Consolidated Financial Statements

ZenaTech, Inc.

Consolidated Statements of Cash Flows

Expressed in Canadian Dollars

For the Years Ended

March 31, 2025, and 2024

		Three Months Ended			Three Months Ended
		March 31,			March 31,
		2025			2024
Operating Activities:
Net loss for the period	$	(4,651,581	)	$	(120,924	)
Item not affecting cash:
Amortization and depreciation		122,135			66,823
Bad debts		1,062			–
Amortization of loan initiation fees		108,775			–
Finance expenses		208,447			131,547
Loan derivative		1,255,667			–
Stock–based compensation		395,000			32,000
Stocks issued for services		151,105			133,333
Lease obligation		(8,664	)		(7,320	)
Changes in non–cash working capital:
Accounts receivable		(160,398	)		40,092
Other current assets		(497	)		14,433
Accounts payable and accrued liabilities		269,576			161,637
Deferred revenue		(423,416	)		(191,304	)
Change in long-term due from affiliate		(2,225,154	)		(803,091	)
Cash Provided by (Used in) Operating Activities		(4,916,680	)		(542,774	)
Investing Activities:
Purchase of equipment		(505,282	)		–
Note receivable – principal		–			22,698
Weddle, KJM and Othership acquisitions		(744,403)			–
Long-term investments		(22,828	)		–
Product development costs		(248,762	)		(229,992	)
Cash Provided by (Used in) Investing Activities		(1,521,275	)		(207,294	)
Financing activities:
Borrowings under line of credit		4,630,405			802,545
Warrants exercised		1,017,821			–
Repayment of long-term debt		(179,516	)		(52,374	)
Cash Provided by (Used in) Financing Activities		5,468,710			750,171
Effect of foreign exchange on cash		2,391			(146,747	)
Change in cash		(966,854	)		103
Cash, beginning of the year		3,754,075			1,184
Cash, End of the Period	$	2,787,221		$	147,828
Cash and Cash Equivalents Consist of:
Cash held in banks	$	2,787,221		$	147,828

For Bansal & Co., LLP	For ZenaTech, Inc.
Chartered Accountants	Approved and authorized for issuance by the Board of Directors
/s/ SK Bansal	/s/ Shaun Passley	/s/ Craig Passley
S.K. Bansal	Shaun Passley, PhD	Craig Passley
Partner	Chief Executive Officer	Director
Date: April , 2025	Date: April, 2025	Date: April , 2025
Place: New Delhi, India	Place: Toronto, ON, Canada	Place: Chicago, Illinois, USA

1.NATURE OF OPERATIONS

ZenaTech, Inc. (“ZenaTech” or the “Company”) was incorporated by Articles of Incorporation in the State of Illinois, United States of America (“USA”), on August 31, 2017, under the name ZenaPay, Inc. On August 11, 2020, the name of the Company was changed to ZenaDrone, Inc., and on October 5, 2020, to ZenaTech, Inc. to better reflect the Company’s business activities and its corporate organization.

Until November 30, 2018, the Company was a wholly owned subsidiary of Epazz, Inc. (“Epazz”), after which it was restructured as a separate entity by way of a stock dividend to Epazz shareholders. On December 14, 2018, the Company was domiciled in British Columbia, Canada, through Articles of Continuance pursuant to the provisions of the Business Corporation Act (British Columbia).

The Company’s principal address and office is located at Suite 1404, 69 Yonge Street, Toronto, Ontario M5E 1K3. The Company’s registered and records office is located at Suite 700 – 1199 West Hastings Street, Vancouver, British Columbia V6E 3T5, Canada.

ZenaTech, Inc. is an enterprise software technology company specializing in the development of mission-critical cloud-based software applications that can be integrated with smart hardware to create innovative solutions for companies in a variety of industries. The Company, through its wholly owned subsidiaries, currently conducts business in the operating segments listed below.

·ZenaTech, Inc. (“ZenaTech”), originally incorporated under the name ZenaPay, Inc., a British Columbia, Canada, company, provides cloud-based enterprise safety and compliance management software and mobile solutions that can be utilized in a variety of industries including for field management services

·PacePlus, Inc.(“PacePlus”) is a Wyoming, USA corporation that provides cloud-based enterprise software solutions for the medical records industry with its subsidiaries,

·SystemView, Inc. (“SystemView”) is a Wyoming, USA corporation that provides software solutions for the automated facility management industry, and,

·ZigVoice, Inc. (“ZigVoice”) is a Wyoming, USA corporation that provides software solutions for the contact center industry.

·WorkAware, Inc. (“WorkAware”), a Wyoming, USA company, provides cloud-based enterprise safety and compliance management software and mobile solutions that can be utilized in a variety of industries including field management services,

·TillerStack, GmbH., a German corporation, provides cloud-based enterprise field service management software and mobile solutions for variety of industries.

·PsPortals, Inc. (“PsPortals”), a Delaware, USA corporation, provides browser-based enterprise software applications for public safety.

·ZenaDrone, Inc. (“ZenaDrone WY”) is a Wyoming, USA, company, and its subsidiaries,

·ZenaDrone Limited is an Irish entity established for the Irish and European Union drone sales and drone services operations. The Company created ZenaDrone Limited to register with the Irish Aviation Authority.

·ZenaDrone Manufacturing, Inc. is an Arizona corporation established to manufacture drones in the United States of America.

·ZenaDrone Trading LLC (“ZenaDrone LLC”) is a Dubai, United Arab Emirates (“UAE”) corporation established in the Middle East for the drone commercial, marketing and sales drone operations with its subsidiary,

·ZenaDrone Manufacturing (FZE) (“ZenaDrone FZE”) is a Sharjah, UAE company, established in the Middle East for the manufacturing of drones and batteries.

·Ecker Capital, Inc. (“Ecker”), a holding company for,

·Interactive Systems, Inc., a software inventory management company,

·interlinkONE, Inc., a SaaS cloud-based solutions for warehouse and inventory fulfillment company, and,

·ESM Software, Inc., a software technology provider specializing in developing business strategy management solutions.

·ZooOffice, Inc., DBA Jadian, a global software and services company that provides complete solutions for companies managing compliance, and its subsidiary,

·DeskFlex, Inc., provides smart desk booking and office hoteling software solutions.

·Drone as a Service, Inc, a Wyoming Corporation, opened in anticipation of 2025 operations in the drone industry.

·Spider Vision Sensors, Ltd., opened in anticipation of opening a sensors and component manufacturing facility in Taipei, Taiwan and to supply components which will be used in the ZenaDrone products.

·Weddle Surveying, Inc., (‘Weddle”) a Tigard, Oregon, company, serves residential and commercial clients within the Portland Metropolitan region and surrounding areas of Northwest Oregon and Southwest Washington.

·KJM Land Surveying, Inc. (“KJM”), based in Pensacola, Florida, provides a range of professional land surveying services, including boundary surveys, ALTA surveys, as-built surveys, topographic surveys, and elevation certificates to residential, commercial, and construction customers.

·Othership, Limited (“Othership”), a United Kingdom limited liability company, provides software for workplace scheduling and management solutions to remote businesses and individuals.

ZenaDrone, WY, with its subsidiaries and ZenaDrone LLC with its subsidiaries, collectively “ZenaDrone,” operate in the drone industry and have separate production processes, customers and sales distribution systems. ZenaDrone entities were a cost center for the current period and the year ended December 31, 2024. ZenaDrone became a separate financial reporting segment in 2025.

ZenaTech listed its common stock on Nasdaq.com, a New York stock trading exchange, under the ticker ‘ZENA’ on October 1, 2024.

The Company acquired the following companies and patents during the last quarter of 2024: (i) ZooOffice, Inc. from Epazz, which develops cloud business software products for businesses and government (ii) Ecker Capital, LLC., from Ameritek Ventures Inc., which is a software developer for warehouse software products (to be used in developing the Company's IQ drone series) (iii) a design patent from Epazz that allows for the ZenaDrone 1000 to be able to generate lift from its body design and increasing payload capacity, and (iv) a utility patent from Epazz that allows for the ZenaDrone 1000 to be recharged remotely without human assistance. In consideration for the acquisitions, the Company issued Common Shares, Super Voting shares and preferred shares.

ZenaTech acquired Weddle Surveying, Inc., a Tigard, Oregon based professional land surveying company, on January 14, 2025. Weddle serves residential and commercial clients within the Portland Metropolitan region and surrounding areas of Northwest Oregon and Southwest Washington.

ZenaTech acquired KJM Land Surveying, Inc. based in Pensacola, Florida, on January 22, 2025. KJM provides a range of professional land surveying services, including boundary surveys, ALTA surveys, as-built surveys, topographic surveys, and elevation certificates to residential and commercial and construction sectors for over thirty years.

ZenaTech opened Spider Vision Sensors, Ltd, a new business in Taiwan in February 2025. Spider Vision Sensors will help the company with sensors manufacturing while developing a partnership in East Asia to sell to the growing defense market in that region.

ZenaTech bought Othership, Limited, a United Kingdom company on March 18, 2025. Othership is a workspace and collaborative workplace software company providing workplace scheduling and management solutions to remote-first businesses and individuals. This acquisition will expand ZenaTech’s internal expertise in developing applications using quantum computing across both AI drone and enterprise SaaS areas, where we see growing demand and revenue opportunities.

Today, ZenaTech is a group of companies that offers various world-class cloud-based software and enterprise software solutions for the medical records industry and compliance management for field management. The Company’s clients operate in a variety of industries, including agriculture. The Company branched into the drone manufacturing and service industry during 2025.

We prepared these consolidated financial statements under a going concern basis, which presume that the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company had an accumulated deficit of $(13,175,694) as of March 31, 2025, while the Company had an accumulated deficit of $(8,524,113) as of December 31, 2024. The working capital was $1,347,680 as of March 31, 2025, while the working capital was $3,387,365 as of December 31, 2024. Working capital is current assets minus current liabilities.

2.BASIS OF PREPARATION

Statement of Compliance

These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and interpretations issued by the International Financial Reporting Interpretation Committee (“IFRIC”). These policies have been consistently applied to all the years presented, unless otherwise stated. Expenses in the income statement are categorized based on their function within the Company in compliance with IAS 1. The reviewed consolidated financial statements have been authorized by the Company’s Board of Directors on May XX, 2024.

Basis and Principle of Consolidation

We consolidated financial statement reports for all the software-provider companies for the three months ended March 31, 2025 and for the year ended December 31, 2024 according to IFRS 8, paragraph 22.

We have two reportable segments. In the software industry we have our seven operating segments that are in the technology sector and have similar operating activities. We decided this based on the type of products and services each company offers, which is software licensing and software maintenance, the nature of the production processes, which is issuing new software licenses to customers, the type or class of customer for their products and services, which is users of software, and the methods used to distribute their products and services, which is online delivery.

Subsidiaries are all entities over which the Company has the power to govern the financial and operating policies generally accompanying a shareholding of more than one half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the group controls another entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Company. They are de-consolidated from the date that control ceases.

Inter-company transactions, balances, income, and expenses on transactions are eliminated on consolidation. Profits or losses resulting from intercompany transactions that are recognized in assets are also eliminated. The accounting policies of subsidiaries are consistent with the policies adopted by the Company.

The second revenue reporting segment refers to drone surveying and servicing. Revenue comprises the fair value of consideration received or receivable for the consulting services in the ordinary course of the Company’s business. Revenue is shown net of return allowances and discounts.

The consolidated financial statements include financial statements of the Company and the subsidiaries listed below:

	Country of Incorporation	Economic interests
PacePlus, Inc.	United States of America	100%
SystemView, Inc.	United States of America	100%
ZigVoice, Inc.	United States of America	100%
ZenaTech, Inc.	Canada	100%
TillerStack, GmbH.	Germany	100%
PsPortals, Inc.	United States of America	100%
Interactive Systems, Inc.	United States of America	100%
interlinkONE, Inc.	United States of America	100%
ZooOffice, Inc.	United States of America	100%
Drones as a Service, Inc.	United States of America	100%
KJM Land Surveying, Inc.	United States of America	100%
Weddle Surveying, Inc.	United States of America	100%

Basis of Measurement

The consolidated financial statements are prepared on an accrual basis and historical cost basis, except for certain financial instruments, which are measured at fair value. These consolidated financial statements are prepared and presented in Canadian dollar (“CAD”) and represented by a dollar sign ($). The functional currency of the Company is the Canadian dollar, and the functional currency of the subsidiaries is Canadian dollar, United States of America (“USD”) dollar, and euro. In addition to Canada, the Company has operations in the United States of America and Germany.

The Company has a manufacturing facility in Lahore, Pakistan and a warehouse lease in Sharjah, UAE. ZenaTech plans to open a manufacturing facility in Nevada, USA and sales offices related to the drones in Germany, Ireland, United Arab Emirates, and United Kingdom. ZenaTech is negotiating with potential drone clients in Europe, the Middle East, Asia and South America.

Significant Accounting Estimates and Assumptions

These consolidated financial statements were prepared in conformity with International Financial Reporting Standards, or IFRS. This requires management to make assumptions, estimates, and judgments that affect the application of policies and reported amounts of assets and liabilities and disclosures of assets and liabilities at the date of the consolidated financial statements, along with reported amounts of expenses and net losses during the period. Actual results may differ from these estimates, and as such, estimates and underlying assumptions are reviewed on an ongoing basis. Revisions are recognized in the period in which the estimates are revised and in any future periods affected. Significant assumptions about the future and other sources of estimation uncertainty that management has made at the statement of financial position reporting date that could result in a material adjustment to the carrying value of assets and liabilities, if actual results differ from assumptions made, relate to, but are not limited to, the following:

Income Taxes

The determination of deferred income tax assets or liabilities requires subjective assumptions regarding future income tax rates and the likelihood of utilizing tax carryforwards. Changes in these assumptions could materially affect the recorded amounts and therefore do not necessarily provide certainty as to their recorded values. Deferred tax assets are recognized when it is determined that the company is likely to recognize their recovery from the generation of taxable income.

Contingencies

The assessment of contingencies involves the exercise of significant judgment and estimates of the outcome of future events. In assessing loss contingencies related to legal proceedings that are pending against the Company and that may result in regulatory or government actions that may negatively impact the Company’s business or operations, the Company and its legal counsel evaluate the perceived merits of the legal proceeding or unasserted claim or action as well as the perceived merits of the nature and amount of relief sought or expected to be sought, when determining the amount, if any, to recognize as a contingent liability or when assessing the impact on the carrying value of the Company’s assets. Contingent assets are not recognized in the consolidated financial statements.

Business Combinations

The assessment of whether an acquisition meets the definition of a business or whether assets are acquired is an area of key judgment. If deemed to be a business combination, applying the acquisition method to business combinations requires each identifiable assets and liability to be measured at its acquisition date fair value. The excess, if any, of the fair value of consideration over the fair value of the net identifiable assets acquired is recognized as goodwill. If deemed to be an asset acquisition, acquisition considerations are allocated to assets acquired and liabilities assumed on a relative fair value basis and no goodwill is recognized. In case of transaction under common control, the assets and liabilities acquired are accounted for on the carrying value of previous owner.

Impairment of Non-Financial Assets

An impairment loss is recognized for the amount by which the asset's or cash-generating unit's carrying amount exceeds its recoverable amount. To determine the recoverable amount, management estimates expected future cash flows from each asset or cash-generating unit and determines a suitable interest rate in order to calculate the present value of those cash flows. In the process of measuring expected future cash flows, management makes assumptions about future operating results. In addition, when determining the applicable discount rate, estimation is involved in determining the appropriate adjustments to market risk and asset specific risk factors.

Other Significant Judgments

−The assessment of the Company’s ability to continue as a going concern and whether there are events or conditions that may give rise to significant uncertainty;

−the classification of financial instruments;

−the assessment of revenue recognition using the five-step approach under IFRS 15 and the collectability of accounts receivable;

−the determination of whether a set of assets acquired, and liabilities assumed constitute a business; and

−the determination of the functional currency of the company.

Foreign Currency Translation

Transactions in foreign currencies are translated into Canadian dollars at rates of exchange at the time of such transactions. Monetary assets and liabilities are translated at the reporting period rate of exchange. Non-monetary assets and liabilities are translated at historical exchange rates. Revenue and expenses denominated in a foreign currency are translated at the monthly average exchange rate. Gains and losses resulting from the translation adjustments are included in income.

The functional currencies for the parent company and each subsidiary are as follows:

	Functional Currency
ZenaTech, Inc.	Canada dollar
PacePlus, Inc.	United States of America dollar
SystemView, Inc.	United States of America dollar
ZigVoice, Inc.	United States of America dollar
TillerStack, GmbH.	Euro
PsPortals, Inc.	United States of America dollar
Interactive Systems, Inc.	United States of America dollar
interlinkONE, Inc.	United States of America dollar
ZooOffice, Inc.	United States of America dollar
Drone as a Service, Inc.	United States of America dollar
KJM Land Surveying, Inc.	United States of America dollar
Weddle Surveying, Inc.	United States of America dollar

Financial statements of subsidiaries for which the functional currency is not the Canadian dollar are translated into Canadian dollars as follows: all asset and liability accounts are translated at the year-end exchange rate; all earnings and expense accounts and as well as cash flow statement items are translated at average exchange rates for the year. The resulting translation gains and losses are recorded as exchange differences on translating foreign operations in other comprehensive income.

