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A2Z Smart Technologies Enters into a Non-Binding Letter of Understanding to Acquire a 60% Interest in a Leading Israel Based Industrial Corporation

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TEL AVIV, ISRAEL / ACCESSWIRE / March 9, 2021 / A2Z Smart Technologies Corp. ("A2Z" or the "Company") (TSXV:AZ)(OTCQX:AAZZF) is pleased to announce that on March 8, 2021, the board of directors of the Company approved a a non-binding Letter of Understanding to acquire a 60% equity interest (the "Acquisition") in a leading engineering and manufacturing corporation for commercial, industrial and transportation industries based in Israel (the "Target").

The Target has 161 employees with 16,222 square meters (approximately 175,000 square feet) of manufacturing space and also has a wholly owned subsidiary in the UK (manufacturing plant) which caters to is European clients. It also has a major worldwide distribution network.

For the year ended December 31, 2019 the Target had recognized revenues of NIS 80.5 million (approximately US$ 25 million) and a net loss of NIS 597 thousand (approximately US$185 thousand) and as of December 31, 2019 had total assets of NIS 77.8 million (approximately US$ 24 million) and total liabilities of NIS 50.1 million (US$15.8 million).

The Acquisition, is subject to the parties entering into a binding definitive agreement (the "Definitive Agreement"), the terms of which are expected to include an acquisition price consisting of a one-time cash payment of US$500,000 and the issuance of that number of common shares (the "Common Shares") in the capital of A2Z as is equal to US$900,000 (the "Acquisition Shares"). The number of Acquisition Shares being issued will be determined at the time of the entering into of the Definitive Agreement and shall be calculated at the lower of: (i) the market price at closing of the Acquisition, or (ii) the volume weighted average trading price on the preceding 5 days, though in any event not less than 90% of the market price at closing of the Acquisition.

Additionally, it is expected that the Definitive Agreement will include an undertaking by A2Z to invest an additional amount of NIS 10 million (approximately US$ 3.1 million) in the Target during the initial 24 months immediately following the closing of the Acquisition in order to enhance the growth strategy and revenue generation ability of the Target (the "Investment"). In consideration for the Investment A2Z will receive additional ownership in the Target in an amount not to exceed an additional 20% of the Target.

As part of the transaction, A2Z is expected to undertake to keep the Target's dividend policy in place. A2Z will be entitled to receive its pro rata share of any such dividends.

The parties expect to execute the Definitive Agreement by the end of April 2021.

Closing of the Transaction is subject to certain additional conditions precedent including receipt of all regulatory approval including that of the TSX Venture Exchange.

Disclaimer: The TSX Venture Exchange Inc. has in no way passed upon the merits of the Company has neither approved nor disapproved the contents of this press release. Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. This news release contains forward-looking information, which involves known and unknown risks, uncertainties and other factors that may cause actual events to differ materially from current expectation. Important factors - including the availability of funds, the results of financing efforts, the results of exploration activities -- that could cause actual results to differ materially from the Company's expectations are disclosed in the Company's documents filed from time to time on SEDAR (see www.sedar.com). Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The company disclaims any intention or obligation, except to the extent required by law, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. This press release does not constitute an offer to sell or a solicitation of an offer to sell any of the securities described herein in the United States or elsewhere. These securities have not been, and will not be, registered in the United States Securities Act of 1933, as amended, or any state securities laws, and may not be offered or sold in the United States or to U.S. persons unless registered or exempt therefrom.

Corporate Contact:

Gadi Levin

SOURCE: A2Z Smart Technologies Corp.

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