What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-08-13 compared with 2024-05-14 · 210 added, 72 removed, 452 unchanged (38% of the section changed)

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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

As of June 30, 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.

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direct-to-consumer properties, located in state-markets with robust cannabis consumer demand in the industry.

As of March 31, 2024, a summary of rental properties

As of June 30, 2024, a summary of rental properties

owned by us consisted of the following:

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Green Valley,

Portfolio Total

(special use)

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Land Area (Sq.

Undeveloped Land Area (Sq.

Developed Land Area (Sq.

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Vacant Rentable Sq.

rented as of March 31, 2024

rented as of June 30,

Annual Base Rent (*,**)

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below and should be read in conjunction with the unaudited consolidated financial statements and the notes to those statements for the

three months ended March 31, 2024 and 2023, which are included elsewhere in this quarterly report on Form 10-Q.

three and six months ended June 30, 2024 and 2023, which are included elsewhere in this quarterly report on Form 10-Q.

The results discussed

below are for the three months ended March 31, 2024 and 2023.

Comparison of Results of Operations for the Three Months Ended

March 31, 2024 and 2023

For the three months ended March 31, 2024 and

2023, revenues by reportable business segments were as follows:

below are for the three and six months ended June 30, 2024 and 2023.

Comparison of Results of Operations for the Three and Six Months

Ended June 30, 2024 and 2023

For the three and six months ended June 30, 2024

and 2023, revenues by reportable business segments were as follows:

Three Months Ended

Six Months Ended

Property investment portfolio

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Total revenues

For the three months ended March 31, 2024, total

For the three months ended June 30, 2024, total

revenues amounted to $692,326, including property investment portfolio revenues $679,326, which consists of rental revenues, as compared

to total revenues of $688,024, including rental revenues of $610,474, for the three months ended March 31, 2023, an overall increase of

$149,028, or 21.7%.

This increase was attributable to an increase in rental revenues of $80,818, or 13.2%, and a net increase in real

estate services revenues of $68,210, or 88.0%, attributable to an increase in commissions earned on real estate listings of $142,460,

offset by a decrease in advisory services revenues of $74,250.

to total revenues of $772,617, including property investment portfolio revenues of $609,591, for the three months ended June 30, 2023,

an overall decrease of $80,291, or 10.4%.

This decrease was attributable to a net decrease in real estate services revenues of $150,026,

or 92.0%, attributable to a decrease in commissions earned on real estate listings and a decrease in advisory fees, offset by an increase

in rental revenues of $69,735, or 11.4%.

For the six months ended June 30, 2024, total

revenues amounted to $1,529,378, including property investment portfolio revenues $1,370,618, which consists of rental revenues, as compared

to total revenues of $1,460,641, including property investment portfolio revenues of $1,220,065, for the six months ended June 30, 2023,

an overall increase of $68,737, or 4.7%.

This increase was attributable to an increase in rental revenues of $150,553, or 12.3%.

by a net decrease in real estate services revenues of $81,816, or 34.0%, attributable to a decrease in commissions earned on real estate

listings and a decrease in advisory fees.

The increase in property investment portfolio

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Operating expenses

For the three months ended March 31, 2024, operating

expenses amounted to $708,143 as compared to $711,410 for the three months ended March 31, 2023, a decrease of $3,267, or 0.5%.

three months ended March 31, 2024 and 2023, operating expenses consisted of the following:

For the three months ended June 30, 2024, operating

expenses amounted to $589,188 as compared to $707,812 for the three months ended June 30, 2023, a decrease of $118,624, or 16.8%.

the six months ended June 30, 2024, operating expenses amounted to $1,297,331 as compared to $1,419,222 for the six months ended June

30, 2023, a decrease of $121,891, or 8.6%.

For the three and six months ended June 30, 2024 and 2023, operating expenses consisted of

the following:

Three Months Ended

Six Months Ended

Compensation and benefits

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Business development costs

For the three months ended March 31, 2024, compensation and benefit expense decreased by $80,331, or 23.2%, as compared to the three months ended March 31, 2023.

For the three months ended June 30, 2024, compensation and benefit expense decreased by $89,867, or 24.7%, as compared to the three months ended June 30, 2023.

The decrease was attributable to a decrease in stock-based compensation of $24,168 related to a decrease in accretion of stock option expense, a decrease in health insurance expense of $11,074, and a decrease in other compensation and benefits of $54,625.

For the three months ended March 31, 2024, professional fees decreased by $20,392, or 14.3%, as compared to the three months ended March 31, 2023.

