What changed in this filing

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Item 7. Management’s Discussion and Analysis

2025-03-25 compared with 2024-03-26 · 291 added, 396 removed, 195 unchanged (78% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Note Regarding Forward-Looking Information and Factors That May Affect Future Results

annual report on Form 10-K contains forward-looking statements regarding our business, financial condition, results of operations and

The Securities and Exchange Commission (the “SEC”) encourages companies to disclose forward-looking information

so that investors can better understand a company’s future prospects and make informed investment decisions.

This annual report

on Form 10-K and other written and oral statements that we make from time to time contain such forward-looking statements that set out

anticipated results based on management’s plans and assumptions regarding future events or performance.

We have tried, wherever

possible, to identify such statements by using words such as “anticipate,” “estimate,” “expect,”

“project,” “intend,” “plan,” “believe,” “will” and similar expressions in

connection with any discussion of future operating or financial performance.

In particular, these include statements relating to future

actions, future performance or results of current and anticipated sales efforts, expenses, the outcome of contingencies, such as legal

proceedings, and financial results.

Factors that could cause our actual results of operations and financial condition to differ materially

are set forth in the “Risk Factors” section of this annual report on Form 10-K.

caution that these factors could cause our actual results of operations and financial condition to differ materially from those expressed

in any forward-looking statements we make and that investors should not place undue reliance on any such forward-looking statements.

Further, any forward-looking statement speaks only as of the date on which such statement is made, and we undertake no obligation to

update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect

the occurrence of anticipated or unanticipated events or circumstances.

New factors emerge from time to time, and it is not possible

for us to predict all of such factors.

Further, we cannot assess the impact of each such factor on our results of operations or the extent

to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking

following discussion should be read in conjunction with our audited financial statements and the related notes that appear elsewhere

in this annual report on Form 10-K.

Properties, Inc.

(“Zoned Properties” or the “Company”) was incorporated in the State of Nevada on August 25,

In October 2013, the Company changed its name to Zoned Properties, Inc.

and in April 2014, the Company shifted its business model

to address commercial real estate in the regulated cannabis industry.

Zoned Properties is a technology-driven property investment company

focused on acquiring value-add real estate within the regulated cannabis industry in the United States.

The Company aspires to innovate

within the real estate development sector, focusing on direct-to-consumer real estate that is leased to the best-in-class cannabis retailers.

Headquartered in Scottsdale, Arizona, Zoned Properties is redefining the approach to commercial real estate investment through its standardized

investment model backed by its proprietary property technology.

Zoned Properties has developed a national ecosystem of real estate services

to support its real estate development model, including a commercial real estate brokerage and a real estate advisory practice.

Company operates in two organized segments;

(1) the operations, leasing and management of its commercial properties, herein known as

the “Property Investment Portfolio” segment, and (2) the advisory, brokerage and technology services related to commercial

properties, herein known as the “Real Estate Services” segment.

The Company targets commercial properties that face unique

zoning or development challenges, identifies solutions that can potentially have a major impact on their commercial value, and then works

to acquire the properties while securing long-term, absolute-net leases.

The Company does not grow, harvest, sell or distribute cannabis

or any substances regulated under United States law such as the Controlled Substance Act of 1970, as amended (the “CSA”).

core of our business operations involves identifying, securing, acquiring, and leasing commercial properties that intend to operate within

highly regulated industries, including the legalized cannabis industry.

Within highly regulated industries, local municipalities typically

develop strict regulations, including zoning and permitting requirements related to commercial real estate, that dictate the specific

locations and parameters under which regulated properties can operate, including cannabis properties.

We often refer to these requirements

as cannabis approvals.

These regulations often include complex permitting processes that require longer development timelines than traditional

commercial real estate and can include non-standard codes governing each location;

for example, restricting a regulated property or facility

from operating within a certain distance of any parks, schools, churches, or residential districts, or restricting a regulated property

from operating outside a defined set of hours of operation.

When an organization can collaborate with local representatives, a proactive

set of rules and regulations can be established and followed to meet the needs of both the regulated operators and the local community.

MANAGEMENT’S DISCUSSION AND

ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Cautionary Note Regarding Forward-Looking

Information and Factors That May Affect Future Results

This annual report on Form 10-K contains forward-looking

statements regarding our business, financial condition, results of operations and prospects.

The Securities and Exchange Commission (the

“SEC”) encourages companies to disclose forward-looking information so that investors can better understand a company’s

future prospects and make informed investment decisions.

This annual report on Form 10-K and other written and oral statements that we

make from time to time contain such forward-looking statements that set out anticipated results based on management’s plans and

assumptions regarding future events or performance.

We have tried, wherever possible, to identify such statements by using words such

as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,”

“believe,” “will” and similar expressions in connection with any discussion of future operating or financial

In particular, these include statements relating to future actions, future performance or results of current and anticipated

sales efforts, expenses, the outcome of contingencies, such as legal proceedings, and financial results.

Factors that could cause our

actual results of operations and financial condition to differ materially are set forth in the “Risk Factors” section of

this annual report on Form 10-K.

We caution that these factors could cause our

actual results of operations and financial condition to differ materially from those expressed in any forward-looking statements we make

and that investors should not place undue reliance on any such forward-looking statements.

Further, any forward-looking statement speaks

only as of the date on which such statement is made, and we undertake no obligation to update any forward-looking statement to reflect

events or circumstances after the date on which such statement is made or to reflect the occurrence of anticipated or unanticipated events

or circumstances.

New factors emerge from time to time, and it is not possible for us to predict all of such factors.

Further, we cannot

assess the impact of each such factor on our results of operations or the extent to which any factor, or combination of factors, may

cause actual results to differ materially from those contained in any forward-looking statements.

The following discussion should be read in conjunction

with our audited consolidated financial statements and the related notes that appear elsewhere in this annual report on Form 10-K.

Zoned Properties, Inc.

(“Zoned Properties”

or the “Company”) was incorporated in the State of Nevada on August 25, 2003.

In October 2013, the Company changed its name

to Zoned Properties, Inc.

and in April 2014, the Company shifted its business model to address commercial real estate in the regulated

cannabis industry.

Zoned Properties is a technology-driven property investment company focused on acquiring value-add real estate within

the regulated cannabis industry in the United States.

The Company aspires to innovate within the real estate development sector, focusing

on direct-to-consumer real estate that is leased to the best-in-class cannabis retailers.

