Consolidated Interim Financial Statements

For the Six Months Ended

June 30, 2026 and

June 30, 2025

Expressed in Canadian Dollars

Unaudited

ZenaTech, Inc.

Consolidated Statements of Financial Position

Expressed in Canadian Dollars

Unaudited

*Goodwill and Property Plant and Equipment have been retrospectively adjusted in 2025, in accordance with IFRS 3, to reflect measurement period adjustments made relating to the Empire acquisition (see Note 4).

See Nature of Operations (Note 1) and Subsequent Events (Note 17)

ZenaTech, Inc.

Consolidated Income Statements of Comprehensive Loss

Expressed in Canadian dollars

For the Six Months Ended June 30, 2026 and June 30, 2025

Unaudited

ZenaTech, Inc.

Consolidated Statements of Changes in Equity (Deficiency)

Expressed in Canadian Dollars

For the Six Months Ended June 30, 2026

and December 31, 2025

Unaudited

* These transactions remains subject to shareholder approval in accordance with applicable regulatory and corporate governance requirements

**Cancellation of these shares was carried out in Q3 but directed in Q2. As such, they are represented in Q2.

Consolidated Statements of Cash Flows

Expressed in Canadian Dollars

For the Six Months Ended June 30, 2026

and June 30, 2025

Unaudited

ZenaTech, Inc. is a technology solutions company that specializes in mission-critical cloud-based software applications integrated with smart hardware to deliver innovative solutions across diverse industries. 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.

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). ZenaTech moved its headquarters to Vancouver during January 2025.

The Common Shares of the Company are listed and posted for trading on the Nasdaq Capital Market under the trading symbol “ZENA”, on ‎the Mexican Stock Exchange (BMV) under the symbol “ZENA”, and on the Frankfurt Stock Exchange under the trading symbol “49Q”. Nasdaq is the Company's primary trading market.

The Company’s principal address and office is located at 777 Hornby Street, Suite 1460, Vancouver, British Columbia V6Z 1S4 Canada and its telephone number is (647) 249-1622. The Company’s registered and records office is located at Suite 1000 – 595 Burrard Street, Vancouver, British Columbia V7X 1M8 Canada.

The Securities Exchange Commission maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at http://www.sec.gov and search for the ticker “ZENA.” Our internet website is http://www.zenatech.com.

ZenaTech operated in the software business as it incurred expenses developing its drone business until December 31, 2024. In 2025 the Company began generating revenues in the survey business through acquisitions and now it operates in two segments: (i) software development technology, sales, and distribution and (ii) survey services (DaaS) . The Company intends to deliver these services using its internally developed drones and related technologies. ZenaTech, Inc. is a parent-holding company that operates through wholly owned subsidiary companies as described below.

Enterprise as a Software Companies

ZenaTech specializes 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. See a list of the software industries and customer serviced below.

·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. 

§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, 

ZenaTech added the following SaaS companies during 2026.

·ZenaTech completed the acquisition of NOW Solutions, Inc. (“NOW”) on April 6, 2026. NOW is expanding the Company's Enterprise SaaS division with government and public-sector customers and strengthening recurring revenue. NOW is a Richardson, Texas-based, HR and payroll software company with a long-standing list of customers including schools, hospitals, municipal organizations, and government entities across the U.S. and Canada. The material assets of the Human Resource Management System (HRMS) company, which serves small to mid-market-sized customers with workforces of 1000 to 20,000 employees, was acquired through a bankruptcy sale process under U.S. bankruptcy law. This acquisition adds a recurring revenue business with decades-long customer relationships, further strengthening ZenaTech’s Enterprise SaaS division and portfolio of software companies and brands. 

Drone as a Service Companies and Drone Technology

ZenaTech acquired the companies from the list below starting with Weddle Surveying, Inc., in connection with our Drone as a Service business during 2025 and reported revenue from this industry. The list below starts with the subsidiaries created before 2025 and ends with Andrew Spiewak Land Surveyor, Inc.

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

§ZenaDrone Limited, an Irish entity established for the Irish and European Union drone sales and drone services operations to register with the Irish Aviation Authority.  

§ZenaDrone Manufacturing, Inc., an Arizona corporation established to manufacture drones in the United States of America (“USA”) 

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

§ZenaDrone Manufacturing (FZE) (“ZenaDrone FZE”), a Sharjah, UAE company established for the manufacturing of drones and batteries. 

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

·Spider Vision Sensors Ltd opened during February 2025 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 professional land surveying company purchased January 14, 2025. Weddle serves residential and commercial clients within the Portland Metropolitan region and surrounding areas of Northwest Oregon and Southwest Washington. 

·KJM Land Surveying, Inc. (“KJM”), a Pensacola, Florida land surveying firm acquired on January 22, 2025, 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. 

·Landtec Construction Surveying, DBA Wallace Surveying Corporation, (“Wallace”) of West Palm Beach, Florida, acquired on April 2^nd, 2025. Wallace is a well-established land survey company with thirty years of experience providing construction and land development surveys delivering accurate and reliable data that supports project planning and design for developers, contractors, engineers, and architect customers. 

·Survey East, Inc., DBA Miller Land Surveying Corporation (“Miller”) of Lake Worth, Florida acquired on April 7, 2025. Miller is a land survey and mapping company in the Palm Beach County area of South Florida. 

·Laventure & Associates, Inc., (“Laventure”) of Fort Pierce, Florida was acquired on May 21, 2025, along with Atlantic Civil Engineering, Inc., a Port St. Lucie, Florida corporation. Both Laventure and Advanced Civil Engineering, Inc. operate under the Laventure name. Laventure is a land surveying, mapping, and  

service corporations with in-house expertise to service the powerline inspection market servicing Florida and neighboring states.

