20-F/A: ZenaTech Amends Annual Report to Adopt Comprehensive Compensation Clawback Policy

ZenaTech, Inc. has filed an amendment to its annual report to include a new Compensation Clawback Policy, aligning with recent SEC and Nasdaq regulatory requirements.

Summary

• ZenaTech, Inc. filed an Amendment No. 1 to its Annual Report on Form 20-F for the fiscal year ended December 31, 2024, originally filed on April 25, 2025.
• The sole purpose of this amendment is to include the company's Compensation Clawback Policy as Exhibit 97.1.
• The Compensation Clawback Policy was adopted by the Board of Directors upon recommendation from the Compensation and Governance Committee, effective September 30, 2025.
• The policy's purpose is to recover certain incentive compensation as required by Rule 10D-1 under the Exchange Act and Rule 5608 of the Nasdaq Marketplace Rules.
• It applies to 'Clawback Eligible Incentive Compensation' received by 'Covered Executives' (executive officers as defined by Nasdaq) during a 'Clawback Period' of three completed fiscal years immediately preceding a 'Restatement Trigger Date'.
• 'Erroneously Awarded Compensation' is defined as the amount of incentive compensation that exceeds what would have been received based on restated financial amounts, computed without regard to taxes paid.
• Recovery can be achieved through various means, including cash, Company shares, forfeiture of unvested awards, cancellation of vested awards, offset of other amounts owed, or reduction of future compensation.
• Exceptions to recovery are allowed if direct expense to a third party exceeds the amount to be recovered, if recovery violates home country law adopted prior to November 28, 2022, or if it jeopardizes a tax-qualified retirement plan.
• The company is prohibited from indemnifying current or former Covered Executives against recovered compensation or related claims, and cannot reimburse for third-party insurance purchased for potential recovery obligations.
• Covered Executives are required to acknowledge and agree to be bound by the policy, regardless of whether they sign the acknowledgment form.

Sentiment

Score: 7

Explanation: The adoption of a compensation clawback policy is a positive development for corporate governance and regulatory compliance, enhancing accountability and protecting shareholder interests. It does not, however, directly impact the company's operational or financial performance in the short term.

Positives

• The adoption of the Compensation Clawback Policy demonstrates ZenaTech's commitment to strong corporate governance and executive accountability.
• The policy ensures compliance with new SEC Rule 10D-1 and Nasdaq Marketplace Rule 5608, mitigating regulatory risks.
• It provides a clear framework for recovering erroneously awarded incentive compensation, protecting shareholder interests in cases of financial misstatement.

Risks

• The policy introduces a risk for Covered Executives of having incentive-based compensation clawed back in the event of an accounting restatement.
• The company may incur expenses in attempting to recover erroneously awarded compensation, although exceptions exist if expenses exceed recovery amounts.

Future Outlook

The document does not provide forward-looking statements regarding financial performance or business operations, but rather outlines a new corporate governance policy that will be effective in the future.

Management Comments

• Dr. Shaun Passley, Chief Executive Officer, signed the Form 20-F/A on behalf of ZenaTech, Inc.
• Dr. Shaun Passley also signed an acknowledgment form confirming receipt and agreement to be bound by the Compensation Clawback Policy.

Industry Context

The adoption of this Compensation Clawback Policy is a direct response to new regulatory requirements from the U.S. Securities and Exchange Commission (SEC) and Nasdaq, specifically SEC Rule 10D-1 and Nasdaq Marketplace Rule 5608. This makes ZenaTech's policy consistent with evolving industry standards for corporate governance and executive compensation across publicly traded companies.

Comparison to Industry Standards

• ZenaTech's Compensation Clawback Policy aligns with the requirements set forth by SEC Rule 10D-1 and Nasdaq Marketplace Rule 5608, which mandate clawback provisions for incentive-based compensation tied to financial reporting measures.
• The policy's definitions for 'Accounting Restatement', 'Clawback Period', and 'Erroneously Awarded Compensation' are consistent with the regulatory guidelines, ensuring comparability with similar policies adopted by other U.S.-listed companies.
• The specified means of recovery (e.g., cash, forfeiture of awards, offset) and the limited exceptions for impracticability are standard practices observed in clawback policies across the industry following the new regulations.

Corporate Governance

Stakeholder Impact

• Shareholders: Benefit from enhanced corporate governance, increased executive accountability, and protection against financial misstatements leading to inflated compensation.
• Executive Officers: Subject to potential recovery of incentive-based compensation if an accounting restatement occurs, increasing personal financial risk related to company performance and reporting accuracy.
• Regulatory Bodies: The policy demonstrates compliance with SEC and Nasdaq rules, fulfilling regulatory obligations.

Next Steps

• The Compensation Clawback Policy will become effective on September 30, 2025.
• The company will continue to comply with reporting and disclosure requirements related to this policy under the Exchange Act and Nasdaq Marketplace Rules.
• Covered Executives will be required to sign acknowledgment forms agreeing to the policy's terms.

Key Dates

Keywords

ZenaTech, Compensation Clawback Policy, SEC Filing, Form 20-F/A, Corporate Governance, Executive Compensation, Financial Reporting, Nasdaq, Rule 10D-1, Accountability