Functional Currency

The Company determines the functional currency through an analysis of several indicators such as expenses and cash flow, financing activities, retention of operating cash flows, and frequency of transactions with the reporting entity. These assumptions relate to future events and circumstances. Actual results may vary and may cause significant adjustments to the Company’s assets within the next financial year.

ZenaTech made company acquisitions in United States dollars, or USD. We used US dollars to describe these transactions since they were the historical amounts. When appropriate for certain year-end balance sheet information, we converted those amounts to Canadian dollars, CAD or $, as listed on the https://www.wsj.com/market-data/quotes/fx/USDCAD/historical-prices.

3.SIGNIFICANT ACCOUNTING POLICIES

The significant accounting policies used in the preparation of these consolidated financial statements set out below have been applied consistently in all material respects.

Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, deposits held at call with financial institutions and other short-term, highly liquid investments with original maturities of six months or less that are readily convertible to known amounts of cash and subject to an insignificant risk of change in value. The Company had $2,787,221 in cash and no other cash equivalents as of March 31, 2025.

Other Current Assets

The Company had $248,443 other current assets as of March 31, 2025 representing $151,105 as stock issued for services to Maxim Group representing the final payment due for the original contract.

ZenaTech contracted Maxim Group services related to the Company’s listing on a relevant stock exchange in February 2024. Maxim Group’s services are for one year. The Company paid the retainer fee of $25,000 USD in cash and issued 333,334 shares of common stock, which is earned over the one-year contract.

ZenaTech had an amount of $399,050 in other current assets as of December 31, 2024, accrued costs from the Maxim Group contract of $800,000 less the corresponding expense for the ten and a half months of 2024. Upon listing the Company shall allow Maxim Group to purchase shares up to 7% of the shares underlying the securities issued in Financing, pay a cash fee of $250,000 upon the closing of the Company’s next financing, and issue 166,667 shares of the Company’s common stock. The Company created a yearly accrual for $800,000 representing 166,667 shares at the current share trading price of $4.80 per share or $3.54 USD and expensed each month until December 2024. The currency exchange rate used in calculating the amounts above was $1 USD to $1.3559 CAD, as listed on https://www.wsj.com/market-data/quotes/fx/USDCAD/historical-prices as of July 1, 2024.

Collection Policy

When all collections activities are exhausted and an account receivable is deemed uncollected, the company creates a reserve in the allowance for doubtful accounts. Based on management experience, which may involve obtaining a legal opinion on its collectability, the company will then write off the amount uncollectible by reducing the allowance for doubtful accounts.

Long-Term Assets

The Company reviews the carrying value of property, plant, and equipment for impairment whenever events and circumstances indicate that the carrying value of an asset may not be recoverable from the estimated future cash expected to result from its use and eventual disposition. In cases where undiscounted expected future cash flows are less than the carrying value, an impairment loss is recognized as equal to an amount by which the carrying value exceeds the fair value of assets. The factors considered by management in performing this assessment include current operating results, trends, and prospects, as well as the effects of obsolescence, demand, competition, and other economic factors.

Product Development Costs/Intangibles

The Company recognizes intangible assets in accordance with IAS 38 – Intangible Assets. These assets include both acquired intangible assets and internally generated intangible assets that meet the recognition criteria.

Recognition and Measurement

·Acquired intangible assets are initially recognized at cost, which includes the purchase price and directly attributable costs.

·Internally generated intangible assets are recognized only during the development phase, provided that the following criteria are met:

·Demonstration of technical feasibility for completion.

·Intention to complete and use/sell the asset.

·Ability to use/sell the asset.

·Expectation of future economic benefits.

·Availability of necessary financial and other resources.

·Reliable measurement of development costs.

·Research costs are expensed as incurred, while development costs are capitalized when the above criteria are met.

Subsequent Measurement

The Company applies the cost model, where intangible assets are carried at cost less accumulated amortization and impairment losses. The revaluation model is not applied, as there is no active market for these assets.

Amortization Policy

·Finite-life intangibles are amortized on a straight-line basis over their estimated useful lives, as follows:

−Software technology –15 years

·Indefinite-life intangibles are not amortized but are tested annually for impairment.

·Impairment

·The Company assesses indicators of impairment at each reporting date.

·Indefinite-life intangibles and goodwill are tested for impairment at least annually.

·Any impairment losses are recognized in the statement of profit or loss.

Property Plant & Equipment

Property Plant and Equipment are recorded at its acquisition cost, which includes the costs of bringing the equipment to the condition and location for its intended use. Property Plant and Equipment are depreciated using the straight-line method over the estimated useful life of the related asset. Our German fixed assets are depreciated according to the German fixed assets laws and then written off in five years. Our equipment includes computers and related equipment and has a useful life of five years.

Drone Patents

ZenaTech acquired the permanent licensing of drone design patent number USD932369S1 (“Design Patent”) in January 2022. We plan to use this licensing for drone development. This was an asset purchase paid in stock to Epazz, Inc. for $1,440,000 (notes 16).

ZenaTech acquired asset design patent USD1005883S1 from Epazz and Dr. Shaun Passley, related parties (note 16). The design drone patent allows for the ZenaDrone 1000 to be able to generate lift from its body design and increase payload capacity.

In consideration of the purchase of the Design Patent, ZenaTech issued the following shares:

·1,465,000 Preferred Shares with a stated value of CAD$2.49 per Preferred Share which will be allocated as to 1,172,000 to Epazz and 293,000 to Shaun Passley, PhD,

·5,200 Super Voting Shares with a stated value of CAD$2.13 which will be allocated as to 4,160 to Epazz and 1,040 to Dr. Shaun Passley, and,

·110,000 Common Stock Shares with a stated value of USD$1.79 which will be allocated as to 88,000 to Epazz and 22,000 to Dr. Shaun Passley.

The cost of the patent has been accounted for at the cost to the previous owner since this was a common control transaction.

ZenaTech has entered into an Asset Patent Purchase Agreement with Epazz dated October 13, 2024 for the purchase from Epazz by ZenaTech of Utility Patent US11597515B2 which allows for ZenaDrone 1000 to be recharged remotely without human assistance (the "Drone Assembly Patent"). Effective November 20, 2024, the parties entered into an amendment to the Asset Patent Purchase Agreement with Epazz dated October 13, 2024 for the purchase from Epazz by ZenaTech of Charging Pad Patent US11970293B2 related to a drone with extendable and rotatable wings and multiple accessory securing panel (the "Charging Pad Patent").

In consideration of the purchase of the Drone Assembly Patent, ZenaTech issued the following shares:

·8,790,000 Preferred Shares with a stated value of CAD$2.49 per Preferred Share which will be allocated as to 7,032,000 to Epazz and 1,758,000 to Shaun Passley, PhD,

·31,200 Super Voting Shares with a stated value of CAD$2.13 which will be allocated as to 24,960 to Epazz and 6,240 to Dr. Shaun Passley, and,

·660,000 Common Stock Shares with a stated value of USD$1.79 which will be allocated as to 528,000 to Epazz and 132,000 to Dr. Shaun Passley.

The cost of the patent has been accounted for at the cost to the previous owner since this was a common control transaction.

In consideration of the purchase of the Charging Pad Patent, ZenaTech issued the following shares:

·4,395,000 Preferred Shares with a stated value of CAD$2.49 per Preferred Share which will be allocated as to 3,516,000 to Epazz and 879,000 to Shaun Passley, PhD,

·15,600 Super Voting Shares with a stated value of CAD$2.13 which will be allocated as to 12,480 to Epazz and 3,120 to Dr. Shaun Passley, and,

·330,000 Common Stock Shares with a stated value of USD$1.79 which will be allocated as to 264,000 to Epazz and 66,000 to Dr. Shaun Passley.

The cost of the patent has been accounted for at the cost to the previous owner since this was a common control transaction.

Robotic Arm Technology

ZenaTech acquired the permanent licensing of Robotic Arm technology in January 2022. We plan to use this license for drone development. This was an asset purchase paid in stock to Ameritek Ventures, Inc., a related party, for 3,500,000 at $0.24, or $840,000, of ZenaTech common shares and 7% of any and all sales (notes 9 and 16).

Goodwill

Goodwill represents the excess of the value of the consideration transferred over the fair value of the net identifiable assets and liabilities acquired in a business combination. Goodwill is allocated to the cash-generating unit to which it relates. We account for goodwill according to IFRS requirements.

Financial Instruments

Classification

The Company classifies its financial assets in the following measurement categories:

·those to be measured subsequently at fair value (either through OCI or through profit or loss), and

·those to be measured at amortized cost.

The classification depends on the Company’s business model for managing the financial assets and the contractual terms of the cash flows.

For assets measured at fair value, gains and losses will either be recorded in profit or loss or OCI. For investments in equity instruments that are not held for trading, this will depend on whether the group has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through other comprehensive income (FVOCI).

The Company reclassifies debt instruments when and only when its business model for managing those assets changes.

Recognition and Derecognition

Purchases and sales of financial assets in the normal course of business are recognized on trade date, the date on which the Company commits to purchase or sell the asset. Financial assets are derecognized when the rights to receive cash flows from the financial assets have expired or have been transferred and the Company has transferred substantially all the risks and rewards of ownership.

Measurement

At initial recognition, the Company measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss (FVPL), transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at FVPL are expensed in profit or loss.

Financial assets with embedded derivatives are considered in their entirety when determining whether or not their cash flows are solely payment of principal and interest.

Debt Instruments

Subsequent measurement of debt instruments depends on the Company’s business model for managing the asset and the cash flow characteristics of the asset. There are three measurement categories into which the Company classifies its debt instruments:

Amortized cost: Assets that are held for collection of contractual cash flows, where those cash flows represent solely payments of principal and interest, are measured at amortized cost. Interest income from these financial assets is included in finance income using the effective interest rate method. Any gain or loss arising on derecognition is recognized directly in profit or loss and presented in other gains or losses together with foreign exchange gains and losses. Impairment losses are presented as separate line items in the statement of profit or loss.

FVOCI: Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets’ cash flows represent solely payments of principal and interest, are measured at FVOCI. Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest income and foreign exchange gains and losses which are recognized in profit or loss. When the financial asset is derecognized, the cumulative gain or loss previously recognized in OCI is reclassified from equity to profit or loss and recognized in other gains or losses. Interest income from these financial assets is included in finance income using the effective interest rate method. Foreign exchange gains and losses are presented in other gains or losses and impairment expenses are presented as separate line in the statement of profit or loss.

FVPL: Assets that do not meet the criteria for amortized cost or FVOCI are measured at FVPL. A gain or loss on a debt investment that is subsequently measured at FVPL is recognized in profit or loss and presented net within other gains or losses in the period in which it arises.

Equity Instruments

The Company subsequently measures all equity investments at fair value. Where the Company’s management has elected to present fair value gains and losses on equity investments in OCI, there is no subsequent reclassification of fair value gains and losses to profit or

loss following the derecognition of the investment. Dividends from such investments continue to be recognized in profit or loss as other income when the Company’s right to receive payments is established.

Changes in the fair value of financial assets at FVPL are recognized in other gains or losses in the statement of profit or loss as applicable. Impairment losses and reversal of impairment losses on equity investments measured at FVOCI are not reported separately from other changes in fair value.

Impairment

The Company assesses on a forward-looking basis the expected credit losses associated with its debt instruments carried at an amortized cost and FVOCI. The impairment methodology applied depends on whether there has been a significant increase in credit risk.

For trade receivables, the Company applies the simplified approach permitted by IFRS 9, which requires expected lifetime losses to be recognized from initial recognition of the receivables.

Income Taxes

Current Income Tax

Current income tax assets and liabilities for the current period are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted at the reporting date in the countries where the Company operates and generates taxable income.

Current income tax relating to items recognized directly in other comprehensive income or equity is recognized in other comprehensive income or equity and not in profit or loss. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.

Deferred Income Tax

Deferred income tax is provided on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. The carrying amount of deferred income tax assets is reviewed at the end of each reporting period and recognized only to the extent that it is probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilized. Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. Deferred income tax assets and deferred income tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current income tax liabilities and the deferred income taxes relate to the same taxable entity and the same taxation authority.

Share Capital

The Company records the proceeds from share issuances net of issue costs and any tax effects. Common shares issued for consideration other than cash are valued based on their market value at the date the common shares are issued.

Revenue

IFRS 15 – Revenue from Contracts with Customers

The Company earns its revenue from managing software derived from business to business or business to government operations. The Company is the only manufacturer of this software and it only sells software on a standalone basis directly to the end user.

Revenue is usually billed and collected at the beginning of the service period, which can be one month, three months, six months, or a year. The revenue is earned through time and recognized at the end of the reporting period. Any amount billed to customers for which services have not yet been provided is recorded as deferred revenue, which is a current liability on the balance sheet. The Company’s software revenue, which comes from software licensing, and support and maintenance agreements that are earned over a period of time, represents approximately 90%.

The Company also earns revenue from custom software programming. Most custom project-oriented software programming are derived from upgrades to software or custom programming to existing software. These projects are small and will usually end within 6-8 weeks.

These custom projects are typically paid 50% upfront and the second part of the revenue is earned at the end of the project. This is a small portion of the company’s revenue, approximately 10%.

Revenue Recognition

Sale of Software Licenses

The software license at the customer’s site is sold as a one-time perpetual license. The software license sales are recognized as revenue when a fixed fee order has been received and delivery has occurred to the customer. Revenue is recognized generally upon customer acceptance (point-in-time) of the software product and verification that it meets the required specifications. Software is delivered to customers electronically.

Software as a service

Software as a service includes revenue from software licensing and delivery in which software is licensed on a subscription basis and is centrally hosted. These services often include software updates which provide customers with rights to unspecified software product upgrades and maintenance releases and patches released during the term of the support period. Contracts for these services are generally 12-36 months in length. Revenue is recognized ratably and evenly over the term of the agreement.

Maintenance and support services

The Company sells maintenance and support services which include access to technical support personnel for software and hardware troubleshooting and monitoring of the health of a customer’s network, access to a sophisticated web-portal for managing the end-to-end hardware and software digital ecosystem, and hosting support services through our network operations center, or NOC. These services provide either physical or automated remote monitoring which support customer networks 7 days a week, 24 hours a day.

These contracts are generally 12-36 months in length and generally automatically renew for additional 12-month periods unless cancelled by the customer. Rates for maintenance and support contracts are typically established based upon a fee per location or fee per device structure, with total fees subject to the number of services selected. Revenue is recognized ratably and evenly over the term of the agreement.

The Company did not have any major customers according to IFRS 8 paragraph 34 for the three months ending March 31, 2025.

The Company had three major customers according to IFRS 8 paragraph 34 for the year ended December 31, 2024. These customers were Wisconsin Crime Information Bureau with 14% revenue, Liquid PC, Inc. with 15% revenue and Unisys – GA with 27% of revenue

Earnings or Loss per Share

Basic earnings or loss per share are computed by dividing the net earnings or loss available to common shareholders by the weighted average number of shares outstanding during the reporting period. Diluted earnings or loss per share are computed similarly to basic earnings or loss per share except that the weighted average share outstanding is increased to include additional shares for the assumed exercise of stock options and warrants, if dilutive. The number of additional shares is calculated by assuming that outstanding stock options and warrants were exercised and that the proceeds from such exercises were used to acquire common stock at the average market price during the reporting periods.

Leases

On January 13, 2016, the International Accounting Standards Board published a new standard, IFRS 16, Leases, eliminating the current dual accounting model for lessees, which distinguishes between on-balance sheet finance leases and off-balance sheet operating leases. Under the new standard, a lease becomes an on-balance sheet liability that attracts interest, together with a new right-of-use asset. In addition, lessees will recognize a front-loaded pattern of expense for most leases, even when cash rentals are constant. IFRS 16 is effective for reporting periods beginning on or after January 1, 2019, with early application permitted.

A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. At the commencement date, the lease liability is recognized at the present value of the future lease payments and discounted using the interest rate implicit in the lease or the Company's incremental borrowing rate. A corresponding right-of-use ("ROU”) asset will be recognized at the amount of the lease liability, adjusted for any lease incentives received and initial direct costs incurred. Over the term of the lease, financing expense is recognized on the lease liability using the effective interest rate method and

charged to net income, lease payments are applied against the lease liability and depreciation on the ROU asset is recorded by class of underlying asset.

The lease term is the non-cancellable period of a lease and includes periods covered by an optional lease extension option if reasonably certain the Company will exercise the option to extend. Conversely, periods covered by an option to terminate are included if the Company does not expect to end the lease during that time frame. Leases with a term of less than twelve months or leases for underlying low value assets are recognized as an expense in net income on a straight-line basis over the lease term.

