Exhibit 99.2
ZORRONET LTD.
CONDENSED FINANCIAL STATEMENTS
AS OF MARCH 31, 2026
ZORRONET LTD.
INTERIM UNAUDITED CONDENSED FINANCIAL STATEMENTS
AS OF MARCH 31, 2026
U.S. DOLLARS IN THOUSANDS
TABLE OF CONTENTS
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ZORRONET LTD.
INTERIM UNAUDITED CONDENSED BALANCE SHEETS
(U.S. dollars in thousands, except share and per share data)
| March 31, 2026 | December 31, 2025 | |||||||
| Assets | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | 34 | - | ||||||
| Accounts receivable | 367 | 102 | ||||||
| Other current assets | 4 | 31 | ||||||
| Total Current Assets | 405 | 133 | ||||||
| Operating lease right-of-use asset | 2 | 6 | ||||||
| Property and equipment, net | 37 | 34 | ||||||
| Total Assets | 444 | 173 | ||||||
| Liabilities and Stockholders’ Deficit | ||||||||
| Current Liabilities | ||||||||
| Short term loans | 150 | 159 | ||||||
| Accounts payable | 21 | 54 | ||||||
| Operating lease liability | 2 | 6 | ||||||
| Other current liabilities – related parties | 407 | 129 | ||||||
| Short-term loans from parent company | 120 | 117 | ||||||
| Other current liabilities | 354 | 222 | ||||||
| Total current liabilities | 1,054 | 687 | ||||||
| Long term loans | 116 | 129 | ||||||
| Total Liabilities | 1,170 | 816 | ||||||
| Stockholders’ Deficit | ||||||||
| Common stock of NIS 0.01 par value each (“Common Stock”): 100,000 shares authorized as of March 31, 2026 and December 31, 2025; issued and outstanding 13,250 shares as of March 31, 2026 and December 31, 2025. | 4 | 4 | ||||||
| Other comprehensive loss | (61 | ) | (60 | ) | ||||
| Accumulated deficit | (669 | ) | (587 | ) | ||||
| Total Stockholders’ Deficit | (726 | ) | (643 | ) | ||||
| Total liabilities and stockholders’ Deficit | 444 | 173 | ||||||
The accompanying notes are an integral part of these interim unaudited condensed financial statements.
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INTERIM UNAUDITED CONDENSED STATEMENTS OF COMPREHENSIVE LOSS
(U.S. dollars in thousands, except share and per share data)
| Period ended | ||||
| March 31, | ||||
| 2026 | ||||
| Revenues for services | 90 | |||
| Revenues for sales | 261 | |||
| 351 | ||||
| Cost of services | (75 | ) | ||
| Cost of sales | (184 | ) | ||
| Gross profit | 92 | |||
| Research and development expenses | (78 | ) | ||
| General and administrative expenses | (88 | ) | ||
| Operating Loss | (74 | ) | ||
| Financial expenses, net | (8 | ) | ||
| Net Loss | (82 | ) | ||
| Translation to presentation currency | (1 | ) | ||
| Total loss and other comprehensive loss | (83 | ) | ||
The accompanying notes are an integral part of these interim unaudited condensed financial statements.
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INTERIM UNAUDITED CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT
(U.S. dollars in thousands, except share and per share data)
| Number of Shares | Amount | Other comprehensive loss | Accumulated deficit | Total stockholders’ deficit | ||||||||||||||||
| BALANCE AT DECEMBER 31, 2025 | 13,250 | 4 | (60 | ) | (587 | ) | (643 | ) | ||||||||||||
| Total comprehensive loss for the period | (1 | ) | (82 | ) | (83 | ) | ||||||||||||||
| BALANCE AT MARCH 31, 2026 | 13,250 | 4 | (61 | ) | (669 | ) | (726 | ) | ||||||||||||
| (*) | represents amount less than $1 thousand |
The accompanying notes are an integral part of these interim unaudited condensed financial statements.
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INTERIM UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS
(U.S. dollars in thousands)
| For the Three- month period ended March 31, 2026 | ||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||
| Total net loss for the period | (82 | ) | ||
| Adjustments required to reconcile net loss for the period to net cash used in operating activities: | ||||
| Depreciation | 2 | |||
| Interest expenses | 3 | |||
| Increase in accounts receivable | (264 | ) | ||
| Decrease in other current assets | 27 | |||
| Decrease in accounts payable | (34 | ) | ||
| Increase in other liabilities | 131 | |||
| Net cash used by operating activities | (217 | ) | ||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||
| Repayment of short-term loans | (10 | ) | ||
| Proceeds from related parties | 278 | |||
| Repayment of long-term loans | (17 | ) | ||
| Net cash provided in financing activities | 251 | |||
| INCREASE IN CASH AND CASH EQUIVALENTS | ||||
| Increase in Cash and Cash Equivalents | 34 | |||
| CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR | - | |||
| CASH AND CASH EQUIVALENTS AT END OF YEAR | 34 | |||
| Supplemental disclosure of cash flow information: | ||||
| Cash transactions: | ||||
| Interest | 5 | |||
| Taxes | - | |||
The accompanying notes are an integral part of these interim unaudited condensed financial statements.
