The massive revenue growth from the DaaS roll-up is overshadowed by accelerating cash burn and widening losses. The company is funding operations through related-party debt and equity, with CAD $28.2M in advances to Epazz. Monitor the next 10-Q for progress toward operating leverage and cash flow breakeven. The dilutive May 2026 offering (CAD $25M) and continued related-party transactions raise governance concerns.
Price Chart
Executive Summary
ZenaTech's Q1 2026 6-K reports revenue of CAD $8.4M, up 640% YoY, driven by the Drone-as-a-Service segment (CAD $7.8M). However, the net loss widened to CAD $26.5M from CAD $4.6M, driven by CAD $8.9M in stock-based compensation and CAD $5.1M in finance expenses (mostly non-cash derivative charges). The company raised CAD $12.8M in equity and converted CAD $20.9M of debt to equity during the quarter, but operating cash burn was CAD $18.8M. The accumulated deficit reached CAD $80.3M, and the company continues to rely heavily on related-party financing and advances to Epazz, Inc. (CAD $28.2M total).
Key Facts
- Q1 2026 revenue of CAD $8.4M, up 640% YoY from CAD $1.1M, driven by DaaS segment (CAD $7.8M vs CAD $0.4M).
- Net loss widened to CAD $26.5M from CAD $4.6M YoY, with operating expenses of CAD $30.0M (including CAD $8.9M stock-based compensation).
- Operating cash flow was negative CAD $18.8M, vs negative CAD $4.9M in Q1 2025.
- Total loans payable decreased 39% to CAD $10.5M, driven by CAD $20.9M in debt-to-equity conversions.
- Cash and marketable securities totaled CAD $15.0M, but working capital surplus was CAD $24.0M.
- Accumulated deficit grew to CAD $80.3M from CAD $53.7M at year-end 2025.
- Related-party advances to Epazz, Inc. totaled CAD $28.2M (short-term CAD $12.2M + long-term CAD $16.0M).
- Subsequent to quarter end, the company completed two additional DaaS acquisitions and signed non-binding offers for two more.
- The company issued 1,500,000 preferred shares and 25,000 super voting shares to CEO Shaun Passley as compensation, valued at CAD $8.8M.
- Basic and diluted loss per share was CAD $(0.50) vs CAD $(0.25) in Q1 2025.
Financial Impact
Revenue grew 640% YoY to CAD $8.4M, but net loss widened 476% to CAD $26.5M. Operating cash burn of CAD $18.8M. Debt reduced by CAD $6.7M via conversions.
Risk Factors
- Heavy reliance on related-party financing and advances to Epazz, Inc. (CAD $28.2M).
- Operating cash burn of CAD $18.8M in Q1 alone, with no clear path to profitability.
- Massive share dilution: weighted average shares outstanding more than tripled YoY to 53.8M.
- Accumulated deficit of CAD $80.3M and material weakness in internal controls disclosed in the 20-F.
- Subsequent dilutive offering of CAD $25M in May 2026 adds further dilution and warrant overhang.
Market Snapshot
Investment Themes
Documents Analyzed
This report is based on 6 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 6-K Filing (Primary) | 0001376474-26-000410 |
| Document: zt_ex99z2.htm | 0001376474-26-000410 |
| Document: zt_6k.htm | 0001376474-26-000410 |
| Document: 0001376474-26-000410-index-headers.html | 0001376474-26-000410 |
| Document: 0001376474-26-000410-index.html | 0001376474-26-000410 |
| Document: 0001376474-26-000410.txt | 0001376474-26-000410 |
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Oct 14, 2026 13d ago | 6-K | $1.12 | awaiting T+20 | — | $0.9200 (−17.86%) |
Oct 8, 2026 18d ago | 424B5 | $1.11 | awaiting T+20 | — | $0.9200 (+17.12%) |
Oct 8, 2026 19d ago | 6-K | $1.32 | awaiting T+20 | — | $0.9200 (−30.30%) |
Oct 6, 2026 20d ago | 6-K | $1.35 | awaiting T+20 | — | $0.9200 (−31.85%) |
Oct 2, 2026 24d ago | 6-K | $1.28 | awaiting T+20 | — | $0.9200 (−28.12%) |
Sep 29, 2026 28d ago | Press Release | $1.47 $0.9200 | ▲ +37.41% | ▲ +38.13% | $0.9200 (+37.41%) |
Sep 15, 2026 6w ago | Press Release | $1.41 $1.07 | ▼ −24.11% | ▼ −27.09% | $0.9200 (−34.75%) |
Jul 20, 2026 14w ago | 6-K | $1.51 $2.04 | ▲ +35.10% | ▲ +32.54% | $0.9200 (−39.07%) |
Jul 16, 2026 14w ago | Press Release | $1.53 $2.13 | ▲ +39.22% | ▲ +35.60% | $0.9200 (−39.87%) |
Jun 30, 2026 17w ago | Press Release | $1.50 $1.37 | ▼ −8.67% | ▼ −7.64% | $0.9200 (−38.67%) |
US Market Status
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