A lease modification will be accounted for as a separate lease if it materially changes the scope of the lease. For a modification that is not a separate lease, on the effective date of the lease modification, the Company will remeasure the lease liability and corresponding ROU asset using the interest rate implicit in the lease or the Company's incremental borrowing rate. Any variance between the remeasured ROU asset and lease liability will be recognized as a gain or loss in net income to reflect the change in scope.

ZenaTech had a prepaid month-to-month lease, which expired mid-June 2023. The Company has since changed locations and commenced a long-term lease contract starting at the end of June 2023. The lease contract is non-cancellable for an initial 5-year term and then can be extended to 25 years, per agreement.

Lease Liability

The Company has made lease liability payments every two months since June 2023 for the warehouse in Sharjah, UAE and will continue to make them until April 2028.

Below are tables describing the maturity of the contractual lease and ROU asset as of March 31, 2025.

Maturity analysis as of March 31, 2025
Contractual undiscounted cash flows (USD)
Less than a year	$	48,803
One to five years		153,004
More than 5 years		–
Total undiscounted as of March 31, 2025	$	201,807

Right of Use (ROU) Asset

Right of Use Asset, net
ROU asset	$	279,072
Amortization		(83,511)
Total net Right of Use Asset as of March 31, 2025	$	195,561

Lease Liability
Current (from the BS)	$	59,592
Non- Current	$	142,215
Total lease liability as of March 31, 2025	$	201,807

Below are tables describing the maturity of the contractual lease and ROU asset as of December 31, 2024.

Maturity analysis as of December 31, 2024
Contractual undiscounted cash flows (USD)
Less than a year	$	58,979
One to five years		152,365
More than 5 years		–
Total undiscounted as of December 31, 2024	$	211,344

Right of Use (ROU) Asset

Right of Use Asset, net
ROU asset	$	279,072
Amortization		(68,512)
Total net Right of Use Asset as of December 31, 2024	$	210,560

Lease Liability
Current	$	58,979
Non- Current	$	152,365
Total lease liability as of December 31, 2024	$	211,344

4.ACQUISITIONS AND SALES

Acquisition of PsPortals, Inc.

On January 7, 2022, with an effective date of December 31, 2021, ZenaTech acquired all stock of PsPortals, Inc., a Delaware, United States of America, corporation. PsPortals is a principal supplier of browser-based software applications for public safety. The Company paid $900,000 USD and closing fees of $1,818 USD of which $450,000 USD was cash and issued a promissory note for $450,000 USD to its majority shareholder. The promissory note has terms of thirty-six months that begin January 1, 2022, and end December 31, 2024, and bears an interest of six percent (6%) per year.

The allocation of the purchase consideration is as follows:

Assets acquired
Cash	$	567,975
Computers and equipment		44,798
Note receivable		63,195
Product development costs (Note 9)		1,048,782
Less liabilities assumed
Accounts payable		(1,721)
Deferred revenue		(595,860)
Net purchase price ($900,000 USD)	$	1,127,169
Acquisition payment
Cash ($450,000 USD, less closing adjustment)	$	558,414
Promissory note ($450,000 USD)		568,755
TOTAL	$	1,127,169

ZenaTech paid the final payment of $12,811 USD or $18,429 during the last quarter of 2024. The currency exchange rate was $1 USD to $1.4385 CAD as listed on https://www.wsj.com/market-data/quotes/fx/USDCAD/historical-prices on December 31, 2024.

Acquisition of Ecker Capital, Inc.

ZenaTech entered into an acquisition agreement with Ameritek Ventures, Inc. to acquire Ecker Capital, LLC ("Ecker") on October 14, 2024, with an effective date of October 1, 2024. Ecker Capital, LLC is a subsidiary of Ameritek Ventures, Inc (notes 16).

In consideration of the purchase of Ecker, ZenaTech issued to Ameritek the following shares:

·5,000 Super Voting Shares with a stated value of $30.00 per share and an affective value of $2.13 per share,

·1,000,000 Common Shares at $2.67 per Common share and

·750,000 Preferred Shares with a stated value of $3.00 per share and an affective value of $2.49 per share.

Epazz is the principal shareholder of Ameritek with 95% voting control of Ameritek. Shaun Passley, PhD is the sole director and the CEO of Ameritek and the Managing Director of Ecker. Since Shaun Passley, PhD is also the Chief Executive Officer, a director and a stockholder of ZenaTech he is considered a related party to Ecker, Ameritek and ZenaTech and, therefore, Ecker and Ameritek are considered "related parties" to ZenaTech, and the acquisition of Ecker by ZenaTech constitutes a related party transaction.

Ecker is located at 602 W 5^th Avenue, Suite B, Naperville, Illinois and is the software developer for warehouse products. This purchase was a benefit to ZenaDrone for its IQ drone series. Ecker is a parent holding company of Interactive Systems, Inc., interlinkONE, Inc, and ESM Software, Inc., three software technology companies.

The Company has received an independent valuation of the business of Ecker, which was prepared by the Stonebridge Advisory of Pasadena, California (“Valuator”). The effective date of the valuation is September 30, 2024, and is based on Ecker as an on-going concern which assumes Ecker has the financial resources to continue operating into the foreseeable future. All traditional approaches to

value were considered by the Valuator and specific methods and calculations were weighted to reflect Ecker's value. Ecker was appraised using the fair market value as the standard of value assuming no discount for a lack of control (DLOC) and no adjustment for lack of marketability (DLOM). Because the balance sheet of Ecker might not represent the business, this valuation only values the enterprise value. The enterprise value is the invested capital value (debt and equity) of the business.

The Fair Market Value (enterprise value) of Ecker is estimated at $4,554,556. After any balance sheet adjustments, the adjusted value is $3,573,878 and after subtraction of term debt, if any, the equity value is $2,790,000. Equity value subtracts interest-bearing term debt and the working capital surplus or shortage, if any, from the enterprise value. A 100.00% interest of the Company's equity equals $4,550,000. The Valuator's conclusion is subject to the Report's Limiting Conditions and the note in the conclusion section.

The Fair Market Value (FMV) is defined as the value an asset or liability would exchange hands given a willing buyer and seller to negotiate an "arms-length" transaction with neither party under duress and with the parties having access to all pertinent information. The valuation supports the issuance of the number of shares issued and the transaction at arm's length price.

The following table describes the purchase of Ecker Capital, Inc. The exchange rate for the transactions below was $1 USD to $1.3526, as listed on https://www.wsj.com/market-data/quotes/fx/USDCAD/historical-prices on October 1, 2024.

Assets acquired		USD		CAD
Cash	$	7,334	$	9,921
Accounts receivable		136,214		184,242
Less liabilities assumed
Accounts payable		(191,744)		(259,352)
Deferred revenue		(242,546)		(328,068)
SBA Loan – Interactive Systems, Inc.		(535,145)		(723,837)
SBFS LLC Loan dba RapidAdvance		(44,684)		(60,439)
Net Asset (Liability) Acquired	$	(870,571)	$	(1,177,534)

This being a transaction under common control the assets and liabilities are accounted for at the carrying amount of previous owner.

Acquisition of Securities of ZooOffice, Inc.

ZenaTech entered into an acquisition agreement with Epazz, Inc. to acquire all stock of ZooOffice, Inc. ("ZooOffice") on October 1, 2024.

In consideration of the purchase of the ZooOffice Securities, ZenaTech issued to Epazz the following shares:

·3,000 Super Voting Shares with a stated value of $30.00 per share and an affective value of $2.13 per share,

·500,000 Common Shares at $2.67 per Common share and

·550,000 Preferred Shares with a stated value of $3.00 per share and an affective value of $2.49 per share.

Shaun Passley, PhD is the sole director and officer of Epazz and is its principal shareholder with 95% voting control of Epazz. He is also the sole director of ZooOffice. Shaun Passley, PhD is also the Chief Executive Officer, a director and a stockholder of ZenaTech. As such, Shaun Passley, PhD is considered a related party to ZooOffice, Epazz and ZenaTech and therefore ZooOffice and Epazz are considered related parties to ZenaTech, and the acquisition of ZooOffice by ZenaTech constitutes a related party transaction.

ZooOffice is located at 602 W 5th Avenue, Suite B, Naperville, Illinois and develops cloud business software products for businesses and governments. It has compliance software what will be useful for compliance for ZenaDrone smart farming.

The Company has received an independent valuation of the business of ZooOffice, which was prepared by the Stonebridge Advisory (“Valuator”) of Pasadena, California. The effective date of the valuation is September 30, 2024 and is based on ZooOffice as an on-going concern. The going concern premise of value assumes ZooOffice has the financial resources to continue operating into the foreseeable future. All traditional approaches to value were considered by the Valuator and specific methods and calculations were weighted to reflect ZooOffice's value. ZooOffice was appraised using the fair value as the standard of value assuming no discount for a lack of control (DLOC) and no adjustment for lack of marketability (DLOM). Because the balance sheet might not represent the business, this valuation only values the enterprise value.

The valuation supports the issuance of the number of shares issued and the transaction at arm's length price.

There are no restrictive agreements that might impact on the value of ZooOffice. The internal financials of ZooOffice were used by the Valuator in this valuation for analysis. The Valuator reviewed information on ZooOffice, and the assumptions based on client discussions that allowed the Valuator to consider the net cash flow, the market selling multiples, Zoo Office’s assets and liabilities and build out the Discount and Capitalization Rate which measures the investment risk.

The following table describes the purchase of ZooOffice, Inc.

Assets acquired		USD		CAD
Cash	$	8,104	$	10,962
Accounts receivable		41,480		56,106
Less liabilities assumed
Accounts payable		(1,688)		(2,283)
Deferred revenue		(265,957)		(359,733)
SBA Loan – ZooOffice, Inc.		(157,250)		(212,696)
Net Asset (Liability) Acquired	$	(375,311)	$	(507,646)

This being a transaction under common control the assets are accounted for at the carrying amount of previous owner.

Acquisition of Design Patent

ZenaTech has entered into an Asset Patent Purchase Agreement with Epazz dated October 8, 2024 for the purchase from Epazz by ZenaTech of Design Patent USD1005883S1 (the "Design Patent"). In addition, ZenaTech has agreed to purchase any future Design Patent related to the ZenaDrone 1000 product.

In consideration of the purchase of the Design Patent, ZenaTech will issue the following shares:

·6,000 Super Voting Shares with a stated value of $30.00 per share and an affective value of $2.13 per share, which will be allocated 5,000 to Epazz and 1,000 to Dr. Shaun Passley, and

·1,650,000 Preferred Shares with a stated value of $3.00 per share and an affective value of $2.49 per share, which will be allocated as to 1,150,000 to Epazz and 500,000 to Dr. Passley.

For future issue Design Patent(s) related to the ZenaDrone 1000 product, ZenaTech has agreed to issue the following shares, subject to director approval and compliance with applicable laws and regulatory rules at the time of issuance of the securities:

·16,000 Super Voting Shares with a stated value of $30.00 per share and an affective value of $2.13 per share, which will be allocated as to 12,000 to Epazz and 4,000 to Dr. Passley; and

·2,500,000 Preferred Shares with a stated value of $3.00 per share and an affective value of $2.49 per share, which will be allocated as to 2,000,000 to Epazz and 500,000 to Dr. Passley.

As disclosed above, Shaun Passley, PhD and Epazz are considered related parties to ZenaTech and the acquisition of the Design Patent by ZenaTech constitutes a related party transaction.

The Design Patent allows for the ZenaDrone 1000 to be able to generate lift from its body design.

The Company has received an independent valuation of the business of the Design Patent, which was prepared by the Valuator. All traditional approaches to value were considered in this valuation and the appropriate allocation of methods and calculations were weighted that best represent value of the value of the business. The Design Patent was appraised using the fair market value (enterprise value) as the standard of value assuming no discount for a lack of control (DLOC) and no adjustment for lack of marketability (DLOM).

The appraisal's estimated value for 100.00% of the Design Patent without any discounts and premiums, is $4,846,667 of enterprise value. This conclusion is subject to the Report's Limiting Conditions.

There are no restrictive agreements that might impact value. The Valuator reviewed information on the Design Patent as well as the assumptions based on client discussions that allowed the Valuator to forecast the future cash flow of the business, review the assets and liabilities to the extent possible and build out the Discount and Capitalization Rate, which is essentially an indicator of risk in the business investment.

The valuation supports the issuance of number of shares issued and the transaction at arm's length price. This being a transaction under common control the assets are accounted for at the carrying amount of previous owner.

The patents are yet to be registered in the name of the Company.

Acquisition of Utility Patents

ZenaTech has entered into an Asset Patent Purchase Agreement with Epazz dated October 13, 2024 (the "Utility Purchase Agreement") for the purchase from Epazz by ZenaTech of Utility Patent US11597515B2 Drone Assembly which allows for ZenaDrone 1000 to be recharged remotely without human assistance (the "First Utility Patent"). Effective November 20, 2024, the parties entered into an amendment to the Asset Patent Purchase Agreement with Epazz dated October 13, 2024 for the purchase from Epazz by ZenaTech of Charging Pad Patent US11970293B2 related to a drone with extendable and rotatable wings and multiple accessory securing panel (the "Second Utility Patent"). The amendment made the agreement effective as of October 1, 2024.

In consideration of the purchase of the First Utility Patent and the Second Utility Patent (together, the "Utility Patents"), ZenaTech issued to Epazz and Dr. Shaun Passley the following shares:

·46,000 Super Voting Shares with a stated value of $30.00 per share and an affective value of $2.13 per share, which will be allocated as to 37,000 to Epazz and 9,000 to Dr. Passley, and

·13,000,000 Preferred Shares with a stated value of $3.00 per share and an affective value of $2.49 per share, which will be allocated as to 9,000,000 to Epazz and 400,000 to Dr. Passley.

As disclosed above, Shaun Passley, PhD and Epazz are considered "related parties" to ZenaTech and the acquisitions of the Utility Patents by ZenaTech constitutes a related party transaction.

The Company has received independent valuations of each of the First Utility Patent and Second Utility Patent, which were prepared by the Valuator. The effective date of the valuations is December 31, 2024. All traditional approaches to value were considered in the valuations and the appropriate allocation of methods and calculations were weighed that best represent the respective value of each of the First Utility Patent and the Second Utility Patent. The Utility Patents were appraised using the fair market value (enterprise value) as the standard of value assuming no discount for a lack of control (DLOC) and no adjustment for lack of marketability (DLOM).

The appraisal's estimated value for 100.00% of the First Utility Patent without any discounts and premiums, is $29,081,865 USD of enterprise value. The appraisal's estimated value for 100.00% of the Second Utility Patent without any discounts and premiums, is $14,540,001 USD of enterprise value. These conclusions are subject to the Report's Limiting Conditions.

There are no restrictive agreements that might impact value. The Valuator reviewed information on the Utility Patents as well as the assumptions based on client discussions that allowed the Valuator to forecast the future cash flow of the business, review the assets and liabilities to the extent possible and build out the Discount and Capitalization Rate, which is essentially an indicator of risk in the business investment. The valuation supports the issuance of number of shares issued and the transaction at arm's length price. This being a transaction under common control the assets are accounted for at the carrying amount of previous owner.

The patents are yet to be registered in the name of the Company.

Acquisition of Weddle Surveying, Inc.

ZenaTech acquired all outstanding shares of equity securities and warrants of Weddle Surveying, Inc., a Oregon, United States of America, corporation on January 14, 2025. Weddle serves residential and commercial clients within the Portland Metropolitan region and surrounding areas of Northwest Oregon and Southwest Washington.

The Company paid $525,000 USD of which $262,500 USD was paid in cash and issued a promissory note for $262,500 USD to its shareholder. The promissory note has three equal payments and six percent (6%) interest per year paid in equal annual payments and with a maturity date of January 14, 2028.

The allocation of the purchase consideration is as shown in the table below. The currency exchange rate used in the calculations was $1 USD to $1.4348, the exchange rate on January 13, 2025, as per https://www.wsj.com/market-data/quotes/fx/USDCAD/historical-prices.

Assets acquired
Cash	$	43,671
Employees draw receivable		11,635
Computers and related equipment		3,372
Furniture and fixtures		17,978
Vehicles		11,130
Business equipment		112,947
Less liabilities assumed
Accounts payable		(301)
Net tangible assets	$	200,432
Customer lists, brand recognition, tec.		368,559
Goodwill		184,279
Net purchase price		753,270
Acquisition payment
Cash paid ($262,500 USD)	$	376,635
Promissory note ($262,500 USD)		376,635
Total purchase price	$	753,270

The Company did not make any payments on this note as of March 31, 2025 since it is not yet due.

In accordance with IFRS 3 Business Combinations, the acquisition has been accounted for on a provisional basis. At the reporting date, the Company is still in the process of identifying and measuring the fair value of all identifiable assets acquired and liabilities assumed. Consequently, the amounts recognized in these financial statements for the assets acquired, liabilities assumed, and any resulting goodwill or gain from a bargain purchase are subject to change. Final adjustments will be made within the measurement period as permitted under IFRS 3.

Acquisition of KJM Land Surveying, Inc.

