ZENA · ZenaTech, Inc.

ZenaTech’s FY2025 financial reporting reflects a deliberate and comprehensive strategic repositioning. The Company transitioned from a software-centric business model to a dual-segment structure, introducing Drone-as-a-Service (DaaS) as a core operating pillar. This shift was operationally realized through the acquisition of multiple land surveying firms — a foundational step that established both customer-facing capabilities and domain-specific technical assets. The DaaS initiative represents more than a revenue stream; it signals a structural evolution in go-to-market strategy, service delivery architecture, and capital allocation discipline. As such, FY2025 serves as the inaugural period for this new operating reality — one defined not by incremental growth but by platform-level reinvention.

The income statement captures the early-stage financial profile of this transformation. Net loss widened meaningfully compared to prior periods, driven primarily by non-recurring and integration-related expenditures. These include personnel costs tied to scaling operations, professional services supporting acquisition integration, and infrastructure investments necessary to operationalize drone-based survey workflows. Importantly, these expenses reflect intentional, front-loaded investments rather than operational inefficiencies — they are the cost of building capacity ahead of revenue maturation. No comparative period exists for DaaS-specific results, as the segment did not exist in FY2024; therefore, year-over-year comparisons are structurally limited and should be interpreted within the context of strategic launch rather than performance trending.

On the balance sheet, several notable changes emerged. Cash and marketable securities increased, consistent with proceeds from recently completed debt and equity financings. These funds were deployed toward acquisition consideration and the development of proprietary drone hardware and software infrastructure — critical enablers of differentiated service delivery. Goodwill rose significantly, directly corresponding to the fair-value accounting treatment of acquired land surveying businesses. This increase underscores the Company’s reliance on external growth levers and introduces considerations around future integration execution, client retention, and margin realization. Working capital includes long-term advances to Epazz, a related party, which function as a source of operational funding. This arrangement supports liquidity during the ramp phase but also highlights intercompany dependencies that warrant continued governance oversight. Lease liabilities were newly recognized, reflecting implementation of updated lease accounting guidance and the Company’s expanded use of facilities and equipment under contractual arrangements. Collectively, these balance sheet developments illustrate a company actively reshaping its asset base, capital structure, and operational footprint — all in service of the DaaS strategy. The financial statements for FY2025 therefore serve less as a measure of mature profitability and more as a record of strategic inflection: the point at which ZenaTech committed fully to a new operating paradigm.