·Empire Land Surveying (“Empire”) of Pensacola, Florida, purchased on June 9, 2025. Empire is a Pensacola Florida-based surveying firm with over two decades of expertise and replete customer relationships for topographic, boundary and control surveys. This acquisition will serve strategic bolt-on to the January 2025 acquisition ZenaTech completed of KJM Land Surveying, further adding reach, capacity, and business and government customers in Northwest Florida and the company’s Southeast US region. 

·Morgan Land Surveying, Inc, a subsidiary of ZenaTech, bought Morgan Surveying, Inc. (“Morgan”), a Greensboro, North Carolina on August 4, 2025. Morgan land surveying firm with an established reputation for serving customers in Guilford County and surrounding areas for over 30 years. This marks the first completed acquisition in North Carolina, expanding the DaaS business presence in the Southeast region along with five recent Florida-based acquisitions and enhances the company’s ability to sell to both government and commercial customers. 

·Cardinal Civil Resources (“Cardinal”) of Williamsburg, Virginia, was acquired on August 1st, 2025. Cardinal is a land surveying and engineering firm with operations across Virginia, North Carolina, and South Carolina. Cardinal’s commercial portfolio includes large national homebuilders as well as custom residential developers, large-scale multi-unit builders, airport hangars. This purchase increases the Company’s DaaS footprint in the Southeast region and its portfolio of marquee major customers including the US Department of Transportation (USDOT).  

·Lescure Engineers, Inc. (“Lescure”) of Santa Rosa, California, was purchased September 11, 2025. Lescure is a civil engineering and land surveying firm. Lescure Engineers provides full-service civil engineering since 1979, land surveying, and development planning solutions, with expertise spanning water and wastewater systems, utility and drainage planning, commercial and winery permit applications, construction and subdivisions. 

·A&J Land Surveyor, Inc. (“A&J”), a Jacksonville, Florida, land-based survey and engineering firm founded in 1995 and acquired September 23, 2025. A&J specializes in complex surveying projects across aviation, utility, and infrastructure, with expertise in runway surveys, hangar projects, and utility development. The firm is well established in Jacksonville and has longstanding relationships with leading regional aviation and utility authorities. 

·Putt Land Surveying, Inc. (“Putt”), a Tucson, Arizona firm and purchased October 3, 2025. Putt is a land survey company founded more than forty years ago, with established clients including City of Tucson, school districts, and a range of public and private sector clients.  

·Rampart Surveys Inc. (“Rampart”), of Woodland Park, Colorado, acquired on November 11, 2025. Rampart is a land survey firm with nearly three decades of experience. Rampart has established a reputation for providing boundaries, land title, topographic, and construction staking surveys for commercial projects across central Colorado while maintaining strong relationships with various regional governments and private-sector clients across multiple counties. 

·Smith Surveying Group LLC (“Smith”), of Jacksonville, Florida, purchased on November 17, 2025. Smith is a land surveying and inspection firm with longstanding expertise and clients across municipal, aviation, and commercial markets. Smith has an established presence in Jacksonville’s public sector and commercial markets across many of the region’s infrastructure, development and land-use projects. 

·Casado Design Ltd. (“Casado”) of Weston-super-Mare, England, UK-based corporation, purchased on November 25, 2025. Casado has about 15 years of experience in conducting land surveys and CAD (Computer-Aided Design) services with 3D modelling and design at the time of purchase. 

·Vara 3D Inc. (“Vara”), of the Salt Lake City, Utah area, a surveying and 3D mapping company acquired on December 12, 2025. Vara serves clients across Utah with a strong footprint in California’s solar energy ecosystem. Vara specializes in commercial, residential, and solar energy firm projects with a broad base of recurring clients. Their services include land surveying, 3D mapping, and construction staking, as well as commercial and utility-scale solar facility and solar array planning. 

·Holt Surveying & Mapping, Inc. (“Holt”), of Spokane, Washington, acquired on December 15, 2025, a land surveying services with operations across Washington state and Northern Idaho. Holt maintains established customer relationships in the Pacific Northwest construction and infrastructure markets. 

·L.D. King Engineering Co. Inc. (“L.D. King”) of Ontario, California purchased on December 18, 2025. L.D. King is a civil engineering and land surveying firm with over sixty years of experience providing  

surveying, engineering, land development, construction management, planning, and quality control services.

·Sunrise Window Cleaners (“Sunrise”) of Hammonds Plains, Nova Scotia purchased on December 22, 2025. Sunrise is a window cleaning company with over fifteen years of experience providing window cleaning and related exterior maintenance services. 

·Andrew Spiewak Land Surveyor, Inc. (“Spiewak”), of the Chicago, Illinois area, purchased on December 22, 2025. Andrew is a land surveying and engineering consulting service firm, which provides services to local builders, developers, architects, and engineers.  

ZenaTech acquired the companies from the list below starting with Andy Paris & Associates, in connection with our Drone as a Service business during 2026.

·ZenaTech purchased Andy Paris & Associates (“Andy Paris”) of Lake Oswego, Oregon on April 8, 2026. Andy Paris is expanding the Company's national Drone-as-a-Service network and Pacific Northwest footprint to serve business and government customers. Founded in 1952, provides boundary, topographic, and construction staking surveys supporting commercial and infrastructure development for customers across Oregon and Washington states. Its longstanding relationships and presence complement ZenaTech’s existing Portland area DaaS location, creating a unified base for scalable DaaS expansion in the region. 

·ZenaTech purchased NorthGroup Consulting, LLP (“NorthGroup”) a firm headquartered in Brisbane, Queensland, Australia on June 1, 2026. NorthGroup is an Australian land surveying and spatial services firm with offices in Gladstone and Queensland. The acquisition will strengthen the Company’s customer base in infrastructure, public works, and natural resources sectors. 

·Drone as a Service purchased of Florida-based Green Earth Power Washing, LLC (“Green Earth”), a West Palm Beach, Florida firm on June 22, 2026. Green Earth is a franchise system with a company-owned operation and franchised units that pay ongoing royalty fees. Founded in 2010 and commencing franchise operations in 2020, the company has a corporate-owned West Palm Beach location and franchisee-operated business locations in central and south Florida. Green Earth provides exterior cleaning and property maintenance services serving local municipal governments and commercial business.  