This decrease was primarily attributable to a decrease in public relations fees of $20,080.

For the three months ended March 31, 2024 and 2023, we recorded brokerage fees amounting to $103,330 and $0, respectively, representing an increase of $103,350, or 100.0%.

For the six months ended June 30, 2024, compensation and benefit expense decreased by $170,198, or 24.0%, as compared to the six months ended June 30, 2023.

The decrease was attributable to a decrease in stock-based compensation of $50,936 related to a decrease in accretion of stock option expense, a decrease in health insurance expense of $27,460, and a decrease in other compensation and benefits of $91,802.

For the three months ended June 30, 2024, professional fees increased by $28,944, or 48.3%, as compared to the three months ended June 30, 2023.

This increase was primarily attributable to an increase in consulting fees of $19,000, an increase in accounting fees of $6,546, and an increase in other professional fees of $3,398.

For the six months ended June 30, 2024, professional fees increased by $8,552, or 4.2%, as compared to the six months ended June 30, 2023.

This increase was primarily attributable to an increase in consulting fees of $24,000, and an increase in accounting fees of $5,473, offset by a decrease in other public relations fees of $14,901, and a decrease in legal fees of $6,076.

For the three months ended June 30, 2024 and 2023, we recorded brokerage fees amounting to $0 and $50,571, respectively, representing a decrease of $50,571, or 100.0%.

For the six months ended June 30, 2024 and 2023, we recorded brokerage fees amounting to $103,330 and $50,571, respectively, representing an increase of $52,759, or 104.3%.

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 three months ended March 31, 2024, general and administrative expenses decreased by $147, or 0.20%, as compared to the three months ended March 31, 2023.

For the three months ended March 31, 2024, depreciation expense decreased by $7,935, or 8.1%, as compared to the three months ended March 31, 2023.

For the three months ended March 31, 2024, real estate taxes decreased by $4,392, or 13.8%, as compared to the three months ended March 31, 2023.

For the three months ended March 31, 2024, business development costs increased by $6,600, or 44.0%, as compared to the three months ended March 31, 2023.

This increase was attributable to an increase in costs related to forfeited escrow deposits and the write off of costs related to projects which we decided not to pursue.

For the three months ended June 30, 2024, general and administrative expenses decreased by $56, or 0.06%, as compared to the three months ended June 30, 2023.

For the six months ended June 30, 2024, general and administrative expenses decreased by $203, or 0.11%, as compared to the six months ended June 30, 2023.

For the three months ended June 30, 2024, depreciation expense decreased by $12,178, or 11.9%, as compared to the three months ended June 30, 2023.

For the six months ended June 30, 2024, depreciation expense decreased by $20,113, or 10.1%, as compared to the six months ended June 30, 2023.

For the three months ended June 30, 2024, real estate taxes increased by $3,829, or 12.0%, as compared to the three months ended June 30, 2023.

For the six months ended June 30, 2024, real estate taxes decreased by $563, or 0.9%, as compared to the six months ended June 30, 2023

For the three months ended June 30, 2024, business development costs increased by $1,275, or 100.0%, as compared to the three months ended June 30, 2023.

For the six months ended June 30, 2024, business development costs increased by $7,875, or 52.5%, as compared to the six months ended June 30, 2023.

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.

Income (loss) from operations

As a result of the factors described above, for

the three months ended March 31, 2024, income from operations amounted to $128,909 as compared to a loss from operations of $(23,386)

for the three months ended March 31, 2023, a positive change of $152,295, or 651.23%.

the three months ended June 30, 2024, income from operations amounted to $103,138 as compared to income from operations of $64,805 for

the three months ended June 30, 2023, an increase of $38,333, or 59.1%.

For the six months ended June 30, 2024, income from operations

amounted to $232,047 as compared to income from operations of $41,419 for the six months ended June 30, 2023, an increase of $190,628,

Other (expenses) income, net

Other (expense) income primarily includes interest

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

For the three months ended March

31, 2024, total other expenses, net amounted to $32,436 as compared to total other expenses, net of $284,793, respectively, representing

a decrease of $252,357, or 88.6%.

This decrease was attributable to an increase in interest expense of $3,539 primarily related to an

increase in notes payable, offset by an increase in income in fair value from an interest rate swap of $255,896.

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

For the three months ended June 30, 2024, total

other expenses, net amounted to $135,421 as compared to total other expenses, net of $17,005, respectively, representing an increase of

$118,416, or 696.4%.

This increase was attributable to a decrease in interest expense of $526 primarily related to a decrease in notes

payable, offset by a decrease in income in fair value from an interest rate swap of $118,942.

