F-1/A: ZenaTech Files for Direct Listing on Nasdaq Capital Market, Aiming to Commence Trading Around June 17, 2024

ZenaTech, an enterprise software technology company, is set to directly list its common stock on the Nasdaq Capital Market, anticipating trading to begin around June 17, 2024, without an underwritten initial public offering.

Summary

• ZenaTech, Inc., an enterprise software technology company, has filed an amendment to its registration statement for a direct listing on the Nasdaq Capital Market under the ticker symbol ZENA.
• The company expects its common stock to begin trading on or about June 17, 2024, contingent upon Nasdaq approval and other conditions.
• Unlike a traditional IPO, this direct listing does not involve underwriters, and the resale of shares will be conducted by registered stockholders.
• ZenaTech will not receive any proceeds from the sale of shares by the registered stockholders.
• The company's recent private transactions showed a sales price per share between $0.24 and $0.80 from January 1, 2022, through May 22, 2024.
• Maxim Group LLC is serving as the financial advisor for the listing.
• ZenaTech is considered an emerging growth company and a foreign private issuer, allowing it to comply with certain reduced reporting requirements.
• The company is also a controlled company under Nasdaq rules, as Dr. Shaun Passley controls more than 50% of the voting stock.
• ZenaTech's revenue for the three months ended March 31, 2024, was $591,379, with a net loss of $120,924.
• For the year ended December 31, 2023, revenue was $1,831,912, with a net loss of $241,504.
• The company's total assets as of March 31, 2024, were $18,210,732, and total liabilities were $10,162,355.

Sentiment

Score: 6

Explanation: The document presents a mixed sentiment. While the company is pursuing a direct listing and expanding into the drone business, it also faces challenges such as a history of net losses, dependence on key personnel, and regulatory risks. The lack of an underwriter and the potential for price volatility add further uncertainty.

Positives

• ZenaTech is expanding into the drone business, complementing its existing software offerings.
• The company has secured contracts with the US Air Force and US Naval Research for drone-related services.
• ZenaTech has a management services agreement with Epazz, providing access to a software development team and other resources.
• The company has a diverse portfolio of software products across various industries, including medical records, security, and public safety.

Negatives

• ZenaTech has a history of net losses, including a net loss of $120,924 for the three months ended March 31, 2024, and $241,504 for the year ended December 31, 2023.
• The company's success is heavily dependent on the successful implementation of its business strategy.
• The company faces competition in the software and drone industries.
• The company is dependent on its relationship with Epazz Inc., and any termination or non-renewal of agreements could materially affect the business.

Risks

• The company has a limited operating history and may not be profitable in the future.
• The company will need additional capital for its operations, and there is no assurance that it will be able to raise the necessary funds.
• The company may face product liability claims and defects in its software or drone technology.
• The company's products will need market acceptance to be successful.
• The company is subject to a variety of regulatory risks, including changes in laws and regulations.
• The company is dependent on key personnel, and the loss of these individuals could harm the business.
• The company operates in multiple countries and is therefore subject to currency risk.
• The registration and listing of our common stock differs significantly from an underwritten initial public offering.

Future Outlook

The company plans to expand its business into Unmanned Vehicle Systems (drones) and leverage its existing software assets to enhance its drone offerings. The company is also pursuing business enterprises in a variety of sectors, from agriculture to infrastructure to mining.

Industry Context

The announcement comes amid growing interest in direct listings as an alternative to traditional IPOs, offering companies more control over the offering process and potentially reducing costs. ZenaTech's focus on enterprise software and drone technology aligns with broader industry trends in automation, data analytics, and cloud-based solutions.

Comparison to Industry Standards

• Comparing ZenaTech to industry standards is challenging due to its unique combination of software and drone technology.
• However, comparable companies in the software sector include firms like Salesforce (CRM), ServiceNow (NOW), and Microsoft (MSFT), which have established cloud-based enterprise software platforms.
• In the drone industry, companies like DJI, Draganfly (DPRO), and AeroVironment (AVAV) are key players, but ZenaTech's integrated software approach differentiates it from these hardware-focused competitors.
• ZenaTech's revenue and growth metrics should be assessed against these industry benchmarks to determine its competitive positioning and potential for future success.

Legal Proceedings

• The Company is involved in a legal proceeding with vendors of WorkAware Corporation, with the vendors claiming the Company did not report all revenues and are suing the Company for $200,000.
• The Company has countersued the vendors for $600,000 in damages for misrepresenting the capabilities of certain software acquired.

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.

Stakeholder Impact

• Shareholders may experience price volatility due to the absence of an underwriter and the potential for large sales by existing stockholders.
• Employees may benefit from the company's expansion into the drone business and potential for increased job opportunities.
• Customers may benefit from the company's innovative software and drone technology solutions.
• Suppliers may see increased demand for components and parts used in the manufacture of drones.
• Creditors may face increased risk due to the company's history of net losses and dependence on debt financing.

Next Steps

• Secure Nasdaq approval for the direct listing.
• Commence trading on the Nasdaq Capital Market on or about June 17, 2024.
• Convert pilot customers into paying customers for the drone technology.
• Continue developing and marketing the drone technology for various applications.
• Expand the drone business into new markets, including the United States, Canada, Germany, and Dubai.

Key Dates

Keywords

ZenaTech, direct listing, Nasdaq, software, drones, financial advisor, emerging growth company, foreign private issuer, financial results, risk factors, management services agreement, intellectual property, regulatory risks, capital raising