F-1/A: ZenaTech Files Amendment for Nasdaq Direct Listing, Outlines Business Strategy and Financials

ZenaTech, an enterprise software and drone technology company, files an amendment to its registration statement for a direct listing on the Nasdaq Capital Market, detailing its business operations, financial performance, and risk factors.

Summary

• ZenaTech, Inc., an enterprise software and drone technology company, has filed an amendment to its registration statement for a direct listing on the Nasdaq Capital Market.
• The company operates in software development, sales, and distribution, and is developing a drone manufacturing, sales, and distribution business.
• ZenaTech's core software products include EHR software, medical billing software, SCADA HMI software, video surveillance software, contact center software, safety and compliance management software, field service management software, and law enforcement software.
• The company is also developing a drone business, with plans to manufacture and sell drones in the United States, Ireland, Germany, and the Middle East.
• On July 1, 2024, ZenaTech effected a 1 for 6 reverse stock split of its common shares.
• On July 15, 2024, the company issued 291,829 common shares at a price of $10.28 for gross proceeds of $3,000,002.12.
• The company's revenue for the three months ended March 31, 2024, was $591,379, and its net loss was $120,924.
• The company's total assets as of March 31, 2024, were $18,210,732, and its total liabilities were $10,162,355.
• The company has signed five pilot program agreements to evaluate its drone technology.
• ZenaTech relies on a management services agreement with Epazz Inc., and technology licensing agreements for its software and drone businesses.

Sentiment

Score: 6

Explanation: The document presents a mixed sentiment. While the company is pursuing a Nasdaq listing and expanding into the drone business, it also reports a net loss and faces various risks and challenges.

Positives

• The company is expanding into the drone business, which is expected to generate increasing income over the next five years.
• ZenaTech has a history of growth through acquisitions of established revenue-generating software companies.
• The company has a management service agreement with Epazz to support the development of its products.
• ZenaTech has been awarded contracts by the US Air Force and US Naval Research for its drone technology.

Negatives

• The company has a limited operating history.
• The company had a net loss of $120,924 for the three months ended March 31, 2024.
• The company is dependent on its relationship with Epazz Inc.
• The company does not currently carry directors and officers insurance.

Risks

• There is currently no public trading market for the company's common shares.
• The company may not be able to manage its growth effectively.
• The company's products will need market acceptance to be successful.
• The company's business is subject to a variety of regulatory risks.
• The company's intellectual property rights may be infringed.
• The company is dependent on key personnel.
• The company may be subject to growth-related risks including pressure on its internal systems and controls.
• The company is subject to a variety of operational risks.
• There is risk of litigation.
• The Companys business is dependent on its relationship with Epazz Inc. and may become dependent on a variety of third-party relationships going forward.

Future Outlook

The company plans to expand its business into Unmanned Vehicle Systems (drones) and expects its drone business to generate increasing income over the next five years.

Industry Context

The company operates in the competitive enterprise software and drone technology industries, requiring continuous innovation and adaptation to changing market conditions.

Comparison to Industry Standards

• The document does not provide specific comparisons to industry standards or comparable companies.
• The document does not provide specific comparisons to industry standards or comparable projects.
• The document does not provide specific comparisons to industry benchmarks.

Legal Proceedings

• In connection with the acquisition of the assets of WorkAware Corporation in 2019, pursuant to an earn-out agreement entered on July 1, 2020 between the Company and vendors, the Company was to provide an additional annual payment to the vendors if revenues from the assets of WorkAware acquired were over $500,000 CAD per year.
• In 2021, revenues from the WorkAware assets acquired were over $500,000 and the Company paid the vendors $100,000.
• In 2022, the assets did not achieve over $500,000 in revenue and made no payment, however, the vendors are claiming the Company did not report all revenues and are suing the Company for $200,000.
• The Company plans to vigorously defend against the claim, including stating that the vendors should have proceeded by way of binding arbitration.
• The Company has also countersued the vendors for $600,000 in damages for misrepresenting the capabilities of certain software acquired.
• On July 8, 2024, the parties settled the matter and agreed to dismiss the claims against each other at no cost to either party.

Related Party Transactions

• The company has entered into a management services agreement with Epazz pursuant to which Epazz provides the company with a variety of services, including with respect to intellectual property relied on by the company and personnel to develop products.
• Shaun Passley is the founder and a director and officer of the company and the sole director and office and 95% shareholder of Epazz.
• The company has entered into a number of agreements with Epazz that are material to the business of the company.
• The company relies on these arrangements to satisfy certain of its management and technology requirements.

Stakeholder Impact

• Shareholders may experience dilution due to the issuance of additional common shares.
• The company's expansion into the drone business may create new employment opportunities.
• Customers may benefit from the company's innovative software and drone technology solutions.
• Suppliers may have opportunities to provide components and services to the company's drone manufacturing operations.

Next Steps

• The company expects its common stock to begin trading on the Nasdaq Capital Market on or about August 7, 2024.
• The company plans to develop markets for its drones in the United States, Canada, Germany, and Dubai.
• The company plans to utilize PacePlus, SystemView, WorkAware, TillerStack, and PsPortals assets to expand its drone offerings.

Key Dates

Keywords

drones, software, ZenaTech, listing, Nasdaq, technology, enterprise, management, compliance, services