For the six months ended June 30, 2024,

total other expenses, net amounted to $167,857 as compared to total other expenses, net of $301,798, respectively, representing a decrease

of $133,941, or 44.4%.

This decrease was attributable to an increase in interest expense of $3,013 primarily related to an increase in

notes payable, offset by an increase in income in fair value from an interest rate swap of $136,954.

Equity method loss

For the three months ended March 31, 2024 and

For the three months ended June 30, 2024 and 2023,

we incurred an equity method loss of $0 and $5,641, respectively, a decrease of $5,641, or 100.0%.

For the six months ended June 30, 2024

and 2023, we incurred an equity method loss of $0 and $7,110, respectively, a decrease of $7,110, or 100.0%.

Net income (loss)

As a result of the foregoing, for the three months

ended March 31, 2024 and 2023, net income (loss) amounted to $96,473, or $0.01 per common share (basic and diluted), and $(309,648), or

ended June 30, 2024 and 2023, net income (loss) amounted to $(32,283), or $(0.00) per common share (basic and diluted), and $42,159, or

$0.00 per common share (basic and diluted), respectively.

For the six months ended June 30, 2024 and 2023, net income (loss) amounted

to $64,190, or $0.01 per common share (basic and diluted), and $(267,489), or $(0.02) per common share (basic and diluted), respectively.

Liquidity and Capital Resources

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adequate amounts of cash to meet its needs for cash requirements.

We had cash of $1,519,903 and $3,099,795 as of March 31, 2024 and December

We had cash of $1,528,553 and $3,099,795 as of June 30, 2024 and December

31, 2023, respectively.

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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 March 31, 2024 and December 31, 2023).

an interest rate equal to the prime rate plus 0.75% (9.25% as of June 30, 2024 and December 31, 2023).

The Amended Note matures 10 years

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variability in interest payments on its variable-rate debt.

On March 31, 2024, principal and interest due

on the East West Bank Swap Note amounted to $4,436,449 and $7,520, respectively.

On June 30, 2024, principal and interest due on

the East West Bank Swap Note amounted to $4,436,449 and $7,520, respectively.

On December 31, 2023, principal and interest due on the

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A balloon payment of $1,274,117 including the remaining principal and interest on or before December 1, 2028.

On March 31, 2024, principal and interest due

on the 23616 Land Contract Note Payable amounted to $1,402,071 and $0, On December 31, 2023, principal and interest due on the 23616 Land

On June 30, 2024, principal and interest due on

the 23616 Land Contract Note Payable amounted to $1,394,682 and $0, On December 31, 2023, principal and interest due on the 23616 Land

Contract Note Payable amounted to $1,408,962 and $0, respectively.

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and all interest will be fully paid on or before March 31, 2027.

On March 31, 2024, principal and interest due on the 23634 Land Contract

On June 30, 2024, principal and interest due on the 23634 Land Contract

Note Payable amounted to $411,602 and $0, respectively.

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and (2) monitoring the timeliness of rent collections.

As of March 31, 2024 and December 31, 2023, we had an asset concentration

related to our Significant Tenant leases.

As of March 31, 2023 and December 31, 2023, these Significant Tenants represented approximately

As of June 30, 2024 and December 31, 2023, we had an asset concentration related

to our Significant Tenant leases.

As of June 30, 2024 and December 31, 2023, these Significant Tenants represented approximately 73.7%

and 69.4% of total assets, respectively.

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out new tenants at rental rates per square less than our current rate per square foot.

Recent Property Acquisition and Related Note

On July 8, 2024 (the “Closing”), ZP

Dysart acquired a property in Surprise AZ (the “Surprise Property”) from NWC Dysart & Bell LLC (“NWC”).

previously disclosed, on February 23, 2024, the Company, through ZPRE Holdings provided an approval notice to NWC related to the Company’s

intent to consummate the purchase of the Surprise Property, following notice from the City of Surprise that the Company had received final

approvals of its cannabis entitlements, after satisfaction of the appeal period (the “Cannabis Approvals”), related to a use-permit

for a cannabis retail dispensary to be developed at the Surprise Property.

As used herein, the “Surprise Property” refers

to that certain property commonly known as Bella Fiesta Pad B in Surprise, Arizona, which property is a certain tract or parcel of land

containing approximately 1.114 acres, together with all improvements, buildings, leases, rights, easements, and appurtenances pertaining

Also 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 agreed to sell to ZPRE Holdings, and ZPRE Holdings agreed to purchase, the Surprise Property

in exchange for a purchase price of $1,100,000 (the “Purchase Price”).

