A2Z Smart Technologies Corp. Announces Corporate Update

News Follows: A2Z Cust2Mate Expands to Serve Demand in U.S. Retail Market with New Leadership Team*

TEL AVIV, ISRAEL / ACCESSWIRE / August 25, 2023 / A2Z Smart Technologies Corp. ("A2Z") ("Company"), (NASDAQ:AZ)(TSXV:AZ), A2Z Smart Technologies Corp. (NASDAQ:AZ) is making significant strides in the retail sector, transitioning from purely research and development to becoming a prominent global leader as smart shopping cart platform provider. Recent achievements, including mass manufacturing capabilities and the leadership of Guy Mordoch, CEO of Cust2Mate smart cart business, are driving exceptional growth and reshaping the retail industry. The following is an update on key corporate developments reflecting on our journey.

Kit Cart - Modular Cart Advancements and Mass Production

We have made substantial strides in advancing our new-generation modular cart. This includes streamlining the mass production process, resulting in cost efficiencies and enhanced retrofitting capabilities. Cust2Mate is on course to introduce a modular detachable cart, incorporating cutting-edge features such as RFID technology, AI integration, expanded value-added services, and more.

Monumental Corporate Transition

Cust2Mate is completing a major transition: from the R&D stage to a growth and scale stage; from a hardware company to a software platform and digital services company; from a local company to a global company.

To bolster this transition, we have hired a global Supply Chain Manager, launched a North American focused team (see below), add a Channels & Alliances Manager and other new team members globally.

Update on Client Yochananof:

• A2Z has successfully fulfilled the existing revised order for 1,300 smart carts, receiving positive feedback from both the retail side and the shoppers.
• Yochananof has informed Cust2Mate of plans to acquire an additional 1,700 smart carts.
  • *Original Press Release: https://bit.ly/azclient3
• According to data from Yochananof, the value derived from using the smart carts has surpassed initial projections and expectations. Key metrics include:
  • 73% customer retention rate
  • Customer satisfaction score of 4.1 out of 5
  • Average purchase volume in smart carts is 158% that of regular checkouts and 171% of self-checkouts
  • Improved insights into customer behavior and shopping patterns while in-store

Financial Highlights:

Revenues for the six months ended June 30, 2023 reached $7.6 million, representing a 163% increase from $2.9 million during the same period the previous year. Gross profit for six months ended June 30, 2023 amounted to $1.7 million, a 241% increase from resh$487 thousand during the same period of the previous year

Theft (Shrinkage):

Retailers are suffering from massive increases in theft*. The Cust2Mate Smart Cart is the first-in-class solution that includes 5 layers of protection against shrinkage - on cart scanner, AI cameras, smart security scale, RFID capabilities and a software monitoring layer to detect abnormalities in customer behavior, providing a ‘bulletproof' solution. Data received from the use of Cust2Mate Smart Carts around the world indicates no evidence of any theft while using Cust2Mate Smart Carts.

• *Yahoo Finance Shrinkage Reference Article: https://bit.ly/azshrink

Sales Strategy

Our go-to-market and sales strategies are well-defined and are being bolstered through enhancements to the sales team, including the introduction of inside sales, investments in sales infrastructure, and initiatives in sales enablement and marketing.

The company is continuing the strategy of selling through local tier-one integrators and retail technology providers who have well-established relationships with leading chains.

North America

Following our first US customer order from Morton Williams in New York, we have established Cust2Mate USA Inc. The new North American dedicated leadership team has been established and is operational. The team of senior leaders has a proven track record in sales and in providing technology to retail/grocery chains.

• Announcement of North American Leadership Team: https://bit.ly/aznorthamerica
• Press Release announcing Morton Williams Purchase Order: https://bit.ly/3qpBC0s

IR2S Partnership:

Cust2Mate has partnered with IR2S, a leading integrator and retail technology provider to large retailers, to deliver 30,000 carts. The Company is in the final stages of integration and expects to deliver the first tranche of carts to major retailer Monoprix this year.

• Original Press Announcement of Partnership: https://bit.ly/3qpBC0s

Carrefour:

The Company has completed a very successful pilot phase with CARREFOUR, the number 7 global grocery retailer by revenue*, in which all pre-defined KPIs were met and even exceeded overall expectations.

The Company is progressing to the first stage of the roll out and plans to start the delivery to Carrefour of its new generation detachable smart cart, specially designed for Carrefour in the near future.

• Original Announcement of Carrefour Progressing to Rollout Phase: https://bit.ly/3JuvwTd
• *Source: https://www.businessinsider.com/walmart-costco-7-eleven-kroger-lidl-biggest-grocery-chains-world-2019-9#7-carrefour-4

Additional Sales:

Following major milestones in growth and client successes, we're seeing robust business momentum and a surge in interest from global grocery retail chains. We are actively pursuing exciting new opportunities in both the U.S. and Europe, as well as other regions worldwide.

