What changed in this filing

/stocks — the workspaceLOADING

Item 1A. Risk Factors

2024-03-26 compared with 2023-03-28 · 481 added, 600 removed, 37 unchanged (97% of the section changed)

Investing in our common stock involves a high

degree of risk.

You should not invest in our stock unless you are able to bear the complete loss of your investment.

You should carefully

consider the risks described below, as well as other information provided to you in this annual report on Form 10-K, including information

in “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” before making an investment decision.

The risks and uncertainties

described below are not the only ones facing Zoned Properties.

Additional risks and uncertainties not presently known to us or that we

currently believe are immaterial may also impair our business operations.

If any of the following risks actually occur, our business,

financial condition or results of operations could be materially adversely affected, the value of our common stock could decline, and

you may lose all or part of your investment.

Risks Related to Our Business and Our Industry

Because we have limited operating history

in the real estate industry, we may not succeed.

We have limited operating history or experience

in procuring, building out or leasing real estate for agricultural purposes, specifically legalized marijuana grow facilities, or with

respect to any other activity in the cannabis industry.

Moreover, we are subject to all risks inherent in developing a new business enterprise.

Our likelihood of success must be considered in light of the problems, expenses, difficulties, complications, and delays frequently encountered

in connection with establishing a new business and the competitive and regulatory environment in which we operate.

For example, the regulated

cannabis industry is new and may not succeed, particularly should the federal government change course and decide to prosecute those dealing

in medical marijuana.

If that happens there may not be an adequate market for our properties or other activities we propose to engage

You should further consider, among other factors,

our prospects for success in light of the risks and uncertainties encountered by companies that, like us, are in their early stages.

For example, unanticipated expenses, delays and or complications with build outs, zoning issues, legal disputes with neighbors, local

governments, communities and or tenants.

We may not successfully address these risks and uncertainties or successfully implement our

operating strategies.

If we fail to do so, it could materially harm our business to the point of having to cease operations and could

impair the value of our common stock to the point investors may lose their entire investment.

We may be unable to continue as a going

concern if we do not successfully raise additional capital.

We may need to raise additional funds through

public or private debt or equity financings, as well as obtain credit from vendors to be able to fully execute our business plan.

we cannot raise additional capital, we may be otherwise unable to achieve our goals or continue our property development.

While we believe

that we will be able to raise the capital we need to continue our operations, there can be no assurances that we will be successful in

these efforts or will be able to resolve any liquidity issues or eliminate our operating losses.

In addition, any additional capital

raised through the sale of equity may dilute your ownership interest.

We may not be able to raise additional funds on favorable terms,

If we are unable to obtain additional funds or credit from our vendors, we may be unable to execute our business plan and

you could lose your investment.

Because we may be unable to identify and

or successfully acquire properties which are suitable for our business, our financial condition may be negatively affected.

Our business plan involves the identification

and the successful acquisition of properties, which are zoned for legalized cannabis businesses, including cultivation and retail.

properties we acquire will be leased to regulated cannabis operators.

Local governments must approve and adopt zoning ordinances for

medical cannabis facilities and retail dispensaries.

A lack of properly zoned real estate may reduce our prospects and limit our opportunity

for growth and or increase the cost at which suitable properties are available to us.

Conversely a surplus of real estate zoned for medical

cannabis establishments may reduce demand and prices we are able to charge for properties we may have previously acquired.

In addition, some jurisdictions, such as Arizona,

impose limits on the number of medical cannabis dispensaries that will be permitted to operate within designated geographic areas.

limitations inherently place constraints on the number of properties we acquire for lease to operators in the cannabis industry.

If we fail to diversify our property portfolio

or advisory and real estate services offered, downturns relating to certain industries or business sectors or the financial stability

of our significant tenants may have a significant adverse impact on our assets and our ability to pay our operating expenses or pay dividends

than if we had a diversified property portfolio and service offerings.

While we intend to diversify our portfolio of

properties, we are not required to observe specific diversification criteria.

Therefore, our total assets are concentrated into a limited

number of tenants who were considered significant tenants.

To the extent that our total assets are concentrated in a limited number of

tenants that are in the regulated cannabis industry, downturns relating generally to such industry or business sector, or a decline in

the financial stability of our Significant Tenants may result in defaults on all of our leases within a short time period, which may reduce

our net income and the value of our common stock and accordingly, limit our ability to pay or operating expenses or pay dividends to our

stockholders.

As of December 31, 2022 and 2021, we had an asset concentration related to our Significant Tenant leases at our Tempe, Chino

Valley, Green Valley and Kingman, Arizona properties and our property located in Pleasant Ridge, Michigan.

As of December 31, 2022 and

2021, these Significant Tenants represented approximately 59.8% and 79.2% of total assets, respectively.

If our tenants are prohibited

from operating 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 foot that may be less than our current rate per square foot.

Any adverse economic or real estate developments

in the medical cannabis industry could adversely affect our operating results and our ability to collect rent from out tenants, pay our

operating expenses or pay dividends to our stockholders.

Because our business is dependent upon

continued market acceptance by our tenants’ consumers, any negative trends will adversely affect our business operations.

Out tenants are substantially dependent on continued

market acceptance and proliferation of consumers of regulated cannabis.

We believe that as cannabis becomes more accepted, the stigma

associated with cannabis use will diminish and as a result, consumer demand will continue to grow.

And while we believe that the market

and opportunity in the cannabis space continues to grow, we cannot predict the future growth rate and size of the market.

outlook on the cannabis industry will adversely affect our tenants’ business operations and their ability to pay rent to us.

In addition, it is believed by many that large

well-funded businesses may have a strong economic opposition to the cannabis industry.

We believe that the pharmaceutical industry clearly

does not want to cede control of any product that could generate significant revenue.

For example, medical cannabis will likely adversely

impact the existing market for the current “marijuana pill” sold by the mainstream pharmaceutical industry, should cannabis

displace other drugs or encroach upon the pharmaceutical industry’s products.

The pharmaceutical industry is well funded with a

strong and experienced lobby that eclipses the funding of the medical cannabis movement.

Any inroads the pharmaceutical could make in

halting the impending cannabis industry could have a detrimental impact on our proposed business.

Because we buy and lease property, we will

be subject to general real estate risks.

We will be subject to risks generally incident

to the ownership of real estate, including:

in our common stock involves a high degree of risk.

You should not invest in our stock unless you are able to bear the complete loss

of your investment.

You should carefully consider the risks described below, as well as other information provided to you in this annual

report on Form 10-K, including information in “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” before making

an investment decision.

The risks and uncertainties described below are not the only ones facing Zoned Properties.

Additional risks and

uncertainties not presently known to us or that we currently believe are immaterial may also impair our business operations.

the following risks actually occur, our business, financial condition or results of operations could be materially adversely affected,

the value of our common stock could decline, and you may lose all or part of your investment.

Related to Our Business and Our Industry

we have limited operating history in the real estate industry, we may not succeed.

have limited operating history or experience in procuring, building out or leasing real estate for agricultural purposes, specifically

legalized marijuana grow facilities, or with respect to any other activity in the cannabis industry.

Moreover, we are subject to all

risks inherent in developing a new business enterprise.

Our likelihood of success must be considered in light of the problems, expenses,

difficulties, complications, and delays frequently encountered in connection with establishing a new business and the competitive and

regulatory environment in which we operate.

For example, the regulated cannabis industry is new and may not succeed, particularly should

the federal government change course and decide to prosecute those dealing in medical marijuana.

If that happens there may not be an

adequate market for our properties or other activities we propose to engage in.

should further consider, among other factors, our prospects for success in light of the risks and uncertainties encountered by companies

that, like us, are in their early stages.

For example, unanticipated expenses, delays and or complications with build outs, zoning issues,

legal disputes with neighbors, local governments, communities and or tenants.

We may not successfully address these risks and uncertainties

or successfully implement our operating strategies.

If we fail to do so, it could materially harm our business to the point of having

to cease operations and could impair the value of our common stock to the point investors may lose their entire investment.

we generate positive cash flows from operations, we may need to raise additional capital to fund our expansion.

may need to raise additional funds through public or private debt or equity financings, as well as obtain credit from vendors to be able

to fully execute our business plan.

If we cannot raise additional capital, we may be otherwise unable to achieve our goals or continue

our property development.

