10-Q/A: Ameritek Ventures Q3 Loss Amid Strategic Shift

Sentiment:

Quarterly Report Amendment 14 November 2025 1:22 PM

Ameritek Ventures reported a net loss of $2.25 million for the nine months ended September 30, 2025, as it pivots from software to real estate and new technology ventures.

Delay expectedPayments on the $200,000 convertible note from the Bozki merger and the $250,000 note from the VW Win merger (both with Epazz, Inc., a related party) were agreed to be deferred until January 1, 2028.

Capital raiseManagement plans to raise equity capital to finance operating and capital requirements.Amounts raised will be used for product development, marketing, securing additional property and equipment, and for other working capital purposes.The company expects to use cash, cash equivalents, short-term investments, and other sources of liquidity, such as issuing equity or debt securities, subject to market conditions.

Worse than expectedReported a net loss of $2,250,467 for the nine months ended September 30, 2025, a significant deterioration from a net income of $103,252 in the prior year.No revenue was generated during the reporting period.Total liabilities increased while total assets and stockholders' equity decreased.Disclosure controls and procedures were deemed ineffective due to material weaknesses.

Summary

Reported a net loss of $2,250,467 for the nine months ended September 30, 2025, a significant decline from a net income of $103,252 for the same period in 2024.
Generated no revenue for both the nine months ended September 30, 2025, and 2024.
Underwent a strategic shift, selling its software business (Ecker Capital, LLC) in October 2024 and diversifying into real estate rentals, medical technology (DittoMask), blockchain software (WebBeeO, CordTell), augmented reality (Augmum, Inc.), vertical landing aircraft services (AeroPass, Inc.), and electric bicycles (Equock, Inc.).
Acquired Galaxy Batteries, Inc. from Epazz, Inc., a related party, for $37,000,000 on August 14, 2025, by issuing 10,000,000,000 common shares.
Management concluded that disclosure controls and procedures were not effective as of September 30, 2025, due to a lack of a functioning audit committee and inadequate segregation of duties.
Cash balance increased to $26,602 as of September 30, 2025, from $0 at December 31, 2024.
Total assets decreased to $14,755,335 from $16,207,378, while total liabilities increased to $3,115,810 from $2,477,586.
Engaged in extensive related party transactions, including management fees paid in stock to Epazz, Inc. and Shaun Passley (CEO), and various loans from Epazz, Inc.

Sentiment

Score: 2

Explanation: The company reported a significant net loss with no revenue, has material weaknesses in internal controls, and relies heavily on related party transactions. While it is attempting strategic diversification, the financial performance and governance issues present substantial concerns.

Positives

Operating loss improved to $(223,483) for the nine months ended September 30, 2025, from $(439,951) in the prior year, indicating reduced operating expenses.
Cash balance increased to $26,602 as of September 30, 2025, from $0 at December 31, 2024, improving immediate liquidity.
Reported an unrealized gain on investment of $5,329,604 for the three months ended September 30, 2025, contributing to a positive net income for that quarter.
Strategic diversification into real estate and various technology sectors (blockchain, AR, eVTOL, e-bikes) aims to open new potential revenue streams.

Negatives

Reported a net loss of $2,250,467 for the nine months ended September 30, 2025, a significant deterioration from a net income of $103,252 in the prior year.
No revenue was generated for the nine months ended September 30, 2025, and 2024, indicating a lack of core business operations generating income.
Total assets decreased by $1,452,043 from December 31, 2024, to September 30, 2025, while total liabilities increased by $638,224 over the same period.
Stockholders' equity decreased by $2,090,267 from December 31, 2024, to September 30, 2025.
Disclosure controls and procedures were deemed ineffective as of September 30, 2025, due to material weaknesses.
Significant reliance on related party transactions for acquisitions, financing, and management services raises concerns about potential conflicts of interest.
Incurred an unrealized loss on investment of $1,966,658 for the nine months ended September 30, 2025.

Risks

Ineffective disclosure controls and procedures due to a lack of a functioning audit committee and inadequate segregation of duties, increasing the risk of material misstatements in financial reporting.
Heavy reliance on related parties (Epazz, Inc. and Shaun Passley) for significant transactions, including management services, loans, and acquisitions, which could lead to conflicts of interest and non-arm's-length dealings.
Absence of current revenue generation, with future success dependent on unproven ventures in real estate, medical technology, blockchain, augmented reality, vertical landing aircraft services, and electric bicycles.
Potential for significant dilution of existing shareholders due to the issuance of 10 billion common shares for the Galaxy Batteries acquisition and plans for future equity capital raises.
Uncertainty regarding the recoverability of goodwill and intangible assets if new ventures do not generate sufficient cash flows.
Ongoing legal proceedings against a former owner regarding shares ownership and asset encumbrance, although not expected to have a material effect.

