A2Z CUST2MATE SOLUTIONS CORP. Annual Report - How They Did This Year

A2Z Cust2Mate Solutions is currently in the middle of a major transition. They are moving away from traditional manufacturing to become a pure-play retail tech company. Here is the breakdown of where they stand as of the 2025 year-end.

1. What the Business Does

A2Z is shifting its focus toward two distinct areas:

• Smart Carts: This is the company’s future. These carts use cameras and sensors to allow shoppers to scan and pay for items directly, bypassing traditional checkout lines.
• Precision Metal Parts: This represents the company’s legacy business, focusing on retail displays and metal components. This segment now accounts for about 35% of revenue, down from over 60% three years ago, as the company reallocates resources toward the Cust2Mate platform.

2. Financial Performance & Health

A2Z is currently in a "spending" phase rather than an "earning" phase.

• Funding and Dilution: In 2025, the company raised $12.5 million through new share offerings to cover an annual cash burn of $9.8 million. This resulted in a 42% increase in total shares, which reduces individual ownership percentages and potential earnings per share.
• Profitability: The company reported a $14.2 million loss this year. While Smart Cart revenue grew by 22%, high manufacturing costs and $5.4 million in research spending mean the company currently loses money on every tech product sold. The strategy relies on scaling operations to eventually convert these losses into steady software subscription income.

3. Strategic Wins and Challenges

• Valuation Strategy: By separating their financials, the company aims to achieve a higher valuation. Tech companies typically trade at 5x–10x revenue, whereas industrial firms often trade at 1x–2x.
• Geopolitical Factors: Over 70% of the research and manufacturing staff are based in Israel. Regional instability has led to increased shipping costs and supply chain risks, prompting the company to maintain higher inventory levels to prevent production halts.
• The Path to Adoption: Major retail rollouts are long-term projects, typically taking 18 to 24 months from pilot to full implementation. While there are three active pilots with regional retailers, the company has yet to secure a contract with a "Tier 1" national grocery chain, which remains the primary goal for mass-market success.

4. What’s Next

The company is prioritizing its tech transition by issuing $2.1 million in stock options to engineers to preserve cash while retaining talent. The primary goal for the coming year is to move from pilot programs to a full-scale deployment of 500 units with a single partner to validate the business model for larger investors.

5. Key Risks to Consider

• Capital Needs: With less than 14 months of cash remaining, the company will likely need to raise additional capital soon, which may result in further share dilution.
• Burn Rate: The company burns approximately $800,000 per month. If pilot programs do not convert into high-volume contracts within nine months, the company will face a significant cash shortage.
• Competitive Landscape: A2Z faces competition from well-funded rivals. Maintaining their current 98.5% "Computer Vision" accuracy rate is essential, as any decline in performance could negatively impact their reputation and future sales prospects.

Investor Takeaway: A2Z is a high-risk, high-reward play currently betting everything on the success of its Smart Cart technology. Success depends on their ability to secure a major national retail contract before their current cash reserves run dry. If you are considering an investment, monitor their ability to convert pilots into high-volume, long-term contracts and watch for any further announcements regarding capital raises.