ZenaTech acquired all outstanding shares of equity securities and warrants of KLM Land Surveying, Inc., a Florida, United States of America, corporation on January 22, 2025. KJM Land Surveying provides a range of professional land surveying services, including boundary surveys, ALTA surveys, as-built surveys, topographic surveys, and elevation certificates to residential and commercial and construction sectors for over thirty years.

The Company paid $400,000 USD of which $200,000 USD was paid in cash and issued a promissory note for $200,000 USD to its primary shareholder and other shareholders. The promissory note has equal payments and includes a six percent (6%) interest per year paid monthly and with a maturity date of January 21, 2028.

The allocation of the purchase consideration is as shown in the table below. The currency exchange rate used in the calculations was $1 USD to $1.4379, the exchange rate on January 21, 2025, as per https://www.wsj.com/market-data/quotes/fx/USDCAD/historical-prices.

Assets acquired
Cash	$	17,009
Accounts receivable		1,562
Computers and related equipment		20,418
Furniture and fixtures		19,412
Vehicles		32,353
Business equipment		96,483
Less liabilities assumed
Accounts payable		(2,373)
Net tangible assets	$	184,864
Customer lists, brand recognition, tec.		260,197
Goodwill		130,099
Net purchase price		575,160
Acquisition payment
Cash paid ($200,000 USD)	$	287,580
Promissory note ($200,000 USD) there – there		287,580
Total purchase price	$	575,160

The Company paid $15,987 on this note and incurred a foreign currency exchange of $180 as of March 31, 2025.

Acquisition of Othership, Limited

The Company paid $260,000 USD of which $100,000 USD was paid in cash and issued a promissory note for $160,000 USD to its primary shareholder and other shareholders. The promissory note has one year amortization note at six percent (6%) interest per year paid monthly and with a maturity date of March 13, 2028.

The allocation of the purchase consideration is as shown in the table below. The currency exchange rate used in the calculations was $1 GDP to $1.8563, the exchange rate on March 16, 2025, as per https://www.wsj.com/market-data/quotes/fx/USDCAD/historical-prices.

Assets acquired
Computers and related equipment	$	186
Computers equipment		2,784
Net tangible assets	$	2,970
Customer lists, brand recognition, tec.		85,728
Goodwill		282,790
Net purchase price		371,488
Acquisition payment
Cash paid ($100,000 USD)	$	142,880
Promissory note ($160,000 USD)		228,608
Total purchase price	$	371,488

The Company made no payments on this loan as of March 31, 2025.

Sale of Wallet Software

ZenaTech, Inc. sold for $250,000 USD or $341,850 all ZenaPay, Inc. the wallet software assets to Epazz Limited, Ireland, a related party, on October 2, 2023. The sale was in the form of a convertible promissory note with interest rate of 8% and 10-year terms. The sale note is convertible into Common Stock at 20% discount based on average closing price of trading day. ZenaPay, Inc., a Wyoming, USA corporation is a subsidiary of ZenaTech, Inc., a British Columbia corporation that provides software and cloud-based enterprise software solutions for e-commerce industry. Epazz Limited, Ireland is a subsidiary of Epazz, Inc., a company controlled by Shaun Passley, PhD (note 16).

The Company accrued $4,763 USD or $6,837 interest income related to this note as of March 31, 2025.

The Company accrued $19,966 $27,348 interest income related to this note as of December 31, 2024.

5.NOTE RECEIVABLE

The John Gray Note

On January 7, 2022, with an effective date of December 31, 2021, the Company purchased PsPortals, Inc. With this purchase ZenaTech acquired a non-interest-bearing note receivable from John Gray, its former majority shareholder.

This note receivable had a balance of $110 USD and was paid during January 2025. The balance of this receivable was $0 as of March 31, 2025.

The note receivable had a balance of $110 USD or $158 as of December 31, 2024. The currency exchange rate was $1 USD to $1.4385 CAD as listed on https://www.wsj.com/market-data/quotes/fx/USDCAD/historical-prices on December 31, 2024.

Note Receivable affiliate

ZenaTech, Inc. sold for $341,850 or $250,000 USD all ZenaPay, Inc. the wallet software assets to Epazz Limited, Ireland, a related party on October 2, 2023. The sale was in the form of a convertible promissory note with interest rate of 8% and 10-year terms. The sale note is convertible into Common Stock at 20% discount based on average closing price of trading day. ZenaPay, Inc., a Wyoming, USA corporation is a subsidiary of ZenaTech, Inc., a British Columbia corporation that provides software and cloud-based enterprise software solutions for e-commerce industry. Epazz Limited, Ireland is a subsidiary of Epazz, Inc., a company controlled by Shaun Passley, PhD (note 16).

The Company accrued $6,201 interest income related to this note as of March 31, 2025.

The Company accrued $20,511 interest income related to this note as of December 31, 2024.

6.PROPERTY PLANT & EQUIPMENT

		As of			As of
		March 31,			December 31,
		2025			2024
Property Plant & Equipment:
Computers and equipment	$	159,968		$	103,746
Accumulated depreciation		(67,437	)		(60,763	)
Net computers and equipment		92,530			42,983
Furniture and fixtures		51,519			4,146
Accumulated depreciation		(1,999	)		(69	)
Net furniture and fixtures		49,519			4,077
Vehicles		332,832			202,927
Accumulated depreciation		(19,509	)		(6,577	)
Net vehicles		313,323			196,351
Leasehold improvements		92,807			59,410
Accumulated depreciation		(5,006	)		(1,226	)
Net leasehold improvements		87,801			58,184
Business equipment		674,452			117,751
Accumulated depreciation		(27,248	)		(2,651	)
Net business equipment		647,204			115,100
Total Property Plant & Equipment (PPE), net	$	1,190,377		$	416,695

ZenaTech acquired computers for $ 55,049, furniture and fixtures $47,372 and made leasehold improvements for $33,385 during the three months ended March 31, 2025. These assets are depreciated over 5-15 years using straight line depreciation.

ZenaTech also acquired three vehicles for $129,862 and bought business equipment for $556,676 during the three months ended March 31, 2025. These assets are depreciated over 6-years using straight line depreciation.

ZenaTech acquired computers for $21,269, furniture and fixtures $4,146 and made leasehold improvements for $59,410 during 2024. These assets are depreciated over 5-15 years using straight line depreciation.

ZenaTech also acquired three vehicles for $202,927 USD or $291,911 and bought business equipment for $117,751 USD or $169,385 during 2024. These assets are depreciated over 6-years using straight line depreciation.

7. CAPITAL ADVANCES

As of December 31, 2024, the Company has paid AED 217,310 (approximately $97,818 CAD) as part of a contractual purchase of a residential property located in Sharjah, United Arab Emirates. The total contracted value is AED 2,403,000. The property is under construction and will be used to accommodate Company personnel.

Although the legal title is temporarily held in the name of Dr. Shaun Passley, the Company's CEO and majority shareholder, Dr. Passley has formally undertaken to transfer the title to the Company. Accordingly, the payment has been recorded as a capital advance under non-current assets.

8.INTANGIBLES & PRODUCT DEVELOPMENT COSTS

The table below describes the intangibles as of March 31, 2025. Each amounts is shown at its historical acquired price and each type of software product development cost is presented in the acquired currency.

Intangibles

Asset	Total	Additions	Total	Total	Beginning	Amortization	Total	Net Book
Source and	Costs	3-Months Ended	Costs	Amortization	Book Value	3-Months Ended	Amortization	Value
Currency	12/31/2024	2025	03/31/2025	12/31/2024	12/31/2024	03/31/2025	03/31/2025	03/31/2025
ZenaPay Plant Software – developed internally, USD	$28,080*	–	$28,080	$28,080	$Nil	$Nil	$28,080	$Nil
System View Software – Acquired, business combination, USD	40,190*	–	40,190	40,190	–	–	40,190	–
ZigVoice Software – Acquired, business combination, USD	9,702*	–	9,702	9,702	–	–	9,702	–
WorkAware Software – Acquired, business combination, CAD	396,600	–	396,600	116,054	280,546	6,538	122,592	274,008
TillerStack Software – Acquired, business combination, EURO	1,584,516	–	1,584,516	417,198	1,167,318	26,120	443,218	1,141,054
PsPortals Software – Acquired, business combination, USD	1,048,782	–	1,048,782	209,279	839,504	17,289	226,568	822,215
Weddle Customer Lists, Brand Recognition, – Acquired, business combination, USD	–	368,559	368,559	–	368,559	5,102	5,102	363,457

KJM Customer Lists, Brand Recognition, – Acquired, business combination, USD	–	260,197	260,197	–	260,197	4,313	4,313	256,974
Othership Customer Lists, Brand Recognition, – Acquired, business combination, USD	–	85,728	85,728	–	85,728	1,421	1,421	85,509
TOTAL	$3,107,870	$714,484	$3,822,354	$820,503	3,001,851	$58,490	$801,021	$2,993,361

As of December 31, 2024 ZenaPay, SystemView and ZigVoice product development costs were fully amortized.

Product development costs totaled $5,074,088 and include a difference of $22 due to foreign currency adjustments to cost and intangible asset amortization as of March 31, 2025.

Product Development

Asset	Total	Additions	Total	Total	Beginning	Amortization	Total	Net Book
Source and	Costs	3-Months Ended	Costs	Amortization	Book Value	3-Months Ended	Amortization	Value
Currency	12/31/2024	2025	03/31/2025	12/31/2024	12/31/2024	03/31/2025	03/31/2025	03/31/2025
Drone technology, – Acquired, USD	$1,440,000	–	$1,440,000	–	–	–	–	$1,440,000
Robotic Arm Technology, – Acquired, USD	840,000	–	840,000	–	–	–	–	840,000
Drone Development – Acquired, USD	2,545,326	248,762	248,762	–		–	–	2,794,088
TOTAL	$4,825,326	$248,762	$5,074,088	$Nil		$Nil	$Nil	$5,074,088

Drone technology, Robotic Arm Technology and drone development technology are not currently amortized.

The amounts listed in the tables below are historical amounts as of December 31, 2024. As such, each type of software product development cost is presented in the acquired currency.

	Asset	Total		Total		Amortization	Total	Net Book
	Source and	Costs	Additions	Costs	Amortization	12 Mo. Ended	Amortization	Value
	Currency	12/31/2023	2024	12/31/2024	12/31/2023	12/31/2024	12/31/2024	12/31/2024
INTANGIBLES
ZenaPay Plant Software	Developed internally, USD	$28,080	-	$28,080	$28,080	$Nil	$28,080	$Nil
System View Software	Acquired – business combination, USD	40,190	–	40,190	39,529	661	40,190	–
ZigVoice Software	Acquired – business combination, USD	9,702	–	9,702	9,543	159	9,702	–
WorkAware Software	Acquired – business combination, CAD	396,600	–	396,600	89,842	26,213	116,054	280,546
TillerStack Software	Acquired – business combination, EURO	1,584,516	–	1,584,516	312,345	104,853	417,918	1,167,318
PsPortals Software	Acquired – business combination, USD	1,048,782	–	1,048,782	139,694	69,585	209,279	839,504
TOTAL		$3,107,870	$Nil	$3,107,870	$619,033	$201,471	$820,503	$2,287,367
PRODUCT DEVELOPMENT
Drone technology	Acquired separately, USD	$1,440,000	–	1,440,000	–	–	–	$1,440,000
Robotic Arm Technology	Acquired separately, USD	840,000	–	840,000	–	–	–	840,000
Drone Development	Developed internally, USD	1,376,200	1,169,126	2,545,326	–	–	–	2,545,326
TOTAL		$3,656,200	$1,169,126	$4,825,326	$Nil	$Nil	$Nil	$4,825,326

Product development costs totaled $4,825,326 and include a difference of $(118,676) due to foreign currency adjustments to cost and intangible asset amortization as of December 31, 2024.

9.GOODWILL

ZenaTech recorded goodwill of $2,468,722 associated with the PacePlus acquisition. This asset is not being amortized for financial reporting purposes.

ZenaTech recorded goodwill of $184,279 associated with the Weddle acquisition. This asset is not being amortized for financial reporting purposes.

ZenaTech recorded goodwill of $130,099 associated with the KJM acquisition. This asset is not being amortized for financial reporting purposes.

ZenaTech recorded goodwill of $282,790 associated with the Othership acquisition. This asset is not being amortized for financial reporting purposes.

10.SHORT-TERM LINE OF CREDIT

The Company has a $100,000 USD line of credit with TD Bank, though its PS Portals, Inc. subsidiary, classified as short-term debt. The line of credit has a variable interest rate that is renewable annually. The current interest rate is 8.5%.

The Company loaned $49,926 USD or $71,834 on March 31, 2025, when the currency exchange rate was $1 USD to $1.4388 CAD as listed on https://www.wsj.com/market-data/quotes/fx/USDCAD/historical-prices.

The Company loaned $86,685 USD or $124,696 on December 31, 2024, when currency exchange rate was $1 USD to $1.4385 CAD as listed on https://www.wsj.com/market-data/quotes/fx/USDCAD/historical-prices.

11.LOANS PAYABLE

The Company had amounts borrowed in United States dollars, or USD. We used US dollars to describe these transactions since they were historical amounts. When appropriate for certain year-end balance sheet information, we converted those amounts to Canada dollars, or CA dollars or $, as listed on the https://www.wsj.com/market-data/quotes/fx/USDCAD/historical-prices.

		As of		As of
		March 31,		December 31,
		2025		2024
Balance of Loans Payable:
SBA Loan – Interactive Systems, Inc.	$	762,721	$	766,201
SBA Loan – ZooOffice, Inc.		223,883		225,025
SBFS LLC Loan dba RapidAdvance		37,568		52,379
GG Mars Capital, Inc. LOC (note 16)		2,215,773		992,798
Star Financial Corporation LOC (note 16)		1,826,888		1,394,839
Jennings Family Investments, Inc. LOC (note 16)		7,116,057		3,921,087
Lone Stella, Inc. LOC		550,384		539,556
Nancy Cowden RLOC		1,102,062		1,080,380
Weddle Surveying Acquisition note		377,685		–
KJM Surveying Acquisition note		271,773		–
Othership UK Acquisition note		230,208		–
ProPal Investments, LLC. (note 16)		431,640		575,400
GG Mars Capital, Inc. Debenture (note 16)		241,788		235,874
Total Loans Payable	$	15,388,430	$	9,783,539

Note: See convertible debt table at the end of the note and note 16 for related party notes.

Debt Financing

From time to time the Company has received and repaid loans from Epazz, Inc, Shaun Passley and his immediate family members, to fund operations. These related party debts are fully disclosed in note 16 below. ZenaTech has back-up lines of credit from related parties and others with an available spending limit of $32,800,000 to cover the repayment of the current portion of long-term debt, should it need it.

Epazz, Inc. Convertible Line of Credit

On June 1, 2018 the Company and Epazz, Inc., a related party, entered into a convertible line of credit agreement whereby Epazz agreed to advance funds of up to $400,000 USD to the Company as needed for acquisitions and working capital needs. Epazz, Inc. and Shaun Passley, PhD have common control of the Company’s shares outstanding. The agreement expires on December 31, 2025, and carries an interest rate of 6% on unpaid funds. No payments are due to Epazz on balances of $400,000 USD or less until the expiration of the agreement. Interest on the note is rolled into the principal amount on a quarterly basis. Provided that the Company is not in default, the agreement can be renewed for ten additional twelve-months periods.

The total amount available to borrow was $400,000 USD or $575,520 as of March 31, 2025. The currency exchange rate used in calculations was $1 USD to $1.4388 CAD, as listed on https://www.wsj.com/market-data/quotes/fx/USDCAD/historical-prices.

The total amount available to borrow was $400,000 USD or $575,400 as of December 31, 2024. The currency exchange rate used in calculations was $1 USD to $1.4385 CAD, as listed on https://www.wsj.com/market-data/quotes/fx/USDCAD/historical-prices.

There were no borrowings outstanding under this agreement as of March 31, 2025 or December 31, 2024.

SBA Loan - ZooOffice

ZooOffice, Inc., a subsidiary of Epazz, Inc, applied for a Disaster loan to cover expenses and maintain the business during the period of Covid in December 2021. ZooOffice received a $150,000 USD loan for 30 years with a 3.5% interest on December 31, 2021. The SBA ZooOffice loan is due December 31, 2052 and interest of $731 USD is accrued each reporting period. ZooOffice, Inc., started to make payments for this loan starting with January 16, 2023. The Company acquired this loan with the ZooOffice purchase as of October 1, 2024.

The Company owed $223,883 USD or $322,123 and no accrued interest as of March 31, 2025. The currency exchange rate used in calculations was $1 USD to $1.4388 CAD, as listed on https://www.wsj.com/market-data/quotes/fx/USDCAD/historical-prices.

The Company owed $225,025 USD or $323,699 and no accrued interest as of December 31, 2024. The currency exchange rate used in calculations was $1 USD to $1.4385 CAD, as listed on https://www.wsj.com/market-data/quotes/fx/USDCAD/historical-prices.

