 6(c)) | ||||||||||||||||||||||||||||||||||||
| Purchase of treasury stock (note 6(d)) | - | ( |
) | ( | ) | |||||||||||||||||||||||||||||||
| Share based compensation (notes 7(b, c)) | - | |||||||||||||||||||||||||||||||||||
| Balance - March 31, 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)
| Ordinary share capital | Accumulated | Transactions | ||||||||||||||||||||||||||||||
| Number of shares | Additional
paid in capital | Warrant reserve | Other Comprehensive Loss | with non-controlling interests | Accumulated deficit | Non-controlling interest | Total Equity | |||||||||||||||||||||||||
| Balance – December 31, 2024 | $ | | $ | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||
| Net loss for the period | - | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||
| Adjustments arising from translating financial statements of foreign operations | - | |||||||||||||||||||||||||||||||
| Net comprehensive profit (loss) for the period | - | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||
| Issuance of share in January 2025 financing round | ||||||||||||||||||||||||||||||||
| Transactions with non-controlling interests | - | ( | ) | ( | ) | |||||||||||||||||||||||||||
| Exercise of RSUs | ||||||||||||||||||||||||||||||||
| Exercise of warrants | ||||||||||||||||||||||||||||||||
| Share based compensation | - | |||||||||||||||||||||||||||||||
| Balance - March 31, 2025 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||||
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)
| For the period of three months ended | ||||||||
| March 31 | ||||||||
| 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 | ||||||||
| Share based compensation | ||||||||
| Gain on revaluation of warrant liability | ( | ) | ||||||
| Gain from revaluation of investment in associate | ( | ) | ||||||
| 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 | ( | ) | ||||||
( | ) | ( | ) | |||||
| Cash flows from investing activities | ||||||||
| Investment in short-term deposits | ( | ) | ( | ) | ||||
| Investment in financial assets | ||||||||
| Purchase of property, plant and equipment | ( | ) | ( | ) | ||||
| ( | ) | |||||||
| 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 | ( | ) | ( | ) | ||||
| Transactions with non-controlling interests | ( | ) | ||||||
| ( | ) | |||||||
| 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 | ||||||||
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
(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 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”).
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 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 May 14, 2026.
| 8 |
A2Z CUST2MATE SOLUTIONS CORP.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(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 March 31, 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
Short-term investments consist of held-for-sale securities (or trading) and are stated at fair value, with unrealized gains and losses included in earnings. Transaction costs are expensed as incurred. The securities are classified as current assets because they are expected to be realized within one year. The Company regularly evaluates whether declines in fair value below cost are other-than-temporary; if so, an impairment is recognized. Gains or losses realized on sales of these securities are included in financial income (expense), net in the consolidated statement of operations and comprehensive loss.
| 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 three months ended March 31, 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
(Unaudited)
(Expressed in Thousands of US Dollars, except per share data)
| 3. | New Accounting Standards |
The following new amendments are effective for the period beginning 1 January 2025: The Company and its subsidiaries did not have to change their accounting policies or make retrospective adjustments as a result of adopting these amended standards:
Lack of exchangeability (Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates)
On 15 August 2023, the IASB issued Lack of Exchangeability which amended IAS 21 The Effects of Changes in Foreign Exchange Rates (the “Amendments”).
These Amendments are applicable for annual reporting periods beginning on or after January 1, 2025. The Amendments introduce requirements to assess when a currency is exchangeable into another currency and when it is not. The Amendments require an entity to estimate the spot exchange rate when it concludes that a currency is not exchangeable into another currency. The Amendments also introduce additional disclosure requirements when an entity estimates a spot exchange rate because a currency is not exchangeable into another currency.
IAS 21, prior to the Amendments, did not include explicit requirements for the determination of the exchange rate when a currency is not exchangeable into another currency, which led to diversity in practice.
When applying the Amendments, an entity is not permitted to restate comparative information
These Amendments have had no material effect on the interim condensed consolidated financial statements.