Headquartered in Scottsdale, Arizona, Zoned

Properties is redefining the approach to commercial real estate investment through its standardized investment model backed by its proprietary

property technology.

Zoned Properties has developed a national ecosystem of real estate services to support its real estate development

model, including a commercial real estate brokerage and a real estate advisory practice.

The Company operates in two organized segments;

(1) the operations, leasing and management of its commercial properties, herein known as the “Property Investment Portfolio”

segment, and (2) the advisory, brokerage and technology services related to commercial properties, herein known as the “Real Estate

Services” segment.

The Company targets commercial properties that face unique zoning or development challenges, identifies solutions

that can potentially have a major impact on their commercial value, and then works to acquire the properties while securing long-term,

absolute-net leases.

The Company does not grow, harvest, sell or distribute cannabis or any substances regulated under United States

law such as the Controlled Substance Act of 1970, as amended (the “CSA”).

The core of our business operations involves

identifying, securing, acquiring, and leasing commercial properties that intend to operate within highly regulated industries, including

the legalized cannabis industry.

Within highly regulated industries, local municipalities typically develop strict regulations, including

zoning and permitting requirements related to commercial real estate, that dictate the specific locations and parameters under which

regulated properties can operate, including cannabis properties.

We often refer to these requirements as cannabis approvals.

These regulations

often include complex permitting processes that require longer development timelines than traditional commercial real estate and can

include non-standard codes governing each location;

for example, restricting a regulated property or facility from operating within a

certain distance of any parks, schools, churches, or residential districts, or restricting a regulated property from operating outside

a defined set of hours of operation.

When an organization can collaborate with local representatives, a proactive set of rules and regulations

can be established and followed to meet the needs of both the regulated operators and the local community.

to the complex nature of the Company’s core business operations and target investment properties, the Company may secure dozens

13 unchanged sentences

Properties maintains a portfolio of properties that it owns, develops and leases.

As of March 2024, the Company leases land and/or building

space at the six properties in its portfolio to licensed and regulated cannabis tenants in areas with established cannabis regulations

and zoning procedures.

Four of the leased properties are zoned and permitted as regulated cannabis retail dispensaries, and two of the

leased properties are zoned and permitted as regulated cannabis cultivation and processing facilities.

The Company considers the two

cultivation sites in its portfolio as legacy properties, and may consider selling or leveraging those properties to unlock equity and

create capital availability in the future.

The Zoned Properties investment thesis has evolved over the years as the cannabis industry

has emerged, and is currently focused on investing capital into direct-to-consumer properties, located in state-markets with robust cannabis

consumer demand in the industry.

As of December 31, 2024, the Company leases land and/or

building space at the seven properties in its portfolio to licensed and regulated cannabis tenants in areas with established cannabis

regulations and zoning procedures.

Four of the leased properties are zoned and permitted as regulated cannabis retail dispensaries, two

of the leased properties are zoned and permitted as regulated cannabis cultivation and processing facilities, and one property is leased

for the future development of a licensed medical and adult use marijuana retail dispensary.

The Company considers the two cultivation

sites in its portfolio as legacy properties and may consider selling or leveraging those properties to unlock equity and create capital

availability in the future.

The Zoned Properties investment thesis has evolved over the years as the cannabis industry has emerged, and

is currently focused on investing capital into direct-to-consumer properties, located in state-markets with robust cannabis consumer

demand in the industry.

of March 25, 2025, a summary of rental properties owned by us consisted of the following:

1 unchanged sentence

Green Valley,

Portfolio Total

(special use)

7 unchanged sentences

Lease End Date

Land Area (Acres)

Land Area (Sq.

Undeveloped Land Area (Sq.

Developed Land Area (Sq.

1 unchanged sentence

Vacant Rentable (Sq.

rented as of March 26, 2024

rented as of December 31, 2024

Annual Base Rent (*,**)

base rent represents amount of cash payments due from tenants.

rent represents amount of cash payments due from tenants.

For Tempe, AZ, table includes

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Total revenues

the year ended December 31, 2023, total revenues amounted to $2,886,991, including property investment portfolio revenues $2,481,892,

which consists of rental revenues, as compared to total revenues of $2,660,090, including rental revenues of $1,795,719, for the year

ended December 31, 2022, an overall increase of $226,901, or 8.5%.

This increase was attributable to an increase in rental revenues of

$686,173, or 38.2%, offset by a net decrease in real estate services revenues of $459,272, or 53.1%, attributable to a decrease in commissions

earned on real estate listings of $518,522, offset by an increase in advisory services revenues of $59,250.

increase in property investment portfolio revenues was primarily due to an amendment to the Company’s leased property in Chino

Valley, Arizona in March 2022, and the signing of a new lease with a new tenant at our recently acquired property located in Pleasant

Ridge, Michigan which began on December 1, 2022.

All of the Company’s real estate properties are leased under absolute-net or triple-net

leases with the Significant Tenants.

Additionally, beginning in August 2023, we began receiving additional rental revenue of $3,500 per

month in connection with a Sublease Agreement with CJK and a subtenant in connection with our Kingman property.

the years ended December 31, 2024, total revenues amounted to $3,793,289, including property investment portfolio revenues $2,884,286,

which consists of rental revenues, as compared to total revenues of $2,886,991, including property investment portfolio revenues of $2,481,892,

for the year ended December 31, 2023, an overall increase of $906,298, or 31.4%.

This increase was attributable to an increase in rental

revenues of $402,394, or 16.2%, primarily attributable to an increase in rental revenue from our recently acquired property in Chicago,

IL and Surprise, AZ, and a net increase in real estate services revenues of $503,904, or 124.4%, attributable to an increase in commissions

and assignment fees earned on real estate listings, offset by a decrease in advisory fees.

increase in property investment portfolio revenues was primarily due to the signing of a new lease with new tenants at our recently acquired

properties located in Chicago, Illinois which began in January 2024 and Surprise, AZ which began in July 2024.

All of the Company’s

real estate properties are leased under absolute-net or triple-net leases with our tenants.

the year ended December 31, 2024, operating expenses amounted to $2,690,119 as compared to $2,717,804 for the year ended December 31,

8 unchanged sentences

Business development costs

Gain on sale of rental property

year ended December 31, 2023, compensation and benefit expense increased by $94,071, or 7.6%, as compared to the year ended December

The increase was attributable to an increase in compensation and benefits of $314,183 related to the addition of multiple

new full-time and part-time team members, and an increase in health insurance expense, offset by a decrease in stock-based compensation

The decrease in stock-based compensation was from a decrease in accretion of stock option expense.