SBA Loan - Interactive Systems

Interactive Systems, Inc., a subsidiary of Ecker Capital LLC, applied for a Disaster loan to cover expenses and maintain the business during the period of Covid in March 2021. Interactive Systems received a $500,000 USD loan for 30 years with a 3.75% interest on October 31, 2021. The SBA loan from Interactive Systems is due September 25, 2051 and interest is accrued each reporting period. The interest was added to the principal as of March 2024. Interactive Systems started to make payments for this loan in March 2024.

The Company acquired this loan with the Ecker purchase as of October 1, 2024.

The Company owed $762,721 USD or $1,097,404 and no accrued interest as March 31, 2025. The currency exchange rate used in calculations was $1 USD to $1.4388 CAD, as listed on https://www.wsj.com/market-data/quotes/fx/USDCAD/historical-prices.

The Company owed $766,201 USD or $1,102,180 and no accrued interest as of December 31, 2024. The currency exchange rate used in calculations was $1 USD to $1.4385 CAD, as listed on https://www.wsj.com/market-data/quotes/fx/USDCAD/historical-prices.

SBFC LLC - DBA RapidAdvance Loan

Ecker Capital has a loan with SBFC LLC, DBA RapidAdvance with a variable interest rate originating on 11/30/2022. The loan amount has a principal of $37,000 USD or $53,225 and had an interest rate of 59%. ZenaTech acquired this loan with the Ecker Capital purchase as of October 1, 2024. The amount acquired was $44,684 USD or $60439, representing $37,000 USD or $53,225 in principal and $7,684 USD or $8,448 in interest. The currency exchange rate used in calculations was $1 USD to $1.3802 CAD as of October 1, 2024, as listed on https://www.wsj.com/market-data/quotes/fx/USDCAD/historical-prices.

The Company makes weekly payments of $1,334 USD or $1,919, representing the interest rate of 89%, which accrues every month.

The Company had a balance of $37,568 USD or $54,054, made loan payments of $26,111 USD or $37,568 and had accrued interest of $87 USD or $123 as of March 31, 2025. The currency exchange rate used in year-end calculations was $1 USD to $1.4388 CAD, as listed on https://www.wsj.com/market-data/quotes/fx/USDCAD/historical-prices.

The Company had a balance of $52,379 USD or $75,347, made loan payments of $17,346 USD or $24,953 and had accrued interest of $87 USD or $123 as of December 31, 2024. The currency exchange rate used in year-end calculations was $1 USD to $1.4385 CAD, as listed on https://www.wsj.com/market-data/quotes/fx/USDCAD/historical-prices.

GG Mars Capital, Inc. August 2019 Convertible Line of Credit

The Company entered into an agreement with GG Mars Capital, Inc., an Illinois corporation, (“GG Mars Capital”), a related party, for a convertible line of credit on August 1, 2019 (note 16). The Company issued GG Mars Capital a promissory note for $100,000 USD with a simple interest of six percent (6%) and a thirty-six (36) month maturity date and no covenants. The principal amount of this loan shall be due and payable on July 31, 2022. Interest is calculated on a basis of 360-day year and charged for the actual number of days elapsed and payable monthly starting September 1, 2019. Provided that ZenaTech is not in default, the Company may extend and renew this note for ten additional twelve months. GG Mars Capital has an option to convert all or part of the balance into ZenaTech common stock at the last valuation of share price or the lower price issued within the last 30 days. GG Mars Capital, Inc. is owned by a family member of Shaun Passley, PhD. Epazz, Inc. and Shaun Passley, PhD have common control of the Company’s shares outstanding. On July 1, 2020, both parties agreed to increase the amount to $500,000 USD. The Company borrowed $295,000 USD from GG Mars Capital and issued GG Mars Capital a promissory note for $295,000 USD and a simple interest rate of six percent (6%) per annum on August 1, 2020. On March 1, 2021 both parties amended the note, which increased the line of credit amount to $2,000,000 USD and updated the due date to December 31, 2024. GG Mars Capital converted $800,000 USD of the convertible line of credit debt into the Company’s common stock on February 1, 2022 (note 13). On November 30, 2023 both parties amended the note, which increased the line of credit amount to $6,000,000 USD and updated the due date to December 31, 2024.

The GG Mars Capital, Inc. 2019 six percent interest loan agreement was terminated and the $2,243,070 USD or $3,226,656 outstanding balance due was rolled over into the new 8% interest agreement on October 9, 2024. See GG Mars Capital, Inc October 2024 revolving line of credit below.

GG Mars Capital, Inc. October 2024 Revolving Line of Credit

ZenaTech entered into an agreement with GG Mars Capital, Inc., a related party, for a convertible line of credit on October 9, 2024 (note 16). The Company issued GG Mars Capital a promissory note for $5,000,000 USD with a simple interest of eight percent (8%) and a one-hundred and twenty (120) month maturity date and no covenants. The principal amount of this loan shall be due and payable on October 8, 2034. Interest is calculated on a basis of 360-day year and charged for the actual number of days elapsed and payable monthly starting November 1, 2024. Provided that ZenaTech is not in default, the Company may extend and renew this note for ten additional twelve months. Loan origination fees were 200,000 preferred shares of ZenaTech stock at aa fair value of $2.49 USD or $3.41 per share, having stated value of $3.00 per share, and 500,000 warrants of common stock. Each warrant shall entitle GG Mars Capital to purchase the Company’s common stock at an exercise price of $1.77 USD or the lowest price traded between October 9, 2024 through October 31, 2027 whichever is lower, which expires 10 years from the date of this executed agreement. GG Mars Capital shall have an option to convert all or part of the balance into ZenaTech, Inc. preferred shares with a stated value of $3.00 or convert into ZenaTech, Inc. common stock at the last valuation of price per share or the lowest price traded within the last 30 days. GG Mars Capital shall provide a written conversion notice which will be convert into preferred shares or common stock within 5 business days. GG Mars Capital, Inc. is owned by a family member of Shaun Passley, PhD. Epazz, Inc. and Shaun Passley, PhD have common control of the Company’s shares outstanding. GG Mars Capital, Inc. has an option to convert all or part of the balance into ZenaTech common stock at twenty percent (20%) discount of the last valuation of share price or the lower price issued within the last 30 days. The conversion price is the price after applying the twenty percent (20%) discount off the market price.

The total amount available to borrow was $5,000,000 USD or $7,194,000 and the amount drawn on the note was $2,215,773 USD or $3,188,054 as of March 31, 2025. The Company had an accrued interest expense of $24,853 USD or $35,676 and GG Mars Capital had an unrealized currency gain of $289 during this period. The currency exchange rate was $1 USD to $1.4388 CAD as listed on https://www.wsj.com/market-data/quotes/fx/USDCAD/historical-prices. See the ‘Convertible Debt’ table below for the number of shares this note can convert to.

The total amount available to borrow was $5,000,000 USD or $7,192,500 and the amount drawn on the note was $690,162 USD or $992,798 as of December 31, 2024. The Company had an accrued interest expense of $22,691 USD or $31,080 and GG Mars Capital had an unrealized currency loss of $158,579 during this period. The currency exchange rate was $1 USD to $1.4385 CAD as listed on https://www.wsj.com/market-data/quotes/fx/USDCAD/historical-prices.

Star Financial Corporation August 2019 Convertible Line of Credit

The Company entered into an agreement with Star Financial Corporation (“Star Financial Corporation”), a related party, for a convertible line of credit on August 1, 2019 (note 16). The Company issued Star Financial Corporation a promissory note for $100,000 USD, with a simple interest of six percent (6%) and a thirty-six (36) months maturity date and no covenants. Provided that ZenaTech is not in default, the Company may extend and renew this note for ten additional twelve months. Interest is calculated on a basis of 360-day year and charged for the actual number of days elapsed and payable monthly starting September 1, 2020. Star Financial Corporation has an

option to convert all or part of the balance into ZenaTech common stock at the last valuation of share price or the lower price issued within the last 30 days. Star Financial Corporation is owned by a family member of Shaun Passley, PhD. Epazz, Inc. and Shaun Passley, PhD have common control of the Company’s shares outstanding. Both parties agreed to increase the amount to $500,000 USD on July 1, 2020. The Company borrowed $149,000 USD from Star Financial Corporation and issued Star Financial Corporation a promissory note for $149,000 USD and a simple interest rate of six percent (6%) per annum on August 1, 2020. The principal amount of this loan shall be due and payable on July 31, 2022. Both parties amended the note on March 1, 2021, which increased the line of credit amount to $2,000,000 USD and updated the due date to December 31, 2024. Star Financial Corporation converted $720,000 USD of the convertible line of credit debt into the Company’s common stock on February 1, 2022 (notes 16). Both parties amended the note on November 30, 2023 which increased the line of credit amount to $6,000,000 USD and updated the due date to December 31, 2024.

The Star Financial Corporation 2019 six percent loan agreement was terminated and the $1,761,349 USD or $ 2,533,700outstanding balance due was rolled over into the new agreement on October 9, 2024. See Star Financial Corporation October 2024 convertible line of credit below.

Star Financial Corporation October 2024 Revolving Line of Credit

ZenaTech entered into an agreement with Star Financial Corporation, (“Star Financial Corporation”) an Illinois corporation and a related party, for a convertible line of credit on October 9, 2024 (note 16). The Company issued Star Financial Corporation a promissory note for $5,000,000 USD, with a simple interest of eight percent (8%) and one-hundred and twenty (120) month maturity date and no covenants. Provided that ZenaTech is not in default, the Company may extend and renew this note for ten additional twelve months. Interest is calculated on a basis of 360-day year and charged for the actual number of days elapsed and payable monthly starting November 1, 2024. Loan origination fees were 200,000 preferred shares of ZenaTech stock at a fair value of $2.49 USD or $3.41 per share having stated value of $3.00 per share , and 500,000 warrants of common stock. Each warrant shall entitle Star Financial Corporation to purchase the Company’s common stock at an exercise price of $1.77 USD or the lowest price traded between October 9, 2024 through October 31, 2027 whichever is lower, which expires 10 years from the date of this executed agreement. Star Financial Corporation shall have an option to convert all or part of the balance into ZenaTech, Inc. preferred shares with a stated value of $3.00 or convert into ZenaTech, Inc. common stock at the last valuation of price per share or the lowest price traded within the last 30 days. Star Financial Corporation shall provide a written conversion notice which will be convert into preferred shares or common stock within 5 business days. Star Financial Corporation is owned by a family member of Shaun Passley, PhD. Epazz, Inc. and Shaun Passley, PhD have common control of the Company’s shares outstanding. Star Financial Corporation has an option to convert at twenty percent (20%) discount all or part of the balance into ZenaTech common stock at the last valuation of share price or the lower price issued within the last 30 days. The conversion price is the price after applying the twenty percent (20%) discount off the market price.

The total amount available to borrow was $5,000,000 USD or $7,194,000, and the amount drawn on the note was $1,269,731 USD or $1,826,888 as of March 31, 2025. The Company had an accrued interest expense of $20,082 USD or $28,828 and Star Financial Corporation had an unrealized currency gain of $357 during this period. The currency exchange rate was $1 USD to $1.4388 CAD as listed on https://www.wsj.com/market-data/quotes/fx/USDCAD/historical-prices on December 31, 2024. See the ‘Convertible Debt’ table below for the number of shares this note can convert to.

The total amount available to borrow was $5,000,000 USD or $7,192,500, and the amount drawn on the note was $969,648 USD or $1,394,839 as of December 31, 2024. The Company had an accrued interest expense of $17,098 USD or $23,420 and Star Financial Corporation had an unrealized currency loss of $119,892 during this period. The currency exchange rate was $1 USD to $1.4385 CAD as listed on https://www.wsj.com/market-data/quotes/fx/USDCAD/historical-prices on December 31, 2024.

Jennings Family Investments, Inc. August 2019 Convertible Line of Credit

The Company entered into an agreement with Cloud Builder, Inc. (“Cloud Builder”) for a convertible line of credit of $100,000 USD on August 1, 2019. Cloud Builder was controlled by the Company’s Chief Financial Officer. Cloud Builder, Inc. assigned the note to Jennings Family Investments, Inc on August 1, 2023. The Company issued the Lender a promissory note for $100,000 USD and a simple interest rate of six percent (6%) per annum and no covenants. The principal amount of this loan shall be due and payable in the first month after any amount is borrowed. Interest is calculated on a basis of 360-day year and charged for the actual number of days elapsed and payable monthly starting the first of the following month. Provided that ZenaTech is not in default, the Company may extend and renew this note for ten additional twelve months. The Lender has an option to convert all or part of the balance into ZenaTech common stock at the last valuation of share price or the lower price issued within the last 30 days. Both parties amended the note on August 1. 2020, which increased the line of credit amount to $2,000,000 USD and updated the due date to December 31, 2024. The Lender converted $640,000 USD of the convertible line of credit debt into the Company’s common stock on February 1, 2022. Both parties amended the note on November 30, 2023, which increased the line of credit amount to $6,000,000 USD and updated the due date to December 31, 2024.

The Jennings Family Investments, Inc. 2019 six percent loan agreement was terminated and the $1,951,184 USD or $ 2,806,778 outstanding balance due was rolled over into the new agreement on October 9, 2024. See Star Financial Corporation October 2024 convertible line of credit below.

Jennings Family Investments, Inc. October 2024 Revolving Line of Credit

ZenaTech entered into an agreement with Jennings Family Investments, Inc., (“Jennings Family Investments”), an Illinois corporation, for a revolving line of credit on October 9, 2024. The Company issued Jennings Family Investments a promissory note for $5,000,000 USD, with a simple interest of eight percent (8%) and a one-hundred and twenty (120) months maturity date and no covenants. Provided that ZenaTech is not in default, the Company may extend and renew this note for ten additional twelve months. Interest is calculated on a basis of 360-day year and charged for the actual number of days elapsed and payable monthly starting November 10, 2024.

Loan origination fees were 200,000 preferred shares of ZenaTech stock at a fair value of $2.49 USD or $3.41 per share having stated value of $3.00 per share , and 500,000 warrants of common stock. Each warrant shall entitle the holder to purchase common stock at an exercise price of $1.77 USD or the lowest price traded between October 9, 2024 through October 31, 2027 whichever is lower, which expires 10 years from the date of the executed agreement. Jennings Family Investments, Inc. has an option to convert all or part of the balance into ZenaTech, Inc. preferred shares with a stated value of $3.00 or convert into ZenaTech, Inc.’s common stock at the last valuation of price per share or the lowest price traded within the last 30 days. Jennings Family Investments shall provide a written conversion notice which will be converted into preferred shares or common stock within 5 business days. In case of default ZenaTech shall pay an interest rate at the highest allowable interest under applicable law. Jennings Family Investments has an option to convert at twenty percent (20%) discount all or part of the balance into ZenaTech common stock at the last valuation of share price or the lower price issued within the last 30 days. The conversion price is the price after applying the twenty percent (20%) discount off the market price.

The total amount available was $5,000,000 USD or $7,194,000 and the amount drawn on the note was $4,945,827 USD or $7,116,057. The Company had accrued interest expense of $18,634 USD or $26,811 as of March 31, 2025. Jennigs Family Investments had an unrealized currency gain of $1,049. The currency exchange rate was $1 USD to $1.4388 CAD, as listed on https://www.wsj.com/market-data/quotes/fx/USDCAD/historical-prices. See the ‘Convertible Debt’ table below for the number of shares this note can convert to.

The total amount available was $5,000,000 USD or $7,192,500 and the amount drawn on the note was $2,725,817 USD or $3,921,087. The Company had accrued interest expense of $29,031 USD or $39,765 as of December 31, 2024. Jennigs Family Investments had an unrealized currency loss of $137,384. The currency exchange rate was $1 USD to $1.4385 CAD, as listed on https://www.wsj.com/market-data/quotes/fx/USDCAD/historical-prices.

Lone Stella, LLC October 2024 Revolving Line of Credit

The Company entered into an agreement with Lone Stella, LLC, an Illinois limited liability corporation (“Lone Stella”), for a revolving line of credit on October 9, 2024. The Company issued Lone Stella a promissory note for $5,000,000 USD, with a simple interest of eight percent (8%) and a one-hundred and twenty (120) months maturity date and no covenants. Provided that ZenaTech is not in default, the Company may extend and renew this note for ten additional twelve months. Interest is calculated on a basis of 360-day year and charged for the actual number of days elapsed and payable monthly starting November 10, 2024.

Loan origination fees were 200,000 preferred shares of ZenaTech stock at a fair value of $2.49 USD or $3.41 per share having stated value of $3.00 per share , and 500,000 warrants of common stock. Each warrant shall entitle the holder to purchase common stock at an exercise price of $1.77 USD or the lowest price traded between October 9, 2024 through October 31, 2027 whichever is lower, which expires 10 years from the date of the executed agreement. Lone Stella has an option to convert all or part of the balance into ZenaTech, Inc. preferred shares with a stated value of $3.00 or convert into ZenaTech, Inc. Common Stock at the last valuation of price per share or the lowest price traded within the last 30 days. Lone Stella shall provide a written conversion notice which will be converted into preferred shares or common stock within 5 business days. In case of default ZenaTech shall pay an interest rate at the highest allowable interest under applicable law. Lone Stella, LLC has an option to convert at twenty percent (20%) discount all or part of the balance into ZenaTech common stock at the last valuation of share price or the lower price issued within the last 30 days. The conversion price is the price after applying the twenty percent (20%) discount off the market price.