While we believe that we will be able to raise the capital we need to continue our operations, there can be

no assurances that we will be successful in these efforts or will be able to resolve any liquidity issues or eliminate our operating

In addition, any additional capital raised through the sale of equity may dilute your ownership interest.

We may not be able

to raise additional funds on favorable terms, or at all.

If we are unable to obtain additional funds or credit from our vendors, we may

be unable to execute our business plan and you could lose your investment.

we may be unable to identify and or successfully acquire properties which are suitable for our business, our financial condition may

be negatively affected.

business plan involves the identification and the successful acquisition of properties, which are zoned for legalized cannabis businesses,

including cultivation and retail.

The properties we acquire will be leased to regulated cannabis operators.

Local governments must approve

and adopt zoning ordinances for medical cannabis facilities and retail dispensaries.

A lack of properly zoned real estate may reduce

our prospects and limit our opportunity for growth and or increase the cost at which suitable properties are available to us.

a surplus of real estate zoned for medical cannabis establishments may reduce demand and prices we are able to charge for properties

we may have previously acquired.

addition, some jurisdictions, such as Arizona, impose limits on the number of medical cannabis dispensaries that will be permitted to

operate within designated geographic areas.

Such limitations inherently place constraints on the number of properties we acquire for

lease to operators in the cannabis industry.

we fail to diversify our property investment portfolio or advisory and real estate services offered, downturns relating to certain industries

or business sectors or the financial stability of our significant tenants may have a significant adverse impact on our assets and our

ability to pay our operating expenses or pay dividends than if we had a diversified property portfolio and service offerings.

we intend to diversify our portfolio of properties, we are not required to observe specific diversification criteria.

Therefore, our

total assets are concentrated into a limited number of tenants who were considered significant tenants.

To the extent that our total

assets are concentrated in a limited number of tenants that are in the regulated cannabis industry, downturns relating generally to such

industry or business sector, or a decline in the financial stability of our Significant Tenants may result in defaults on all of our

leases within a short time period, which may reduce our net income and the value of our common stock and accordingly, limit our ability

to pay or operating expenses or pay dividends to our stockholders.

As of December 31, 2023 and 2022, we had an asset concentration related

to our Significant Tenant leases at our Tempe, Chino Valley, Green Valley and Kingman, Arizona properties and our property located in

Pleasant Ridge, Michigan.

As of December 31, 2023 and 2022, these Significant Tenants represented approximately 69.4% and 59.8% of total

assets, respectively.

If our tenants are prohibited from operating 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 foot that may be less than our current rate

per square foot.

adverse economic or real estate developments in the medical cannabis industry could adversely affect our operating results and our ability

to collect rent from out tenants, pay our operating expenses or pay dividends to our stockholders.

our business is dependent upon continued market acceptance by our tenants’ consumers, any negative trends will adversely affect

our business operations.

tenants are substantially dependent on continued market acceptance and proliferation of consumers of regulated cannabis.

We believe that

as cannabis becomes more accepted, the stigma associated with cannabis use will diminish and as a result, consumer demand will continue

And while we believe that the market and opportunity in the cannabis space continues to grow, we cannot predict the future growth

rate and size of the market.

Any negative outlook on the cannabis industry will adversely affect our tenants’ business operations

and their ability to pay rent to us.

addition, it is believed by many that large well-funded businesses may have a strong economic opposition to the cannabis industry.

believe that the pharmaceutical industry clearly does not want to cede control of any product that could generate significant revenue.

For example, medical cannabis will likely adversely impact the existing market for the current “marijuana pill” sold by the

mainstream pharmaceutical industry, should cannabis displace other drugs or encroach upon the pharmaceutical industry’s products.

The pharmaceutical industry is well funded with a strong and experienced lobby that eclipses the funding of the medical cannabis movement.

Any inroads the pharmaceutical could make in halting the impending cannabis industry could have a detrimental impact on our proposed

we buy and lease property, we will be subject to general real estate risks.

will be subject to risks generally incident to the ownership of real estate, including:

(a) changes in general economic or local conditions;

(b) changes in supply of, or demand

for, similar or competing properties in the area;

increases in operating costs, such as taxes and insurance;

(e) the inability to achieve full stabilized occupancy at rental rates adequate

to produce targeted returns;

(b) changes in supply of, or demand for, similar or competing properties in the area;

by tenants or other parties;

(d) increases in operating costs, such as taxes and insurance;

(e) the inability to achieve full stabilized

occupancy at rental rates adequate to produce targeted returns;

(f) periods of high interest rates and tight money supply;

(g) excess supply of rental properties in the

supply of rental properties in the market area;

(h) liability for uninsured losses resulting from natural disasters or other perils;

1 unchanged sentence

and (j) changes in tax, real estate, environmental, zoning or other laws or regulations.

For these and other reasons, no assurance can

be given that we will be profitable.

Our growth depends on external sources

of capital, which may not be available on favorable terms or at all.

In addition, banks and other financial institutions may be reluctant

to enter into lending transactions with us, including secured lending, because our properties are used in the cannabis industry.

source of funding is unavailable to us, our growth may be limited and our business may be materially adversely affected.

Our ability to acquire, operate and sell properties,

engage in the business activities that we have planned and achieve positive financial performance depends, in large measure, on our ability

to obtain financing in amounts and on terms that are favorable.

The capital markets in the United States in general, and in the cannabis

sector in particular, have undergone a turbulent period in which lending was severely restricted.

Although there appear to be signs that

financial institutions are resuming lending, the market has not yet returned to its pre-2008 state.

The cannabis sector experienced significant

volatility in 2019 and 2020 and such volatility is expected to continue in 2023.

Obtaining favorable financing in the current environment

remains challenging.

In order to grow our business, we may seek financing

through newly issued equity or debt.

We may not be in a position to take advantage of attractive investment opportunities for growth

if we are unable, due to global or regional economic uncertainty, changes in the state or federal regulatory environment relating to

the medical-use cannabis industry, changes in market conditions for the regulated cannabis industry, our own operating or financial performance

or otherwise, to access capital markets on a timely basis and on favorable terms, or at all.

Our access to capital will depend upon a number

of factors over which we have little or no control, including general market conditions and the market’s perception of our current

and potential future earnings.

If general economic instability or downturn, or volatility within the cannabis sector, leads to an inability

to borrow at attractive rates or at all, our ability to obtain capital could be negatively impacted.

In addition, banks and other financial

institutions may be reluctant to enter into lending transactions with us, particularly secured lending, because our properties are used

in the cultivation, production or dispensing of medical-use cannabis.

If this source of funding is unavailable to us, our growth may

be limited and our business may be materially adversely affected.

If we are unable to obtain capital on terms and

conditions that we find acceptable, we likely will have to curtail operations and reduce the number of properties we purchase in the

In addition, our ability to refinance all or any debt we may incur in the future, on acceptable terms or at all, is subject to

all of the above factors, and will also be affected by our future financial position, results of operations and cash flows, which additional

factors are also subject to significant uncertainties, and therefore we may be unable to refinance any debt we may incur in the future,

as it matures, on acceptable terms or at all.

All of these events would have a material adverse effect on our business, financial condition,

liquidity and results of operations.

In addition, securities clearing firms may refuse

to accept deposits of our securities, which may negatively impact the trading of our securities and have a material adverse impact on

our ability to obtain capital.

Because we will compete with others for

suitable properties, competition will result in higher costs that could materially affect our financial condition.

We will experience competition for real estate

investments from individuals, corporations and other entities engaged in real estate investment activities, many of whom have greater

financial resources than us.

Competition for investments may have the effect of increasing costs and reducing returns to our investors.

Because we are liable for hazardous substances

on our properties, environmental liabilities are possible and can be costly.

Federal, state and local laws impose liability

on a landowner for releases or the otherwise improper presence on the premises of hazardous substances.

This liability is without regard

to fault for, or knowledge of, the presence of such substances.

A landowner may be held liable for hazardous materials brought onto a

property before it acquired title and for hazardous materials that are not discovered until after it sells the property.

Similar liability

may occur under applicable state law.

Sellers of properties may make only limited representations as to the absence of hazardous substances.

If any hazardous materials are found within our properties in violation of law at any time, we may be liable for all cleanup costs, fines,

penalties and other costs.