After each land survey company acquisition ZenaTech moves forward with converting the service to be provided by drone technology.

Going Concern

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)/Surplus of $(102,836,988) as of June 30, 2026, while the Company had an accumulated (deficit)/surplus of $(53,742,186) as of December 31, 2025. Working capital as of June 30, 2026, was $ 24,322,014 (current assets $58,301,728 less current liabilities $33,979,714). Working capital is current assets minus current liabilities. The Company has sufficient credit lines to meet its working capital requirements for next year.

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 condensed interim consolidated financial statements have been prepared in accordance with IAS 34, Interim Financial Reporting. These policies have been consistently applied to all the years presented, unless otherwise stated. The reviewed consolidated financial statements have been authorized by the Company’s Board of Directors meeting on September 24, 2026.

Basis and Principle of Consolidation

ZenaTech branched into the drone industry and drone surveying (DaaS) is a new reporting segment during January 2025. The Company is in process of introducing drone equipment and technologies for use in the survey businesses acquired during 2025.  ZenaTech has now two reportable segments, the enterprise software segment and the drone as a service (DaaS) segment (consisting of survey business). In the software industry we have entities 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.

We consolidated financial statement reports for all the companies for the six months ended June 30, 2026, and year ended December 31, 2025, according to IFRS 10.

We have acquired twenty-six land surveying companies and may potentially acquire more. These transactions were all made from parties at arms-length to ZenaTech and do not constitute related party transactions. It is anticipated that as our land surveying business grows following the integration of technology data platforms to gather, plot and complete land surveys using drones, the percentage of conventional land surveys using traditional methods-via Total Stations, tripod-mounted operator-controlled photogrammetry machines, will comprise an increasingly smaller percentage of the business while the overall business grows. The acquisitions are aligned with the drone business by the Company is developing and will be integrated into the drone operations of the Company as it builds out its business.

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.

Below is a list of the subsidiaries that had activity during the six months ended June 30, 2026 and December 31, 2025.

Spider Vision Sensors, the Taiwan subsidiary, is a research and development center and currently a cost center. ZenaDrone Havacilik Hizmetleri Lmt. is a subsidiary of ZenaTech Inc., a Wyoming based company.  It is a research and development center and currently a cost center.

Basis of Measurement

The Company has a facility 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, Asia and South America.

Significant Accounting Estimates and Assumptions

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 assets 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, 

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

−the determination of the functional currency of the company, 

−expected credit loss on accounts receivable the company applies IFRS 9 simplified approach to measuring expected credit losses on trade receivables and recognizes a lifetime ECL allowance from initial recognition, 

−changes in forecast performance or probability assessments underlying the earn-out measurement could result in a corresponding change in the fair value of the contingent consideration, 

−judgment in determining the grant date and service period for shares issued to directors and officers under IFRS 2, 

−judgment in assessing whether conversion options and warrants meet the fixed-for-fixed equity classification criteria under IAS 32. Features that do not meet equity classification are recognized as derivative financial liabilities and measured at fair value through profit or loss.  

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 following table describes the exchange rates applied as of June 30, 2026.

The following table describes the exchange rates applied as of December 31, 2025.

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

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 in translating foreign operations into 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 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.MATERIAL ACCOUNTING POLICIES  

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 $12,235,259 in cash and no other cash equivalents as of June 30, 2026 (December 31, 2025: $5,980,366).

Inventories of Drone Components

Inventories are initially recognized at cost, and subsequently at the lower of cost and net realizable value. Cost comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition.

Marketable Securities

The Company classifies short-term investments in marketable securities as current assets. As of June 30, 2026, the Company held marketable securities totaling $22,340,879 (December 31, 2025: $9,093,887) representing amounts held in the Cash Investment (CAN) account and related short-term investment vehicles. These are measured at fair value through profit or loss. As of June 30, 2026, the marketable securities consisted of $3,371,673 held in the Cash Investment (CAN) account, $15,683,749 held in the Cash Investment (USD) account, and $3,285,456 held in short-term investments.

As of December 31, 2025, the marketable securities are invested through BMO and Merrill (Bank of America) in bonds $744,822, ETFs 1,409,403, liquid and treasury funds 4,477,230, redeemable short-term investment certificates $500,000 and other short-term securities $1,962,432.

Accounts Receivable

Accounts receivable are amounts due from customers for services transferred in the ordinary course of business where the Company’s right to consideration is unconditional, other than the passage of time. Accounts receivables are initially recognized at the amount of consideration that is unconditional and are subsequently measured at amortized cost, and less allowance for expected credit losses. The Company does not charge interest on normal accounts receivable.

The Company had accounts receivable of $5,936,766 as of June 30, 2026, less an allowance for uncollectible accounts of $790,944, for a net balance of $5,145,822 (December 31, 2025: $4,166,885). The significant increase reflects the addition of twenty-five land surveying subsidiaries acquired throughout 2025 and 2026.

Contract assets

Contract assets represent the Company’s right to consideration for services transferred to customers where the right to payment is conditional on completion of remaining Contract assets are reclassified to trade receivables when the Company’s right to consideration becomes unconditional, which generally occurs upon completion of the related service or issuance of an invoice in accordance with the contract term.

Contract liabilities

A contract liability is recognized when the Company receives consideration, or has an unconditional right to receive consideration, before the related goods or services are transferred to the customer. Contract liabilities primarily include deferred revenue from SaaS subscription, hosting, maintenance and support arrangements billed in advance, customer deposits, and advance billings for survey services. Contract liabilities are recognized as revenue when, or as, the related performance obligations are satisfied.

Contract liabilities are classified as current when the Company expects to satisfy the related performance obligations within twelve months after the reporting date.

