F-1/A: ZenaTech Files for Nasdaq Direct Listing, Reveals Bylaws and Financial Details

ZenaTech, an enterprise software and drone technology company, files an F-1/A amendment for a direct listing on the Nasdaq Capital Market, disclosing its bylaws, financial performance, and risk factors.

Summary

• ZenaTech, Inc., an enterprise software and drone technology company, has filed an amendment to its Form F-1 registration statement for a direct listing on the Nasdaq Capital Market.
• The filing includes the company's bylaws, which detail shareholder meetings, director roles and responsibilities, officer positions, and amendment procedures.
• The company's revenue for 2023 was $1.83 million, a decrease from $3.08 million in 2022.
• ZenaTech reported a net loss of $241,504 in 2023, compared to a net income of $14,276 in 2022.
• The company's total assets were $16.45 million as of December 31, 2023, and total liabilities were $9.13 million.
• The filing highlights the risks associated with the company's business, including its limited operating history, the competitive nature of the software and drone industries, and regulatory challenges.
• ZenaTech expects its common stock to begin trading on or about April 30, 2024, under the symbol ZENA.
• The company is considered an emerging growth company and a foreign private issuer, which allows it to comply with certain reduced reporting requirements.
• The company's CEO, Dr. Shaun Passley, controls more than 50% of the outstanding voting stock, making it a controlled company under Nasdaq rules.

Sentiment

Score: 5

Explanation: The sentiment is neutral. While the company is pursuing a Nasdaq listing and expanding into the drone market, it faces financial challenges and significant risks. The document contains both positive and negative aspects, resulting in a balanced outlook.

Positives

• The company is expanding into the drone business, which it anticipates will become more prevalent over the next five years.
• ZenaTech has a history of providing business-to-business software solutions and has ongoing government contracts.
• The company has a management service agreement with Epazz to support the development of its products.
• The company has a strong team of mechanical engineers and software developers.
• The company has a number of patents and licenses relating to its drone technology.

Negatives

• The company has a limited operating history.
• The company had a net loss of $241,504 in 2023.
• The company is dependent on its relationship with Epazz Inc.
• The company operates in competitive industries.
• The company may face product liability claims.
• The company may not be able to manage its growth effectively.
• The company has had negative operating cash flow.

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 or the company may infringe the intellectual property rights of others.
• If critical components or raw materials used to manufacture the company's drones become scarce or unavailable, then the company may incur delays in manufacturing and delivery of its drones, which could damage its business.
• The company is dependent on key personnel.
• The company is subject to a variety of operational risks.
• The company could be adversely affected if its consumer protection and data privacy practices are not seen as adequate or there are breaches of its security measures or unintended disclosures of its consumer data.
• The company does not currently carry directors and officers insurance.

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 growing trend of technology companies seeking direct listings to access public markets, bypassing traditional underwritten IPOs. The company operates in the competitive software and drone technology industries, requiring continuous innovation and adaptation to changing market conditions.

Comparison to Industry Standards

• The document does not provide enough information to make a detailed comparison to industry standards.
• However, the company's financial performance can be compared to other small-cap technology companies in the software and drone industries.
• For example, comparable software companies include those providing cloud-based enterprise solutions, such as Salesforce or Oracle, although ZenaTech is much smaller in scale.
• In the drone industry, companies like DJI and Drone Delivery Canada could be considered competitors, but ZenaTech's specific focus and technology may differentiate it.
• A thorough comparison would require a deeper analysis of ZenaTech's specific market segments, product offerings, and financial metrics relative to its peers.

Legal Proceedings

• The Company is being sued for $200,000 by vendors of WorkAware Corporation, claiming the Company did not report all revenues and 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 number of agreements with Epazz that are material to the business of the company.
• 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 received and repaid loans from its CEO and his immediate family members to fund operations.

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 innovative software and drone technology solutions.
• Suppliers may have opportunities to partner with the company in its manufacturing and development efforts.
• Creditors may be exposed to risks associated with the company's debt obligations.

Next Steps

• The company expects its common stock to begin trading on or about April 30, 2024, pending Nasdaq approval.
• The company plans to continue developing and marketing its software and drone technology.
• The company intends to pursue business enterprises in a variety of sectors, from agriculture to infrastructure to mining.

Key Dates

Keywords

ZenaTech, direct listing, Nasdaq, bylaws, financials, software, drone technology, risk factors, emerging growth company, foreign private issuer