F-1/A: ZenaTech Files for Nasdaq Direct Listing, Registers Resale of 17.7 Million Shares

ZenaTech, an enterprise software technology company, is pursuing a direct listing on the Nasdaq Capital Market, registering the resale of up to 17,663,879 common shares.

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 symbol ZENA.
• The filing registers the resale of up to 17,663,879 shares of common stock, including shares issuable upon exercise of outstanding warrants, by identified stockholders.
• Unlike an initial public offering, this resale is not underwritten by any investment bank, and stockholders may choose whether or not to sell their shares.
• There is currently no public market for ZenaTech's common stock, but private transactions from January 1, 2022, through September 24, 2024, saw prices between $1.14 and $10.28 USD per share on a post-reverse split basis.
• A 1-for-6 reverse stock split was effected on July 1, 2024.
• The company expects its common stock to begin trading on or about September 27, 2024, contingent on Nasdaq approval.
• 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.
• Maxim Group LLC is serving as the financial advisor for the listing.
• On July 15, 2024, the company issued 291,829 units at USD$10.28 per unit, raising approximately $3,000,000 USD for general corporate and working capital purposes.

Sentiment

Score: 5

Explanation: The sentiment is neutral. While the company is pursuing a Nasdaq listing and expanding into the drone business, it faces risks and challenges, including a limited operating history, negative cash flow, and dependence on related parties. The financial results show a decline in revenue and an increase in net loss.

Positives

• The company is expanding into the drone business.
• The company has a contract with the US Air Force and the US Naval Research.
• The company has signed five pilot program agreements to evaluate drone technology.
• The company has a management service agreement with Epazz to support the development of its products.
• The company has a history of growth through acquisitions.

Negatives

• There is currently no public trading market for the company's common shares.
• The company has a limited operating history.
• The company has had negative operating cash flow in the past.
• The company is dependent on its relationship with Epazz Inc.
• The company does not currently carry directors and officers insurance.

Risks

• 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 face product liability claims.
• The company may have operations in countries known to experience high levels of corruption.

Future Outlook

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

Industry Context

The announcement reflects a trend of technology companies seeking direct listings to access public markets without traditional underwritten IPOs. The company operates in the competitive software and drone industries, requiring continuous innovation and adaptation to changing technologies.

Comparison to Industry Standards

• The document does not provide enough information to make a detailed comparison to industry standards.
• However, the document does mention some competitors in the medical records software industry, such as AdvanceMD, DrChrono EHR, NextGen and Kareo.
• The document also mentions some competitors in the safety and field management software industry, such as Alcumus, gocanvas, EHSInsight, SimPRO and ServiceTitan.
• The document also mentions some competitors in the drone industry, such as DJI, Draganfly and Drone Delivery Canada.

Legal Proceedings

• 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, Inc.
• The company licenses certain patents from Epazz.
• The company has borrowed funds from GG Mars Capital, Inc., Star Financial Corporation and Jennings Family Investments, Inc., which are related parties.
• The company sold ZenaPay, Inc. wallet software assets to Epazz Limited, Ireland, a related party.

Stakeholder Impact

• Shareholders may experience volatility in the stock price following the direct listing.
• Employees may benefit from the company's growth and expansion into the drone business.
• Customers may benefit from the company's innovative software and drone solutions.
• Suppliers may benefit from increased demand for components and parts for the company's products.
• Creditors may be exposed to increased risk due to the company's debt financing.

Next Steps

• Secure Nasdaq approval for the direct listing.
• Convert pilot customers into paying customers for the drone technology.
• Continue developing and testing drone technology.
• Expand drone offerings utilizing PacePlus, SystemView, WorkAware, TillerStack, and PsPortals assets.

Key Dates

Keywords

direct listing, ZenaTech, Nasdaq, common stock, resale, drones, software, IPO, emerging growth company, financial advisor