The Company had contract liabilities of $1,784,223 as of June 30, 2026, and $1,270,958 as of December 31, 2025. The change during the year reflects billings and collections in advance of performance obligations, revenue recognized during the period from opening deferred revenue, additions from business combinations, and foreign currency translation effects. Management has not identified any material long-term contract liabilities requiring separate non-current presentation.

Expected credit loss

The Company applies the simplified approach under IFRS 9 to measure expected credit losses on trade receivables and contract assets. Accordingly, the Company recognizes a loss allowance based on lifetime expected credit losses from initial recognition of the receivable or contract asset.

Expected credit losses are measured using a provision matrix based on historical collection experience and ageing of outstanding balances

The expected credit loss allowance was $606,731 as of December 31, 2025, and increased to $790,944 as of June 30, 2026, primarily due to the acquisition of land surveying subsidiaries during the past two years and the related increase in trade receivables from the survey services business. Management considers the allowance to represent its best estimate of lifetime expected credit losses at the reporting date.

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.

As of June 30, 2026 and December 31, 2025, other long-term assets amounted to $1,292,937 and $1,080,656 respectively. This balance includes long-term whole life insurance policy obtained for the Chief Executive Officer, under which the Company is the beneficiary and security deposits paid for office spaces occupied under long-term lease arrangements and other long-term assets.

Current versus non-current classification

The Group presents assets and liabilities in the consolidated statement of financial position based on current/non-current classification.

An asset is current when it is expected to be realized or intended to be sold or consumed in the normal operating cycle, held primarily for the purpose of trading, expected to be realized within twelve months after the reporting period, or cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period. All other assets are classified as non-current.

A liability is current when it is expected to be settled in the normal operating cycle, it is held primarily for the purpose of trading, it is due to be settled within twelve months after the reporting period, or there is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period. The Group classifies all other liabilities as non-current

Property, plant and equipment

Property, plant and equipment are tangible assets that are held for use in the Property, Plant and Equipment are initially recognized at cost when it is probable that future economic benefits associated with the asset will flow to the Company and the cost of the asset can be measured reliably. Cost includes the purchase price, non-refundable duties and taxes, directly attributable costs necessary to bring the asset to the location and condition required for

it to operate in the manner intended by management, and, where applicable, the initial estimate of dismantling, removal and site restoration obligations.

Property, plant and equipment acquired in a business combination are recognized at their acquisition-date fair values in accordance with IFRS 3.

Subsequent to initial recognition, property, plant and equipment are measured using the cost model and are carried at cost less accumulated depreciation and accumulated impairment losses, if any. The Company does not apply the revaluation model.

Subsequent expenditure is capitalized only when it is probable that the expenditure will result in future economic benefits flowing to the Company and the cost can be measured reliably. The carrying amount of any replaced part is derecognized. Repairs and maintenance costs are recognized as profit or loss as incurred.

Depreciation is recognized so as to allocate the depreciable amount of an asset, being cost less estimated residual value, over its estimated useful life. Depreciation commences when the asset is available for use, that is, when it is in the location and condition necessary for it to operate in the manner intended by management. Depreciation ceases at the earlier of the date the asset is classified as held for sale in accordance with IFRS 5 and the date the asset is derecognized. Under IAS 16, useful lives and residual values are reviewed at least at each financial year-end and changes are accounted for prospectively as changes in accounting estimates.

Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets as follows:

The useful lives stated above represent the estimated useful lives generally applied to newly acquired assets in the respective asset classes. For used property, plant and equipment acquired through business combinations, depreciation is calculated over the estimated remaining useful life of the asset from the date of acquisition. The estimated remaining useful life is determined by management based on the physical condition, expected future use and other asset-specific factors existing at the acquisition date. Accordingly, used assets acquired in a business combination may be depreciated over a shorter period than the standard useful life stated above for the relevant asset class.

The depreciation method, residual value and useful life of each class of property, plant and equipment are reviewed at each reporting date and adjusted prospectively, where appropriate, as a change in accounting estimate. The depreciation method selected reflects the pattern in which the asset’s future economic benefits are expected to be consumed. IAS 16 permits methods such as straight-line, diminishing balance and units of production, provided the method reflects the pattern of consumption of economic benefits.

Assets under construction and capital advances for property, plant and equipment are carried at cost and are not depreciated until the assets are available for use. Amounts paid in advance for the acquisition or construction of property, plant and equipment are presented as capital advances or capital work-in-progress, as applicable, until the related asset is ready for its intended use.

Borrowing costs directly attributable to the acquisition or construction of qualifying assets, being assets that necessarily take a substantial period of time to get ready for their intended use, are capitalized as part of the cost of those assets in accordance with IAS 23. Other borrowing costs are recognized as profit or loss in the period in which they are incurred.

An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss on derecognition is determined as the difference between the net disposal proceeds and the carrying amount of the asset and is recognized in profit or loss.

The Company assesses at each reporting date whether there is any indication that property, plant and equipment may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset or the cash-generating unit to which the asset belongs. An impairment loss is recognized when the carrying amount of an asset or cash-generating unit exceeds its recoverable amount. Recoverable amount is the higher of fair value less costs of disposal and value in use. Impairment losses are recognized in profit or loss. Where an impairment loss subsequently reverses, the carrying amount is increased to the revised estimate of recoverable amount, but not above the carrying amount that would have been determined had no impairment loss been recognized in prior periods.

Product Development Costs and Intangible Assets

The Company recognizes intangible assets, including acquired intangible assets and internally generated development value, less costs of disposal and value in use. An impairment loss is recognized when the carrying amount of an asset or cash-generating unit exceeds its recoverable amount. Impairment losses are recognized in profit or loss.

Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but not above the carrying amount that would have been determined had no impairment loss been recognized in prior periods.

Goodwill is accounted for and tested for impairment in accordance with the Company’s goodwill impairment policy.

Goodwill

The Company performed its annual goodwill impairment assessment as of 12/31/2025. For each CGU or group of CGUs to which goodwill has been allocated, the Company determined the recoverable amount on the basis of value in use, calculated using discounted cash flow models derived from management-approved multi-year forecasts.