The total amount available was $5,000,000 USD or $7,194,000 and the amount drawn on the note was $382,530 USD or $550,384. The Company had accrued interest expense of $23,438 USD or $33,722 as of March 31, 2025. The currency exchange rate was $1 USD to $1.4388 CAD, as listed on https://www.wsj.com/market-data/quotes/fx/USDCAD/historical-prices. See the 'Convertible Debt' table below for the number of shares this note can convert to.

The total amount available was $5,000,000 USD or $7,192,500 and the amount drawn on the note was $375,082 USD or $539,556. The Company had accrued interest expense of $82 USD or $112 as of December 31, 2024. The currency exchange rate was $1 USD to $1.4385 CAD, as listed on https://www.wsj.com/market-data/quotes/fx/USDCAD/historical-prices as of December 31, 2024.

Nancy Cowden October 2024 Revolving Line of Credit

ZenaTech entered into an agreement with Nancy Cowden for a revolving line of credit on October 9, 2024. The Company issued Nancy Cowden a promissory note for $8,000,000 USD, with a simple interest of eight percent (8%) and a one-hundred and twenty (120) months maturity date and no covenants. Provided that ZenaTech is not in default, the Company may extend and renew this note for ten additional twelve months. Interest is calculated on a basis of 360-day year and charged for the actual number of days elapsed and payable monthly starting November 10, 2024.

Loan origination fees were 400,000 preferred shares of ZenaTech stock at a fair value of $2.49 USD or $3.41 per share having stated value of $3.00 per share , and 600,000 warrants of common stock. Each warrant shall entitle the holder to purchase common stock at an exercise price of $1.77 USD or the lowest price traded between October 9, 2024 through October 31, 2027 whichever is lower, which expires 10 years from the date of the executed agreement. Nancy Cowden has an option to convert all or part of the balance into ZenaTech, Inc. preferred shares with a stated value of $3.00 or convert into ZenaTech, Inc. Common Stock at the last valuation of price per share or the lowest price traded within the last 30 days. Nancy Cowden shall provide a written conversion notice which will be converted into preferred shares or common stock within 5 business days. In case of default ZenaTech shall pay an interest rate at the highest allowable interest under applicable law. Nancy Cowden has an option to convert at twenty percent (20%) discount all or part of the balance into ZenaTech common stock at the last valuation of share price or the lower price issued within the last 30 days. The conversion price is the price after applying the twenty percent (20%) discount off the market price.

The total amount available was $8,000,000 USD or $11,510,400 and the amount drawn on the note was $751,047 USD or $1,080,606. The Company had accrued interest expense of $7,189 USD or $10,343 as of March 31, 2025. The currency exchange rate was $1 USD to $1.4388 CAD, as listed on https://www.wsj.com/market-data/quotes/fx/USDCAD/historical-prices. See the 'Convertible Debt' table below for the number of shares this note can convert to.

The total amount available was $8,000,000 USD or $11,508,000 and the amount drawn on the note $751,047 USD or $1,080,380 and made no interest payments related to this loan and accrued interest of $2,105 USD or $2,884 as of December 31, 2024. The currency exchange rate was $1 USD to $1.4385 CAD, as listed on https://www.wsj.com/market-data/quotes/fx/USDCAD/historical-prices on December 31, 2024. See the ‘Convertible Debt’ table below for the number of shares this note can convert to.

PsPortals, Inc. Note

ZenaTech acquired all stock of PsPortals, Inc., a Delaware corporation, for $901,818 USD, on January 7, 2022, with an effective date of December 31, 2021. The Company paid $450,000 USD in cash and issued a three-year promissory note that began January 1, 2022 for $568,755 USD, which includes additional interest of six percent (6%) per year, has a maturity date of December 31, 2024 and was payable to its former shareholders.

The Company paid off this loan in the last quarter of 2024. This loan is no longer outstanding and had no balance as of March 31, 2025.

The Company paid $227,636 to former PsPortals shareholders and had $Nil currency exchange loss as of December 31, 2024. The currency exchange rate was $1 USD to $1.4385 CAD, as listed on https://www.wsj.com/market-data/quotes/fx/USDCAD/historical-prices on December 31, 2024.

Propal Investments LLC Loan

The Company secured a $500,000 USD or $677,550, three-year loan from Propal Investments, LLC on December 15, 2022. Interest payments are paid on the 10^th of each month and the principal is due December 14, 2025. This loan carries 20 units of debt and one unit contains $25,000 USD or $33,878 unit of debenture, which equals $500,000 USD or $677,550. Each one unit of debenture carries an annual rate of fourteen percent (14%), paid monthly, with no prepayment penalty. Unpaid principal and accrued interest of this loan can convert into common shares at a 20% from market value. Each of the 20 units of debt carry 2,083 warrants for total of 41,667 warrants. Each warrant is exercisable to purchase one share of common stock of the Company at $12 Canadian, which is equal to $8.77 USD using a conversion rate of $1 USD to $1.368 as of the balance sheet date. The warrants expire three years after the Company listing on a recognized state exchange. The loan also has a minimum conversion amount of $25,000 USD or $33,878 or a debenture holder’s remaining debt, whichever is less. The maximum conversion per month is equal to the greater of twenty-five (25%) of a debenture holder’s initial investment of $25,000 USD or $33,878. The conversion price after applying the twenty percent (20%) discount must be equal to or greater than $0.75 USD or $1.02. The loan has a personal guarantee by James A. Sherman, the Company’s Chief Financial

Officer and Director (note 16). For the foreign currency conversions above we used the currency exchange rate of $1 USD to $1.3551 CAD as of December 31, 2022 and as listed by www.poundsterlinglive.com.

ZenaTech paid $100,000 USD or $143,880 towards the principal during the first quarter of 2025.

ZenaTech paid $100,000 USD or $143,850 towards the principal during the last quarter of 2024.

The Company’s outstanding balance on this loan was $300,000 USD or $431,640. The currency exchange rate was $1 USD to $1.4388 CAD, as listed on https://www.wsj.com/market-data/quotes/fx/USDCAD/historical-prices on March 31, 2025. See the ‘Convertible Debt’ table below for the number of shares this note can convert to.

The Company’s outstanding balance on this loan was $400,000 USD or $575,400. The currency exchange rate was $1 USD to $1.4385 CAD, as listed on https://www.wsj.com/market-data/quotes/fx/USDCAD/historical-prices on December 31, 2024.

GG Mars Capital, Inc. Debentures

The Company secured a $150,000 USD or $170,308 three-year loan from GG Mars Capital, Inc. on January 9, 2024. GG Mars Capital, Inc. is a related party, see note 16. The principal is due January 8, 2027. This loan carries 30 units, and one unit contains $5,000 USD or $6,770 unit of debenture. Each one unit of debenture carries an annual rate of ten percent (10%), paid monthly and no prepayment penalty. The loan also has a minimum conversion amount of $5,000 USD or $6,770, or a debenture holder’s remaining debt, whichever is less. The maximum conversion per month is $25,000 USD or $37,848. The conversion price after applying the twenty percent (20%) discount off the market price. The currency exchange rate used in calculating the amounts above was $1 USD to $1.3539 CAD, as listed on https://www.wsj.com/market-data/quotes/fx/USDCAD/historical-prices as of March 31, 2024.

The Company’s outstanding balance on this loan was $168,049 USD or $241,788 and accrued interest of $4,067 USD or $5,852 related to this loan as of March 31, 2025. GG Mars had an unrealized currency exchange gain of $63. The currency exchange rate was $1 USD to $1.4388 CAD, as listed on https://www.wsj.com/market-data/quotes/fx/USDCAD/historical-prices. See the ‘Convertible Debt’ table below for the number of shares this note can convert to.

The Company’s outstanding balance on this loan was $163,972 USD or $235,874 and accrued interest of $12,308 USD or $19,207 related to this loan as of December 31, 2024. GG Mars had an unrealized currency exchange gain of $774. The currency exchange rate was $1 USD to $1.4385 CAD, as listed on https://www.wsj.com/market-data/quotes/fx/USDCAD/historical-prices on December 31, 2024.

Marie Pindling Debenture

The Company secured a $10,000 USD or $13,539, three-year loan from Marie Pindling on January 9, 2024. Marie Pindling is a related party, see note 16. The principal is due January 8, 2027. This loan carries 2 units, and one unit contains $5,000 USD or $6,770 unit of debenture, which equals $10,000 USD or $13,539. Each one unit of debenture carries an annual rate of ten percent (10%), paid monthly and no prepayment penalty. The loan also has a minimum conversion amount of $5,000 USD or $6,770, or a debenture holder’s remaining debt, whichever is less. The maximum conversion per month is $25,000 USD or $37,848. The conversion price after applying the twenty percent (20%) discount off the market price. The currency exchange rate used in calculating the amounts above was $1 USD to $1.3539 CAD, as listed on https://www.wsj.com/market-data/quotes/fx/USDCAD/historical-prices as of March 31, 2024.

Marie Pindling and the Company agreed to convert this debt to 6,760 shares of common stock on October 9, 2024. The Company incurred a foreign exchange loss of $672 related to this conversion for the last quarter ended December 31, 2024. The currency exchange rate was $1 USD to $1.4385 CAD, as listed on https://www.wsj.com/market-data/quotes/fx/USDCAD/historical-prices on December 31, 2024.

Olga Passley Debenture

The Company secured a $10,000 USD or $13,539, three-year loan from Olga Passley on January 9, 2024. Olga Passley is a related party, see note 16. The principal is due January 8, 2027. This loan carries 2 units, and one unit contains $5,000 USD or $6,770 unit of debenture, which equals $10,000 USD or $13,539. Each one unit of debenture carries an annual rate of ten percent (10%), paid monthly and no prepayment penalty. The loan also has a minimum conversion amount of $5,000 USD or $6,770, or a debenture holder’s remaining debt, whichever is less. The maximum conversion per month is $25,000 USD or $37,848. The conversion price after applying the twenty percent (20%) discount off the market price. The currency exchange rate used in calculating the amounts above was $1 USD to $1.3539 CAD, as listed on https://www.wsj.com/market-data/quotes/fx/USDCAD/historical-prices as of March 31, 2024.

Olga Passley and the Company agreed to convert this debt to 6,760 shares of common stock on October 9, 2024. The Company incurred a foreign exchange loss of $672 related to this conversion for the last quarter ended December 31, 2024. The currency exchange rate was $1 USD to $1.4385 CAD, as listed on https://www.wsj.com/market-data/quotes/fx/USDCAD/historical-prices on December 31, 2024.

Yvonne Rattray Debenture

The Company secured a $10,000 USD or $13,539, three-year loan from Yvonne Rattray on January 11, 2024. Yvonne Rattray is a related party, see note 16. The principal is due January 10, 2027. This loan carries 2 units, and one unit contains $5,000 USD or $6,770 unit of debenture, which equals $10,000 USD or $13,539. Each one unit of debenture carries an annual rate of ten percent (10%), paid monthly and no prepayment penalty. The loan also has a minimum conversion amount of $5,000 USD or $6,770, or a debenture holder’s remaining debt, whichever is less. The maximum conversion per month is $25,000 USD or $37,848. The conversion price after applying the twenty percent (20%) discount off the market price. The currency exchange rate used in calculating the amounts above was $1 USD to $1.3539 CAD, as listed on https://www.wsj.com/market-data/quotes/fx/USDCAD/historical-prices as of March 31, 2024.

Yvonne Rattray and the Company agreed to convert this debt to 6,760 shares of common stock on October 9, 2024. The Company incurred a foreign exchange loss of $672 related to this conversion for the last quarter ended December 31, 2024. The currency exchange rate was $1 USD to $1.4385 CAD, as listed on https://www.wsj.com/market-data/quotes/fx/USDCAD/historical-prices on December 31, 2024.

Nancy Cowden Subscription Debenture

The Company secured a $1,000,000 USD or $1,323,400, three-year loan from Nancy Cowden on March 14, 2024. The principal is due March 15, 2027. This loan carries 200 units, and one unit contains $5,000 USD or $6,622 unit of debenture, which equals $1,000,000 USD or $1,362,600. The subscriber will wire $100,00 upon the execution of the agreement and will wire the remaining $900,000 upon the SEC sending a completed review letter which means the registration statement is effective and approved. Each one unit of debenture carries an annual rate of ten percent (10%) monthly converted into additional principal each month. The loan also has a minimum conversion amount of $25,000 USD or $33,118, or a debenture holder’s remaining debt, whichever is less. The maximum conversion per month is $100,000 USD or $135,390. The conversion price is the price after applying the twenty percent (20%) discount off the market price.

The currency exchange rate used in calculating the amounts above was $1 USD to $1.3539 CAD, as listed on https://www.wsj.com/market-data/quotes/fx/USDCAD/historical-prices as of March 31, 2024. This loan agreement was terminated and any outstanding balance that was due was rolled over into the new agreement on October 9, 2024 to a new loan, see Nancy Cowden Revolving Line of Credit below.

Convertible Debt Table

Certain debts can be converted into the Company’s Common Stock at a 20% discount. The total number of shares issuable for convertible debt is 6,006,569 as of March 31, 2025. This assumes all potentially convertible debt was converted as of March 31, 2025. Other assumptions include a common stock market price of $2.58 USD or $3.71 per share on March 31, 2025 and a USD to Canadian conversion rate $1.4388 as listed on https://www.wsj.com/market-data/quotes/fx/USDCAD/historical-prices on that date.

See table below for debt itemization. All amounts are in CAD in the table below.

	As of	Number
	March 31,	of
	2025	Shares
GG Mars Capital, Inc. – revolving line of credit	$ 2,215,773	746,131
Star Financial Corporation – revolving line of credit	1,826,888	615,179
Jennings Family Investments, Inc. – revolving line of credit	7,116,057	2,396,234
Lone Stella – revolving line of credit	550,384	1,651,152
Nancy Cowden – revolving line of credit	1,102,062	371,104
GG Mars Capital, Inc. - debentures – convertible debt at 20% discount	241,788	81,419
Propal Investments LLC – convertible debt at a 20% discount	431,640	145,349
Total Number of Common Stock Shares Debt can Convert to	$ 13,484,592	6,006,569

12.SHARE CAPITAL

Authorized Common Shares

The Company is authorized to issue an unlimited number of Common Shares with a par value of $0.30.

Holders of Common Shares are entitled to one vote per share upon all matters on which they have the right to vote. The Common Shares do not have pre-emptive rights, conversion rights or exchange rights and are not subject to redemption, retraction, purchase for cancellation or surrender provisions. The Company may, if authorized by the directors, purchase or otherwise acquire any of its Common Shares at a price and upon the terms determined by the directors. There are no sinking or purchase fund provisions, no provisions permitting or restricting the issuance of additional securities or any other material restrictions, and there are no provisions which are capable of requiring a security holder to contribute additional capital. Holders of the Common Shares are entitled to receive such dividends as may be declared by the Board of Directors out of funds legally available therefore. In the event of dissolution or winding up of the affairs of the Company, holders of the Common Shares are entitled to share ratably in all assets of the Company remaining after payment of all amounts due to creditors.

Issued and Outstanding Common Shares

ZenaTech issued 166,667 common shares of the Company to Maxim Group, LLC on February 7, 2024 for advisory services in connection with its Nasdaq listing at a price of $4.80 per share.

ZenaTech issued 3,333 common shares of the Company to Yvonne Rattray on February 7, 2024 for services as director of the Company at a price of $4.80 per share.

ZenaTech issued 3,333 common shares of the Company to Neville Brown on February 7, 2024 for services as director of the Company at a price of $4.80 per share.

ZenaTech effected a 1 to 6 reverse stock split of its common shares on July 1, 2024. The Company had 17,080,050 shares of common stock on a post reverse stock split basis, including 63,722 shares issuable upon exercise of outstanding warrants as of December 31, 2024. The above financial statements were updated to reflect the post-reverse split stock allocation, as per IAS 33, paragraph 64.

On July 1, 2024 ZenaTech reduced the share capital by 30 shares to account for fractional shares as a result of 1 to 6 split as such there were 17,016,486 shares post-split.

On July 24, 2024 ZenaTech issued 291,829 units at a price of $10.28 per unit for gross proceeds of approximately $4,133,402 each unit being comprised of one common share and one warrant, , with each warrant being exercisable at a price of $10.28 USD for a period of three years from the time the shares are listed for trading on a recognized stock exchange. The Company raised the funds for general corporate and working capital purposes. The currency exchange rate was $1 USD to $1.3670 CAD, as listed on https://www.wsj.com/market-data/quotes/fx/USDCAD/historical-prices on July 15, 2024 to calculate the above foreign exchange conversion. As a result, the Company had 17,663,879 shares, including 355,551 common shares issuable upon exercise of outstanding warrants as of July 15, 2024.

