20-F/A: ZenaTech Expands Drone Services with 20+ Acquisitions in 2025

ZenaTech reports significant revenue growth driven by its Drone as a Service (DaaS) segment, fueled by numerous acquisitions of land surveying companies.

Summary

• ZenaTech's total revenue surged by 558% to $12.91 million in 2025, primarily due to the launch and rapid expansion of its Drone as a Service (DaaS) segment.
• The DaaS segment, comprising land surveying services, contributed $10.11 million, representing 78% of the total revenue.
• The company completed approximately twenty land surveying company acquisitions throughout 2025, integrating them into its DaaS model.
• Enterprise SaaS revenue saw modest growth of 43% to $2.81 million, with efforts focused on integrating drone capabilities into existing software offerings.
• Despite revenue growth, ZenaTech reported a net loss of $45.22 million for 2025, an increase from $4.48 million in 2024, largely due to finance expenses, increased wages, and marketing costs associated with expansion.
• Total assets grew significantly by 188% to $99.93 million, reflecting the impact of acquisitions and investments in property, plant, and equipment, and intangible assets.
• The company secured new financing and revolving credit facilities, increasing its loans payable to $17.26 million.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this filing as negative due to the significant increase in net loss and cash burn, despite impressive revenue growth driven by acquisitions. The company's heavy reliance on debt and related-party financing, coupled with a material weakness in internal controls, presents considerable risks.

Positives

• Significant revenue growth of 558% in 2025, reaching $12.91 million.
• Successful launch and rapid scaling of the Drone as a Service (DaaS) segment, contributing 78% of total revenue.
• Completion of approximately twenty acquisitions in the land surveying sector, expanding the DaaS footprint.
• Modest organic growth in the Enterprise SaaS segment.
• Increase in total assets by 188% to $99.93 million, indicating business expansion.
• Strengthened cash position, with cash increasing by 59% to $5.98 million.
• Management believes existing cash resources and credit facilities are sufficient for the next twelve months.

Negatives

• Net loss increased significantly to $45.22 million in 2025, up from $4.48 million in 2024.
• High finance expenses, largely non-cash, of $19.88 million impacted profitability.
• Substantial increase in general and administrative expenses, including wages and marketing, due to acquisitions and market entry.
• The company has a history of operating losses and a significant accumulated deficit of $53.74 million.
• Dependence on related party transactions and management services agreements with Epazz, Inc.

Risks

• The successful integration of approximately twenty acquired land surveying companies into ZenaTech's drone-based service delivery model is a significant operational risk.
• The DaaS strategy relies on the successful conversion of traditional surveying operations to drone-based delivery, which is subject to regulatory approvals (FAA Part 107 waivers, commercial drone permits), technology readiness, and customer acceptance.
• The Company's convertible debt instruments create non-cash finance charges that significantly impact reported net loss, and their resolution will affect share count and financial position.
• Foreign currency fluctuations can materially impact the translation of foreign currency-denominated assets, liabilities, revenues, and expenses.
• The Company is substantially dependent on the leadership of Dr. Shaun Passley, and the loss of key personnel could adversely affect operations.
• The company faces intense competition in both the drone and enterprise software markets.
• Potential for dilution of existing shareholders' ownership and voting power due to the Company's authority to issue an unlimited number of Common Shares.
• Failure to meet Nasdaq continued listing requirements could result in delisting, negatively impacting share price and liquidity.
• The company has a material weakness in internal control over financial reporting, which could impact its ability to prevent or detect misstatements.
• The company's business is subject to complex and evolving regulations, including U.S. export controls and sanctions laws, which could restrict operations.

Future Outlook

ZenaTech anticipates continued growth in 2026, with the DaaS segment benefiting from a full year of revenue from 2025 acquisitions and the maturation of its drone conversion program. The company expects to reduce per-survey labor costs, expand its geographic reach through further acquisitions, and grow Enterprise SaaS revenue by cross-selling drone monitoring and compliance capabilities. Investments in drone platforms are expected to yield new revenue streams in defense, agriculture, and inspection markets. Management also expects a decrease in non-cash finance expenses and a move towards positive operating cash flow as the DaaS segment scales.