During the second

quarter of 2022, we began to hire additional staff related to the diversification of our real estate services for the expansion of

both advisory services and brokerage services.

For the year ended December

31, 2023, professional fees increased by $36,164, or 10.3%, as compared to the year ended December 31, 2022.

This increase was primarily

attributable to an increase in accounting fees of $15,740, an increase in consulting fees of $97,739, and an increase in other professional

fees of $1,022, offset by a decrease in legal fees of $11,782, and a decrease in public relations fees of $66,555.

For the years ended December

31, 2023 and 2022, we recorded brokerage fees amounting to $64,680 and $431,029, respectively, representing a decrease of $366,349,

or 85.0%, from 2022 to 2023.

Brokerage fees occur as the result of various percentage-based commission splits we pay to our licensed

brokerage team members who participate in various real estate listing transactions.

General and administrative

expenses consist of expenses such as rent expense, insurance expense, insurance expense, travel expenses, office expenses, telephone

and internet expenses, advertising and marketing expense, and other general operating expenses.

For the year ended December 31, 2023,

general and administrative expenses increased by $91,313, or 33.1%, as compared to the year ended December 31, 2022.

These increases

were primarily attributable to an increase in operating activities related to attendance at various industry-related conferences,

an increase in technology services, and an increase in travel expense.

year ended December 31, 2023, depreciation expense increased by $20,268, or 5.6%, as compared to the year ended December 31, 2022.

This increase was related to an increase depreciation of rental properties associated with the purchase of the Pleasant Ridge, MI

property, offset by a decrease in amortization of intangible assets which were fully amortized.

For the year ended December

31, 2023, real estate taxes increased by $46,984, or 40.2%, as compared to the year ended December 31, 2022.

This increase was attributable

to an increase in assessed real taxes associated with improvements made on our Chino Valley property and the purchase of the Pleasant

Ridge, MI property.

For the year ended December

31, 2023, business development costs increased by $26,000, or 100.0%, as compared to the year ended December 31, 2022.

This increase

was attributable to an increase in business development activities and includes costs related to forfeited escrow deposits and the

write off of costs related to projects which we decided not to pursue.

For the year ended December

31, 2022, we recorded a gain from sale of property and equipment of $312 as compared to $0 for the year ended December 31, 2023.

(loss) from operations

For the year ended December 31, 2024, compensation and benefit expense decreased by $38,741, or 2.9%, as compared to the year ended December 31, 2023.

The decrease was attributable to a decrease in health insurance expense of $37,752 and a decrease in stock-based compensation of $61,760 related to a decrease in accretion of stock option expense, offset by an increase in compensation and benefits of $60,771.

For the year ended December 31, 2024, professional fees decreased by $37,381, or 9.6%, as compared to the year ended December 31, 2023.

This decrease was primarily attributable to a decrease in consulting fees of $36,518, a decrease in public relation fees of $18,257, and a decrease in other professional fees of $1,000, offset by an increase in accounting fees of $10,749 and legal fees of $7,916.

For the year ended December 31, 2024 and 2023, we recorded brokerage fees amounting to $158,871 and $64,680, respectively, representing an increase of $94,191, or 145.6%.

Brokerage fees occur as the result of various percentage-based commission splits we pay to our licensed brokerage team members who participate in various real estate listing transactions.

General and administrative expenses consist of expenses such as

rent expense, insurance expense, travel expenses, office expenses, telephone and internet expenses, advertising and marketing expense,

and other general operating expenses.

For the year ended December 31, 2024, general and administrative expenses decreased by $35,680,

or 9.7%, as compared to the year ended December 31, 2023, primarily to a decrease in travel and conference fee expenses.

For the year ended December 31, 2024, depreciation expense decreased by $22,815, or 6.0%, as compared to the year ended December 31, 2023 due to a decrease in depreciable rental properties.

For the year ended December 31, 2024, real estate taxes decreased by $15,134, or 9.2%, as compared to the year ended December 31, 2023 related to our Michigan property.

For the year ended December 31, 2024, property portfolio business development costs increased by $27,875, or 107.2%, as compared to the year ended December 31, 2023.

Property portfolio business development costs are costs related to forfeited escrow deposits and the write off of costs related to projects which we decided not to pursue.

from operations

a result of the factors described above, for the year ended December 31, 2024, income from operations amounted to $1,103,170 as compared

to a loss from operations of $(108,951) for the year ended December 31, 2022, a positive change of $278,138, or 255.3%.

to income from operations of $169,187 for the year ended December 31, 2023, an increase of $933,983, or 552.0%.

(expenses) income, net

(expense) income primarily includes interest expense incurred on debt with third parties and a related party and also includes other

income (expense).

For the year ended December 31, 2023, total other expenses, net amounted to $657,335 as compared to total other expenses,

net of $449,143, respectively, representing an increase of $208,192, or 46.3%.

This increase was attributable to an increase in interest

expense of $463,543 primarily related to an increase in notes payable and a decrease in interest income of $13,000, offset by a decrease

in loss in fair value from an interest rate swap of $57,595 and a decrease in loss on note receivable investment of $210,756 due to the

impairment of such investment.

the years ended December 31, 2023 and 2022, we incurred an equity method loss of $52,110 and $16,261, respectively, an increase of $35,849,

(expense) income primarily includes interest expense incurred on debt with third parties and also includes other income (expense).

the year ended December 31, 2024, total other expenses, net amounted to $529,212 as compared to total other expenses, net of $657,335,

respectively, representing a decrease of $128,123, or 19.5%.

This decrease was attributable to an increase in interest expense of $71,979

primarily related to an increase in notes payable, and a decrease in loss in fair value from an interest rate swap of $200,102 resulting

in 2024 other income of $167,460 from the interest rate swap.

the year ended December 31, 2024 and 2023, we incurred an equity method loss of $0 and $52,110, respectively, a decrease of $52,110,

During the year ended December 31, 2023, we recorded an impairment loss from unconsolidated joint ventures of $45,000 and

a loss from unconsolidated joint ventures of $7,110.

During the year ended December 31, 2022, we recorded a loss from unconsolidated

joint ventures of $16,261.

