10-Q: Ameritek Ventures Reports Q3 Net Income Amid Strategic Shift

Ameritek Ventures reported a net income of $5.28 million for Q3 2025, driven by an unrealized investment gain, despite no operational revenue and significant share dilution.

Summary

• Reported a net income of $5,276,271 for the three months ended September 30, 2025, a substantial increase from $87,167 in the prior year period, primarily due to an unrealized gain on investment.
• Incurred a net loss of $2,250,467 for the nine months ended September 30, 2025, compared to a net income of $103,252 for the same period in 2024.
• Generated no revenue for both the three and nine months ended September 30, 2025, and 2024, with DittoMask, Inc. being the only current revenue source, which did not generate over $1,000 profit in 2024.
• Cash balance increased to $26,602 as of September 30, 2025, from $0 as of December 31, 2024.
• Total assets decreased to $14,755,335 as of September 30, 2025, from $16,207,378 as of December 31, 2024.
• Total liabilities increased to $3,115,810 as of September 30, 2025, from $2,477,586 as of December 31, 2024.
• Acquired Galaxy Batteries, Inc. from related party Epazz, Inc. for $37,000,000 on August 14, 2025, paid by issuing 10,000,000,000 common shares.
• Common stock shares outstanding increased dramatically to 10,949,226,791 as of September 30, 2025, from 613,226,791 as of December 31, 2024, indicating massive dilution.
• Branched into the real estate industry in Q3 2025 by purchasing two apartments in Cook County, Illinois, for $423,242, which are planned for rental.
• Sold Ecker Capital, LLC (a software business) to ZenaTech, Inc. (a related party) on October 1, 2024, in exchange for ZenaTech shares.
• Identified material weaknesses in internal control over financial reporting, including a lack of a functioning audit committee and inadequate segregation of duties.
• Payments on several related-party convertible notes (Bozki loans, VW Win loan) have been deferred until January 1, 2028.

Sentiment

Score: 2

Explanation: The sentiment is overwhelmingly negative due to the complete lack of operational revenue, significant net loss over the nine-month period, massive shareholder dilution, and critical internal control weaknesses. While there was a three-month net income, it was driven by an unrealized investment gain, which is volatile and not indicative of sustainable operational performance. The heavy reliance on related party transactions further compounds governance concerns.

Positives

• Achieved a net income of $5,276,271 for the three months ended September 30, 2025, a significant improvement from the prior year, primarily due to an unrealized gain on investment.
• Cash balance increased to $26,602 as of September 30, 2025, from $0 at the end of the previous fiscal year.
• Generated positive cash flow from operating activities of $540,660 for the nine months ended September 30, 2025.
• Diversified business operations by entering the real estate rental market with the purchase of two apartments for $423,242.
• Expanded into new technological ventures including blockchain (WebBeeO, CordTell), augmented reality (Augmum), vertical landing aircraft services (AeroPass), and electric bicycles (Equock, Inc.).

Negatives

• Reported no revenue for both the three and nine months ended September 30, 2025, and 2024, indicating a lack of core operational income.
• Incurred a net loss of $2,250,467 for the nine months ended September 30, 2025, a reversal from the $103,252 net income in the comparable 2024 period.
• Experienced massive shareholder dilution with common stock shares outstanding increasing from 613,226,791 to 10,949,226,791, largely due to the acquisition of Galaxy Batteries, Inc. for 10 billion shares.
• Identified material weaknesses in internal control over financial reporting, specifically a lack of a functioning audit committee and inadequate segregation of duties.
• Total assets decreased by approximately $1.45 million, and total liabilities increased by approximately $0.64 million from December 31, 2024, to September 30, 2025.
• Investment in ZenaTech securities decreased in value from $14,053,981 as of December 31, 2024, to $12,087,323 as of September 30, 2025, contributing to the nine-month net loss.

Risks

• Material weaknesses in internal control over financial reporting, including the absence of a functioning audit committee and inadequate segregation of duties, pose significant risks to financial reporting reliability.
• Heavy reliance on related party transactions for acquisitions, debt, and management services raises concerns about potential conflicts of interest and fair valuation.
• Lack of current operational revenue means the company relies entirely on future business development and speculative ventures for profitability.
• Significant shareholder dilution from recent stock issuances could negatively impact existing shareholders' value.
• The pending lawsuit against former owner Clinton L. Stokes, III, regarding shares ownership and asset encumbrance, while not expected to be material, introduces legal uncertainty.
• Forward-looking statements are subject to known and unknown risks and uncertainties that may cause actual results to differ materially from expectations.
• The company has not filed appropriate federal and state income tax returns, which could lead to disallowance of any accumulated net operating income or loss carryforwards.

Future Outlook

Management plans to raise equity capital to finance operating and capital requirements, further develop products, fund marketing and promotion, secure additional property and equipment, and for other working capital purposes. The company is strategically shifting its focus to real estate rentals, medical technology (DittoMask), blockchain software (WebBeeO, CordTell), augmented reality (Augmum), vertical landing aircraft services (AeroPass), and electric bicycles (Equock, Inc.).

Management Comments

• Management expects that cash, cash equivalents, 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 company's operations were affected by the unrealized gain on the ZenaTech investment of almost $2 million.
• The cash outflows do not compare directly since Ameritek had two different businesses during the first nine months of 2025, when it is branching into the real estate industry, and the similar 2024 period, when it operated in the software industry.

Industry Context

Ameritek Ventures is undergoing a significant strategic pivot, divesting from its traditional software business (Ecker Capital, LLC) and diversifying into a wide array of unrelated, early-stage ventures including real estate rentals, medical technology, blockchain, augmented reality, vertical landing aircraft, and electric bicycles. This highly diversified approach for a company with no operational revenue is unusual and carries substantial execution risk, contrasting with industry trends towards specialization and focused growth.

Comparison to Industry Standards

• The absence of revenue for the reporting periods is significantly below industry standards for publicly traded companies, which typically demonstrate consistent revenue streams.
• The reported material weaknesses in internal control over financial reporting, including the lack of an audit committee and inadequate segregation of duties, fall far short of corporate governance best practices and regulatory expectations for public companies.
• The extensive reliance on related party transactions for acquisitions, debt, and management services, particularly with entities controlled by the CEO, raises significant transparency and conflict-of-interest concerns compared to arm's-length transactions common in mature industries.
• The massive dilution of common stock (over 10 billion new shares issued) is an extreme event, far exceeding typical capital raises or stock-based compensation in most industries, and would be highly detrimental to existing shareholders.
• The company's highly diversified and early-stage business model across disparate sectors (real estate, medical tech, blockchain, AR, aviation, e-bikes) makes direct comparison to specific industry benchmarks challenging, but generally, successful companies tend to focus and achieve market penetration in one or a few core areas before such broad diversification.

Corporate Governance

Legal Proceedings

• A lawsuit is pending in Clark County, Nevada, against Clinton L. Stokes, III, the former owner, to settle matters of shares ownership and whether Fiber Optic Assets were purchased free of encumbrance from Meridian Financial Group, LLC. No trial date is set, and the litigation is not expected to have a material effect on the company.

Related Party Transactions

• Sold Ecker Capital, LLC to ZenaTech, Inc. (a related party controlled by Epazz, Inc. and Shaun Passley, PhD) on October 1, 2024, in exchange for ZenaTech shares.
• Holds an investment in ZenaTech, Inc. securities, which fluctuates based on ZenaTech's stock price.
• Assumed three convertible notes (two from Bozki merger, one from VW Win merger) totaling $1,014,094 in principal from Epazz, Inc. (a related party).
• Entered into a management agreement with Epazz, Inc. (controlled by Shaun Passley, PhD) with a minimum annual fee of $350,000.
• Issued 66,000,000 shares of Common Stock to Epazz, Inc. for management fees on April 1, 2025.
• Issued 300,000,000 shares of Common Stock to Shaun Passley, PhD for management fees on April 1, 2025.
• Acquired Galaxy Batteries, Inc. from Epazz, Inc. for $37,000,000 on August 14, 2025, paid by issuing 10,000,000,000 common shares.
• Owes $558,992 to Epazz, Inc. and $317,793 to ZenaTech, Inc. as short-term advances from affiliates as of September 30, 2025.
• Shaun Passley, PhD, Epazz, Inc., and Shaun Passley's family members (Vivienne Passley, Fay Passley, Craig Passley, Olga Passley, Lloyd Passley) hold significant amounts of common and preferred stock.

Stakeholder Impact

• **Shareholders:** Face significant dilution from recent and potential future stock issuances, increased volatility due to reliance on investment gains, and substantial governance risks from related party transactions and internal control weaknesses. The lack of operational revenue poses a long-term value concern.
• **Creditors:** Exposed to a company with no operational revenue and increasing liabilities, although some related-party debt payments have been deferred.
• **Management:** Shaun Passley, as CEO/CFO and controlling shareholder of key related parties, is central to all major transactions and strategic shifts, indicating high concentration of control and potential for conflicts of interest.
• **Customers:** Future customers for new ventures (real estate, e-bikes, AR, blockchain, medical tech) will be impacted by the company's ability to successfully execute its highly diversified strategy.

Next Steps

• Raise equity capital to fund operations and strategic initiatives.
• Continue development of new business ventures including DittoMask, WebBeeO, CordTell, Augmum, AeroPass, and Equock.
• Expand real estate rental operations in Cook County, Illinois.
• Address and remediate identified material weaknesses in internal control over financial reporting, including establishing a functioning audit committee and improving segregation of duties.

Key Dates

Recommendation

Ameritek Ventures presents a highly speculative investment profile with significant red flags. The company has no operational revenue, reported a substantial net loss for the nine-month period, and experienced massive shareholder dilution (over 10 billion new shares issued). Critical internal control weaknesses, including the absence of an audit committee and inadequate segregation of duties, indicate severe governance deficiencies. The business strategy involves a broad, unfocused diversification into multiple early-stage, unrelated ventures, which carries high execution risk. Furthermore, the extensive reliance on related party transactions, particularly with entities controlled by the CEO, raises serious concerns about transparency and potential conflicts of interest. While a net income was reported for the most recent quarter, it was driven by an unrealized investment gain, which is not sustainable operational performance. Given these fundamental issues, the stock is a strong sell for any seasoned investor or institution.

Keywords

Ameritek Ventures, ATVK, Quarterly Report, SEC Filing, Financial Results, Real Estate Investment, Share Dilution, Internal Controls, Related Party Transactions, Blockchain Technology, Augmented Reality, Electric Bicycle, Medical Technology, Corporate Governance