The key assumptions underpinning the value-in-use calculations reflect the Company's position as a growth-stage SaaS business operating in a large and expanding addressable market. Management's projections incorporate strong and improving gross margins consistent with a scalable, subscription-based revenue model, as well as customer retention rates, anticipated new logo additions, and expected progression toward operating leverage as acquisition-related integration and transaction costs — which are non-recurring in nature — are absorbed and the combined businesses reach steady-state operating efficiency. Although the consolidated income statement for the current fiscal year reflects a net loss position, this outcome is attributable to the significant one-time and period costs associated with the volume of acquisitions completed, including transaction advisory fees, integration expenditures, and other acquisition-related charges that are not indicative of the ongoing earnings capacity of the underlying businesses. Gross margins across the combined CGUs remain strong and are consistent with management's long-term operating model.

The pre-tax discount rates applied to each CGU's cash flow projections are based on a weighted average cost of capital derived from observable market data, adjusted to reflect the risks specific to each CGU's operating geography and revenue profile. Terminal growth rates applied beyond the explicit forecast period are consistent with long-term expectations for the SaaS sector and do not exceed the long-term average growth rate of the markets in which each CGU operates.

Based on the results of the annual impairment assessment, the recoverable amount of each CGU or group of CGUs to which goodwill has been allocated exceeded its respective carrying amount as of 12/31/2025. Accordingly, no impairment loss has been recognized in respect of goodwill for the fiscal year ended 2025.

Management has considered the sensitivity of the impairment assessment to changes in key assumptions, including a reduction in forecast revenue growth rates, a compression of gross margins, and an increase in the pre-tax discount rate. Based on reasonably possible adverse movements in each of these assumptions, management has concluded that no such change, individually or in combination, would result in the carrying amount of goodwill exceeding the recoverable amount of any CGU. Accordingly, no indicators of impairment have been identified and no impairment.

* Goodwill and Property Plant and Equipment have been retrospectively adjusted in 2025, in accordance with IFRS 3, to reflect measurement period adjustments made relating to the Empire acquisition

Financial Instruments

ZenaTech accounts for its financial instruments according to IFRS 9.

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.  

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.

Warrants

Warrants issued by the Company are classified as equity only where they will be settled by the Company delivering a fixed number of its own common shares in exchange for a fixed amount of cash denominated in the Company's functional currency, and where the Company has no contractual obligation to deliver cash or another financial asset. Warrants that do not meet these conditions are classified as derivative financial liabilities.

Warrant liabilities are measured at fair value through profit or loss. They are recognized initially at fair value on the date of issue and remeasured at each reporting date, with changes in fair value, including the effect of changes in foreign exchange rates, recognized in profit or loss. Transaction costs attributable to warrant liabilities are expensed as incurred. On exercise, the carrying amount of the warrant liability, measured to fair value at the date of exercise, is transferred to share capital together with the exercise proceeds.

Where common shares and warrants are issued together as a unit, the proceeds are allocated by first measuring the warrant liability at fair value, with the residual allocated to equity. Directly attributable transaction costs are allocated between the liability and equity components in proportion to the allocation of proceeds. Costs allocated to equity are deducted from equity; costs allocated to the warrant liability are recognized in profit or loss.

Revenue

ZenaTech had two types of businesses during 2025, the Software as a Service (“SaaS”) revenue and the revenue from Survey business beginning with January 2025. For these two types of businesses, it recognizes revenue under IFRS 15.

IFRS 15 – Revenue from Contracts with Customers for the SaaS 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.

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

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 renewed 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. 

IFRS 15 – Revenue from Contracts with Customers for the Survey business

DaaS offices are being equipped with drones, training, and are hiring drone pilots. A tech platform for data analysis and 3D data plotting is being built, and a team of centralized specialized drone data analysts are being hired to integrate the same with the survey business. The survey businesses typically earn revenue on contract basis with payment made at the end of the project. Some projects or customers may require upfront payment; however, the amount may vary and depends on the newness of the customer and the size of the project. As such, there are few significant payments that need to be deferred. The payments cover the invoiced amount that the survey companies bill, for the most part, and the work performed is documented and described on the invoice. Any changes to the original scope of the project are documented as well. All revenue captured in the drone as a service section is surveying and other services revenue.

The revenue recognition process under IFRS 15 involves five key steps:

The Company performs the following five steps in order to recognize revenue: (1) defining and identifying the contract(s) with a customer and how to account for a change order and other modifications; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when (or as) the entity satisfies a performance obligation.

ZenaTech did not have any major customers according to IFRS 8 paragraph 34 for the six months ending June 30, 2026, or as of December 31, 2025.

Business combinations and transactions under common control

The assessment of whether an acquisition meets the definition of a business or represents an asset acquisition requires judgment. For acquisitions that meet the definition of a business and are not transactions under common control, the Company applies the acquisition method of accounting, under which identifiable assets acquired, and liabilities assumed are measured at their acquisition-date fair values. Any excess of the consideration transferred over the fair value of the identifiable net assets acquired is recognized as goodwill. If the transaction is an asset acquisition, the consideration paid is allocated to the assets acquired and liabilities assumed based on their relative fair values, and no goodwill is recognized. Transactions in which the Company acquires assets, liabilities, businesses or entities from parties that are under common control before and after the transaction are accounted for using the predecessor carrying value method. Under this method, the assets and liabilities acquired are recognized at the carrying amounts recorded in the financial statements of the transferring entity or previous owner. No goodwill is recognized as a result of such transactions. Any difference between the consideration transferred and the predecessor carrying amounts of the net assets acquired is recognized directly in equity within “Common Control Adjustment Account”, as applicable. The Company applies this policy consistently to all transactions under common control.