On December 31, 2023, we recorded an other-than-temporary impairment loss of $45,000 because it was determined

that the fair value of our equity method investment in Zoneomics was less than its carrying value.

Based on management’s evaluation,

it was determined that due to market and regulatory conditions, implementing our Zoneomics business model was at risk and that our ability

to recover the carrying amount of the investment in Zoneomics was impaired.

a result of the foregoing, for the years ended December 31, 2023 and 2022, net loss amounted to $540,258, or $0.04 per common share (basic

and diluted), and $574,355, or $0.05 per common share (basic and diluted), respectively.

income (loss)

a result of the foregoing for the year ended December 31, 2024 and 2023, net income (loss) amounted to $573,958, or $0.05 per common

share (basic) and $0.06 per common share (diluted), and $(540,258), or $(0.04) per common share (basic and diluted), respectively.

and Capital Resources

2 unchanged sentences

and $3,099,795 as of December 31, 2024 and 2023, respectively.

primary uses of cash have been for compensation and benefits, fees paid to third parties for professional services, real estate taxes,

general and administrative expenses, and the development of rental properties and other lines of business.

All funds received have been

expended in the furtherance of growing the business.

We receive funds from the collection of rental income, and real estate services,

which primarily includes advisory fees and brokerage fees.

The following trends are reasonably likely to result in changes in our liquidity

over the near to long term:

primary uses of cash have been for the acquisition of new property investments, compensation and benefits, fees paid to third parties

for professional services, real estate taxes, general and administrative expenses, and the development of rental properties and other

lines of business.

All funds received have been expended in the furtherance of growing the business.

We receive funds from the collection

of rental income, and real estate services, which primarily includes advisory fees and brokerage fees.

The following trends are reasonably

likely to result in changes in our liquidity over the near term to long term:

in working capital requirements to finance our current business,

13 unchanged sentences

have used these funds to fund our operating expenses, pay our obligations, acquire and develop rental properties, invest in joint ventures,

and notes receivable, and to grow our company.

We may need to raise significant additional capital or debt financing to acquire new properties,

to develop existing properties, to assure we have sufficient working capital for our ongoing operations and debt obligations, and to

invest in new joint venture and other projects.

West Bank Swap and Amended Note

July 11, 2022, Zoned Arizona entered into a Loan Agreement (the “Loan Agreement”), dated as of July 11, 2022, by and between

Zoned Arizona and East West Bank (the “Bank”).

Pursuant to the terms of the Loan Agreement, subject to and upon the satisfaction

of the terms and conditions of the Loan Agreement, Zoned Arizona could request advances under a multiple access loan (“MAL”)

during the MAL.

On July 11, 2022, in connection with the Loan Agreement, Zoned Arizona paid loan and other fees of $176,472, and in connection

with the First Amendment to the Loan Agreement discussed below, paid additional fees of $8,124.

These loan and other fees aggregating

$184,596 are reflected as a debt discount and are being amortized ratably and charged to interest expense over the term of the related

proceeds of each advance under the MAL may be used by Zoned Arizona to refinance the real property at 410 S.

Madison Drive, Tempe, AZ

85251 (the “Property”) or to conduct certain acts related to the acquisition, improvement and maintenance of real property.

On termination of the MAL, all unpaid principal, unpaid and accrued interest, and all other amounts due under the MAL will be immediately

due and payable.

Loan Agreement contains representations, warranties and covenants customary for a transaction of this type.

Among other things, the Loan

Agreement provides as follows:

(a) upon the occurrence of an event of default, the outstanding principal balance of the MAL will not

at any time exceed 65% of the Property’s most recent appraised value;

(b) upon the occurrence of an event of default, Zoned Arizona

will maintain a minimum Non-Cannabis Debt Service Coverage Ratio (as hereinafter defined) of 1.40 to 1.00;

all times maintain a minimum debt service coverage ratio of 1.50 to 1.0;

and (d) Zoned Arizona and the Company, collectively, will maintain

at all times, liquid assets of at least the sum of all tenant securities deposits under leases, plus $350,000 in operating reserves.

advances under the MAL bear interest at a variable rate equal to the greater of (a) the prime rate plus 2%, or (b) a floor rate equal

to the sum of the prime rate as of July 11, 2022 plus 2.25%.

From July 11, 2022 to July 11, 2023, Zoned Arizona agreed to make interest

payments on the outstanding principal balance of the MAL.

From and after July 11, 2023 and continuing until July 11, 2028 (the “Maturity

Date”), Zoned Arizona will pay principal together with interest on the MAL in 60 monthly installments based on the interest rate

set forth in the Note and a principal amortization schedule of 25 years from July 11, 2023 (or if Zoned Arizona makes the Early Amortization

Election, from the date such election is made).

Arizona may prepay the outstanding principal under the Note, at any time, subject to the provisions of the Note.

If Zoned Arizona prepays

all, but not less than all, of the outstanding principal balance of the MAL at any time until July 11, 2023, then Zoned Arizona will

also pay a premium equal to 1% of the amount prepaid.

December 7, 2022, Zoned Arizona and the Bank entered into a First Amendment to Loan Agreement (the “First Amendment”).

to the terms of the First Amendment, Zoned Arizona has elected to make its Early Amortization Election (defined in the First Amendment

and Loan Agreement), which election requires Zoned Arizona to commence paying principal and interest on the MAL as set forth in the Amended

Note (defined below).

Except as provided in the First Amendment, the terms of the Loan Agreement remain in full force and effect.

to the terms of the Loan Agreement and First Amendment, on December 7, 2022, Zoned Arizona issued an Amended and Restated Promissory

Note (the “Amended Note”) to the Bank.

The Amended Note has an original principal amount of $4,500,000, a 50% loan-to-value

as determined by the bank-ordered appraisal completed on the Tempe Property.

The Amended Note requires Zoned Arizona to pay monthly principal

and interest payments to the Bank at an interest rate equal to the prime rate plus 0.75% (9.25% as of December 31, 2023).

Note matures 10 years after its effective date and payments are calculated based on a 30-year amortization schedule.

In connection with

the Amended Note, in 2022, Zoned Arizona received gross proceeds of $4,500,000 and paid fees of $184,596.