Management Comments

• "The year ended December 31, 2025 represented a transformational period for ZenaTech."
• "Management believes that its existing cash resources, amounts available under its revolving credit facilities, and cash flows expected from the DaaS operations are sufficient to fund the Company's operational needs for the next twelve months."
• "We believe compensation should be structured to ensure that a significant portion of an executive's compensation opportunity is at risk and related to factors that influence shareholder value."

Industry Context

StockSavvy.ai notes that ZenaTech's aggressive acquisition strategy in the land surveying sector, coupled with its integration of drone technology, aligns with broader industry trends of leveraging automation and advanced data capture for efficiency and precision. The company's focus on the Drone as a Service (DaaS) model addresses a growing market demand for specialized drone applications across various industries.

Comparison to Industry Standards

• ZenaTech's revenue growth of 558% in 2025 significantly outpaces the typical growth rates seen in the mature enterprise software market, but is more aligned with high-growth technology sectors undergoing consolidation.
• The company's net loss of $45.22 million on $12.91 million in revenue indicates a high burn rate, common in early-stage companies focused on rapid expansion and market penetration through acquisitions, rather than immediate profitability.
• The significant increase in intangible assets and goodwill ($10.36 million and $12.11 million respectively) reflects the accounting treatment of its numerous acquisitions, a common practice in industries undergoing consolidation.
• The company's reliance on debt financing, particularly revolving lines of credit from related parties, is a strategy often employed by growth-stage companies, but carries inherent interest rate and liquidity risks.

Corporate Governance

Legal Proceedings

• ZenaDrone, Inc. is aware of a claim filed by NightSun LLC in the Shoshone & Aropaho Tribal Court, Wyoming, for purported breach of contract. The Company believes the claim is frivolous and baseless and will defend itself vigorously.

Related Party Transactions

• Significant transactions and balances exist with Epazz, Inc., GG Mars Capital, Inc., Star Financial Corporation, Jennings Family Investments, Inc., LoneStella, LLC, and Dr. Shaun Passley, including advances, service agreements, share issuances, and loans.
• The company acquired patents and technology assets from Epazz, Inc. and Dr. Shaun Passley, which are considered related party transactions and are pending shareholder approval.
• The company has a management services agreement with Epazz, Inc., its controlling shareholder, for various services, including a software development team and office space.

Stakeholder Impact

• Shareholders may experience dilution due to potential future equity issuances and the conversion of convertible debt and warrants.
• The significant net loss and cash burn could impact the company's ability to fund future operations and growth, potentially affecting shareholder value.
• The company's reliance on Dr. Shaun Passley, its CEO, presents a key personnel risk for all stakeholders.
• The material weakness in internal controls could impact investor confidence and the reliability of financial reporting.

Next Steps

• Continue integration of acquired land surveying companies into the drone-based service delivery model.
• Pursue further targeted land survey company acquisitions in new US states and internationally.
• Advance development and commercialization of the ZenaDrone product family, including defense applications.
• Expand Enterprise SaaS offerings by cross-selling drone monitoring and compliance capabilities.
• Seek shareholder approval for pending acquisitions of technology assets from Epazz, Inc.

Key Dates

Recommendation

ZenaTech shows impressive revenue growth driven by strategic acquisitions in the DaaS sector, indicating strong execution on its expansion strategy. However, the significant increase in net loss, high cash burn rate, and the presence of a material weakness in internal controls present considerable risks. While the DaaS segment shows promise, the company's financial performance and reliance on related-party transactions warrant a cautious 'hold' approach until profitability improves and control deficiencies are fully remediated.

Keywords

ZenaTech, SEC Filing, Form 20-F/A, Drone as a Service, DaaS, Land Surveying, Acquisitions, Enterprise Software, SaaS, Financial Results, Revenue Growth, Net Loss, Nasdaq, Corporate Governance, Related Party Transactions