ZenaTech, Inc. Annual Report: A Simple Breakdown

I’ve put together this guide to help you understand ZenaTech’s latest annual report. Think of this as a plain-English breakdown of how the company is doing, where it’s headed, and what you should watch as an investor.

1. What does the company do?

ZenaTech (Nasdaq: ZENA) is a Vancouver-based tech firm that has transitioned from a software provider to a "Drone as a Service" operator. Its business now rests on two pillars: enterprise software and specialized drone services, including land surveying, inspections, and inventory management.

A key point for investors: ZenaTech is a "controlled company." CEO Dr. Shaun Passley owns over 50% of the voting power, giving him total control over major decisions, such as electing directors. As a minority shareholder, you have very little say in the company’s direction.

2. Financial performance

ZenaTech is growing its sales, but it is also spending heavily and remains unprofitable.

• Software Revenue: Grew to $2.8 million in 2025, up from $1.96 million in 2024.
• Drone Revenue: This new segment brought in $10.1 million in 2025, up from zero in 2024.

Costs from acquisitions and research are currently outpacing the money coming in from operations.

3. Growth strategy and related party transactions

ZenaTech has expanded rapidly by acquiring other software companies, such as ZooOffice and Ecker Capital. These acquisitions are "related party transactions," meaning Dr. Passley owned these companies prior to the sale. Because these deals were not negotiated at "arm's length," the assets were moved under the CEO’s control rather than through independent market negotiations.

4. Financial health and liquidity

ZenaTech is an "emerging growth company" with fewer reporting requirements than larger firms. The company has issued a "going concern" warning, indicating it may run out of cash within 12 months without additional funding. To address this, the company filed to potentially raise $250 million. If this occurs, the resulting issuance of new shares will dilute the ownership percentage of current shareholders.

5. Key risks

• Accounting Controls: Management has identified "material weaknesses" in its financial reporting, meaning current accounting systems may not be sufficient to guarantee the accuracy of financial statements.
• Operational Dependency: ZenaTech relies on Epazz, Inc.—another company controlled by Dr. Passley—for essential staff and office space. The company’s ability to function is tied to the stability of this relationship.
• Regulatory Environment: The company operates in regions with evolving or weak legal frameworks, which can complicate contract enforcement and the protection of proprietary technology.

6. Future outlook

Management is focusing on scaling its drone service model through pilot programs and further acquisitions. Current projects include testing drones for agricultural use in Ireland and inventory management in automotive manufacturing plants. These initiatives are experimental, and there is no certainty they will lead to long-term, profitable contracts.

Investor Note: While revenue is showing growth, this is a high-risk, speculative investment. The combination of significant related-party transactions, potential share dilution, and the "going concern" warning suggests that investors should carefully weigh these factors against the company's growth ambitions.