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

Pursuant to the terms of the Agreement, ZPRE Holdings

deposited the following amounts into escrow:

(i) $50,000, for the initial earnest money deposit, and (ii) $47,500, for additional earnest

money deposited related to extensions to the Agreement (collectively, the “Earnest Money”).

The Earnest Money was to be applied

as a credit upon closing.

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.

PMF Construction Loan Agreement

In 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,

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 the Sunday Goods’ Work (as hereinafter defined) (the “Construction

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 the 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.

ZP Dysart agreed to pay PMF through escrow on

or before the date of the Closing a nonrefundable 2% loan fee.

The PMF Loan Agreement contains representations,

warranties and covenants customary for a transaction of this type.

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.

August 13, 2024, the principal amount of the loan is $1,020,000.

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 Date”).

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

(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 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.

After 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.

Unconditional Repayment Guaranty

Pursuant to the terms of the Unconditional Repayment

Guaranty (the “PMF Guaranty”), dated as of July 8, 2024, by Zoned Properties, Inc.

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.

In anticipation of the Closing, ZP Dysart and

The Pharm, LLC (“Sunday Goods”) entered into a Licensed Cannabis Facility Absolute Net Ground Lease Agreement, effective as

of December 20, 2023, and having commenced as of July 13, 2024 (the “Sunday Goods”), pursuant to which Sunday Goods will construct

certain improvements on the Surprise Property (the “Sunday Goods’ Work”).

PMF has approved the Contingent Lease and

the construction of such improvements.

Licensed Cannabis Facility Absolute Net Lease

Agreement, Guaranty and Security Agreement

On January 2, 2024, ZP Holdings entered into a contingent Licensed

Cannabis Facility Absolute Net Lease Agreement (the “Contingent Lease”), with a commencement date contingent upon the satisfaction

of various contingencies to the Sunday Goods Lease, by and between ZP Holdings, as landlord, and Sunday Goods, as tenant.

the terms of the Contingent Lease, ZP Holdings agreed to lease the Surprise Property to Sunday Goods for use as a licensed medical and

adult use marijuana retail dispensary in accordance with the laws of Arizona.

The Contingent Lease has a term of 15 years, with four five-year

renewal terms.

Pursuant to the Contingent Lease, ZP Holdings has agreed to provide a tenant improvement allowance for up to $1,000,000

to Sunday Goods to be reimbursed in tranches following completion of tenant’s work.

The rental payment terms pursuant to the Contingent

Lease begin with a monthly base rent of $25,000 per month in year one, subject to an annual base rent increase of 3% each year.

to the terms of the Contingent Lease, on February 27, 2024, Sunday Goods executed a guaranty (the “Guaranty”) in favor of

ZP Holdings, guaranteeing the prompt and complete payment and performance of all of Sunday Goods’ obligations to ZP Holdings arising

under the Contingent Lease.

As of July 8, 2024, all contingencies were satisfied and the Contingent Lease commenced on July 13, 2024.

We may secure additional financing to acquire

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may restrict our ability to grow our business operations.

For the Three Months Ended March 31, 2024 and

For the Six Months Ended June 30, 2024 and

Net cash flow provided by operating activities

was $207,218 for the three months ended March 31, 2024, as compared to net cash flow provided by operating activities of $3,589 for the

three months ended March 31, 2023, representing an increase of $203,629.

cash flow provided by operating activities for the three months ended March 31, 2024 primarily reflected net income of $96,473, adjusted

for the add-back of non-cash items consisting of depreciation of $89,647, amortization of debt discount of $4,615, accretion of stock-based

stock option expense of $16,494, a loss on forfeited escrow deposit of $21,600, and income from the changes in fair value from an interest

rate swap of $125,603, offset by changes in operating assets and liabilities primarily consisting of an increase in accounts receivable

of $42,908, an increase in deferred rent of $88,048 attributable to rent abatement on our new tenant lease at our Chicago, Illinois Property,

an increase in accounts payable of $58,025, an increase in accrued expenses of $128,038, an increase in contract liabilities of $23,508,

and an increase in security deposits payable of $27,730.

Net cash flow provided by operating activities for the three months ended March 31, 2023 primarily reflected a net loss of $309,648 adjusted for the add-back of non-cash items consisting of depreciation of $97,582, amortization of debt discount of $4,615, accretion of stock-based stock option expense of $43,262, a loss on forfeited escrow deposit of $15,000, a loss from unconsolidated joint ventures of $1,469, and a loss from the changes in fair value from an interest rate swap of $130,293, offset by changes in operating assets and liabilities primarily consisting of an increase in deferred rent of $102,327 attributable to rent abatement on our new tenant lease at our Woodward Properties, an increase in contract liabilities of $49,700, and an increase in security deposits payable of $56,100 attributable to the collection of additional security deposit on our Woodward Properties.