There are no new relevant standards beyond those included in the 2025 annual report.
| 10 |
A2Z CUST2MATE SOLUTIONS CORP.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(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:
| Financial assets at fair value | Level 1 | |||
| USD in thousand | ||||
| December 31, 2024 | $ | |||
| Purchases | ||||
| Disposals | ||||
| Gain (loss) | ||||
| December 31, 2025 | $ | |||
| Purchases | ||||
| Disposals | ||||
| Gain (loss) | ||||
| March 31, 2026 | $ | |||
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
Other market price risk
The
Company is exposed to price risks of shares, certificate of participation in mutual funds and bonds, which are classified as financial
assets carried at fair value through profit or loss. The effect of a
NOTE 4 - INVENTORIES:
| March 31, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Raw materials | $ | $ | ||||||
Finished goods | ||||||||
Inventory in transit | ||||||||
| Smart cart parts | ||||||||
| $ | $ | |||||||
| 11 |
A2Z CUST2MATE SOLUTIONS CORP.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 2026
(Unaudited)
(Expressed in Thousands of US Dollars, except per share data)
NOTE 5 – WARRANT LIABILITY
Certain warrants were issued on November 2, 2022 and January 4, 2024, with an exercise price denominated in US Dollars rather than the functional currency of the Company – New Israeli Shekels (NIS). During the three months ended March 31, 2026, the balance of these warrants was exercised (see note 6(c)) and as such, as of March 31, 2026, there are no outstanding warrants accounted for as a liability.
A contract that will be settled by the exchange of a fixed number of the Company’s own equity instruments for a fixed amount of cash qualifies as an equity instrument. This is commonly referred to as the “fixed-for-fixed” criterion.
Because the exercise price of the warrants is denominated in a currency different from the Company’s functional currency, the amount of functional currency cash to be received upon exercise varies as a result of changes in foreign exchange rates. Accordingly, the warrants do not meet the fixed-for-fixed criterion and are classified as derivative financial liabilities.
The warrants are initially recognized at fair value and subsequently remeasured at fair value at each reporting date. Changes in fair value are recognized in profit or loss within gain on revaluation of warrant liabilities.
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 with the following assumptions: volatility of
| Balance at December 31, 2024 | $ | |||
| Expiration of warrants | ( | ) | ||
| Warrant exercise | ( | ) | ||
| Revaluation at December 31, 2025 | ||||
| Effect of changes in foreign exchange rates | ( | ) | ||
| Balance at December 31, 2025 | $ | |||
| Warrant exercise | ( | ) | ||
| Revaluation at March 31, 2026 | ||||
| Balance at March 31, 2026 | $ |
Level 3 for the period ended on March 31, 2026:
For
the three months ended March 31, 2026, the Company recorded a gain on revaluation of warrant liabilities in the amount of $ (for
the three months ended March 31, 2025 - $
| 12 |
A2Z CUST2MATE SOLUTIONS CORP.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 2026
(Unaudited)
(Expressed in thousands of US Dollars, except per share data)
| a) | During the period ended March 31, 2026, the Company issued Common Shares in respect of the exercise of vested RSUs (note 7 (c)). | |
| b) | During the period ended March 31, 2026, the Company issued Common Shares in respect of the exercise of share options for proceeds of $ (note 7 (b)). | |
| c) | During the period ended March 31, 2026, the Company issued Common Shares in respect of the exercise of warrants for proceeds of $ (note 7 (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 to (the “Buyback”). Oppenheimer & Co. Inc. will act as the Company’s advisor
and dealer manager in respect of the Buyback. As of March 31, 2026, the Company repurchased a total of shares with a value
of $ |
NOTE 7 - WARRANTS AND OPTIONS
a) Warrants
| (i) | Warrant transactions for the three months ended March 31, 2026, and for the year ended December 31, 2025, are as follows: |
| 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 | ( | ) | ||||||
| Balance, March 31, 2026 | $ | |||||||
During the three-month period ended March 31, 2026, the Company issued shares in respect of warrants that were exercised for total proceeds of $.
(ii) As at March 31, 2026, the Company had outstanding warrants, enabling the holders to acquire Common Shares as follows:
March 31, 2026 | Expiry date | Exercise price | Exercise price (USD) | |||||||||
| ILS | $ | |||||||||||
| ILS | $ | |||||||||||
| USD | $ | |||||||||||
| USD | $ | |||||||||||
| USD | $ | |||||||||||
| 13 |
A2Z CUST2MATE SOLUTIONS CORP.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 2026
(Unaudited)
(Expressed in thousands of US Dollars, except per share data)
NOTE 7 - WARRANTS AND OPTIONS (CONTINUED)
b) Stock Options
| 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 March 31, 2026 | $ | $ | ||||||||||
Outstanding as of March 31, 2026 | Exercisable as of March 31, 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 | $ | |||||||||||||||
| CAD | $ | |||||||||||||||
Share-based compensation expense is recognized over the vesting period of options. During the three months ended March 31, 2026, share-based compensation of $ was recognized and charged to the Consolidated Statement of Comprehensive Loss (March 31, 2025 – $).
