Zenatech's Dual Push: Pentagon Certification and $25M Raise Fail to Stem 80% Stock Decline

Zenatech has cleared a critical hurdle on the path to supplying the US military with drones, yet the market's response remains tepid. The company announced on Thursday that three of its platforms — the ZenaDrone 1000, IQ Square and IQ Nano — have entered Phase 3 of the Pentagon's Blue-UAS certification process. In this stage, external specialists will test the drones' cyber defenses through penetration tests, encryption checks and simulated attacks. Passing that gauntlet is essential for any vendor hoping to land on government procurement lists.

The stock did manage a modest bounce on Friday, trading at €1.19, up 11.41% on the day. But that rally barely registers against the wider trend: the shares have lost 37.90% over the past month and stand a staggering 54.89% lower since the start of the year. At a recent €1.17, the shares are roughly 80% below their 52-week high. The relative strength index sits at 29.0, deep in technically oversold territory.

Part of the selling pressure stems from the capital structure itself. In mid-May, Zenatech struck a placement agreement with US investment bank Maxim Group, naming it exclusive lead placement agent on a best-efforts basis for future securities offerings. The first drawdown came on 15 May: the company placed roughly 11.8 million shares at $2.12 each to institutional investors, alongside warrants exercisable at $2.50 for five and a half years. The warrants include a redemption clause — if the stock trades above $6.75 for ten consecutive sessions, Zenatech can call them in early. Net proceeds after fees of 5.5% of gross proceeds amounted to about $23.6 million.

The $25 million raise is only a first taste of a much larger facility. Zenatech has an active shelf registration in the US, filed in February 2026, that authorises up to $250 million in securities. Until now none of that capacity had been tapped, making the recent placement the initial draw on a substantial reservoir of potential funding.

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The need for capital becomes clear when looking at the financials. For 2025, Zenatech reported revenue of roughly C$12.9 million — a 558% surge from the prior year, driven by its new Drone as a Service segment. But the net loss ballooned to C$45.2 million even as total assets rose 188% to C$99.8 million. The company has been spending aggressively to build out production capacity in Arizona, Taiwan and the United Arab Emirates.

Alongside the certification push, Zenatech is expanding its service model. It recently signed a binding offer to acquire a surveying and geomatics firm based in Alberta that specialises in drone-based services for the oil and gas sector across three western Canadian provinces. That market, estimated at roughly $2.3 billion, is growing at an annual rate of 28.5%, according to analysts. The logic: shift from one-time hardware sales to recurring service revenue.

The Blue-UAS certification, if completed, would open the door to US defence and government contracts — a market where demand for Western-compliant drones is rising sharply. The first two phases covered inclusion in the programme and a consolidated hardware bill of materials demonstrating compliance with the National Defense Authorization Act. The three platforms target different missions: the ZenaDrone 1000 is a heavy-lift VTOL system capable of carrying 40 kilograms; the IQ Square and IQ Nano are designed for indoor operations where GPS is unreliable, such as warehouses and military facilities.

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But for all the progress, the share price remains under severe pressure. The dilution from the latest equity issue adds to a long list of headwinds. Whether the $25 million fresh injection can reverse the slide depends on how quickly Zenatech can convert its certification wins and acquisition strategy into tangible earnings — before the shelf runs dry.

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