During the three months ended March 31, 2024,

net cash flow used in investing activities amounted to $1,771,916 as compared to net cash used in investing activities of $1,071,456,

an increase of $700,460.

During the three months ended March 31, 2024, net cash used in investing activities was attributable to the purchase

of rental property of $1,585,878 primarily in connection with the acquisition of property in Chicago, Illinois, a purchase of property

and equipment of $6,480, an increase in capitalized permit costs of $56,290, and an increase in escrow deposits of $123,268 in connection

with escrow deposits made on other potential acquisitions of rental properties.

During the three months ended March 31, 2023, net cash

used in investing activities was attributable to the purchase of rental property of $992,214 in connection with the acquisition of property

in Pleasant Ridge, Michigan, an increase in capitalized permit costs of $6,242, and an increase in escrow deposits of $73,000 in connection

was $246,788 for the six months ended June 30, 2024, as compared to net cash flow provided by operating activities of $143,784 for the

six months ended June 30, 2023, representing an increase of $101,729.

Net cash flow provided by operating activities for the six months ended June 30, 2024 primarily reflected net income of $64,190, adjusted for the add-back of non-cash items consisting of depreciation of $179,517, amortization of debt discount of $9,230, accretion of stock-based stock option expense of $29,511, a loss on forfeited escrow deposit of $22,875, and income from the changes in fair value from an interest rate swap of $146,518, offset by changes in operating assets and liabilities primarily consisting of a decrease in accounts receivable of $57,783, an increase in deferred rent of $145,518 attributable to rent abatement on our new tenant lease at our Chicago, Illinois Property, a decrease in accounts payable of $31,733, an increase in accrued expenses of $157,157, an increase in contract liabilities of $19,201, and an increase in security deposits payable of $17,730.

Net cash flow provided by operating activities for the six months ended June 30, 2023 primarily reflected a net loss of $267,489 adjusted for the add-back of non-cash items consisting of depreciation of $199,630, amortization of debt discount of $9,229, accretion of stock-based stock option expense of $80,447, a loss on forfeited escrow deposit of $15,000, a loss from unconsolidated joint ventures of $8,370, and a gain from the changes in fair value from an interest rate swap of $9,692, offset by changes in operating assets and liabilities primarily consisting of an increase in deferred rent of $124,013 attributable to rent abatement on our new tenant lease at our Woodward Properties, a decrease in prepaid expenses and other assets of $32,248, an increase in contract liabilities of $148,394, and an increase in security deposits payable of $56,100 attributable to the collection of additional security deposit on our Woodward Properties.

During the six months ended June 30, 2024, net

cash flow used in investing activities amounted to $1,772,344 as compared to net cash used in investing activities of $1,165,450, an increase

During the six months ended June 30, 2024, net cash used in investing activities was attributable to the purchase of rental

property of $1,587,476 primarily in connection with the acquisition of property in Chicago, Illinois, a purchase of property and equipment

of $6,480, an increase in capitalized permit costs of $58,720, and an increase in escrow deposits of $119,668 in connection with escrow

deposits made on other potential acquisitions of rental properties.

During the six months ended June 30, 2023, net cash used in investing

activities was attributable to the purchase of rental property of $998,821 primarily in connection with the acquisition of property in

Pleasant Ridge, Michigan, an increase in capitalized permit costs of $11,081, and an increase in escrow deposits of $155,548 in connection

with escrow deposits made on other potential acquisitions of rental properties.

During the three months ended March 31, 2024 and

During the six months ended June 30, 2024 and

2023, net cash used in financing activities amounted to $44,411 and $38,399, respectively, and consisted of the repayment of notes payable.

10 unchanged sentences

The following tables summarize our contractual

obligations as of March 31, 2024 (dollars in thousands), and the effect these obligations are expected to have on our liquidity and cash

obligations as of June 30, 2024 (dollars in thousands), and the effect these obligations are expected to have on our liquidity and cash

flows in future periods.

19 unchanged sentences

swap payments utilizing cash flows from operations.

As of March 31, 2024, the notional amount of our interest rate swaps was $4,450,642.

As of June 30, 2024, the notional amount of our interest rate swaps was $4,450,642.

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

144 unchanged sentences

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-Q

Item 2. Management’s Discussion and Analysis