| 14 |
A2Z CUST2MATE SOLUTIONS CORP.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 2026
(Unaudited)
(Expressed in thousands of US Dollars, except per share data)
NOTE 7 - WARRANTS AND OPTIONS (CONTINUED)
c) RSUs
| Number | ||||
| Balance, January 1, 2025 | ||||
| RSUs granted | ||||
| Expiry of RSUs | ( | ) | ||
| Exercise of RSUs | ( | ) | ||
| Balance, December 31, 2025 | ||||
| Exercise of RSUs | ( | ) | ||
| Balance, March 31, 2026 | ||||
Total exercisable RSUs as of March 31, 2026, are , another RSU’s are milestone based RSU’s for which the milestones have not yet been achieved and have not yet vested. During the three months ended March 31, 2026, share-based compensation of $ was recognized and charged to the Consolidated Statement of Comprehensive Loss (March 31, 2025 – $).
| 15 |
A2Z CUST2MATE SOLUTIONS CORP.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 2026
(Unaudited)
(Expressed in Thousands of US Dollars, except per share data)
NOTE 8 - REVENUES:
Revenue streams:
| Three months ended | ||||||||
| March 31, | ||||||||
| 2026 | 2025 | |||||||
| Revenues from sales of precision metal parts | $ | $ | ||||||
| Smart Carts: | ||||||||
| Revenues from the Cust2Mate Platform | ||||||||
Services for the smart carts | ||||||||
| $ | $ | |||||||
For the three months ended March 31, 2026, the Company
recognized revenues of $
NOTE 9 – COMMITMENTS
One
of the Company’s Israeli subsidiaries leases office space with the lease expiring on
NOTE 10 – 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 MONTHS ENDED MARCH 31, 2026
(Unaudited)
(Expressed in Thousands of US Dollars, except per share data)
NOTE 10 – DISCONTINUED OPERATIONS (CONTINUED)
The below are the data of operating results attributed to the discontinued operations:
Three months ended March 31, | ||||||||
| 2026 | 2025 | |||||||
| Revenues | $ | $ | ||||||
| Cost of revenues | ( | ) | ||||||
| Gross profit | ||||||||
| Expenses: | ||||||||
| General and administration expenses | ||||||||
| Operating loss | ( | ) | ||||||
| Other expense | ||||||||
| Financial expense | ||||||||
| Loss before taxes on income | ( | ) | ||||||
| Income tax expense | ||||||||
| Net loss for the year from discontinued operations | $ | $ | ( | ) | ||||
| Three months ended | ||||||||
| March 31, | ||||||||
| 2026 | 2025 | |||||||
| Net cash flows provided by (used by) discontinued operations | ||||||||
| From operating activities | $ | $ | ||||||
| From investing activities | ( | ) | ||||||
| From financing activities | ( | ) | ||||||
| $ | $ | |||||||
| 17 |
A2Z CUST2MATE SOLUTIONS CORP.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 2026
(Unaudited)
(Expressed in Thousands of US Dollars, except per share data)
NOTE 11 – OPERATING SEGMENTS:
The
Company and its subsidiaries are engaged in the following
| a. | Retail automation solutions – Smart Carts (“Smart Carts”) |
| b. | Manufacturing and selling of precision metal parts – “Precision Metal Parts” |
| Three Months Ended March 31, 2026 | ||||||||||||
| Precision Metal Parts | Smart Carts | Total | ||||||||||
| Revenues | ||||||||||||
| External | $ | $ | $ | |||||||||
| Total | ||||||||||||
| Cost of revenues | ||||||||||||
| External | ||||||||||||
| Total | ||||||||||||
| Segment operational loss | ||||||||||||
| Gain on revaluation of warrant liability | ||||||||||||
| Financial expenses, net | ||||||||||||
| Tax expenses | ||||||||||||
| Net loss | $ | |||||||||||
| 18 |
A2Z CUST2MATE SOLUTIONS CORP.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 2026
(Unaudited)
(Expressed in Thousands of US Dollars, except per share data)
NOTE 11 - OPERATING SEGMENTS (CONTINUED)
| Three Months Ended March 31, 2025 | ||||||||||||
| Precision Metal Parts | Smart Carts | Total | ||||||||||
| Revenues | ||||||||||||
| External | $ | $ | $ | |||||||||
| Total | ||||||||||||
| Cost of revenues | ||||||||||||
| External | ||||||||||||
| Total | ||||||||||||
| Segment operational loss | ( | ) | ||||||||||
| Gain on revaluation of warrant liability | ( | ) | ||||||||||
| Financial expenses, net | ( | ) | ||||||||||
| Tax expenses | ||||||||||||
| Net loss | $ | |||||||||||
| As at March 31, 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 | $ | $ | $ | |||||||||
| 19 |