This potential liability will continue after we sell the properties and may apply to hazardous materials present

within the properties before we acquire the properties.

If losses arise from hazardous substance contamination, which cannot be recovered

from a responsible party, the financial viability of the properties may be adversely affected.

It is possible that we will purchase properties

with known or unknown environmental problems, which may require material expenditures for remediation.

Because we may not be adequately insured,

we could experience significant liability for uninsured events.

While our tenants currently carry comprehensive

insurance on our properties, including fire, liability and extended coverage insurance, there are certain risks that may be uninsurable

or not insurable on terms that management believes to be economical.

For example, management may not obtain insurance against floods,

terrorism, mold-related claims, or earthquake insurance.

If such an event occurs to, or causes the damage or destruction of, a property,

we could suffer financial losses.

If we are found non-compliance with the

Americans with Disabilities Act, we will be subject to significant liabilities.

If any of our properties are not in compliance

with the Americans with Disabilities Act of 1990, as amended (the “ADA”), we may be required to pay for any required improvements.

Under the ADA, public accommodations must meet certain federal requirements related to access and use by disabled persons.

The ADA requirements

could require significant expenditures and could result in the imposition of fines or an award of damages to private litigants.

assure that ADA violations do not or will not exist at any of our properties.

Our inability to effectively manage our

growth could harm our business and materially and adversely affect our operating results and financial condition .

Our strategy envisions growing our business.

Any growth in or expansion of our business is likely to continue to place a strain on our management and administrative resources, infrastructure

As with other growing businesses, we expect that we will need to further refine and expand our business development capabilities,

our systems and processes and our access to financing sources.

We also will need to hire, train, supervise and manage new employees.

These processes are time consuming and expensive, will increase management responsibilities and will divert management attention.

cannot assure you that we will be able to:

these and other reasons, no assurance can be given that we will be profitable.

growth depends on external sources of capital, which may not be available on favorable terms or at all.

In addition, banks and other

financial institutions may be reluctant to enter into lending transactions with us, including secured lending, because our properties

are used in the cannabis industry.

If this source of funding is unavailable to us, our growth may be limited and our business may be

materially adversely affected.

ability to acquire, operate and sell properties, engage in the business activities that we have planned and achieve positive financial

performance depends, in large measure, on our ability to obtain financing in amounts and on terms that are favorable.

The capital markets

in the United States in general, and in the cannabis sector in particular, have undergone a turbulent period in which lending was severely

Although there appear to be signs that financial institutions are resuming lending, the market has not yet returned to its

pre-2008 state.

The cannabis sector has experienced significant volatility and such volatility is expected to continue in 2024.

favorable financing in the current environment remains challenging.

order to grow our business, we may seek financing through newly issued equity or debt.

We may not be in a position to take advantage

of attractive investment opportunities for growth if we are unable, due to global or regional economic uncertainty, changes in the state

or federal regulatory environment relating to the medical-use cannabis industry, changes in market conditions for the regulated cannabis

industry, our own operating or financial performance or otherwise, to access capital markets on a timely basis and on favorable terms,

access to capital will depend upon a number of factors over which we have little or no control, including general market conditions and

the market’s perception of our current and potential future earnings.

If general economic instability or downturn, or volatility

within the cannabis sector, leads to an inability to borrow at attractive rates or at all, our ability to obtain capital could be negatively

In addition, banks and other financial institutions may be reluctant to enter into lending transactions with us, particularly

secured lending, because our properties are used in the cultivation, production or dispensing of medical-use cannabis.

If this source

of funding is unavailable to us, our growth may be limited and our business may be materially adversely affected.

we are unable to obtain capital on terms and conditions that we find acceptable, we likely will have to curtail operations and reduce

the number of properties we purchase in the future.

In addition, our ability to refinance all or any debt we may incur in the future,

on acceptable terms or at all, is subject to all of the above factors, and will also be affected by our future financial position, results

of operations and cash flows, which additional factors are also subject to significant uncertainties, and therefore we may be unable

to refinance any debt we may incur in the future, as it matures, on acceptable terms or at all.

All of these events would have a material

adverse effect on our business, financial condition, liquidity and results of operations.

addition, securities clearing firms may refuse to accept deposits of our securities, which may negatively impact the trading of our securities

and have a material adverse impact on our ability to obtain capital.

we will compete with others for suitable properties, competition will result in higher costs that could materially affect our financial

will experience competition for real estate investments from individuals, corporations and other entities engaged in real estate investment

activities, many of whom have greater financial resources than us.

Competition for investments may have the effect of increasing costs

and reducing returns to our investors.

we are liable for hazardous substances on our properties, environmental liabilities are possible and can be costly.

state and local laws impose liability on a landowner for releases or the otherwise improper presence on the premises of hazardous substances.

This liability is without regard to fault for, or knowledge of, the presence of such substances.

A landowner may be held liable for hazardous

materials brought onto a property before it acquired title and for hazardous materials that are not discovered until after it sells the

Similar liability may occur under applicable state law.

Sellers of properties may make only limited representations as to the

absence of hazardous substances.

If any hazardous materials are found within our properties in violation of law at any time, we may be

liable for all cleanup costs, fines, penalties and other costs.

This potential liability will continue after we sell the properties and

may apply to hazardous materials present within the properties before we acquire the properties.

If losses arise from hazardous substance

contamination, which cannot be recovered from a responsible party, the financial viability of the properties may be adversely affected.

It is possible that we will purchase properties with known or unknown environmental problems, which may require material expenditures

for remediation.

we may not be adequately insured, we could experience significant liability for uninsured events.

our tenants currently carry comprehensive insurance on our properties, including fire, liability and extended coverage insurance, there

are certain risks that may be uninsurable or not insurable on terms that management believes to be economical.

For example, management

may not obtain insurance against floods, terrorism, mold-related claims, or earthquake insurance.

If such an event occurs to, or causes

the damage or destruction of, a property, we could suffer financial losses.

we are found non-compliance with the Americans with Disabilities Act, we will be subject to significant liabilities.

any of our properties are not in compliance with the Americans with Disabilities Act of 1990, as amended (the “ADA”), we

may be required to pay for any required improvements.

Under the ADA, public accommodations must meet certain federal requirements related

to access and use by disabled persons.

The ADA requirements could require significant expenditures and could result in the imposition

of fines or an award of damages to private litigants.

We cannot assure that ADA violations do not or will not exist at any of our properties.

inability to effectively manage our growth could harm our business and materially and adversely affect our operating results and financial

strategy envisions growing our business.

Any growth in or expansion of our business is likely to continue to place a strain on our management

and administrative resources, infrastructure and systems.

As with other growing businesses, we expect that we will need to further refine

and expand our business development capabilities, our systems and processes and our access to financing sources.

We also will need to

hire, train, supervise and manage new employees.

These processes are time consuming and expensive, will increase management responsibilities

and will divert management attention.

We cannot assure you that we will be able to:

our business effectively or efficiently or in a timely manner;

4 unchanged sentences

incorporate the components of any business or product line that we may acquire in our effort to achieve growth.

Our inability or failure to manage our growth

and expansion effectively could harm our business and materially and adversely affect our operating results and financial condition.

Unfavorable global economic, business or

political conditions could adversely affect our business, financial condition or results of operations.

Our results of operations could be adversely

affected by general conditions in the global economy and in the global financial markets, including conditions that are outside of our

control, including the impact of health and safety concerns, such as those relating to the current COVID-19 outbreak.

The most recent

global financial crisis caused extreme volatility and disruptions in the capital and credit markets.

A severe or prolonged economic downturn

could result in a variety of risks to our business, including weakened demand for our properties and our ability to raise additional

capital when needed on acceptable terms, if at all.

A weak or declining economy could strain our tenants, possibly resulting in delays

in tenant payments.

Any of the foregoing could harm our business and we cannot anticipate all the ways in which the current economic

climate and financial market conditions could adversely impact our business.

We hold our cash and cash equivalents that

we use to meet our working capital and operating expense needs in deposit accounts that could be adversely affected if the financial institution

holding such funds fail.

We hold our cash and cash equivalents that we

use to meet our working capital and operating expense needs in deposit accounts at one financial institution.

The balance held in these

accounts exceeds the Federal Deposit Insurance Corporation, or FDIC, standard deposit insurance limit of $250,000.

