F-1/A: ZenaTech Files for Nasdaq Direct Listing, Reselling Over 102 Million Shares

ZenaTech, an enterprise software and drone technology company, is set to directly list on the Nasdaq Capital Market, registering the resale of over 102 million shares by existing stockholders.

Summary

• ZenaTech, Inc., an enterprise software technology company specializing in cloud-based applications and drone technology, has filed an amendment to its Form F-1 registration statement for a direct listing on the Nasdaq Capital Market.
• The filing pertains to the registration of the resale of up to 102,481,427 shares of common stock, including 382,333 shares issuable upon exercise of outstanding warrants, by the Registered Stockholders.
• Unlike an initial public offering, this resale is not underwritten by any investment bank, and the Registered Stockholders may or may not elect to sell their shares.
• ZenaTech will not receive any proceeds from the sale of these shares.
• The company expects its common stock to begin trading on or about May 20, 2024, under the symbol ZENA.
• The company's recent private transaction prices ranged from $0.24 to $0.80 per share between January 1, 2022, and April 30, 2024.
• Maxim Group LLC has been appointed 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.
• Dr. Shaun Passley, the CEO, controls more than 50% of the company's outstanding voting stock, making it a controlled company under Nasdaq rules.
• The company's total revenues for 2023 were $1,831,912, with a net loss of $241,504, compared to 2022 revenues of $3,076,054 and a net income of $14,276.

Sentiment

Score: 5

Explanation: The sentiment is neutral. While the company is pursuing a Nasdaq listing, it is not raising new capital and experienced a net loss in the most recent year. The company is also considered a controlled company under Nasdaq rules.

Positives

• The company is pursuing a Nasdaq listing, which could increase its visibility and access to capital.
• ZenaTech is considered an emerging growth company and a foreign private issuer, allowing it to comply with certain reduced reporting requirements.

Negatives

• ZenaTech will not receive any proceeds from the resale of shares by existing stockholders.
• The company experienced a net loss of $241,504 in 2023.
• The company's recent private transaction prices ranged from $0.24 to $0.80 per share between January 1, 2022, and April 30, 2024.
• The listing is conditional upon Nasdaq approval, with no assurance given that approval will be granted.

Risks

• The trading volume and price of shares of common stock may be more volatile than if shares of common stock were initially listed in connection with an underwritten initial public offering.
• There is no assurance that the Nasdaq application will be approved and that common stock will ever be listed on Nasdaq.
• The company's recent private transaction prices may have little or no relation to the opening public price or the subsequent trading price of shares of common stock on the Nasdaq Capital Market.
• The company's CEO controls more than 50% of the company's outstanding voting stock.

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 companies seeking alternative routes to public markets, such as direct listings, to avoid the traditional IPO process and associated underwriter fees.

Comparison to Industry Standards

• The company's financial performance can be compared to other small-cap technology companies in the software and drone industries.
• Comparable companies in the software sector include those providing cloud-based enterprise solutions, such as Salesforce, Oracle, and SAP, although these are much larger companies.
• In the drone industry, competitors include DJI, Draganfly, and Drone Delivery Canada.
• ZenaTech's approach of integrating software and hardware solutions is similar to companies like Trimble, which provides integrated solutions for various industries.

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 service agreement with Epazz, Inc., a related party.
• The company licenses certain patents from Epazz and the company has entered into a management services agreement with Epazz pursuant to which the company receives the benefits of a software development team, office space, project management and hosting services from Epazz.
• The company has convertible lines of credit with GG Mars Capital, Inc. and Star Financial Corporation, 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 new markets.
• Customers may have access to new and improved software and hardware solutions.
• Suppliers may see increased demand for their products as the company expands its operations.

Next Steps

• The company is waiting for approval from the Irish Aviation Authority and/or US Federal Aviation Authority (FAA) to begin the pilot programs.
• The company plans to develop markets for its drones in the United States, Canada, Germany, and Dubai.
• The company is working towards opening a manufacturing facility in Phoenix, Arizona, USA.

Key Dates

Keywords

ZenaTech, direct listing, Nasdaq, common stock, resale, emerging growth company, foreign private issuer, financial advisor, Maxim Group LLC, Shaun Passley, drone technology, enterprise software