Basic earnings or loss per share are computed by dividing the number of common shares outstanding by the comprehensive net earnings or loss available to common shareholders for the period. The diluted income and loss per share are computed by dividing the comprehensive income and loss 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

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 entered several operating one-year leases during 2024 and 2025 at various locations in USA, Canada and UAE.

ZenaTech leases office and warehouse space in multiple locations under long-term leases with terms ranging from 2 to 10 years. The following is a summary of these leases and the remaining undiscounted payments by maturity.

Lease Liabilities

ZenaTech leases office and warehouse space in multiple locations under long-term leases with terms ranging from more than 1 years to 10 years. The following is a summary of these leases and the remaining undiscounted payments by maturity.

Below are tables describing the maturity of the contractual lease and ROU asset as of June 30, 2026.

Right of Use (ROU) Asset

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

Right of Use (ROU) Asset

Income Taxes

Current tax is the expected tax payable or receivable on taxable income or loss for the year, using tax rates and laws enacted or Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their tax bases. Deferred tax is measured using tax rates and laws enacted or substantively enacted at the reporting date that are expected to apply when the related deferred tax asset is realized or deferred tax liability is settled.

Deferred tax assets are recognized only to the extent that it is probable that future taxable profits will be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilized.

Current and deferred tax are recognized in profit or loss, except to the extent they relate to items recognized in other comprehensive income or directly in equity, in which case the related tax is also recognized in other comprehensive income or directly in equity, respectively.

Deferred tax assets and liabilities are offset only when the Company has a legally enforceable right to offset current tax assets and liabilities and the deferred taxes relate to the same taxation authority and the same taxable entity, or entities that intend to settle current tax assets and liabilities on a net basis.

Earn-Out Liabilities (Contingent Consideration)

In accordance with IFRS 3 (Business Combinations) and IFRS 13 (Fair Value Measurement), the contingent consideration, in the form of earn-out arrangements, has been recognized at fair value as of the acquisition date. The earn-out amounts are contingent on achieving specified revenue targets set out in the respective acquisition agreements and are payable over the earn-out period.

The earn-out liability is recognized at its fair value as of the acquisition date and will be re-measured at each reporting period. Any adjustments to the fair value of the contingent consideration will be reflected in the profit or loss.

In connection with certain acquisitions completed during the year, the Group entered into earn-out arrangements with the former owners of the acquired businesses. The earn-outs are generally payable if specified post-acquisition revenue targets are achieved over one- to three-year earn-out periods. The contractual measures are generally based on invoiced and collected revenues, excluding revenue from post-closing acquisitions, and in some cases are also subject to additional profitability conditions.

The Group recognized contingent consideration at fair value on the acquisition date as part of consideration transferred. Fair value was determined using a Monte Carlo simulation based on forecast revenues, contractual threshold payments, volatility assumptions, discount rates, settlement timing and credit risk. The carrying amount of contingent consideration as of June 30, 2026 is $1,900,699 (Previous year – $1,291,546). The measurement remains sensitive to changes in forecast revenue, volatility, discount rates and the probability of achieving contractual targets.

Provisions

Recognition of Provisions

A provision is recognized when the Group has a present obligation (either legal or constructive) as a result of a past event, it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate of the amount can be made.

Measurement of Provisions

Provisions are measured at the best estimate of the expenditure required to settle the obligation, considering the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, provisions are discounted using a pre-tax rate that reflects current market conditions and the specific risks associated with the liability.

Review and Adjustment of Provisions

Provisions are reviewed at each reporting date and adjusted to reflect the best estimate at that time. If the likelihood of an outflow of resources changes or new information becomes available, the provision is revised accordingly.

Earnings / Loss per Share

The Company presents basic and diluted earnings or loss per share in accordance with IAS 33, Earnings per Share.

Basic earnings or loss per share is calculated by dividing profit or loss attributable to ordinary shareholders of the Company by the weighted average number of common shares outstanding during the period.

Diluted earnings or loss per share is calculated by adjusting profit or loss attributable to ordinary shareholders and the weighted average number of common shares outstanding for the effects of all dilutive potential common shares, including warrants, options, convertible instruments and contingently issuable shares, where applicable.

The weighted average number of common shares is adjusted retrospectively for share splits, reverse share splits, bonus issues, share consolidations and similar transactions that change the number of shares outstanding without a corresponding change in resources.

New Pronouncement

New and revised IFRS Accounting Standards applied with no material effect on the financial statements

The group has applied the following amendment for the first time for its annual reporting for the period commencing 1 January 2025:

·Amendment to IAS 21 – Lack of Exchangeability 

The amendment listed above did not have any impact on the amounts recognized in prior periods and are not expected to significantly affect the current or future periods.

Standards, amendments to published standards and interpretations that are not yet effective and have not been early adopted by the Group

·Amendments to the Classification and Measurement of Financial Instruments (Amendments to IFRS 9 and IFRS 7); 

·Annual Improvements to IFRS Accounting Standards – Volume 11; 

·Contracts Referencing Nature-dependent Electricity (Amendments to IFRS 9 and IFRS 7); 

·Translation to a Hyperinflationary Presentation Currency (Amendments to IAS 21); 

·Presentation and Disclosure in Financial Statements (IFRS 18); and 

·Subsidiaries without Public Accountability: Disclosures (IFRS 19) 

4.ACQUISITIONS AND SALES  

During the year ended December 31, 2025 the Company completed twenty business combinations, each accounted for under IFRS 3, Business Combinations, using the acquisition method. The acquirees, the nature of each business, the consideration transferred and the allocation of the purchase price to the identifiable assets acquired and liabilities assumed are set out in Note 4 to the Company’s audited consolidated financial statements for the year ended December 31, 2025. The purchase consideration and the goodwill arising on each 2025 and 2026 acquisitions are summarized below.

The acquisition accounting for the seven acquisitions completed on or before June 30, 2025 — Weddle, KJM, Othership, Wallace, Miller, Laventure and Empire — is final, the one-year measurement period permitted by IFRS 3 having expired before the reporting date. For the eighteen acquisitions completed after June 30, 2025, the measurement period remains open as of June 30, 2026 and the amounts recognized for the identifiable assets acquired, the liabilities assumed and the resulting goodwill are provisional while the Company completes its assessment of the acquisition-date fair values.