Below are described all transactions making up the 291,829 warrants from the paragraph above. These warrants do not have any value as of December 31, 2024 since they were issued when the company was private and the stock price was $0.30. Since the Company became public and as of December 31, 2024 the Company’s stock price did not reach the warrants offering price of $10.28 as such they are considered out of the money since they could not be exercised. At all times since issuance, the warrant offering price was more than the stock price.

On July 24, 2024 ZenaTech and Star Financial Corporation, a related party, entered into a purchase agreement, where ZenaTech will sell Star Financial Corporation 49,088 shares of common stock at $10.28 USD per share for an aggregate price of $695,272 USD, par value of $0.30 Canadian per share, and 49,088 warrants or one warrant for one share of common stock (note 16). Each warrant shall entitle Star Financial Corporation to purchase one share of common stock at $10.28 USD, immediately prior to and subject to the consummation of the direct listing on a national stock exchange. Each warrant will have a duration of three years starting on the first day of the Company’s stock on the NASDAQ.

ZenaTech issued 49,088 shares of common stock and 49,088 warrants to Star Financial Corporation for $695,272 USD on July 24, 2024 under this agreement.

On July 24, 2024 ZenaTech and GG Mars Capital, a related party, entered into a purchase agreement, where ZenaTech will sell GG Mars Capital 55,396 shares of common stock at $10.28 USD per share for an aggregate price of $784,617 USD, par value of $0.30 Canadian per share, and 55,396 warrants or one warrant for one share of common stock (note 16). Each warrant shall entitle GG Mars Capital to purchase one share of common stock at $10.28 USD, immediately prior to and subject to the consummation of the direct listing on a national stock exchange. Each warrant will have a duration of three years starting on the first day of the Company’s stock on the NASDAQ.

ZenaTech issued 55,396 shares of common stock and 55,396 warrants for $784,617 USD to GG Mars Capital on July 24, 2024 under this agreement.

On July 24, 2024 ZenaTech and Jacob D Sherman entered into a purchase agreement, where ZenaTech will sell Jacob D Sherman 9,728 shares of common stock at $10.28 USD per share for an aggregate price of $137,785 USD, par value of $0.30 Canadian per share, and 9,728 warrants or one warrant for one share of common stock. Each warrant shall entitle Jacob D Sherman to purchase one share of common stock at $10.28 USD, immediately prior to and subject to the consummation of the direct listing on a national stock exchange. Each warrant will have a duration of three years starting on the first day of the Company’s stock on the NASDAQ.

ZenaTech issued 9,728 shares of common stock and 9,728 warrants for $137,785 USD to Jacob D Sherman on July 24, 2024 under this agreement.

On July 24, 2024 ZenaTech and Nancy Cowden entered into a purchase agreement, where ZenaTech will sell Nancy Cowden 116,732 shares of common stock at $10.28 USD per share for an aggregate price of $1,653,367 USD, par value of $0.30 Canadian per share, and 116,732 warrants or one warrant for one share of common stock. Each warrant shall entitle Nancy Cowden to purchase one share of common stock at $10.28 USD, immediately prior to and subject to the consummation of the direct listing on a national stock exchange. Each warrant will have a duration of three years starting on the first day of the Company’s stock on the NASDAQ.

ZenaTech issued 116,732 shares of common stock and 116,732 warrants for $1,653,367 USD to Nancy Cowden on July 24, 2024 under this agreement.

On July 24, 2024 ZenaTech and Lone Stella, LLC entered into a purchase agreement, where ZenaTech will sell Lone Stella 60,885 shares of common stock at $10.28 USD per share for an aggregate price of $862,362 USD, par value of $0.30 Canadian per share, and 60,885 warrants or one warrant for one share of Common Stock. Each warrant shall entitle Lone Stella to purchase one share of common stock at $10.28 USD, immediately prior to and subject to the consummation of the direct listing on a national stock exchange. Each warrant will have a duration of three years starting on the first day of the Company’s stock on the NASDAQ.

ZenaTech issued 60,885 shares of common stock and 60,885 warrants for $862,362 USD to Lone Stella on July 24, 2024 under this agreement.

ZenaTech issued 500,000 common shares of the Company to Epazz, Inc., a related party, for purchase of ZooOffice, Inc. on October 1, 2024.

ZenaTech issued 1,000,000 common shares of the Company to Ameritek Ventures, Inc., a related party, for purchase of Ecker Capital, Inc. on October 1, 2024.

ZenaTech paid directors a total of 201,692 shares of common stock issued at $1.77 USD. See below the breakdown of the issuances on October 9, 2024.

ZenaTech issued 100,000 common shares of the Company to Shaun Passley, PhD on October 9, 2024 for services as director of the Company at a price of $1.77 USD per share.

ZenaTech issued 28,248 common shares of the Company to Craig Passley on October 9, 2024 for services as director of the Company at a price of $1.77 USD per share.

ZenaTech issued 28,248 common shares of the Company to James Sherman on October 9, 2024 for services as director of the Company at a price of $1.77 USD per share.

ZenaTech issued 11,299 common shares of the Company to Paul Piekos on October 9, 2024 for services as director of the Company at a price of $1.77 USD per share.

ZenaTech issued 11,299 common shares of the Company to Thomas Burns on October 9, 2024 for services as director of the Company at a price of $1.77 USD per share.

ZenaTech issued 11,299 common shares of the Company to Neville Brown on October 9, 2024 for services as director of the Company at a price of $1.77 USD per share.

ZenaTech issued 11,299 common shares of the Company to Yvonne Rattray on October 9, 2024 for services as director of the Company at a price of $1.77 USD per share.

ZenaTech issued 101,406 common shares of the Company to GG Mars Capital, a related party, for $205,695 USD from the debt conversion note issued on October 9, 2024 (note 16). The Conversion price was $1.4792 USD per share, a 20% discount from $1.8490 price per share on October 9, 2024.

ZenaTech issued 101,406 common shares of the Company to Star Financial Corporation, a related party, for $205,695 USD from the debt conversion note issued on October 9, 2024. The Conversion price was $1.4792 USD per share, a 20% discount from $1.8490 price per share on October 9, 2024.

ZenaTech issued 270,416 common shares of the Company to Jennings Family Investments for $548,519 USD from the debt conversion issued on October 9, 2024. The Conversion price was $1.4792 USD per share, a 20% discount from $1.8490 price per share on October 9, 2024.

ZenaTech issued 6,760 common shares to Marie Pindling, a related party, on October 9, 2024. This was a conversion of her $10,000 USD convertible debenture from January 9, 2024. The Conversion price was $1.4792 USD per share, a 20% discount from $1.8490 price per share on October 9, 2024.

ZenaTech issued 6,760 common shares to Olga Passley, a related party, on October 9, 2024. This was a conversion of her $10,000 USD convertible debenture from January 9, 2024. The Conversion price was $1.4792 USD per share, a 20% discount from $1.8490 price per share on October 9, 2024.

ZenaTech issued 6,760 common shares to Yvonne Rattray, a related party, on October 9, 2024. This was a conversion of her $10,000 USD convertible debenture from January 9, 2024. The Conversion price was $1.4792 USD per share, a 20% discount from $1.8490 price per share on October 9, 2024.

ZenaTech issued 600,000 common shares of the Company to GG Mars Capital, a related party, for $1,453,373 USD debt conversion on October 11, 2024. The Conversion price was $1.76 USD per share, a 20% discount from $2.2 price per share on October 11, 2024.

ZenaTech issued 500,000 common shares of the Company to Star Financial Corporation, a related party, for $1,211,144 USD debt conversion on October 11, 2024. The Conversion price was $1.76 USD per share, a 20% discount from $2.2 price per share on October 11, 2024.

ZenaTech issued 500,000 common shares of the Company to GG Mars Capital, a related party, for $1,197,158 USD on October 24, 2024. This amount was drawn from the note issued on October 9, 2024. The Conversion price was $1.7280 USD per share, a 20% discount from $2.16 price per share on October 24, 2024.

ZenaTech issued 500,000 common shares of the Company to Star Financial Corporation, a related party, for $1,197,158 USD on October 24, 2024. This amount was drawn from the note issued on October 9, 2024. The Conversion price was $1.7280 USD per share, a 20% discount from $2.16 price per share on October 24, 2024.

ZenaTech issued 500,000 common shares of the Company to Jennings Family Investments for $1,197,158 USD on October 24, 2024. This amount was from the note issued on October 9, 2024. The Conversion price was $1.7280 USD per share, a 20% discount from $2.16 price per share on October 9, 2024.

ZenaTech issued 166,667 common shares of the Company to Maxim Group, LLC on November 22, 2024 for advisory services in connection with its Nasdaq listing at a price of $1.45 USD per share.

ZenaTech issued 200,000 common shares of the Company at $1.45 USD to Shaun Passley, PhD for patents on November 20, 2024.

ZenaTech issued 900,000 common shares of the Company at $1.45 USD to Epazz, Inc. for patents on November 22, 2024.

ZenaTech issued 550,000 common shares of the Company to GG Mars Capital, a related party, for $1,094,291 on November 22, 2024. This amount was drawn from the note issued on October 9, 2024. The Conversion price was $1.432 USD per share, a 20% discount from $1.79 price per share on November 22, 2024.

ZenaTech issued 950,000 common shares of the Company to Jennings Family Investments for $1,890,140 USD from the debt conversion issued on November 22, 2024. The Conversion price was $1.432 USD per share, a 20% discount from $1.79 price per share on October 9, 2024.

ZenaTech issued 80,942 common shares of the Company to Nancy Cowden for $161,044 USD from the debt conversion issued on November 22, 2024. The Conversion price was $1.432 USD per share, a 20% discount from $1.79 price per share on October 9, 2024.

ZenaTech issued 150,000 common shares of the Company to Star Financial Corporation, a related party, for $298,443 USD on November 22, 2024. This amount was drawn from the note issued on October 9, 2024. The Conversion price was $1.432 USD per share, a 20% discount from $1.79 price per share on October 24, 2024.

ZenaTech issued 200,000 common shares of the Company to GG Mars Capital, Inc. for warrants. The Conversion price was $1.77 USD per share (note 16).

ZenaTech issued 200,000 common shares of the Company to Jennings Family Investments for warrants. The Conversion price was $1.77 USD per share.

The Company’s outstanding share capital was 25,501,124 common shares of stock as of March 31, 2025.

The Company’s outstanding share capital was 25,101,124 common shares of stock as of December 31, 2024.

Authorized Preferred Shares

The Company is authorized to issue 100,000,000 Preferred Shares at a stated value of $3.

Holders of Preferred Shares are not entitled to vote. The Preferred Shares do not have pre-emptive rights, conversion rights or exchange rights and are not subject to redemption, retraction, purchase for cancellation or surrender provisions. There are no sinking or purchase fund provisions, no provisions permitting or restricting the issuance of additional securities or any other material restrictions, and there are no provisions which can require a security holder to contribute additional capital. Holders of the Preferred Shares are entitled to receive such dividends as may be declared by the Board of Directors out of funds legally available therefore. In the event of dissolution or winding up of the affairs of the Company, holders of the Preferred Shares are entitled to liquidation first in all assets of the Company remaining after payment of all amounts due to creditors.

Issued and Outstanding Preferred Shares

ZenaTech had 17,270,000 issued and outstanding Preferred Shares as of December 31, 2024.

ZenaTech issued 120,000 preferred shares of the Company to Shaun Passley, PhD, a related party, as compensation on January 16, 2025 (note 16).

ZenaTech issued 550,000 preferred shares of the Company to Epazz, Inc., a related party, for purchase of ZooOffice, Inc. on October 1, 2024 (note 16).

ZenaTech issued 750,000 preferred shares of the Company to Ameritek Ventures, Inc., a related party, for purchase of Ecker Capital, Inc. on October 1, 2024 (note 16).

ZenaTech issued 500,000 preferred shares of the Company to Shaun Passley, PhD, a related party, for purchase of patents on November 20, 2024 (note 16).

ZenaTech issued 200,000 preferred shares of the Company to GG Mars Capital, a related party, as loan origination fees (note 16).

ZenaTech issued 200,000 preferred shares of the Company to Jennins Family Investments, as loan origination fees.

ZenaTech issued 200,000 preferred shares of the Company to Star Financial Corporations, a related party, as loan origination fees (note 16).

ZenaTech issued 200,000 preferred shares of the Company to Lone Stella, LLC, as loan origination fees.

ZenaTech issued 400,000 preferred shares of the Company to Nancy Cowden, as loan origination fees.

ZenaTech issued 1,150,000 preferred shares of the Company to Epazz, a related party, for purchase of patents on November 20, 2024 (note 16).

ZenaTech issued 3,000,000 preferred shares of the Company to Shaun Passley, PhD, a related party, for purchase of patents on December 31, 2024 (note 16).

ZenaTech issued 1,000,000 preferred shares of the Company to Epazz, a related party, for purchase of patents on December 31, 2024 (note 16).

ZenaTech had 17,270,000 issued and outstanding Preferred Shares as of March 31, 2025.

ZenaTech had 17,150,000 issued and outstanding Preferred Shares as of December 31, 2024.

Authorized Super Voting Shares

The Company is authorized to issue 23,000,000 Super Voting Shares with a stated value of $30 per share.

Holders of Super Voting Shares have one thousand votes per share upon all matters on which they have the right to vote. The Super Voting Shares do not have pre-emptive rights, conversion rights or exchange rights and are not subject to redemption, retraction, purchase for cancellation or surrender provisions. There are no sinking or purchase fund provisions, no provisions permitting or restricting the issuance of additional securities or any other material restrictions, and there are no provisions which can require a security holder to contribute additional capital. Holders of the Super Voting Shares are entitled to receive such dividends as may be declared by the Board of Directors out of funds legally available therefore. In the event of dissolution or winding up of the affairs of the Company, holders of the Super Voting Shares are entitled to liquidation second in all assets of the Company remaining after payment of all amounts due to creditors.

ZenaTech issued 3,000 super voting shares of the Company to Epazz, a related party, for purchase ZooOffice on October 1, 2024.

ZenaTech issued 5,000 super voting shares of the Company to Ameritek Ventures, a related party, for purchase Ecker Capital on October 1, 2024.

ZenaTech issued 10,000 preferred shares of the Company to Shaun Passley, PhD, a related party, for purchase of patents on December 31, 2024.

ZenaTech issued 42,000 preferred shares of the Company to Epazz, a related party, for purchase of patents on December 31, 2024.

Issued and Outstanding Super Voting Shares

ZenaTech had 60,000 issued and outstanding Super Voting Shares as of March 31, 2025.

ZenaTech had 60,000 issued and outstanding Super Voting Shares as of December 31, 2024.

Warrants Outstanding

The Company had 2,555,551 warrants outstanding as of March 31, 2025. Below is a table summarizing the warrants. Of these warrants only the loan origination fees issued in October 2024 had value as of March 31, 2025 and are represented on the balance sheet.

Issue Date	Name	Reason for Issuance	Number
09-19-2020	Various	Subscription, OSE listing	22,056
02-15-2022	Propal Investments, LLC	Debt issuance 2022	41,666
07-23-2024	Star Financial Corporation	July 2024 purchase agreement	49,088
07-23-2024	GG Mars Capital, Inc.	July 2024 purchase agreement	55,396
07-23-2024	Jacob D Sherman	July 2024 purchase agreement	9,728
07-23-2024	Nancy Cowden	July 2024 purchase agreement	116,732
07-23-2024	Lone Stella	July 2024 purchase agreement	60,885
10-09-2024	GG Mars Capital, Inc.	Oct 2024 debt origination fees	300,000
10-09-2024	Star Financial Corporation	Oct 2024 debt origination fees	500,000
10-09-2024	Jennings Family Investments	Oct 2024 debt origination fees	300,000
10-09-2024	Lone Stella	Oct 2024 debt origination fees	500,000
10-09-2024	Nancy Cowden	Oct 2024 debt origination fees	600,000
	Total warrants		2,495,551

GG Mars Capital exercised 200,000 warrants and converted them at $1.77 USD on January 27, 2025 (note 16).

Jennings Family Investments exercised 200,000 warrants and converted them at $1.77 USD on January 27, 2025.

The table below summarizes the total of the 2,555,551 outstanding warrants and the strike price as of March 31, 2025. The Company applied a USD to Canadian conversion rate of $1.4388 as of March 31, 2025 when calculating the option price for the warrants.

		Option	Conversion	Option	Share Price	Intrinsic
Warrants	Curr	Price	Rate Can/US	Price USD	03/31/2025	Value	Dilution
291,829	USD	10.28	n/a	10.28	2.58	non-dilutive	–
41,666	CAN	12.00	0.7100	8.52	2.58	non-dilutive	–
22,056	CAN	0.90	0.7100	0.64	2.58	1.94	16,593
2,200,000	USD	1.77	n/a	1.77	2.58	0.81	690,698
2,555,551							707,291

The Company had 2,955,551 warrants outstanding as of December 31, 2024. Below is a table summarizing the warrants. Of these warrants only the loan origination fees issued in October 2024 had value as of December 31, 2024 and are represented on the balance sheet.