Arizona may prepay the outstanding principal under the Swap Note, at any time, subject to the provisions of the Swap Note.

as previously disclosed, on July 11, 2022 and pursuant to the terms of the Loan Agreement, the Company executed a Guaranty (the “Guaranty”)

in favor of the Bank, pursuant to which the Company agreed to guarantee all indebtedness of Zoned Arizona to the Bank arising under or

in connection with the MAL or any of the loan documents.

On December 7, 2022, the Company executed an Acknowledgement of Amendment and

Reaffirmation of Guaranty (the “Reaffirmation”) in favor of the Bank.

The Reaffirmation reaffirms the Guaranty and provides

the Company’s consent to the First Amendment and Swap Note.

December 7, 2022, Zoned Arizona and the Bank entered into an Interest Rate Swap Transaction Confirmation (the “Confirmation”).

The Confirmation incorporates by reference the 2002 ISDA Master Agreement as published by the International Swaps and Derivatives Association,

as if the parties to the Confirmation executed such agreement in such form.

The Confirmation provides the terms and conditions governing

the interest rate swap transaction afforded to Zoned Arizona, including a fixed interest rate of 7.65%.

The Company recorded the swap

at fair value in the consolidated balance sheets with changes in fair value recorded contemporaneously in earnings.

The Company has entered

into an interest rate swap to mitigate variability in interest payments on its variable-rate debt.

December 31, 2023, principal and interest due on the East West Bank Swap Note amounted to $4,447,068 and $8,861, respectively.

31, 2022, principal and interest due on the East West Bank Swap Note amounted to $4,485,808 and $28,324, respectively.

Land Contract Note Payable

December 5, 2022, in connection with the acquisition of the Woodward Property located in Pleasant Ridge, Michigan, the Company entered

into a land contract note in the amount of $1,425,000 (the “Woodward Property Note Payable”).

The Woodward Property Note

Payable bears interest at 9% per annum and is due in full as follows:

payments of principal and interest of $12,821 beginning on January 1, 2023, and

A balloon payment of $1,274,117

including the remaining principal and interest on or before December 1, 2028.

December 31, 2023, principal and interest due on the Woodward Property Note Payable amounted to $1,408,962 and $0, respectively.

31, 2022, principal and interest due on the Woodward Property Note Payable amounted to $1,425,000 and $10,687, respectively.

Land Contract Note Payable

February 24, 2023, in connection with the 23634 Land Contract dated February 24, 2023 (see Note 4), the Company entered into a land contract

note payable of $430,000 (the “23634 Land Contract Note Payable”).

The 23634 Land Contract Note Payable accrues interest

at the rate of 7% and is payable in 48 monthly installments of $3,865, beginning April 1, 2023, until the purchase price and interest

are fully paid, provided that such purchase price and all interest will be fully paid on or before March 31, 2027.

On December 31, 2023,

principal and interest due on the 23634 Land Contract Note Payable amounted to $420,269 and $0, respectively.

future operations are dependent on our ability to manage our current cash balance, on the collection of rental and real estate services

revenues and the attainment of new advisory and brokerage clients.

Our real estate properties are leased to Significant Tenants under

triple-net leases for which terms vary.

We monitor the credit of these tenants to stay abreast of any material changes in credit quality.

We monitor tenant credit by (1) reviewing financial statements and related metrics and information that are publicly available or that

are provided to us upon request, and (2) monitoring the timeliness of rent collections.

As of December 31, 2023 and 2022, we had

an asset concentration related to our Significant Tenant leases.

As of December 31, 2023 and 2022, these Significant Tenants represented

approximately 69.4% and 68.7% of total assets, respectively.

If our Significant Tenants are prohibited from operating due to federal

or state regulations or due to COVID-19, or cannot pay their rent, we may not have enough working capital to support our operations and

we would have to seek out new tenants at rental rates per square less than our current rate per square foot.

and to grow our company.

We may need to raise significant additional capital or debt financing to acquire new properties, to develop

existing properties, to assure we have sufficient working capital for our ongoing operations and debt obligations, and to invest in new

joint venture and other projects.

Property Acquisitions and Related Note Payables

July 8, 2024 (the “Closing”), ZP Dysart acquired a property in Surprise AZ (the “Surprise Property”) from NWC

Dysart & Bell LLC (“NWC”).

Surprise Property is a tract or parcel of land containing approximately 1.114 acres, together

with all improvements, buildings, leases, rights, easements, and appurtenances pertaining thereto.

The Surprise Property was acquired

for an aggregate purchase price of $1,712,541, which included (i) $1,100,000, representing the Purchase Price, (ii) reimburse to NWC

for onsite and offsite improvements of $492,022, and (iii) closing costs, commissions, and fees customary to the acquisition of real

estate of $120,519.

As previously disclosed, on January 23, 2023, ZPRE Holdings entered into a Purchase and Sale Agreement and Joint

Escrow Instructions, by and between NWC, as the seller, and ZPRE Holdings, as the buyer.

Such agreement was subsequently amended on May

12, 2023, October 25, 2023, and December 20, 2023 (as amended, the “Agreement”).

Pursuant to the terms of the Agreement,

NWC also agreed to complete a number of on-site and off-site improvements to the Surprise Property (the “NWC’s Work”)

in exchange for ZPRE Holdings’ reimbursement of up to $250,000 for the off-site work and reimbursement of up to $350,000 for the

on-site work (collectively, the “Reimbursements”).

The obligation to complete the Reimbursements was conditioned upon the

closing of the sale of the Surprise Property.

Subsequent to entry into the Agreement and as approved by NWC under the terms of the Agreement,

ZPRE Holdings designated ZP Dysart as the named buyer for the Closing.

connection with the Surprise Property Closing, ZP Dysart entered into the Construction Loan Agreement (the “PMF Loan Agreement”),

dated as of July 8, 2024, by and between ZP Dysart and Private Money Funding, LLC (“PMF”).

Pursuant to the terms of the PMF

Loan Agreement, PMF agreed to loan up to $1,620,000 to ZP Dysart, which loan is evidenced by a promissory note (the “PMF Note”).

ZP Dysart’s obligations under the PMF Note and the PMF Loan Agreement are secured by a Deed of Trust, Assignment of Leases and

Rents, Security Agreement and Fixture Filing (the “PMF Deed”).

The PMF Loan Agreement, the PMF Note, any guaranties, and

all other related documents executed and delivered concurrently with the PMF Loan Agreement are referred to herein as the “PMF

Loan Documents.” Pursuant to the terms of the PMF Loan Agreement, on July 8, 2024, ZP Dysart issued the PMF Note with the maximum

principal amount of $1,620,000 to PMF (the “Maximum Amount”).