If the financial institution

in which we hold such funds fails or is subject to significant adverse conditions in the financial or credit markets, we could be subject

to a risk of loss of all or a portion of such uninsured funds or be subject to a delay in accessing all or a portion of such uninsured

Any such loss or lack of access to these funds could adversely impact our short-term liquidity and ability to meet our operating

expense obligations, including payroll obligations.

For example, on March 10, 2023, Silicon Valley Bank, or SVB, and Signature

Bank, were closed by state regulators and the FDIC was appointed receiver for each bank.

The FDIC created successor bridge banks and all

deposits of SVB and Signature Bank were transferred to the bridge banks under a systemic risk exception approved by the United States

Department of the Treasury, the Federal Reserve and the FDIC.

If the financial institution in which we hold funds for working capital

and operating expenses were to fail, we cannot provide any assurances that such governmental agencies would take action to protect our

uninsured deposits or investments in a similar manner.

We will be required to attract and retain

top quality talent to compete in the marketplace.

We believe our future growth and success will

depend in part on our ability to attract and retain highly skilled managerial, sales and marketing, and finance personnel.

be no assurance of success in attracting and retaining such personnel.

Shortages in qualified personnel could limit our ability to compete

in the marketplace.

We are dependent on Bryan McLaren, our

Chief Executive Officer, President, Chief Financial Officer and Chairman of the Board, and the loss of this officer could harm our business

and prevent us from implementing our business plan in a timely manner.

In view of his direct relationships with industry

partners that directly contribute to our business development strategy, our success depends substantially upon the continued services

inability or failure to manage our growth and expansion effectively could harm our business, and materially and adversely affect our

operating results and financial condition.

global economic, business or political conditions could adversely affect our business, financial condition or results of operations.

results of operations could be adversely affected by general conditions in the global economy and in the global financial markets, including

conditions that are outside of our control, including the impact of health and safety concerns, such as those relating to the current

COVID-19 outbreak and conflicts in Ukraine and the Middle East.

The most recent global financial crisis caused extreme volatility and

disruptions in the capital and credit markets.

A severe or prolonged economic downturn could result in a variety of risks to our business,

including weakened demand for our properties and our ability to raise additional capital when needed on acceptable terms, if at all.

A weak or declining economy could strain our tenants, possibly resulting in delays in tenant payments.

Any of the foregoing could harm

our business and we cannot anticipate all the ways in which the current economic climate and financial market conditions could adversely

impact our business.

hold our cash and cash equivalents that we use to meet our working capital and operating expense needs in deposit accounts that could

be adversely affected if the financial institution holding such funds fail.

hold our cash and cash equivalents that we use to meet our working capital and operating expense needs in deposit accounts at one financial

The balance held in these accounts exceeds the Federal Deposit Insurance Corporation, or FDIC, standard deposit insurance

limit of $250,000.

If the financial institution in which we hold such funds fails or is subject to significant adverse conditions in

the financial or credit markets, we could be subject to a risk of loss of all or a portion of such uninsured funds or be subject to a

delay in accessing all or a portion of such uninsured funds.

Any such loss or lack of access to these funds could adversely impact our

short-term liquidity and ability to meet our operating expense obligations, including payroll obligations.

example, on March 10, 2023, Silicon Valley Bank, or SVB, and Signature Bank, were closed by state regulators and the FDIC was appointed

receiver for each bank.

The FDIC created successor bridge banks and all deposits of SVB and Signature Bank were transferred to the bridge

banks under a systemic risk exception approved by the United States Department of the Treasury, the Federal Reserve and the FDIC.

the financial institution in which we hold funds for working capital and operating expenses were to fail, we cannot provide any assurances

that such governmental agencies would take action to protect our uninsured deposits or investments in a similar manner.

will be required to attract and retain top quality talent to compete in the marketplace.

believe our future growth and success will depend in part on our ability to attract and retain highly skilled managerial, sales and marketing,

and finance personnel.

There can be no assurance of success in attracting and retaining such personnel.

Shortages in qualified personnel

could limit our ability to compete in the marketplace.

are dependent on Bryan McLaren, our Chief Executive Officer, President, Chief Financial Officer and Chairman of the Board, and the loss

of this officer could harm our business and prevent us from implementing our business plan in a timely manner.

view of his direct relationships with industry partners that directly contribute to our business development strategy, our success depends

substantially upon the continued services of Mr.

We previously purchased a one-year key person life insurance policy on Mr.

McLaren with a base coverage amount of $8,000,000

renewable annually at a 10-year fixed guaranteed premium.

The policy was renewed in January 2023.

McLaren with a base coverage amount of $8,000,000 renewable annually at a 10-year fixed guaranteed premium.

The policy was renewed in

January 2024.

The loss of Mr.

McLaren’s services

could have a material adverse effect on our business and operations.

Risks Related to Government Regulation

Marijuana remains illegal under federal

law, and therefore, strict enforcement of federal laws regarding marijuana would likely result in our inability and the inability of

our tenants to execute our respective business plans.

Marijuana is a Schedule I controlled substance

under the CSA.

Even in those jurisdictions in which the manufacture and use of medical marijuana has been legalized at the state level,

the possession, use and cultivation all remain violations of federal law that are punishable by imprisonment and substantial fines, and

the prescription of marijuana is a violation of federal law.

Moreover, individuals and entities may violate federal law if they intentionally

aid and abet another in violating these federal controlled substance laws or conspire with another to violate them.

Court has ruled in United States v.

Oakland Cannabis Buyers’ Coop.

and Gonzales v.

Raich that it is the

federal government that has the right to regulate and criminalize marijuana, even for medical purposes.

We would likely be unable to

execute our business plan if the federal government were to strictly enforce federal law regarding marijuana.

On January 4, 2018, former U.S.

General Jeff Sessions issued which rescinded the Cole Memo.

The Sessions Memo stated, in part, that current law reflects “Congress’

determination that cannabis is a dangerous drug and cannabis activity is a serious crime,” and Mr.

Sessions directed all U.S.

Attorneys to enforce the laws enacted by Congress by following well-established principles when pursuing prosecutions related to cannabis

The Company is not aware of any prosecutions of investment companies doing routine business with licensed marijuana related

businesses in light of the DOJ position following issuance of the Sessions Memo.

However, there can be no assurance that the federal government

will not enforce federal laws relating to cannabis in the future.

As a result of the Sessions Memo, federal prosecutors are now free to

utilize their prosecutorial discretion to decide whether to prosecute cannabis activities, despite the existence of state-level laws that

may be inconsistent with federal prohibitions.

No direction was given to federal prosecutors in the Sessions Memo as to the priority they

should ascribe to such cannabis activities, and thus it is uncertain how active U.S.

federal prosecutors will be in relation to such activities.

Federal prosecutors appear to continue to use

the Cole Memo’s priorities as an enforcement guide.

Merrick Garland, who became Attorney General on March 10, 2021, has indicated

that he would deprioritize enforcement of low-level cannabis crimes such as possession, and has shared his view that the government

should focus on large-scale criminal enterprises that circumvent state legalization laws instead of going after people who abide by local

cannabis policies.

The Company believes it is too soon to determine what prosecutorial effects will be created by the rescission of the

Cole Memo or any replacement thereof and when or if the Sessions Memo will be rescinded.

To date, there has been no new federal cannabis

memoranda issued by the Biden Administration or any published change in federal enforcement policy.

Regardless, U.S.

federal government

has always reserved the right to enforce federal law regarding the sale and disbursement of medical or recreational marijuana, even if

state law sanctioned such sale and disbursement.

Although the rescission of the Cole Memo does not necessarily indicate that marijuana

industry prosecutions are now affirmatively a priority for the DOJ, there can be no assurance that the U.S.

federal government will not

enforce such laws in the future.

The sheer size of the cannabis industry, however, in addition to participation by state and local governments

and investors, suggests that a large-scale federal enforcement operation would more than likely create unwanted political backlash for

the DOJ and the current administration.

Regardless, at this time, cannabis remains a Schedule I controlled substance at the federal level.

It is unclear whether the risk of enforcement has been altered.

One legislative safeguard for the medical cannabis

industry, appended to the federal budget bill, remains in place following the rescission of the Cole Memo.