Business Model:

• The company maintains its unique business approach, retaining ownership of the carts. These carts, along with the integrated software, are made available to clients on a subscription model, with the software being provided on a SaaS (Software as a Service) basis.
• Beyond the base subscription, clients have the option for additional premium features. These enhancements encompass big data integration, machine learning insights, advanced analytics, data consumption metrics, etc.
• There is a revenue-sharing component associated with value-added features like retail media. (Additional details on retail media are provided below.)
• To cover manufacturing expenses, the company plans to secure funding from commercial banks. Negotiations are underway with these financial institutions to provide asset-based financing specifically for the carts.

Data/Retail Media:

• A2Z has successfully initiated the monetization of the very valuable data collected through our smart carts, in addition to tapping into the potential of retail media displays on the carts. Company anticipates data and retail media sourced revenues to start in Q4.
• By capitalizing on the insights gleaned from customer behavior and preferences, as well as offering targeted advertising and promotional opportunities through the interactive cart displays, we are creating a win-win scenario for the company, retailers and advertisers. This strategic move exemplifies our commitment to maximizing the value of our technology solutions for all stakeholders.
  • Reference: https://www.Cust2Mate.com/retail-media/

Sustainability, Food Security, ESG:

A2Z Cust2Mate remains committed to its sustainability targets, our multifaceted approach include contributions to global food security and climate change reduction. Our smart carts feature advanced capabilities like dynamic pricing that adjusts based on factors such as product expiry dates, energy efficiency, local sourcing of produce, etc. This accelerates the sale of items nearing their shelf life, reducing food waste and optimizing supply chain and inventory turnover. Smart Carts create a more sustainable, efficient, and socially responsible retail environment.

• Recent Press Release on Cust2Mate Sustainability Capabilities: https://bit.ly/azsustainability

Vision:

Company's vision is to become the global leading provider of smart carts and associated technology solutions, providing a data-driven superior customer experience and cutting-edge platform for digital value-added services, resolving the pain points for all stakeholders in the retail industry.

Software Platform:

At A2Z Cust2Mate, innovation remains our cornerstone. Our software platform is continually evolving, reflecting this commitment.

• R&D Expansion: Our Research and Development team is at the helm of our growth. We're focusing on enhancing both our team's capabilities and our software products to ensure cutting-edge solutions.
• Agile Implementation: Recognizing the need for agility in today's dynamic retail environment, we've fully integrated the Agile methodology. This ensures swift adaptability, more frequent updates, and an emphasis on customer feedback.
• Enhanced Security with CISO: To underline our commitment to safeguarding our platform and our clients' data, we have brought a Chief Information Security Officer (CISO) on board. Their primary role is to reinforce security measures and ensure robust cybersecurity protocols, safeguarding both our software and the sensitive information it holds.
• Updated Solution Architecture: Our ongoing initiatives aim to modernize our solution architecture, ensuring it's scalable, efficient, and current.
• Fortifying the Development Team: The strength of our platform lies in our developers. We continue to expand our development team and we are providing them with advanced tools and training, positioning them - and us - for continued success.

For more information on A2Z Subsidiary Cust2Mate please visit www.Cust2Mate.com

For more information on investing in A2Z (NASDAQ:AZ) ($AZ) visit www.a2zas.com

For Investor Relations and media inquiries, please contact:

John Gildea,

SVP of Corp Coms and Investor Relations

John@a2zas.com

About A2Z Cust2Mate

A2Z Smart Technologies Corp. creates innovative solutions for complex challenges. A2Z's flagship product, Cust2Mate, is an advanced proven-in-use mobile self-checkout shopping cart. With its user-friendly smart algorithm, touch screen, and computer-vision system, Cust2Mate streamlines the retail shopping experience by scanning purchased products and enabling in-cart payment so that customers can simply "pick & go", and bypass long cashier checkout lines. This results in a more efficient shopping experience for customers, less unused shelf space and manpower requirements, and advanced command and control capabilities for store managers.

*1 A2Z Cust2Mate Expands to Serve Demand in U.S. Retail Market with New Leadership Team: READ MORE

Cautionary Statement Regarding Forward-Looking Statements

This press release contains forward-looking statements. Forward-looking statements are subject to risks, uncertainties and assumptions and are identified by words such as "expects," "estimates," "projects," "anticipates," "believes," "intends," "plans," "may," "will," "should," "could," "outlook" and other similar words. All statements addressing operating performance, events or developments that A2Z Cust2Mate expects or anticipates will occur in the future, including but not limited to statements relating to the company's anticipated growth strategies, technological developments, market position, financial performance, and potential for future success, are forward-looking statements.

The forward-looking statements in this press release are based upon various assumptions, including, without limitation, management's examination of historical operating trends, data contained in the company's records and data available from third parties. Although A2Z Cust2Mate believes that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies that are difficult or impossible to predict and are beyond the company's control, A2Z Cust2Mate cannot assure you that it will achieve or accomplish these expectations, beliefs or projections.

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations or beliefs and are subject to uncertainty and changes in circumstances. Actual results may vary materially from those expressed or implied by the statements herein due to changes in economic, business, competitive, technological, and/or regulatory factors. More detailed information about these factors is included in the Company's filings with the Securities and Exchange Commission and Canadian securities regulatory authorities. The Company disclaims any obligation to update forward-looking statements except as required by law.

SOURCE: A2Z Smart Technologies Corp.