Issue Date	Name	Reason for Issuance	Number
09-19-2020	Various	Subscription, OSE listing	22,056
02-15-2022	Propal Investments, LLC	Debt issuance 2022	41,666
07-23-2024	Star Financial Corporation	July 2024 purchase agreement	49,088
07-23-2024	GG Mars Capital, Inc.	July 2024 purchase agreement	55,396
07-23-2024	Jacob D Sherman	July 2024 purchase agreement	9,728
07-23-2024	Nancy Cowden	July 2024 purchase agreement	116,732
07-23-2024	Lone Stella	July 2024 purchase agreement	60,885
10-09-2024	GG Mars Capital, Inc.	Oct 2024 debt orig fees	500,000
10-09-2024	Star Financial Corporation	Oct 2024 debt orig fees	500,000
10-09-2024	Jennings Family Investments	Oct 2024 debt orig fees	500,000
10-09-2024	Lone Stella	Oct 2024 debt orig fees	500,000
10-09-2024	Nancy Cowden	Oct 2024 debt orig fees	600,000
	Total warrants		2,995,551

For a complete description of the warrants issuances, see below.

The Company issued 22,056 warrants on September 19, 2020 upon conversion of subscription receipts issued on September 19, 2019. Each warrant is exercisable into one common share at a price of $0.90 per share for a period of three years from the date that the shares are listed on a recognized stock exchange.

ZenaTech had 41,666 warrants outstanding issued to Propal Investments, LLC from the debt agreement as of December 31, 2024.

The Company secured a $500,000 USD or $677,550, three-year loan from Propal Investments, LLC on December 15, 2022. Interest payments are paid on the 10^th of each month and the principal is due December 14, 2025. This loan carries 20 units of debt and one unit contains $25,000 USD or $33,878 unit of debenture, which equals $500,000 USD or $677,550. Unpaid principal and accrued interest of this loan can convert into common shares at a 20% from market value. Each of the 20 units of debt carry 2,083 warrants for total of 41,667 warrants. Each warrant is exercisable to purchase one share of common stock of the Company at $12 Canadian, which is equal to $8.90 USD using a conversion rate of $1 USD to $1.4385 as of the balance sheet date. These warrants expire three years after the Company listing on a recognized state exchange. The loan also has a minimum conversion amount of $25,000 USD or $33,878 or a debenture holder’s remaining debt, whichever is less. The maximum conversion per month is equal to the greater of twenty-five (25%) of a debenture holder’s initial investment of $25,000 USD or $33,878. The conversion price after applying the twenty percent (20%) discount must be equal to or greater than $0.75 USD or $1.01. The loan has a personal guarantee by James A. Sherman, the Company’s Chief Financial Officer and Director (note 16). For the foreign currency conversions above we used the currency exchange rate of $1 USD to $1.3551 CAD as of December 31, 2022 and as listed by www.poundsterlinglive.com.

Below are described all transactions making up the 291,829 warrants for issued on July 24, 2024 from the paragraph above. These warrants do not have any value as of December 31, 2024 since they were issued when the company was private and the stock price was $0.30. Since the Company became public and as of December 31, 2024 the Company’s stock price did not reach the warrants offering price of $10.28 as such they are considered out of the money since they could not be exercised. At all times since issuance, the warrant offering price was more than the stock price

ZenaTech had 116,732 warrants outstanding issued to Nancy Cowden from the stock purchase agreement as of December 31, 2024.

On July 24, 2024 the Company and Nancy Cowden entered into a purchase agreement, where ZenaTech will sell Nancy Cowden 121,596 shares of common stock at $10.28 USD per share for an aggregate price of $1,250,006.88 USD, par value of $0.30 Canadian per share, and one warrant for one share of common stock, or 121,576 warrants. Each warrant shall entitle Nancy Cowden to purchase one share of common stock at $10.28 USD, immediately prior to and subject to the consummation of the direct listing on a national stock exchange. Each warrant will have a duration of three years starting on the first day of the Company’s stock on the NASDAQ.

ZenaTech had 60,885 warrants outstanding issued to Lone Stella, LLC from stock purchase agreement as of December 31, 2024.

On July 24, 2024 the Company and Lone Stella, LLC entered into a purchase agreement, where ZenaTech will sell Lone Stella 60,885 shares of common stock at $10.28 USD per share for an aggregate price of $625,987.80 USD, par value of $0.30 Canadian per share,

and 60,885 warrants or one warrant for one share of Common Stock. Each warrant shall entitle Lone Stella to purchase one share of common stock at $10.28 USD, immediately prior to and subject to the consummation of the direct listing on a national stock exchange. Each warrant will have a duration of three years starting on the first day of the Company’s stock on the NASDAQ.

ZenaTech had 55,396 warrants outstanding issued to GG Mars Capital from stock purchase agreement as of December 31, 2024.

ZenaTech had 49,088 warrants outstanding issued to Star Financial Corporation from stock purchase agreement as of December 31, 2024.

ZenaTech issued 9,728 shares of common stock and 9,728 warrants for $137,785 USD to Jacob D Sherman on July 24, 2024 under this agreement.

ZenaTech had 500,000 warrants outstanding issued to GG Mars Capital from the issuance of the October 9, 2024 revolving line of credit note.

ZenaTech entered into an agreement with GG Mars Capital, Inc., a related party, for a convertible line of credit on October 9, 2024 (note 10). The Company issued GG Mars Capital a promissory note for $5,000,000 USD with a simple interest of eight percent (8%) and a one-hundred and twenty (120) month maturity date and no covenants. The principal amount of this loan shall be due and payable on October 8, 2034. Interest is calculated on a basis of 360-day year and charged for the actual number of days elapsed and payable monthly starting November 1, 2024. Provided that ZenaTech is not in default, the Company may extend and renew this note for ten additional twelve months. Loan origination fees were 200,000 preferred shares of ZenaTech stock at $3.00 per share and 500,000 warrants of common stock. Each warrant shall entitle GG Mars Capital to purchase the Company’s common stock at an exercise price of $1.77 USD or the lowest price traded between October 9, 2024 through October 31, 2027 whichever is lower, which expires 10 years from the date of this executed agreement. GG Mars Capital shall have an option to convert all or part of the balance into ZenaTech, Inc. preferred shares with a stating value of $3.00 or convert into ZenaTech, Inc. common stock at the last valuation of price per share or the lowest price traded within the last 30 days. GG Mars Capital shall provide a written conversion notice which will be convert into preferred shares or common stock within 5 business days. GG Mars Capital, Inc. is owned by a family member of Shaun Passley, PhD. Epazz, Inc. and Shaun Passley, PhD have common control of the Company’s shares outstanding.

ZenaTech had 500,000 warrants outstanding issued to Star Financial Corporation from the issuance of the October 9, 2024 revolving line of credit note.

$1.77 USD or the lowest price traded between October 9, 2024 through October 31, 2027 whichever is lower, which expires 10 years from the date of this executed agreement. Star Financial Corporation shall have an option to convert all or part of the balance into ZenaTech, Inc. preferred shares with a stating value of $3.00 or convert into ZenaTech, Inc. common stock at the last valuation of price per share or the lowest price traded within the last 30 days. Star Financial Corporation shall provide a written conversion notice which will be convert into preferred shares or common stock within 5 business days. Star Financial Corporation is owned by a family member of Shaun Passley, PhD. Epazz, Inc. and Shaun Passley, PhD have common control of the Company’s shares outstanding.

ZenaTech had 500,000 warrants outstanding issued to Jennings Family Investments, Inc. from the issuance of the October 9, 2024 revolving line of credit note.

Loan origination fees were 200,000 Preferred Shares of ZenaTech, Inc. at a state value of $3.00 per share and 500,000 warrants of common stock. Each warrant shall entitle the holder to purchase common stock at an exercise price of $1.77 USD or the lowest price traded between October 9, 2024 through October 31, 2027 whichever is lower, which expires 10 years from the date of the executed agreement. Jennings Family Investments, Inc. has an option to convert all or part of the balance into ZenaTech, Inc. preferred shares with a stating value of $3.00 or convert into ZenaTech, Inc. common stock at the last valuation of price per share or the lowest price traded within the last 30 days. Jennings Family Investments shall provide a written conversion notice which will be converted into preferred shares or common stock within 5 business days. In case of default ZenaTech shall pay an interest rate at the highest allowable interest under applicable law.

ZenaTech had 500,000 warrants outstanding to Lone Stella, LLC from the issuance of the October 9, 2024 revolving line of credit note.

Loan origination fees were 200,000 Preferred Shares of ZenaTech, Inc. at a state value of $3.00 per share and 500,000 warrants of common stock. Each warrant shall entitle the holder to purchase common stock at an exercise price of $1.77 USD or the lowest price traded between October 9, 2024 through October 31, 2027 whichever is lower, which expires 10 years from the date of the executed agreement. Lone Stella has an option to convert all or part of the balance into ZenaTech, Inc. preferred shares with a stating value of $3.00 or convert into ZenaTech, Inc. Common Stock at the last valuation of price per share or the lowest price traded within the last 30 days. Lone Stella shall provide a written conversion notice which will be converted into preferred shares or common stock within 5 business days. In case of default ZenaTech shall pay an interest rate at the highest allowable interest under applicable law.

ZenaTech had 600,000 warrants outstanding to Nancy Cowden from the issuance of the October 9, 2024 revolving line of credit note.

Loan origination fees were 400,000 Preferred Shares of ZenaTech, Inc. at a state value of $3.00 per share and 600,000 warrants of common stock. Each warrant shall entitle the holder to purchase common stock at an exercise price of $1.77 USD or the lowest price traded between October 9, 2024 through October 31, 2027 whichever is lower, which expires 10 years from the date of the executed agreement. Nancy Cowden has an option to convert all or part of the balance into ZenaTech, Inc. preferred shares with a stating value of $3.00 or convert into ZenaTech, Inc. Common Stock at the last valuation of price per share or the lowest price traded within the last 30 days. Nancy Cowden shall provide a written conversion notice which will be converted into preferred shares or common stock within 5 business days. In case of default ZenaTech shall pay an interest rate at the highest allowable interest under applicable law.

The valuation of these warrants was conducted by Stonebridge Advisory Inc. using the Black-Scholes Option Pricing Model, a widely accepted method for pricing financial derivatives. Key assumptions included a stock price at the grant date of $1.77 per share, an expected life of 1.8 years, a risk-free rate aligned with market benchmarks, and a zero dividend yield assumption. The initial warrant

value per unit was determined to be $0.24, with a dilution adjustment of 2.888%, resulting in a final adjusted warrant value of $0.23 per unit and a total warrant valuation of $751,000. The valuation also incorporated a foreign exchange adjustment, converting the warrant value to $0.32 per unit in CAD using an exchange rate of 1.3713. This valuation is subject to the assumptions and limitations detailed in the independent valuation report

On July 24, 2024 ZenaTech and Star Financial Corporation, a related party, entered into a purchase agreement, where ZenaTech will sell Star Financial Corporation 49,088 shares of common stock at $14.16/$10.28 USD per share for an aggregate price of $695,272, par value of $0.30 Canadian per share, and 49,088 warrants or one warrant for one share of common stock (note 16). Each warrant shall entitle Star Financial Corporation to purchase one share of common stock at $10.28 USD, immediately prior to and subject to the consummation of the direct listing on a national stock exchange. Each warrant will have a duration of three years starting on the first day of the Company’s stock on the NASDAQ.

ZenaTech issued 49,088 shares of common stock and 49,088 warrants to Star Financial Corporation for $695,272 USD on July 24, 2024 under this agreement.

On July 24, 2024 ZenaTech and GG Mars Capital, a related party, entered into a purchase agreement, where ZenaTech will sell GG Mars Capital 55,396 shares of common stock at $14.16 /$10.28 USD per share for an aggregate price of $784,617, par value of $0.30 Canadian per share, and 55,396 warrants or one warrant for one share of common stock (note 16). Each warrant shall entitle GG Mars Capital to purchase one share of common stock at $10.28 USD, immediately prior to and subject to the consummation of the direct listing on a national stock exchange. Each warrant will have a duration of three years starting on the first day of the Company’s stock on the NASDAQ.

ZenaTech issued 55,396 shares of common stock and 55,396 warrants for $784,617 USD to GG Mars Capital on July 24, 2024 under this agreement.

On July 24, 2024 ZenaTech and Jacob D Sherman entered into a purchase agreement, where ZenaTech will sell Jacob D Sherman 9,728 shares of common stock at $14.16 / $10.28 USD per share for an aggregate price of $137,785, par value of $0.30 Canadian per share, and 9,728 warrants or one warrant for one share of common stock. Each warrant shall entitle Jacob D Sherman to purchase one share of common stock at $10.28 USD, immediately prior to and subject to the consummation of the direct listing on a national stock exchange. Each warrant will have a duration of three years starting on the first day of the Company’s stock on the NASDAQ.

ZenaTech issued 9,728 shares of common stock and 9,728 warrants for $137,785 USD to Jacob D Sherman on July 24, 2024 under this agreement.

On July 24, 2024 ZenaTech and Nancy Cowden entered into a purchase agreement, where ZenaTech will sell Nancy Cowden 116,732 shares of common stock at $14.16 /$10.28 USD per share for an aggregate price of $1,653,367 USD, par value of $0.30 Canadian per share, and 116,732 warrants or one warrant for one share of common stock. Each warrant shall entitle Nancy Cowden to purchase one share of common stock at $10.28 USD, immediately prior to and subject to the consummation of the direct listing on a national stock exchange. Each warrant will have a duration of three years starting on the first day of the Company’s stock on the NASDAQ.

ZenaTech issued 116,732 shares of common stock and 116,732 warrants for $1,653,367 USD to Nancy Cowden on July 24, 2024 under this agreement.

On July 24, 2024 ZenaTech and Lone Stella, LLC entered into a purchase agreement, where ZenaTech will sell Lone Stella 60,885 shares of common stock at $14.16 /$10.28 USD per share for an aggregate price of $862,362 , par value of $0.30 Canadian per share, and 60,885 warrants or one warrant for one share of Common Stock. Each warrant shall entitle Lone Stella to purchase one share of common stock at $10.28 USD, immediately prior to and subject to the consummation of the direct listing on a national stock exchange. Each warrant will have a duration of three years starting on the first day of the Company’s stock on the NASDAQ.

ZenaTech issued 60,885 shares of common stock and 60,885 warrants for $862,362 USD to Lone Stella on July 24, 2024 under this agreement.

The table below summarizes the total of the 2,955,551 outstanding warrants and the strike price as of December 31, 2024. The Company applied a USD to Canadian conversion rate of $1.4385 as of December 31, 2024, when calculating the option price for the warrants. These warrants are non-dilutive.

		Option	Conversion	Option	Share Price	Intrinsic
Warrants	Curr	Price	Rate Can/US	Price USD	12/31/2024	Value	Dilution
291,829	USD	10.28	n/a	10.28	7.69	non-dilutive	-
41,666	CAN	12.00	0.7100	8.52	7.69	non-dilutive	-
22,056	CAN	0.90	0.7100	0.64	7.69	7.05	20,223
2,600,000	USD	1.77	n/a	1.77	7.69	5.92	2,001,560
2,955,551							2,021,783

13.DIRECTORS AND OFFICERS STOCK COMPENSATION

The Company has a Compensation Package for Directors and Executives. Elements of compensation awarded to, earned by or paid to each of our directors and executive officers who served during the last two financial years. This compensation discussion considers the size and stage of development of the Company to date.

As of December 31, 2024 the named executive officers of the Company were Shaun Passley, PhD as Chief Executive Officer, and James Sherman as Chief Financial Officer (the “Named Executive Officers”). Mr. Passley and Mr. Sherman are expected to be the only Named Executive Officers for the current fiscal year as well.

In assessing the compensation of its Named Executive Officers, the Company’s objectives have been to retain and motivate a highly talented executive team, allowing the Company to develop, evolve and achieve business and financial objectives. We believe compensation should be structured to ensure that a significant portion of an executive's compensation opportunity is at risk and related to factors that influence shareholder value.

Below are the directors and officers stock compensation details as of March 31, 2025.

ZenaTech issued 120,000 preferred shares of the Company to Shaun Passley, PhD on January 16, 2025 for services as director of the Company at a price of $3 per share.

Below are the directors and officers stock compensation details for the year ended December 31, 2024.

No other compensation was provided to key management personnel for the years ended December 31, 2023, and 2022. The Company and Shaun Passley, PhD agreed to forego his salary from inception until September 30, 2024.

The Company issued 3,333 common shares of the Company to each of Yvonne Rattray and Neville Brown for services as directors of the Company on February 7, 2024 at a price of $4.80 per share or $3.54 USD (note 16). The currency exchanged used in this conversion was $1 USD to $1.36 as of July 1, 2024 as listed on as listed on https://www.wsj.com/market-data/quotes/fx/USDCAD/historical-prices.