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NOTES TO INTERIM UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 1 – GENERAL
| A. | ZorroNet Ltd. (the “Company”) is a private company incorporated in Israel on January 13, 2021. |
The Company is engaged in the development of artificial intelligence (AI)-based software solutions for defense, command-and-control (C2), and intelligence applications. The Company’s platform integrates video analytics, drones, sensors, IoT systems and additional data sources into a unified real-time operational environment designed to support monitoring, threat detection, situational awareness and operational decision-making.
The Company provides its solutions and related services to governmental, defense, homeland security and commercial customers in Israel and internationally.
| B. | Israel –war |
In October 2023, a large-scale terrorist attack in southern Israel led to the outbreak of armed conflict between Israel and Hamas. The conflict subsequently expanded to additional regional fronts and contributed to a period of heightened geopolitical and security instability in the region.
During 2024 and 2025, hostilities included military operations in Lebanon and direct confrontations involving Iran. These developments increased regional uncertainty and, at times, resulted in temporary disruptions to the Company’s operations in Israel, including limited interruptions to routine business activities.
In September 2025, a ceasefire agreement was reached between Israel and Hamas, and all remaining living Israeli hostages were released and returned to Israel. While the ceasefire has generally held as of the date of these financial statements, the security situation remains sensitive, and the potential for renewed hostilities or broader regional escalation cannot be ruled out. More recently, on February 28, 2026, hostilities between Israel and Iran escalated again. Israel, together with the United States, conducted a major joint military campaign of air and missile strikes against targets in Iran, which triggered a broad Iranian response and contributed to significant regional instability. The situation remains highly fluid, and management is unable to predict when, or on what terms, this escalation will be resolved. Accordingly, the extent of the continued impact on the Company’s operations and financial results, if any, cannot be reasonably estimated at this time.
Given that the majority of the Company’s operations are conducted in Israel, and that all members of the Company’s board of directors and management, as well as most employees, consultants, and service providers, are located in Israel, the Company is directly affected by the economic, political, geopolitical, and military conditions impacting the region. As of March 31, 2026, while ceasefire arrangements with Hamas, Lebanon and Iran were generally in effect and large-scale military operations had subsided, the overall security environment in Israel and the surrounding region remained unstable and unpredictable. Any further escalation or expansion of the conflict could negatively affect both regional and global conditions, and may adversely impact the Company’s business, financial condition, and results of operations.
In April 2026, a ceasefire agreement was reached; however, the ceasefire remains fragile and the overall security situation in Israel and the region continues to be uncertain.
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ZORRONET LTD.
NOTES TO INTERIM UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 1 – GENERAL
| C. | The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As of March 31, 2026, the Company had $34 in cash and cash equivalents, $649 in negative working capital, stockholders’ deficit of $726 and an accumulated deficit of $669. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent upon raising capital from financing transactions and revenue from operations. Management anticipates their business will require substantial additional investments that have not yet been secured. The Parent Company has expressed its intent to support the Company’s operations and to provide financial assistance as needed. However, the extent and timing of such support are uncertain. Therefore, substantial doubt about the Company’s ability to continue as a going concern remains.These financial statements do not include any adjustments that may be necessary should the Company be unable to continue as a going concern. |
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION
Unaudited Interim Financial Statements
The accompanying condensed interim balance sheet as of March 31, 2026 and the condensed interim statements of operations, changes in shareholders’ equity and cash flows for the three month period ended March 31, 2026 are unaudited. These unaudited condensed interim financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America.
The unaudited condensed interim financial statements contain all adjustments which, in the opinion of management, are necessary to present fairly, the financial information included therein. It is suggested that these condensed interim financial statements be read in conjunction with the audited financial statements and accompanying notes included in the Company’s report for the year ended December 31, 2025. Results for the interim periods presented are not necessarily indicative of the results to be expected for the full year.
These financial statements should be read in conjunction with the financial statements and notes thereto contained in the Company’s Annual Report for the year ended December 31, 2025.
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ZORRONET LTD.
NOTES TO INTERIM UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, certain revenues and expenses, and disclosure of contingent assets and liabilities as of the date of the financial statements. As applicable to these financial statements, the most significant estimates and assumptions relate to revenue recognition and valuation of accounts receivable. These estimates and assumptions are based on management’s best estimates and judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, which management believes to be reasonable under the circumstances. Actual results could differ from those estimates.
During the period ended March 31, 2026, two customers accounted for approximately 45% and 11%, respectively, of the Company’s total revenues.
NOTE 3 – RELATED PARTIES
Balances with related parties:
| As of March 31, 2026 | ||||
| Other current liabilities (*) | 407 | |||
| Short- term loans | 120 | |||
| (*) | The balance with a related party represents a non-interest bearing current account, payable on demand. |
NOTE 4 – SUBSEQUENT EVENTS
The Company evaluated subsequent events through June 11, 2026, the date on which these financial statements were available to be issued. No subsequent events were identified that required adjustment to or disclosure in the accompanying financial statements.
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