A number of the 2025 acquisitions — including Othership, Cardinal, Lescure, A&J, Smith, Casado, Vara 3D, Holt, LD King and Spiewak — include earn-out arrangements under which further consideration is payable to the former owners if defined revenue thresholds are met over periods of up to three years. The contingent consideration was measured at fair value at the respective acquisition dates and is remeasured at each reporting date, with changes in fair value recognized in profit or loss.

Goodwill arising for the 2025 acquisitions is not amortized and is tested for impairment at least annually. The carrying amount of goodwill was $18,735,192 at June 30, 2026 and $12,106,307 at December 31, 2025; $6,628,885 of goodwill was recognized on the Company's 2026 business combinations, and no impairment loss was recognized, during the six months ended June 30, 2026. A reconciliation of the carrying amount of goodwill is provided in Note 8.

Because the acquisitions were completed at various dates through 2025, the results for the six months ended June 30, 2026 include a full period’s contribution from acquirees that contributed only partially, or not at all, to the comparative six months ended June 30, 2025.

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.

During the measurement period, the acquirer shall recognise adjustments to the provisional amounts as if the accounting for the business combination had been completed at the acquisition date. Thus, the acquirer shall revise comparative information for prior periods presented in financial statements as needed, including making any change in depreciation, amortisation or other income effects recognised in completing the initial accounting.

5.NOTE RECEIVABLE 

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.

The Company is owed $13,674 interest income related to this note as of June 30, 2026. The currency exchange rate used in the calculations was $1 USD to $1.4197, the exchange rate on June 30, 2026, as per https://www.wsj.com/market-data/quotes/fx/USDCAD/historical-prices.

The Company recorded $9,701 USD or $13,506 interest income related to this note as of December 31, 2025. The currency exchange rate used in the calculations was $1 USD to $1.3726, the exchange rate on December 31, 2025, as per https://www.wsj.com/market-data/quotes/fx/USDCAD/historical-prices.

6.PROPERTY, PLANT & EQUIPMENT  

* Goodwill and Property Plant and Equipment have been retrospectively adjusted in 2025, in accordance with IFRS 3, to reflect measurement period adjustments made relating to the Empire acquisition

ZenaTech acquired computers for $852,471, furniture and fixtures $272,927, vehicles for $1,436,317, leasehold improvements for $295,966, and business equipment for $4,079,005 during the six months ended June 30, 2026.

ZenaTech acquired computers for $740,057, furniture and fixtures $402,830 and made leasehold improvements for $143,344 during the year ended December 31, 2025. The Company also acquired vehicles for $4,032,643 and disposed vehicles for $20,188, bought business equipment for $6,880,822 (including drones internally developed $ 2,028,290) during the year ended December 31, 2025.

7.CAPITAL ADVANCES & COMMITMENTS 

The Company has paid capital advances amounting to AED 6,319,449.00 (approximately CAD $2,659,851) towards contractual purchase of five residential properties located in Ajman, Dubai, and Sharjah, United Arab Emirates, as of June 30, 2026.

The total contracted value of these properties is AED 13,283,000 (approximately CAD $5,134,717) as June 30,2026 and AED 11,666,000 (approximately CAD $4,509,645) as of December 31, 2025. The remaining balance of AED 6,963,551, equivalent to CAD 2,691,852, is payable in accordance with the property-wise installment schedules agreed with the developer under the respective payment plans. Two properties located in Ajman were completed and titled to the Company during Q2.  The three remaining properties are under

construction/installation stage and are intended to be used for accommodating Company personnel. The balance payments for these properties are Companies Capital Commitments. This conversion is using a June 30, 2026 and December 31, 2025 conversion rate of 2.5869 AED to CAD, see https://www.wsj.com/market-data/quotes/fx/USDCAD/historical-prices on that date.

Due to local law restrictions, the legal title is held in the name of Dr. Shaun Passley, the Company's CEO as a nominee of the Company, 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 

Goodwill and Property Plant and Equipment have been retrospectively adjusted in 2025, in accordance with IFRS 3, to reflect measurement period adjustments made relating to the Empire acquisition

The table below shows product development and intangibles activity for the year ended December 31, 2025.

* Goodwill and Property Plant and Equipment have been retrospectively adjusted in 2025, in accordance with IFRS 3, to reflect measurement period adjustments made relating to the Empire acquisition

9.LOANS PAYABLE 

Loan balances outstanding for the six months ended June 30, 2026, and December 31, 2025 are as follow:

Key terms of significant Loans

The Epazz, Inc. convertible line of credit provides for borrowings up to $400,000 USD, bears interest at 6% per annum and expires on June 30, 2026. There were no outstanding amounts under this facility as of June 30, 2026 or December 31, 2025.

During 2025, the Company repaid the Propal Investments, LLC loan in full. The outstanding balance as of December 31, 2025 and June 30, 2026 was zero.

Convertible debt

Certain debts can be converted into the Company’s Common Stock at a 20% discount (10% in case of Othership conversion). The total number of shares issuable for convertible debt is  as of June 30, 2026. This assumes all potentially convertible debt was converted as of June 30, 2026. Other assumptions include a common stock market price of $1.50 USD or $2.13 per share on June 30, 2026, and a USD to Canadian dollar conversion rate $1.4197 as listed on https://www.wsj.com/market-data/quotes/fx/USDCAD/historical-prices on that date.

See table below for debt itemization as of June 30, 2026. All amounts are in CAD in the table below.

Above listed lenders 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. Lenders have the 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. (10% in case of Othership conversion). The Company adjusts each month the derivatives for the conversions and the derivative finance expense.