Interest accrues at the rate of 12% per annum, with ZP Dysart

paying interest only in arrears, in monthly installment payments, beginning on August 1, 2024 through July 1, 2029 (the “Maturity

ZP Dysart may prepay the PMF Loan in full or in part at any time.

However, during the first 48 months of the term of the

loan, if ZP Dysart pays any principal payment, ZP Dysart will pay to PMF a prepayment premium equal to (i) 5% of the amount of principal

prepaid in months 1-24;

(ii) 2% of the amount of principal prepaid in months 25-36;

and (iii) 1% of the amount of principal prepaid in

months 36-48, which amount will be due and payable at the time ZP Dysart pays the principal payment.

During the year ended December 31,

2024, the Company borrowed $1,020,000 of the Maximum Amount and received net proceeds of $983,940, net of origination fees and costs

As of December 31, 2024, the principal amount of the loan is $1,020,000 and accrued interest payable amounted to $0.

the existence of any event of default, PMF may, at its option, exercise any one or more of the remedies described in the PMF Loan Documents

or otherwise available, including declaring all unpaid indebtedness then evidenced by the Note (including any late charges that are then

due and payable, any advances thereafter made from the loan and any accruing costs and reasonable attorneys’ fees which are the

obligation of ZP Dysart under the PMF Loan Documents) to become immediately due and payable.

Unless PMF otherwise elects, such acceleration

will occur automatically upon the occurrence of any event of default described in PMF Loan Agreement or PMF Deed.

maturity or during the existence of any event of default, or at any time that ZP Dysart is more than 10 days delinquent in the payment

of money as required by the Note or the other Loan Documents (whether or not Holder has given any notice of default or any cure period

has expired), then all amounts outstanding thereunder will thereafter bear interest at the default rate of 18% per annum from the date

such payment became due until paid, but in no event to exceed the highest rate lawfully collectible under applicable law.

to the terms of the PMF Loan Agreement, following ZP Dysart’s satisfaction of the conditions to funding the PMF Loan and recordation

of the PMF Deed, the loan proceeds will be disbursed in multiple advances through escrow, first in the form of an initial advance in

the amount of $1,020,000 for the purpose of contributing funding towards acquiring the Surprise Property (the “Acquisition Advance”).

The remaining loan proceeds will be used for the purpose of financing for the completion of Sunday Goods’ Work (as hereinafter

defined) (the “Construction Advances”).

Following the Acquisition Advance, subject to satisfying the conditions set forth

in the PMF Loan Agreement, ZP Dysart will be entitled to request the Construction Advances from the remaining loan proceeds at the following

stages of completion of the construction of Sunday Goods’ Work:

(i) first advance in the amount of $300,000 at 50% completion,

and (ii) final advance in the amount of $300,000 at 100% completion and issuance of certificate of occupancy.

PMF Loan Agreement contains representations, warranties and covenants customary for a transaction of this type.

to the terms of the Unconditional Repayment Guaranty (the “PMF Guaranty”), dated as of July 8, 2024, by Zoned Properties,

in favor of PMF, the Company guaranteed to PMF the full and prompt payment of the principal sum of the PMF Note or so much thereof

that may be outstanding at any one time or from time to time in accordance with its terms when due, by acceleration or otherwise, together

with all interest accrued thereon, and the full and prompt payment of all other sums, together with all interest accrued thereon, when

due under the terms of the PMF Loan Agreement, the PMF Note, and in any deed of trust, security agreement, lease assignment and other

assignment or agreement referred to in the PMF Loan Agreement or the PMF Note and/or now or hereafter securing the PMF Note or setting

forth any obligations of ZP Dysart in connection with the loan.

may secure additional financing to acquire and develop additional and existing properties.

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cash flow provided by operating activities was $578,218 for the year ended December 31, 2024, as compared to net cash flow provided by

operating activities of $871,901 for the year ended December 31, 2022, representing a decrease of $789,354.

flow provided by operating activities for the year ended December 31, 2023 primarily reflected a net loss of $540,258 adjusted for

the add-back of non-cash items consisting of depreciation of $380,761, amortization of debt discount of $18,460, accretion

of stock-based stock option expense of $116,643, a loss on forfeited escrow deposit of $15,000, a loss from unconsolidated joint

ventures of $8,370, a non-cash impairment loss from unconsolidated joint ventures of $45,000, and a loss from the changes in fair

value from an interest rate swap of $32,642, offset by changes in operating assets and liabilities primarily consisting of an increase

in deferred rent of $167,393 attributable to rent abatement on our new tenant lease at our Woodward Properties, a decrease in prepaid

expenses and other assets of $31,653, a decrease in lease incentive receivable of $27,523, an increase in accounts payable of $9,576,

a decrease in accrued expenses of $11,698, an increase in contract liabilities of $42,861, and an increase in security deposits payable

of $71,060 attributable to the collection of additional security deposit on our Woodward Properties.

flow provided by operating activities for the year ended December 31, 2022 primarily reflected a net loss of $574,355 adjusted for

the add-back of non-cash items consisting of depreciation of $351,043, amortization expense of $9,450, accretion of stock-based

stock option expense of $336,755, a loss on note receivable investments of $210,756 attributable to the recording of an allowance

for uncollectible amounts, a loss from unconsolidated joint ventures of $16,261, and a loss from the changes in fair value from an

interest rate swap of $90,237, offset by changes in operating assets and liabilities primarily consisting of an increase in contract

liabilities of $298,565 attributable to the receipt of cash of a $300,000 assignment fee which was reflected in contract liabilities

on the accompanying consolidated balance sheet and will be amortized into rental revenue on a straight-line basis over the remaining

term of the lease, and an increase in security deposits payable of $147,600 attributable to the collection of additional security

deposit on our Tempe property.

operating activities of $82,547 for the year ended December 31, 2023, representing an increase of $495,671.

cash flow provided by operating activities for the year ended December 31, 2024 primarily reflected net income of $573,958, adjusted

for the add-back of non-cash items consisting of depreciation of $357,946, amortization of debt discount of $22,066 accretion of stock-based

stock option expense of $54,833, a loss on forfeited escrow deposit of $22,875, an increase in bad debt expense of $20,000, and gain

from the changes in fair value from an interest rate swap of $167,460, offset by changes in operating assets and liabilities primarily

consisting of an increase in accounts receivable of $253,538, an increase in deferred rent of $376,032 attributable to rent abatement

on our new tenant leases at our Chicago, Illinois and Surprise, AZ properties, an increase in accrued expenses of $256,951, a decrease

in contract liabilities of $27,225, and an increase in security deposits payable of $71,217.

cash flow provided by operating activities for the year ended December 31, 2023 primarily reflected a net loss of $540,258 adjusted for

the add-back of non-cash items consisting of depreciation of $380,761, amortization of debt discount of $18,460, accretion of stock-based

stock option expense of $116,643, a loss on forfeited escrow deposit of $15,000, a loss from unconsolidated joint ventures of $8,370,

a non-cash impairment loss from unconsolidated joint ventures of $45,000, and a loss from the changes in fair value from an interest

rate swap of $32,642, offset by changes in operating assets and liabilities primarily consisting of an increase in deferred rent of $167,393

attributable to rent abatement on our new tenant lease at our Woodward Properties, a decrease in prepaid expenses and other assets of

$31,653, a decrease in lease incentive receivable of $27,523, an increase in accounts payable of $9,576, a decrease in accrued expenses

of $11,698, an increase in contract liabilities of $42,861, and an increase in security deposits payable of $71,060 attributable to the

collection of additional security deposit on our Woodward Properties.

the year ended December 31 2024, net cash flow used in investing activities amounted to $3,527,929 as compared to net cash used in investing

activities of $2,009,213, a decrease of $770,129.

activities of $1,239,084, an increase of $2,288,845.

During the year ended December 31, 2024, net cash used in investing activities was

attributable to the purchase of rental property of $1,007,941 primarily in connection with the acquisition of property in Pleasant Ridge,

Michigan, an increase in capitalized permit costs of $38,016, and an increase in escrow deposits of $192,048 in connection with escrow

deposits made on other potential acquisitions of rental properties.

During the year ended December 31, 2022, net cash used in investing

activities was attributable to an increase in lease incentive receivables related to the disbursement of $500,000 to a Significant Tenant

to be used for leasehold improvements, the purchase of rental property of $867,549 in connection with the acquisition of property in

Pleasant Ridge, Michigan, the purchase of property and equipment of $3,764, an increase in escrow deposits of $590,000 in connection

with the acquisition of additional property in Pleasant Ridge, Michigan which closed in February 2023, and cash used to invest in equity

securities of $50,000.

These uses of cash in investing activities were offset by proceeds from the sale of property and equipment of

the year ended December 31, 2023, net cash used in financing activities amounted to $79,508 and consisted of the repayment of notes payable

of $64,508 and the purchase of treasury stock of $15,000.

During the year ended December 31, 2022, net cash provided by financing activities

amounted to $4,281,212 and consisted of net proceeds from notes payable of $4,315,404, offset by the repayment of notes payable of $14,192

and the repayment of notes payable – related party of $20,000.

attributable to the purchase of rental properties of $3,336,763 primarily in connection with the acquisition of properties in Chicago,

IL and Surprise, AZ, a purchase of property and equipment of $6,480, an increase in capitalized project costs of $168,984, and an increase

in escrow deposits of $15,702.

During the year ended December 31, 2023, net cash used in investing activities was attributable to the

purchase of rental property of $1,007,941 primarily in connection with the acquisition of property in Pleasant Ridge, Michigan, an increase

in capitalized project costs of $38,016, and an increase in escrow deposits of $192,048 in connection with escrow deposits made on other

potential acquisitions of rental properties.

the year ended December 31, 2024 and 2023, net cash provided by (used in) financing activities amounted to $869,896 and $(79,508), respectively.

During the year ended December 31, 2024, net cash provided by financing activities consisted of net proceeds from a note payable of $983,940

used to acquire our Surprise, AZ property, offset by cash used for the repayment of notes payable of $106,034 and the purchase of treasury

stock of $8,010.

During the year ended December 31, 2023, net cash used in financing activities amounted to $79,508 and consisted of

the repayment of notes payable of $64,508 and the purchase of treasury stock of $15,000.

Obligations and Off-Balance Sheet Arrangements

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Sheet Arrangements

than discussed below, we have not entered into any other financial guarantees or other commitments to guarantee the payment obligations

of any third parties.

We have not entered into any derivative contracts that are indexed to our shares and classified as shareholders’

Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves

as credit, liquidity or market risk support to such entity.

We do not have any variable interest in any unconsolidated entity that provides

financing, liquidity, market risk or credit support to us or engages in leasing, hedging or research and development services with us.

Our off-balance sheet arrangement includes the notional amount of our interest rate swaps which we use to hedge a portion of our exposure

to interest rate fluctuations.

Other than discussed herein, we have not entered

into any other financial guarantees or other commitments to guarantee the payment obligations of any third parties.

We have not entered

into any derivative contracts that are indexed to our shares and classified as shareholders’ equity.

Furthermore, we do not have

any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk

support to such entity.

We do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk

or credit support to us or engages in leasing, hedging or research and development services with us.

Our off-balance sheet arrangement

includes the notional amount of our interest rate swaps which we use to hedge a portion of our exposure to interest rate fluctuations.

Currently, our interest rate swap fixes the variable rate interest on our bank swap note payable.

to fund our interest rate swap payments utilizing cash flows from operations.

As of December 31, 2023, the notional amount of our interest

rate swaps was $4,461,260.

In interest rate swaps, the notional amount is the specified value upon which interest rate payments will

be exchanged.

The notional amount in interest rate swaps is used to come up with the amount of interest due.

We intend to fund our interest rate

swap payments utilizing cash flows from operations.

As of December 31, 2024, the notional amount of our interest rate swaps was $4,418,471.

In interest rate swaps, the notional amount is the specified value upon which interest rate payments will be exchanged.

The notional amount

in interest rate swaps is used to come up with the amount of interest due.

Accounting Estimates

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We continually evaluate our estimates, including the critical

ones related to an interest rate swap, the allowance for accounts receivable, impairment of rental properties, the valuation of our investments

in unconsolidated joint ventures, and valuation of equity transactions.

We base our estimates on historical experience and on various

other assumptions that we believed to be reasonable under the circumstances, the results of which form the basis for making judgments

about the carrying values of assets and liabilities that are not readily apparent from other sources.

Any future changes to these estimates

and assumptions could cause a material change to our reported amounts of revenues, expenses, assets and liabilities.

Actual results may

differ from these estimates under different assumptions or conditions.

We believe the following critical accounting estimates affect

our more significant judgments and estimates used in the preparation of the financial statements.

ones related to an interest rate swap, the allowance for accounts receivable, impairment of rental properties, and the valuation of equity

transactions.

We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under

the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that

are not readily apparent from other sources.

Any future changes to these estimates and assumptions could cause a material change to our

reported amounts of revenues, expenses, assets and liabilities.

Actual results may differ from these estimates under different assumptions

or conditions.

We believe the following critical accounting estimates affect our more significant judgments and estimates used in the

preparation of the financial statements.

connection with a bank loan executed in 2022, the Company entered into an interest rate swap agreement to manage interest rate risk related

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to its swap agreement mitigates the counterparty credit risk.

estimated fair value of the interest rate swap agreement is reflected as a derivative liability on the accompanying balance sheet with

changes in the fair value reflected in interest expense in the accompanying statements of operations.

The Company uses derivative financial

instruments only to manage interest rate risks and not as investment vehicles.

estimated fair value of the interest rate swap agreement is reflected as a derivative liability on the accompanying balance sheets with

changes in the fair value reflected in income (loss) from derivative - interest rate swap on the accompanying statements of operations.

The Company uses derivative financial instruments only to manage interest rate risks and not as investment vehicles.

regarding the interest rate swap is as follows:

Amount on December 31, 2023

Fair Value of

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December 10, 2032

receivable and notes receivable

recognize an allowance for losses on accounts receivable and notes receivable in an amount equal to the estimated probable losses net

of recoveries under the current expected credit loss method.

The allowance is based on an analysis of historical bad debt experience,

current receivables aging and expected future write-offs, as well as an assessment of specific identifiable customer accounts and notes

receivable considered at risk or uncollectible.

recognize an allowance for losses on accounts receivable in an amount equal to the estimated probable losses net of recoveries under

the current expected credit loss method.

The allowance is based on an analysis of historical bad debt experience, current receivables

aging and expected future write-offs, as well as an assessment of specific identifiable customer accounts receivable considered at risk

or uncollectible.

On January 1, 2023, we adopted ASC 326, “Financial Instruments - Credit Losses”.

In accordance with ASC 326, an allowance is maintained for estimated forward-looking losses resulting from the possible inability of

customers to make required payments (current expected losses).

The amount of the allowance is determined principally on the basis of

past collection experience and known financial factors regarding specific customers.

The expense associated with the allowance for doubtful

accounts on accounts receivable is recognized in general and administrative expenses.

In accordance with ASC

326, an allowance is maintained for estimated forward-looking losses resulting from the possible inability of customers to make required

payments (current expected losses).

The amount of the allowance is determined principally on the basis of past collection experience

and known financial factors regarding specific customers.

The expense associated with the allowance for doubtful accounts on accounts

receivable is recognized in general and administrative expenses.

properties are carried at cost less accumulated depreciation and amortization.

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have capitalized land, which is not subject to depreciation.

in joint ventures

have equity investments in various privately held entities.

We account for these investments either under the equity method or cost method

of accounting depending on our ownership interest and level of influence.

Investments accounted for under the equity method are recorded

based upon the amount of our investment and adjusted each period for our share of the investee’s income or loss.

Investments are

reviewed for changes in circumstance or the occurrence of events that suggest an other than temporary event where our investment may

not be recoverable.

We evaluate our investments in these entities for consolidation.

We consider our percentage interest in the joint

venture, evaluation of control and whether a variable interest entity exists when determining whether or not the investment qualifies

for consolidation or if it should be accounted for as an unconsolidated investment under either the equity method of accounting.

investment qualifies for the equity method of accounting, our investment is recorded initially at cost, and subsequently adjusted for

equity in net income (loss) and cash contributions and distributions.

The net income or loss of an unconsolidated investment is allocated

to its investors in accordance with the provisions of the operating agreement of the entity.

The allocation provisions in these agreements

may differ from the ownership interest held by each investor.

Differences, if any, between the carrying amount of our investment in the

respective joint venture and our share of the underlying equity of such unconsolidated entity are amortized over the respective lives

of the underlying assets as applicable.

These items are reported as a single line item in the statements of operations as income or loss

from investments in unconsolidated affiliated entities.

compensation is accounted for based on the requirements of ASC 718 – “Compensation –Stock Compensation ”,

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as they occur as permitted under ASU 2016-09 Improvements to Employee Share-Based Payment Accounting .

2022, the fair value of stock option grants was estimated on the date of grant using the Black-Scholes option-pricing model with the

following weighted-average assumptions:

dividend yield of 0%;

expected volatility of 109.83%;

risk-free interest rate of 2.88%;

estimated holding period of 10 years.

We did not grant any stock options in 2023.

Assumptions used in the

estimation of stock-based grants may include the volatility of our common stock, expected term of exercise, our discount rate and our

dividend rate.

Accounting Pronouncements

June 2016, the FASB issued ASU No.

2016-13, “Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses on

Financial Instruments” (“ASU 2016-13”).

ASU 2016-13 requires financial assets measured at amortized cost to be presented

at the net amount expected to be collected.

The measurement of expected credit losses is based on relevant information about past events,

including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported

An entity must use judgment in determining the relevant information and estimation methods that are appropriate in its circumstances.

ASU 2016-13 is effective for annual reporting periods beginning after December 15, 2019, including interim periods within those fiscal

years, and a modified retrospective approach is required, with a cumulative-effect adjustment to retained earnings as of the beginning

of the first reporting period in which the guidance is effective.

In November of 2019, the FASB issued ASU 2019-10, which delayed the

implementation of ASU 2016-13 to fiscal years beginning after December 15, 2022 for smaller reporting companies which applies to the

The adoption of ASU 2016-13 had no financial impact on our consolidated financial statements.

does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect

on the accompanying consolidated financial statements.

does not believe that recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the

accompanying consolidated financial statements.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Index to Consolidated Financial Statements and Consolidated Financial Statement Schedules appearing on pages F-1 to F-31 of this annual

report on Form 10-K.

Index to Consolidated Financial Statements and Consolidated Financial Statement Schedules appearing on pages F-1 to F-35

of this annual report on Form 10-K.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis