Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)

Management's Discussion and Analysis of Financial Condition and Results of Operations

Results of Operations

For the years ended December 31, 2025, and 2024

Ameritek is transitioning its business model to being a real estate company and as such it had no revenue during 2025. The Company created Chicago Real Estate Partners, LLC and became a franchisee for a fitness center in Chicago during 2025. Ameritek had $678,300 software revenue during 2024.

Total operating expenses increased to $2,709,326 for 2025, from $458,968 in 2024, an increase of $2,250,358. The increase was due to two non-operating expenses, a stock compensation issuance of $477,722 and an impairment loss of $2,117,676. Ameritek had no development and support expenses during 2025 as it no longer has software operations, while it had $294,434 costs related to development during 2024. General and administrative expenses decreased to $95,874 from $132,398, a decrease of $36,524. Ameritek recorded this year an impairment loss of $2,117,676, and depreciation and amortization of$18,054 of which amortization of $8,000 was related to the intangible assets and related to the amortization of franchise fees of $4,125 during and $5,929 on real estate investments in 2025. The Company recorded $32,136 depreciation during 2024 of which $8,000 was recorded for amortization for intangible assets and $24,136 depreciation related to computers 2024.

Ameritek had an operating loss of $(2,709,326) during 2025 but had no revenue from the real estate business during 2025, an incipient business for the Company. Ameritek had an operating income of $219,332 for 2024 when it operated in the software business.

Other income or expenses during 2025 were affected by the following changes in revenues in expenses. The Company recorded an unrealized loss on investment in ZenaTech, Inc., a related party, of $(3,582,515) resulting from the change in fair value of ZenaTech securities, as compared to a gain of $13,461,645 recorded during 2024. Interest expenses, which decreased to $130,736 during 2025 from $162,083 in 2024. This $31,347 decrease was due to a reduction of interest paid during 2025 following the sale of Interactive Systems, which was sold with its loan These expenses were partially offset by other income of $38,185 representing reversal of accruals from 2024.

Ameritek had net loss of $6,384,392 during 2025, compared to net income of $13,518,894 during 2024. The decrease is primarily due to no operating revenue in 2025 and it is explained by the factors above.

Liquidity and Capital Resources

Cash Flow

The Company currently funds its operations, including working capital and capital expenditures, and acquisitions through cash, cash equivalents and short-term investments and financing activities as necessary. We expect that cash, cash equivalents and short-term investments, and other sources of liquidity, such as issuing equity or debt securities, subject to market conditions, will be available and sufficient to meet all foreseeable cash requirements. The following is a summary of the changes in the Company's cash flows followed by a brief discussion of these changes:

		Twelve months ended December 31,
		2025				2024				Change ($)
Cash flow (used in) provided by operating activities		$	516,601			$	324,041			$	192,560
Cash flow (used in) provided by investing activities		$	(505,742	)		$	-			$	(505,742	)
Cash flow (used in) provided by financing activities		$	(8,316	)		$	(329,659	)		$	(321,343	)

Operating activities

Cash flow provided by operating activities had a total inflow of 516,601 for the year ended December 31, 2025, while for 2024 the cash inflow provided by operating activities was $324,041, a $192,560 increase. While the two periods cannot be compared since the Company was in two different business sectors during 2025 and 2024, here are some major changes for 2025. Ameritek posted a net loss of $6,384,392, partially offset by a change of $18,054 in amortization and depreciation. Other items affecting operations were stock-based compensation of $477,722, an unrealized loss on investment in ZenaTech securities of $3,582,515, a impairment loss of $2,117,676 and amortization of commitment fees of $27,720. Other items affecting operating cash flow were accounts payable of $37,887, accrued interest of $103,011 and short-term advance from affiliate of $574,593.

Cash flow provided by operating activities during 2024 were affected by a net income of $13,518,894 while partially offset by a gain on ZenaTech securities of $13,461,645 and by amortization and depreciation of $32,136 and accounts payable decrease of $286,591. Other items affecting operating cash flow were accrued interest of $106,836 and short-term advance from affiliate of $317,793.

Investing Activities

Ameritek invested in the purchase of a franchise for $82,500 and the purchase of real estate of $423,242 during 2025, since it is branching into real estate.

There were no investing activities during the year ending December 31, 2024.

Financing Activities

Cash outflow used by financing activities decreased by $321,343 for the year ended December 31, 2025. The decrease by $321,343 in financing activities is due to almost no activity during 2025, except for repayment of long-term debt of $8,316 as compared to proceeds from long-term debt of $296,155 and the repayment of long-term debt of $33,504 during 2024.

Cash and Cash Equivalents

The Company had $2,543 cash as of December 31, 2025 as compared with no cash as of December 31, 2024. Ameritek continues to rely on borrowings to finance its working capital needs.

Off Balance Sheet Arrangements

We do not have any significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our consolidated financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

Recent Accounting Pronouncements

There were no accounting standards and interpretations issued which are expected to have a material impact on the Company's financial position, operations or cash flows during the year ended December 31, 2024.