For several years, Congress

has adopted a so-called “rider” provision to the Consolidated Appropriations Act (formerly referred to as the Rohrabacher-Farr

Amendment and currently referred to as the Rohrabacher-Blumenauer Amendment) to prevent the federal government from using congressionally

appropriated funds to enforce federal cannabis laws against regulated medical cannabis actors operating in compliance with state and

Despite the rescission of the Cole Memo, the DOJ appears to continue to adhere to the enforcement priorities set forth in

the Cole Memo.

The Cole Memo and the Rohrabacher-Blumenauer

Amendment gave licensed cannabis operators (particularly medical cannabis operators) and investors in states with legal regimes greater

certainty regarding the DOJ’s enforcement priorities and the risk of operating cannabis businesses.

While the Sessions Memo has

introduced some uncertainty regarding federal enforcement, the cannabis industry continues to experience growth in legal medical and

adult use markets across the United States.

When she was a U.S.

Senator, Vice President Kamala Harris was the lead sponsor of the Marijuana

Opportunity, Reinvestment, and Expungement (MORE) Act, which seeks to end the federal prohibition of marijuana, among other things, but

in March 2020, it was reported that Vice President Harris has adopted the same position as President Biden, who opposes legalization.

Currently, there is no guarantee that state laws legalizing and regulating the sale and use of cannabis will remain in place or that

local governmental authorities will not limit the applicability of state laws within their respective jurisdictions.

Unless and until

Congress amends the CSA with respect to cannabis (and as to the timing or scope of any such potential amendments there can be

no assurance), there is a risk that federal authorities may enforce current U.S.

federal law criminalizing cannabis.

Although the U.S.

Supreme Court has ruled that

it is the federal government that has the right to regulate and criminalize cannabis, and federal law criminalizing the use of marijuana

preempts state laws that legalize its use, cannabis is largely regulated at the state level.

State laws that permit and regulate the production,

distribution and use of cannabis for adult use or medical purposes are in direct conflict with the CSA, which makes cannabis use and

possession federally illegal.

Although certain states and territories of the U.S.

authorize medical and/or adult use cannabis production

and distribution by licensed or registered entities, under U.S.

federal law, the possession, use, cultivation and transfer of cannabis

and any related drug paraphernalia is illegal, and any such acts are criminal acts under federal law under any and all circumstances

under the CSA.

Although the Company’s activities are believed to be compliant with applicable state and local laws, strict compliance

with state and local laws with respect to cannabis may neither absolve the Company of liability under U.S.

federal law, nor may it provide

a defense to any federal proceeding which may be brought against the Company.

Many states and U.S.

territories have legalized the medical and/or

adult use of cannabis.

We will continue to monitor compliance on an ongoing basis in accordance with our compliance program and standard

operating procedures.

While our operations are in full compliance with all applicable state laws, regulations and licensing requirements,

such activities remain illegal under federal law.

Accordingly, there are significant risks associated with our business.

Owners of properties located in close proximity

to our properties may assert claims against us regarding the use of the property as a marijuana dispensary or marijuana cultivation and

processing facility, which if successful, could materially and adversely affect our business.

Owners of properties located in close proximity

to our properties may assert claims against us regarding the use of our properties as cannabis dispensaries or for cannabis cultivation

and processing, including assertions that the use of the property constitutes a nuisance that diminishes the market value of such owner’s

nearby property.

Such property owners may also attempt to assert such a claim in federal court as a civil matter under the Racketeer

Influenced and Corrupt Organizations Act.

If a property owner were to assert such a claim against us, we may be required to devote significant

resources and costs to defending ourselves against such a claim, and if a property owner were to be successful on such a claim, our tenants

may be unable to continue to operate their business in its current form at the property, which could materially adversely impact the

tenant’s business and the value of our property, our business and financial results and the trading price of our securities.

We and our tenants may have difficulty

accessing the services of banks, which may make it difficult to contract for real estate needs.

Financial transactions involving proceeds generated

by marijuana-related conduct can form the basis for prosecution under the federal money laundering statutes, unlicensed money transmitter

statute and the Bank Secrecy Act.

Previous guidance issued by the Financial Crimes Enforcement Network, a division of the U.S.

of the Treasury (“FinCEN”), clarifies how financial institutions can provide services to marijuana-related businesses consistent

with their obligations under the Bank Secrecy Act.

Prior to the DOJ’s announcement in 2018 of the rescission of the Cole Memo and

related memoranda, supplemental guidance from the DOJ directed federal prosecutors to consider the federal enforcement priorities enumerated

in the Cole Memo when determining whether to charge institutions or individuals with any of the financial crimes described above based

upon marijuana-related activity.

Consequently, those businesses involved in the

marijuana industry continue to encounter difficulty establishing banking relationships, which may increase over time.

Our inability to

maintain our current bank accounts would make it difficult for us to operate our business, increase our operating costs, and pose additional

operational, logistical and security challenges and could result in our inability to implement our business plan.

The inability of our current and potential tenants

to open accounts and continue using the services of banks will limit their ability to enter into triple-net lease arrangements with us

or may result in their default under our lease agreements, either of which could materially harm our business and the trading price of

our securities.

Laws and regulations affecting the regulated

cannabis and marijuana industry are constantly changing, which could materially adversely affect our operations, and we cannot predict

the impact that future regulations may have on us.

Local, state and federal marijuana laws and regulations

are broad in scope and subject to evolving interpretations, which could require us to incur substantial costs associated with compliance

or alter our business plan.

In addition, violations of these laws, or allegations of such violations, could disrupt our business and

result in a material adverse effect on its operations.

In addition, it is possible that regulations may be enacted in the future that

will be directly applicable to our proposed business.

We cannot predict the nature of any future laws, regulations, interpretations or

applications, nor can we determine what effect additional governmental regulations or administrative policies and procedures, when and

if promulgated, could have on our business.

FDA regulation of marijuana and the possible

registration of facilities where medical marijuana is grown could negatively affect the marijuana industry, which would directly affect

our financial condition.

Should the federal government legalize marijuana

for medical use, it is possible that the FDA would seek to regulate it under the Food, Drug and Cosmetics Act of 1938.

Additionally,

the FDA may issue rules and regulations including cGMPs (certified good manufacturing practices) related to the growth, cultivation,

harvesting and processing of medical marijuana.

Clinical trials may be needed to verify efficacy and safety.

It is also possible that

the FDA would require that facilities where medical marijuana is grown be registered with the FDA and comply with certain federally prescribed

In the event that some or all of these regulations are imposed, we do not know what the impact would be on the medical marijuana

industry, what costs, requirements and possible prohibitions may be enforced.

If we or our tenants are unable to comply with the regulations

and or registration as prescribed by the FDA, we and or our tenants may be unable to continue to operate their and our business in its

current form or at all.

Risks Related to Our Common Stock

Our common stock is quoted on the OTCQB,

which may limit the liquidity and price of our common stock more than if our common stock were listed on The NASDAQ Stock Market or another

national exchange.

Our securities are currently quoted on the OTCQB,

an inter-dealer automated quotation system for equity securities.

Quotation of our securities on the OTCQB may limit the liquidity and

price of our securities more than if our securities were listed on The NASDAQ Stock Market (“NASDAQ”) or another national

As an OTCQB company, we do not attract the extensive analyst coverage that accompanies companies listed on national securities

Further, institutional and other investors may have investment guidelines that restrict or prohibit investing in securities

traded on the OTCQB.

McLaren’s services could have a material adverse effect on our business and operations.

Related to Government Regulation

remains illegal under federal law, and therefore, strict enforcement of federal laws regarding marijuana would likely result in our inability

and the inability of our tenants to execute our respective business plans.

In the United States, cannabis is largely regulated

at the state level.

To the Company’s knowledge, as of December 31, 2023, 37 states, the District of Columbia, Guam, Puerto Rico,

the Northern Mariana Islands and the U.S.

Virgin Islands have passed laws broadly legalizing marijuana for medicinal use by eligible patients.

In the District of Columbia, the Northern Mariana Islands, Guam and 21 of these states, marijuana has been legalized for adult use, although

not all of those jurisdictions have fully implemented their legalization programs.

These include the states in which the Company operates.

Notwithstanding the permissive regulatory environment of cannabis at the state level, cannabis continues to be categorized as a Schedule

1 controlled substance under the CSA and as such, cultivation, distribution, sale and possession of cannabis violates federal law in the

United States.