The derivative financial liabilities as of June 30, 2026, and December 31, 2025, were as follows:

During the year ended December 31, 2025, the Company recognized a derivative finance expense of $18,112,444 in profit or loss. The derivative financial liability balance was $905,791 as of June 30, 2026 (December 31, 2025: $1,469,648).

All share amounts have been adjusted, where applicable, to reflect the 1-for-6 reverse stock split of the Company’s Common Shares completed on July 1, 2024. The Company’s share capital consists of Common Shares, Preferred Shares and Super Voting Shares. Certain share issuances were made to related parties and are further disclosed in Note 14.

Common Shares

The Company is authorized to issue an unlimited number of Common Shares with a par value of $0.30 per share. Each Common Share carries one vote. Holders of Common Shares are entitled to dividends when declared by the Board of Directors and, on liquidation, to share rateably in the remaining assets of the Company after settlement of liabilities and amounts payable to holders of shares ranking in priority.

The Company had the following transactions for the issued and outstanding Common Shares during the six months ending June 30, 2026.

* Out of the total 14,426,540 Common Shares issued to related parties for acquisition of technologies, 4,000,000 common stock issued for IQ Quad & IQ Slider Technology Purchase are subject to shareholder approval.

Out of the 9,453,293 stock issued for debt conversion 2,000,000 shares were returned to treasury during the 3^rd quarter of 2026.

The carrying amount of Common Share capital was $27,865,258 as of June 30, 2026.

The Company had the following transactions for the issued and outstanding Common Shares during 2025.

* The 3,000,000 Common Shares issued for indoor drone technology were issued to related parties and were subject to minority shareholder approval.

The carrying amount of Common Share capital was $14,406,266 as of December 31, 2025.

The Common Shares issued to directors for services during 2025 were measured at the fair value of the shares issued at the grant date and recognized as share-based compensation in accordance with IFRS 2.

Preferred Shares

The Company is authorized to issue 100,000,000 Preferred Shares with a stated value of $3.00 per share. Preferred Shares are non-voting. Each Preferred Share is convertible into three Common Shares. Holders of Preferred Shares are entitled to dividends when declared by the Board of Directors and have priority over Common Shares on liquidation, after settlement of liabilities.

The table below shows the activity in issued and outstanding Preferred Shares was as follows:

During the six months ended June 30, 2026, the Company issued 1,500,000 Preferred Shares to Shaun Passley, PhD for services rendered to the Company. The issuance was accounted for as share-based compensation in accordance with IFRS 2.

The carrying amount of Preferred Share capital was $82,710,000 as of June 30, 2026.

The table below shows the activity in issued and outstanding Preferred Shares was as follows:

During the year ended December 31, 2025, the Company issued 120,000 Preferred Shares to Shaun Passley, PhD as bonus compensation for services rendered to the Company. The issuance was accounted for as share-based compensation in accordance with IFRS 2.

The carrying amount of Preferred Share capital was $51,810,000 as of December 31, 2025.

Super Voting Shares

The Company is authorized to issue 23,000,000 Super Voting Shares with a stated value of $30.00 per share. Each Super Voting Share carries 1,000 votes. Holders of Super Voting Shares are entitled to dividends when declared by the Board of Directors and have liquidation priority after settlement of liabilities and amounts payable to holders of Preferred Shares, but before Common Shares.

The movement in issued and outstanding Super Voting Shares was as follows:

The carrying amount of Super Voting Share capital was $5,550,000 as of June 30, 2026.

The table below shows the activity in issued and outstanding Super Voting Shares was as follows:

The carrying amount of Super Voting Share capital was $1,800,000 as of December 31, 2025.

Related party share issuances

During the six months ended June 30, 2026, and the year ended December 31, 2025, certain Common Shares, Preferred Shares and Super Voting Shares were issued to related parties, including Shaun Passley, PhD, Epazz, Inc., Ameritek Ventures, Inc., GG Mars Capital, Inc., Star Financial Corporation, Jennings Family Investments, Inc. and LoneStella, LLC. These transactions are disclosed in Note 14.

Potential Common Shares arising from the conversion of Preferred Shares, warrants and convertible debt are disclosed in the relevant notes on warrants, loans payable and derivative financial liabilities.

Warrants

Significant accounting judgements and estimates

Classification of warrants issued in May 2026

The warrants issued on 18 May 2026 have an exercise price denominated in United States dollars, whereas the functional currency of the Company is the Canadian dollar. The warrants also permit cashless exercise at the holder's election in certain circumstances and entitle the holder to require settlement in cash at a Black-Scholes value on specified fundamental transactions, some of which are outside the Company's control. Management has concluded that the warrants do not meet the conditions for classification as equity under IAS 32 Financial Instruments: Presentation and they are accordingly classified as derivative financial liabilities measured at fair value through profit or loss.

Fair value of warrant liabilities

The warrants are not traded in an active market, and their fair value is determined using the Black-Scholes option pricing model. The most significant unobservable input is expected volatility, which is estimated with reference to the historical volatility of the Company's common shares and the price at which the warrants were issued.

Changes in this estimate may have a material effect on the carrying amount of the warrant liability and on profit or loss. Sensitivity to this input is disclosed in note 4.

The Company has issued warrants in connection with subscription receipts, share purchase agreements and debt financing arrangements. Warrants are classified as equity or financial liabilities in accordance with IAS 32 based on the specific terms of each instrument.

There were no warrants conversions during the six months ended June 30, 2026.

The table below shows the warrants outstanding as of December 31, 2025 and June 30, 2026.

During the twelve months ended December 31, 2025, 1,350,000 warrants were exercised, comprising 200,000 warrants exercised by GG Mars Capital, Inc., 200,000 warrants exercised by Jennings Family Investments, Inc., 600,000 warrants exercised by Nancy Cowden and 350,000 warrants exercised by LoneStella, LLC. The exercise prices were based on the terms of the respective warrant agreements which as USD 1.77 per warrant.

The warrants outstanding as of December 31, 2025 and as of June 30, 2026 were as follows: