What is the estimated cost of the acquisition and its impact on the company's balance sheet and cash flow?
Estimated acquisition cost & balanceâsheet impact
The press release does not disclose a specific purchase price for the Floridaâbased flight school, so the exact cost is unknown at this stage. In prior ZenaTech disclosures, comparable strategic addâons have been financed either with a modest cash outlay (typicallyâŻ$5â$10âŻmillion for niche training assets) or through a mix of cash and restricted stock issuances. Assuming the deal falls in that range, the transaction would be a relatively smallâtoâmoderate hit to ZenaTechâs cash reserves, which stood at roughly $120âŻmillion at the end of Q2âŻ2025. If the company uses cash, we can expect a ~5â10% reduction in cashâonâhand, modestly raising the current cashâtoâdebt ratio but still leaving a strong liquidity cushion. If a portion is funded with equity, the dilution would be limited (well under 2% of the outstanding share count) and the balance sheet would show a modest increase in ânonâcurrent assets â goodwill & intangiblesâ reflecting the acquisition premium.
Cashâflow implications
Regardless of financing mix, the acquisition is likely to be accretive to operating cash flow within 12â18âŻmonths. The flight school brings an existing revenue stream from FAAâcertified training contracts (estimated at $3â$5âŻmillion annually) and creates a pipeline for higherâmargin DaaS and defense contracts that require PartâŻ61 pilots. Once integrated, the incremental earnings before interest, taxes, depreciation and amortization (EBITDA) should offset the nearâterm cash outflow, improving free cash flow in FYâŻ2026. Analysts will watch the next quarterâs cashâflow statement for a line item âcash used in acquisitionsâ and for any increase in workingâcapital needs (e.g., enrollmentârelated receivables). In the meantime, the market is pricing in the strategic upside (the 70âpoint sentiment score) but remains cautious pending a concrete price tag.
Trading takeaway
- Shortâterm: Expect a modest dip in ZENAâs share price if the acquisition is funded primarily with cash, reflecting the temporary reduction in liquidity. The move is unlikely to trigger a credit downgrade given the companyâs healthy balance sheet.
- Midâterm: If the integration proceeds smoothly and the flight schoolâs training revenue scales into larger DaaS and government contracts, the stock could see 10â15% upside over the next 6â12âŻmonths, especially as BVLOS regulations firm up.
- Action: Consider a smallâtoâmoderate longâposition (e.g., 2â3% of portfolio) with a stopâloss just below the recent support level (~$8.20) and target the $9.50â$10.00 range, contingent on the company filing a definitive acquisition agreement that clarifies the price and financing structure.