The inconsistency between federal and state laws and regulations poses material risks to the Company and its tenants.

Federal prosecutors are free to utilize their prosecutorial discretion

to decide whether to prosecute cannabis activities despite the existence of state-level laws that may be inconsistent with federal prohibitions.

It is not yet known whether the Department of Justice under President Biden and Attorney General Garland will re-adopt the Cole Memo or

announce a substantive marijuana enforcement policy.

Attorney General Garland stated at a confirmation hearing before the United States

Senate that “It does not seem to me a useful use of limited resources that we have, to be pursuing prosecutions in states that have

legalized and that are regulating the use of marijuana, either medically or otherwise.

I don’t think that’s a useful use.”1

Garland reiterated this view at a Senate Appropriations subcommittee hearing on April 26, 2022.

When asked by Senator Brian Schatz whether

he intended to reissue guidance encouraging federal prosecutors to use discretion in marijuana cases in states that have legalized.

laid this out in my confirmation hearing, and my view hasn’t really changed since then,” Garland replied.

Department has almost never prosecuted use of marijuana, and it’s not going to be.”2 Marijuana prosecutions are “not

an efficient use of the resources given the opioid and methamphetamine epidemic that we have,” he said.

However, Garland declined

to comment on whether the Department of Justice intended to formally re-adopt the Cole Memo.

Recently, in testimony in February of 2023

before the Senate Judiciary Committee, Attorney General Garland said the DOJ is “still working on a marijuana policy” and

that policy – when issued – “will be very close to what was done in the Cole Memorandum.” Nevertheless, there

can be no assurance that the federal government will not seek to prosecute cases involving cannabis businesses that are otherwise compliant

with state law.

Federal law is separate from state law in these circumstances;

therefore, the federal government can assert criminal violations

of federal law despite state law.

Although the Company’s activities are believed to be compliant

with applicable state and local laws, strict compliance with state and local laws with respect to cannabis may neither absolve the Company

of liability under U.S.

federal law, nor may it provide a defense to any federal proceeding which may be brought against the Company.

We will continue to monitor compliance on an ongoing basis in accordance

with our compliance program and standard operating procedures.

While our operations are believed to be in full compliance with all applicable

state laws, regulations and licensing requirements, such activities remain illegal under federal law.

Accordingly, there are significant

risks associated with our business.

of properties located in close proximity to our properties may assert claims against us regarding the use of the property as a marijuana

dispensary or marijuana cultivation and processing facility, which if successful, could materially and adversely affect our business.

of properties located in close proximity to our properties may assert claims against us regarding the use of our properties as cannabis

dispensaries or for cannabis cultivation and processing, including assertions that the use of the property constitutes a nuisance that

diminishes the market value of such owner’s nearby property.

Such property owners may also attempt to assert such a claim in federal

court as a civil matter under the Racketeer Influenced and Corrupt Organizations Act.

If a property owner were to assert such a claim

against us, we may be required to devote significant resources and costs to defending ourselves against such a claim, and if a property

owner were to be successful on such a claim, our tenants may be unable to continue to operate their business in its current form at the

property, which could materially adversely impact the tenant’s business and the value of our property, our business and financial

results and the trading price of our securities.

and our tenants may have difficulty accessing the services of banks, which may make it difficult to contract for real estate needs.

transactions involving proceeds generated by marijuana-related conduct can form the basis for prosecution under the federal money laundering

statutes, unlicensed money transmitter statute and the Bank Secrecy Act.

Previous guidance issued by the Financial Crimes Enforcement

Network, a division of the U.S.

Department of the Treasury (“FinCEN”), clarifies how financial institutions can provide services

to marijuana-related businesses consistent with their obligations under the Bank Secrecy Act.

Prior to the DOJ’s announcement in

2018 of the rescission of the Cole Memo and related memoranda, supplemental guidance from the DOJ directed federal prosecutors to consider

the federal enforcement priorities enumerated in the Cole Memo when determining whether to charge institutions or individuals with any

of the financial crimes described above based upon marijuana-related activity.

Consequently,

those businesses involved in the marijuana industry continue to encounter difficulty establishing banking relationships, which may increase

Our inability to maintain our current bank accounts would make it difficult for us to operate our business, increase our operating

costs, and pose additional operational, logistical and security challenges and could result in our inability to implement our business

inability of our current and potential tenants to open accounts and continue using the services of banks will limit their ability to

enter into triple-net lease arrangements with us or may result in their default under our lease agreements, either of which could materially

harm our business and the trading price of our securities.

and regulations affecting the regulated cannabis and marijuana industry are constantly changing, which could materially adversely affect

our operations, and we cannot predict the impact that future regulations may have on us.

state and federal marijuana laws and regulations are broad in scope and subject to evolving interpretations, which could require us to

incur substantial costs associated with compliance or alter our business plan.

In addition, violations of these laws, or allegations

of such violations, could disrupt our business and result in a material adverse effect on its operations.

In addition, it is possible

that regulations may be enacted in the future that will be directly applicable to our proposed business.

We cannot predict the nature

of any future laws, regulations, interpretations or applications, nor can we determine what effect additional governmental regulations

or administrative policies and procedures, when and if promulgated, could have on our business.

regulation of marijuana and the possible registration of facilities where medical marijuana is grown could negatively affect the marijuana

industry, which would directly affect our financial condition.

the federal government legalize marijuana for medical use, it is possible that the FDA would seek to regulate it under the Food, Drug

and Cosmetics Act of 1938.

Additionally, the FDA may issue rules and regulations including cGMPs (certified good manufacturing practices)

related to the growth, cultivation, harvesting and processing of medical marijuana.

Clinical trials may be needed to verify efficacy

It is also possible that the FDA would require that facilities where medical marijuana is grown be registered with the FDA

and comply with certain federally prescribed regulations.

In the event that some or all of these regulations are imposed, we do not know

what the impact would be on the medical marijuana industry, what costs, requirements and possible prohibitions may be enforced.

or our tenants are unable to comply with the regulations and or registration as prescribed by the FDA, we and or our tenants may be unable

to continue to operate their and our business in its current form or at all.

Related to Our Common Stock

common stock is quoted on the OTCQB, which may limit the liquidity and price of our common stock more than if our common stock were listed

on The NASDAQ Stock Market or another national exchange.

securities are currently quoted on the OTCQB, an inter-dealer automated quotation system for equity securities.

Quotation of our securities

on the OTCQB may limit the liquidity and price of our securities more than if our securities were listed on The NASDAQ Stock Market (“NASDAQ”)

or another national exchange.

As an OTCQB company, we do not attract the extensive analyst coverage that accompanies companies listed

on national securities exchanges.

Further, institutional and other investors may have investment guidelines that restrict or prohibit

investing in securities traded on the OTCQB.

These factors may have an adverse impact on the trading and price of our common stock.

The trading price of our common stock may

decrease due to factors beyond our control.

The stock market from time to time has experienced

extreme price and volume fluctuations, which have particularly affected the market prices for smaller reporting companies and which often

have been unrelated to the operating performance of the companies.

These broad market fluctuations may adversely affect the market price

of our common stock.

If our shareholders sell substantial amounts of their common stock in the public market, the price of our common

stock could fall.

These sales also might make it more difficult for us to sell equity, or equity-related securities, in the future at

a price we deem appropriate.

The market price of our common stock may also

fluctuate significantly in response to the following factors, most of which are beyond our control:

trading price of our common stock may decrease due to factors beyond our control.

stock market from time to time has experienced extreme price and volume fluctuations, which have particularly affected the market prices

for smaller reporting companies and which often have been unrelated to the operating performance of the companies.

These broad market

fluctuations may adversely affect the market price of our common stock.

If our shareholders sell substantial amounts of their common

stock in the public market, the price of our common stock could fall.

These sales also might make it more difficult for us to sell equity,

or equity-related securities, in the future at a price we deem appropriate.

market price of our common stock may also fluctuate significantly in response to the following factors, most of which are beyond our

in our quarterly operating results,

5 unchanged sentences

addition or loss of key managerial and collaborative personnel.

Any such fluctuations may adversely affect the

market price of our common stock, regardless of our actual operating performance.

As a result, stockholders may be unable to sell their

shares, or may be forced to sell them at a loss.

The market price for our common shares

is particularly volatile given our status as a relatively unknown company with a small and thinly traded public float, limited operating

history and lack of profits which could lead to wide fluctuations in our share price.

You may be unable to sell your common shares at

or above your purchase price, which may result in substantial losses to you.

The market for our common shares is characterized

by significant price volatility when compared to seasoned issuers, and we expect that our share price will continue to be more volatile

than a seasoned issuer for the indefinite future.

The volatility in our share price is attributable to a number of factors.

noted above, our common shares are sporadically and thinly traded.

As a consequence of this lack of liquidity, the trading of relatively

small quantities of shares by our shareholders may disproportionately influence the price of those shares in either direction.

for our shares could, for example, decline precipitously in the event that a large number of our common shares are sold on the market

without commensurate demand, as compared to a seasoned issuer which could better absorb those sales without adverse impact on its share

Secondly, we are a speculative or “risky” investment due to our limited operating history and lack of profits to date.

As a consequence of this enhanced risk, more risk-adverse investors may, under the fear of losing all or most of their investment in

the event of negative news or lack of progress, be more inclined to sell their shares on the market more quickly and at greater discounts

than would be the case with the stock of a seasoned issuer.

Many of these factors are beyond our control and may decrease the market

price of our common shares, regardless of our operating performance.

We cannot make any predictions or projections as to what the prevailing

market price for our common shares will be at any time, including as to whether our common shares will sustain their current market prices,

or as to what effect that the sale of shares or the availability of common shares for sale at any time will have on the prevailing market

Our preferred stockholders together have

voting control, which will limit your ability to influence the outcome of important transactions, including a change in control.

Each of our preferred stockholders beneficially

owns 1,000,000 shares of our preferred stock.

Each share of preferred stock entitles the holder to 50 votes per share.

In contrast, each

share of our common stock has one vote per share.

Each of our two preferred stockholders holds approximately 45.5% and 45.8% of the voting

power of our outstanding capital stock, respectively.

Because of the 50-to-1 voting ratio between our preferred stock and our common

stock, our preferred stockholders together control a majority of the combined voting power of our capital stock and therefore are able

to control all matters submitted to our stockholders for approval.

The preferred stockholders may also have interests that differ from

yours and may vote in a way with which you disagree and which may be adverse to your interests.

This concentrated control may have the

effect of delaying, preventing or deterring a change in control of our company, could deprive our stockholders of an opportunity to receive

a premium for their capital stock as part of a sale of our company and might ultimately affect the market price of our common stock.

We may face continuing challenges in complying

with the Sarbanes-Oxley Act, and any failure to comply or any adverse result from management’s evaluation of our internal control

over financial reporting may have an adverse effect on our stock price.

As a smaller reporting company as defined in

Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), we are required to evaluate our internal

control over financial reporting under Section 404 of the Sarbanes-Oxley Act of 2002 (“Section 404”).

Section 404 requires

us to include an internal control report with our Annual Report on Form 10-K.

The report must include management’s assessment of

the effectiveness of our internal control over financial reporting as of the end of the fiscal year.

This report must also include disclosure

of any material weaknesses in internal control over financial reporting that we have identified.

Failure to comply, or any adverse results from such evaluation, could

result in a loss of investor confidence in our financial reports and have an adverse effect on the trading price of our equity securities.

Management concluded that our internal control over financial reporting as of December 31, 2022 were not effective.

Management realizes

there are deficiencies in the design or operation of our internal control over financial reporting that adversely affect our internal

controls, and management considers such deficiencies to be material weaknesses.

As of the end of our 2022 fiscal year, management identified

the following material weaknesses:

such fluctuations may adversely affect the market price of our common stock, regardless of our actual operating performance.

stockholders may be unable to sell their shares, or may be forced to sell them at a loss.

market price for our common shares is particularly volatile given our status as a relatively unknown company with a small and thinly

traded public float, limited operating history and lack of profits which could lead to wide fluctuations in our share price.

be unable to sell your common shares at or above your purchase price, which may result in substantial losses to you.

market for our common shares is characterized by significant price volatility when compared to seasoned issuers, and we expect that our

share price will continue to be more volatile than a seasoned issuer for the indefinite future.

The volatility in our share price is

attributable to a number of factors.

First, as noted above, our common shares are sporadically and thinly traded.

As a consequence of

this lack of liquidity, the trading of relatively small quantities of shares by our shareholders may disproportionately influence the

price of those shares in either direction.

The price for our shares could, for example, decline precipitously in the event that a large

number of our common shares are sold on the market without commensurate demand, as compared to a seasoned issuer which could better absorb

those sales without adverse impact on its share price.

Secondly, we are a speculative or “risky” investment due to our limited

operating history and lack of profits to date.

As a consequence of this enhanced risk, more risk-adverse investors may, under the fear

of losing all or most of their investment in the event of negative news or lack of progress, be more inclined to sell their shares on

the market more quickly and at greater discounts than would be the case with the stock of a seasoned issuer.

Many of these factors are

beyond our control and may decrease the market price of our common shares, regardless of our operating performance.

We cannot make any

predictions or projections as to what the prevailing market price for our common shares will be at any time, including as to whether

our common shares will sustain their current market prices, or as to what effect that the sale of shares or the availability of common

shares for sale at any time will have on the prevailing market price.

preferred stockholders together have voting control, which will limit your ability to influence the outcome of important transactions,

including a change in control.

of our preferred stockholders beneficially owns 1,000,000 shares of our preferred stock.

Each share of preferred stock entitles the holder

to 50 votes per share.

In contrast, each share of our common stock has one vote per share.

Each of our two preferred stockholders holds

approximately 45.5% and 45.8% of the voting power of our outstanding capital stock, respectively.

Because of the 50-to-1 voting ratio

between our preferred stock and our common stock, our preferred stockholders together control a majority of the combined voting power

of our capital stock and therefore are able to control all matters submitted to our stockholders for approval.

The preferred stockholders

may also have interests that differ from yours and may vote in a way with which you disagree and which may be adverse to your interests.

This concentrated control may have the effect of delaying, preventing or deterring a change in control of our company, could deprive

our stockholders of an opportunity to receive a premium for their capital stock as part of a sale of our company and might ultimately

affect the market price of our common stock.

may face continuing challenges in complying with the Sarbanes-Oxley Act, and any failure to comply or any adverse result from management’s

evaluation of our internal control over financial reporting may have an adverse effect on our stock price.

a smaller reporting company as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”),

we are required to evaluate our internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act of 2002 (“Section

Section 404 requires us to include an internal control report with our Annual Report on Form 10-K.

The report must include

management’s assessment of the effectiveness of our internal control over financial reporting as of the end of the fiscal year.

This report must also include disclosure of any material weaknesses in internal control over financial reporting that we have identified.

to comply, or any adverse results from such evaluation, could result in a loss of investor confidence in our financial reports and have

an adverse effect on the trading price of our equity securities.

Management concluded that our internal control over financial reporting

as of December 31, 2022 were not effective.

Management realizes there are deficiencies in the design or operation of our internal control

over financial reporting that adversely affect our internal controls, and management considers such deficiencies to be material weaknesses.

As of the end of our 2022 fiscal year, management identified the following material weaknesses:

had not implemented comprehensive entity-level internal controls;

1 unchanged sentence

did not have sufficient segregation of duties.

Achieving continued compliance with Section 404

may require us to incur significant costs and expend significant time and management resources.

We cannot assure you that we will be

able to fully comply with Section 404 or that we will be able to conclude that our internal control over financial reporting is effective

at fiscal year-end.

As a result, investors could lose confidence in our reported financial information, which could have an adverse effect

on the trading price of our securities.

We have never paid dividends on our common

stock and cannot guarantee that we will pay dividends to our stockholders in the future.

We have never paid dividends on our common stock.

For the foreseeable future, we intend to retain our future earnings, if any, in order to reinvest in the development and growth of our

business and, therefore, do not intend to pay dividends on our common stock.

However, in the future, our board of directors may declare

dividends on our common stock.

Any future determination to pay dividends will be at the discretion of our board of directors and will

depend on our financial condition, results of operations, capital requirements, and such other factors as our board of directors deems

Accordingly, investors may need to sell their shares of our common stock to realize a return on their investment, and they

may not be able to sell such shares at or above the price paid for them.