Future Outlook

Management plans to raise equity capital to finance operating and capital requirements, further product development, marketing, and secure additional property and equipment. The company expects cash, cash equivalents, short-term investments, and other liquidity sources, such as issuing equity or debt securities, subject to market conditions, to be available and sufficient to meet all foreseeable cash requirements.

Management Comments

"We are under no duty to update any of the forward-looking statements after the date of this Quarterly Report to conform these statements to actual results."
"Management plans to raise equity capital to finance the operating and capital requirements of the Company."
"Amounts raised will be used to further development of the Company's products, to provide financing for marketing and promotion, to secure additional property and equipment, and for other working capital purposes."
"Our management, including our President and CEO and CFO, concluded that our disclosure controls and procedures were not effective as of September 30, 2025."

Industry Context

Ameritek Ventures is undergoing a significant strategic pivot, moving away from its traditional software business (divested Ecker Capital, LLC) and diversifying into disparate sectors including real estate, medical technology (DittoMask), blockchain, augmented reality, vertical landing aircraft services, and electric bicycles. This broad diversification suggests an attempt to find new growth avenues after exiting its core software operations, but also introduces challenges in managing diverse business lines without a clear, unified strategy or established revenue streams in these new areas. The reliance on related party transactions for acquisitions and financing is a notable aspect of its operational strategy, which is common in smaller, early-stage companies but can raise governance concerns.

Comparison to Industry Standards

The company's lack of revenue generation in the reported periods is significantly below industry standards for established public companies, indicating a pre-revenue or early-stage operational status.
The reported material weaknesses in internal controls, specifically the lack of a functioning audit committee and inadequate segregation of duties, fall short of corporate governance best practices and SEC compliance expectations for public companies, regardless of size.
The extensive related party transactions, particularly with entities controlled by the CEO, raise concerns about arm's-length dealings and transparency compared to typical industry standards for independent corporate governance.
The rapid diversification into multiple, unrelated high-tech and real estate sectors without clear, substantial revenue or profit generation in any of them contrasts with focused growth strategies often seen in successful industry players.

Corporate Governance

Change Type	Description	Effective Date	Impact Assessment
Internal Control Weakness	Lack of a functioning audit committee, resulting in ineffective oversight in the establishment and monitoring of required internal control and procedures.	2025-09-30	Material weakness in control environment and financial reporting process, increasing the risk of material misstatement.
Internal Control Weakness	Inadequate segregation of duties consistent with control objectives.	2025-09-30	Material weakness in control environment and financial reporting process, increasing the risk of material misstatement.

Legal Proceedings

Lawsuit filed in Clark County, Nevada, against Clinton L. Stokes, III, the former owner, to settle matters of shares ownership and whether Fiber Optic Assets were purchased free of encumbrance from Meridian Financial Group, LLC. The case is pending with no trial date set.

Related Party Transactions

Sale of Ecker Capital, LLC to ZenaTech, Inc. (controlled by Epazz, Inc. and Shaun Passley) on October 1, 2024, in exchange for ZenaTech shares.
Acquisition of Galaxy Batteries, Inc. from Epazz, Inc. (controlled by Shaun Passley) for $37,000,000, paid by issuing 10,000,000,000 common shares on August 14, 2025.
Assumption of a $200,000 convertible note from the Bozki merger with Epazz, Inc., with accrued interest of $123,982 as of September 30, 2025. Payments deferred until January 1, 2028.
Assumption of a $1,000,000 convertible note from the Bozki merger (converted to a $500,000 note) with Epazz, Inc., with accrued interest of $185,080 as of September 30, 2025. Payments deferred until January 1, 2028.
Assumption of a $250,000 note from the VW Win Century, Inc. merger with Epazz, Inc., with accrued interest of $365,125 as of September 30, 2025. Payments deferred until January 1, 2028.
Management agreement with Epazz, Inc. for a minimum annual fee of $350,000.
Issued 66,000,000 shares of Common Stock to Epazz, Inc. for management fees on April 1, 2025.
Issued 300,000,000 shares of Common Stock to Shaun Passley for management fees on April 1, 2025.
Accounts payable balance of $479,564 due to Epazz, Inc. as of September 30, 2025.
Short-term advance from affiliate (Epazz and ZenaTech) of $876,886 as of September 30, 2025.
Shaun Passley, PhD, holds 379,098,457 common shares and 2,000,000 Series C preferred shares.
Epazz, Inc. holds 10,000,000 Series B preferred shares and 116,000,000 common shares.
GG Mars Capital, Inc. (President Vivienne Passley, Shaun Passley's family member) holds 22,159,336 Series C preferred shares and 18,103,638 common shares.
Star Financial Corporation (President Fay Passley, Shaun Passley's family member) holds 22,236,666 Series C preferred shares and 18,106,005 common shares.
Other Passley family members (Vivienne, Fay, Craig, Olga, Lloyd) hold various amounts of common or preferred C stock.