We cannot guarantee that we will pay dividends to our stockholders

in the future.

Our common stock is a “penny stock”

under SEC rules.

It may be more difficult to resell securities classified as “penny stock.”

Our common stock is considered a “penny

stock” under applicable SEC rules (generally defined as non-exchange traded stock with a per-share price below $5.00).

maintain a per-share price above $5.00, these rules impose additional sales practice requirements on broker-dealers that recommend the

purchase or sale of penny stocks to persons other than those who qualify as “established customers” or “accredited

investors.” For example, broker-dealers must determine the appropriateness for non-qualifying persons of investments in penny stocks.

Broker-dealers must also provide, prior to a transaction in a penny stock not otherwise exempt from the rules, a standardized risk disclosure

document that provides information about penny stocks and the risks in the penny stock market.

The broker-dealer also must provide the

customer with current bid and offer quotations for the penny stock, disclose the compensation of the broker-dealer and its salesperson

in the transaction, furnish monthly account statements showing the market value of each penny stock held in the customer’s account,

provide a special written determination that the penny stock is a suitable investment for the purchaser, and receive the purchaser’s

continued compliance with Section 404 may require us to incur significant costs and expend significant time and management resources.

We cannot assure you that we will be able to fully comply with Section 404 or that we will be able to conclude that our internal control

over financial reporting is effective at fiscal year-end.

As a result, investors could lose confidence in our reported financial information,

which could have an adverse effect on the trading price of our securities.

have never paid dividends on our common stock and cannot guarantee that we will pay dividends to our stockholders in the future.

have never paid dividends on our common stock.

For the foreseeable future, we intend to retain our future earnings, if any, in order

to reinvest in the development and growth of our business and, therefore, do not intend to pay dividends on our common stock.

in the future, our board of directors may declare dividends on our common stock.

Any future determination to pay dividends will be at

the discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements, and

such other factors as our board of directors deems relevant.

Accordingly, investors may need to sell their shares of our common stock

to realize a return on their investment, and they may not be able to sell such shares at or above the price paid for them.

guarantee that we will pay dividends to our stockholders in the future.

common stock is a “penny stock” under SEC rules.

It may be more difficult to resell securities classified as “penny

common stock is considered a “penny stock” under applicable SEC rules (generally defined as non-exchange traded stock with

a per-share price below $5.00).

Unless we maintain a per-share price above $5.00, these rules impose additional sales practice requirements

on broker-dealers that recommend the purchase or sale of penny stocks to persons other than those who qualify as “established customers”

or “accredited investors.” For example, broker-dealers must determine the appropriateness for non-qualifying persons of investments

in penny stocks.

Broker-dealers must also provide, prior to a transaction in a penny stock not otherwise exempt from the rules, a standardized

risk disclosure document that provides information about penny stocks and the risks in the penny stock market.

The broker-dealer also

must provide the customer with current bid and offer quotations for the penny stock, disclose the compensation of the broker-dealer and

its salesperson in the transaction, furnish monthly account statements showing the market value of each penny stock held in the customer’s

account, provide a special written determination that the penny stock is a suitable investment for the purchaser, and receive the purchaser’s

written agreement to the transaction.

Legal remedies available to an investor in “penny

stocks” may include the following:

remedies available to an investor in “penny stocks” may include the following:

a “penny stock” is sold to the investor in violation of the requirements listed above, or other federal or states securities

2 unchanged sentences

committed the fraud for damages.

However, investors who have signed arbitration

agreements may have to pursue their claims through arbitration.

These requirements may have the effect of reducing

the level of trading activity, if any, in the secondary market for a security that is or becomes subject to the penny stock rules.

additional burdens imposed upon broker-dealers by such requirements may discourage broker-dealers from effecting transactions in our

securities, which could severely limit the market price and liquidity of our securities.

These requirements may restrict the ability

of broker-dealers to sell our common stock and may affect your ability to resell our common stock.

Many brokerage firms will discourage or refrain

from recommending investments in penny stocks.

Most institutional investors will not invest in penny stocks.

In addition, many individual

investors will not invest in penny stocks due, among other reasons, to the increased financial risk generally associated with these investments.

For these reasons, penny stocks may have a limited

market and, consequently, limited liquidity.

We can give no assurance that our common stock will not be classified as a “penny

stock” in the future.

Rule 144 Related Risks

Pursuant to Rule 144, a person who has beneficially

owned restricted shares of our common stock for at least six months is entitled to sell his or her securities provided that:

person is not deemed to have been one of our affiliates at the time of, or at any time during the three months preceding, a sale, (ii)

we are subject to the Exchange Act periodic reporting requirements for at least 90 days before the sale and (iii) if the sale occurs

prior to satisfaction of a one-year holding period, we provide current information at the time of sale.

Persons who have beneficially owned restricted

shares of our common stock for at least six months but who are our affiliates at the time of, or at any time during the three months

preceding a sale, would be subject to additional restrictions, by which such person would be entitled to sell within any three-month

period only a number of securities that does not exceed the greater of either of the following:

investors who have signed arbitration agreements may have to pursue their claims through arbitration.

requirements may have the effect of reducing the level of trading activity, if any, in the secondary market for a security that is or

becomes subject to the penny stock rules.

The additional burdens imposed upon broker-dealers by such requirements may discourage broker-dealers

from effecting transactions in our securities, which could severely limit the market price and liquidity of our securities.

These requirements

may restrict the ability of broker-dealers to sell our common stock and may affect your ability to resell our common stock.

brokerage firms will discourage or refrain from recommending investments in penny stocks.

Most institutional investors will not invest

in penny stocks.

In addition, many individual investors will not invest in penny stocks due, among other reasons, to the increased financial

risk generally associated with these investments.

these reasons, penny stocks may have a limited market and, consequently, limited liquidity.

We can give no assurance that our common

stock will not be classified as a “penny stock” in the future.

144 Related Risks

to Rule 144, a person who has beneficially owned restricted shares of our common stock for at least six months is entitled to sell his

or her securities provided that:

(i) such person is not deemed to have been one of our affiliates at the time of, or at any time during

the three months preceding, a sale, (ii) we are subject to the Exchange Act periodic reporting requirements for at least 90 days before

the sale and (iii) if the sale occurs prior to satisfaction of a one-year holding period, we provide current information at the time

who have beneficially owned restricted shares of our common stock for at least six months but who are our affiliates at the time of,

or at any time during the three months preceding a sale, would be subject to additional restrictions, by which such person would be entitled

to sell within any three-month period only a number of securities that does not exceed the greater of either of the following:

of the total number of securities of the same class then outstanding;

average weekly trading volume of such securities during the four calendar weeks preceding the filing of a notice on Form 144 with respect

provided , in each case that we are subject

to the Exchange Act periodic reporting requirements for at least three months before the sale.

Such sales by affiliates must also comply

with the manner of sale, current public information and notice provisions of Rule 144.

In addition, as a former shell company, we are

subject to additional restrictions.

Historically, the SEC staff has taken the position that Rule 144 is not available for the resale

of securities initially issued by companies that are, or previously were, shell companies, such as Zoned Properties.

Rule 144 is not

available for resale of securities issued by any shell companies (other than business combination related shell companies) or any issuer

that has been at any time previously a shell company.

The SEC has provided an exception to this prohibition, however, if the following

conditions are met:

in each case that we are subject to the Exchange Act periodic reporting requirements for at least three months before the sale.

sales by affiliates must also comply with the manner of sale, current public information and notice provisions of Rule 144.

addition, as a former shell company, we are subject to additional restrictions.

Historically, the SEC staff has taken the position that

Rule 144 is not available for the resale of securities initially issued by companies that are, or previously were, shell companies, such

as Zoned Properties.

Rule 144 is not available for resale of securities issued by any shell companies (other than business combination

related shell companies) or any issuer that has been at any time previously a shell company.

The SEC has provided an exception to this

prohibition, however, if the following conditions are met:

issuer of the securities that was formerly a shell company has ceased to be a shell company,

4 unchanged sentences

an entity that is not a shell company.

UNRESOLVED STAFF COMMENTS

This Item 1B is not applicable to smaller reporting companies.

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 1A. Risk Factors