Stakeholder Impact

**Shareholders**: Experienced significant dilution from the issuance of 10 billion common shares for the Galaxy Batteries acquisition. Face negative impact from the net loss and the disclosure of ineffective internal controls. Potential for further dilution from planned equity raises.
**Creditors**: Loans from related parties (Epazz, Inc.) have deferred payments, indicating potential liquidity challenges for the company to meet its obligations.
**Management/Employees**: Management (Shaun Passley) benefits from significant stock-based compensation and controls key related parties involved in major transactions, raising questions about independent oversight.
**Customers**: The shift in business focus and lack of established revenue from new ventures could create uncertainty for potential customers of DittoMask, real estate, or other new technologies.

Next Steps

Raise equity capital to finance operations and growth.
Further develop new products and ventures (DittoMask, WebBeeO, CordTell, Augmum, AeroPass, Equock).
Secure additional property and equipment, particularly for real estate rentals.
Address material weaknesses in disclosure controls and procedures, including establishing a functioning audit committee and improving segregation of duties.
Continue legal proceedings against Clinton L. Stokes, III.

Key Dates

Date	Description
2010-12-27	Company organized as ATVROCKN.
2017-06-20	Company changed corporate name to Ameritek Ventures, Inc.
2018-01-01	Effective date of $200,000 convertible note from Bozki merger with Epazz, Inc.
2020-11-10	Merger with VW Win Century, Inc. (formerly FlexFridge, Inc.).
2020-11-12	Entered into management agreement with Epazz, Inc. for a minimum annual fee of $350,000.
2020-11-13	Merger with Bozki, Inc.
2020-12-01	Agreement to defer payments on Bozki and VW Win notes until January 1, 2028.
2021-05-13	Cloud Builder, Inc. promissory note for $185,000 originated.
2021-05-15	Assumed loan from Reading Coop for $27,957 with the acquisition of interlinkOne.
2021-08-05	Decision to convert the $185,000 non-convertible promissory note to Cloud Builder, Inc.
2021-09-09	Issued 30,000,000 shares to Cloud Builder, Inc. for $166,330 repayment and issued a $21,000 note on demand to AdvocateCPA, Inc.
2021-09-15	Agreement to convert $500,000 of Bozki debt into Ameritek common stock and a nine-year note.
2021-10-31	Received a $500,000 SBA Disaster loan for Interactive Systems.
2022-01-01	Drone patent sold to ZenaTech, Inc. for 3,500,000 common shares Canadian.
2023-03-06	Filed lawsuit against Clinton L. Stokes, III regarding shares ownership and Fiber Optic Assets.
2023-10-01	Settlement agreement for Cloud Builder, Inc. note and reinstatement.
2024-01-31	Agreed to convert $32,480 of Cloud Builder debt into 29,000,000 Class A common stock.
2024-03-14	Issued 29,000,000 shares of Common Stock for debt conversion to Cloud Builder, Inc.
2024-04-01	Issued 66,000,000 shares to Epazz, Inc. and 300,000,000 shares to Shaun Passley for management fees.
2024-10-01	Effective date of sale of Ecker Capital, LLC to ZenaTech, Inc.
2024-10-14	Entered into selling agreement with ZenaTech, Inc. to sell Ecker Capital, LLC.
2025-08-14	Acquisition agreement with Epazz, Inc. to acquire Galaxy Batteries, Inc. for $37,000,000, issuing 10,000,000,000 common shares.
2025-09-30	End of the quarterly period covered by this report.
2025-11-10	Date of signing of the 10-Q/A report.
2025-11-11	Latest practicable date for common stock outstanding disclosure (note: this figure contradicts the Sep 30, 2025 balance sheet).
2025-11-14	Date of CEO and CFO certifications.

Recommendation

strong sell

The company reported a substantial net loss with no revenue, indicating severe operational challenges. The disclosure of material weaknesses in internal controls, including the absence of a functioning audit committee and inadequate segregation of duties, raises significant governance and financial reporting integrity concerns. The extensive and complex related-party transactions, particularly the acquisition of Galaxy Batteries from a related party for 10 billion common shares, suggest potential conflicts of interest and significant dilution for existing shareholders. While the company is attempting diversification, the lack of a clear, profitable business model and the fundamental governance issues make it a high-risk investment with a strong likelihood of further value erosion.

Keywords

Ameritek Ventures, ATVK, Quarterly Report, SEC Filing, Financial Results, Net Loss, Real Estate Investment, Galaxy Batteries Acquisition, Ecker Capital Sale, Related Party Transactions, Internal Control Weaknesses, Blockchain Technology, Augmented Reality, eVTOL, Electric Bicycle, DittoMask, ZenaTech, Epazz, Shaun Passley, Convertible Notes, Equity Raise

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