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Item 1. Business

2026-04-01 compared with 2025-03-25 · 730 added, 546 removed, 407 unchanged (76% of the section changed)

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Zoned Properties is a technology-driven property

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

aspires to innovate within the real estate development sector, focusing on direct-to-consumer real estate that is leased to the best-in-class

cannabis retailers.

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

through its standardized investment model backed by its proprietary property technology.

Zoned Properties has developed a national ecosystem

of real estate services to support its real estate development model, including a commercial real estate brokerage and a real estate

advisory practice.

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

Headquartered

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

model backed by its proprietary property technology.

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

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

The Company operates in two organized segments;

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

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

Services” segment.

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

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

absolute-net leases.

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

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

Zoned Properties corporate headquarters are located

segment, and (2) the advisory, brokerage and technology services related to commercial properties related to commercial properties, herein

known as the “Real Estate Services” segment.

The Company targets commercial properties that face unique zoning or development

challenges, identifies solutions that can potentially have a major impact on their commercial value, and then works to acquire the properties

while securing long-term, absolute-net leases.

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

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

Zoned Properties corporate

headquarters are located at 8360 E.

Raintree Dr., Suite 230, Scottsdale, Arizona.

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The Company has the following wholly owned subsidiaries:

Chino Valley Properties, LLC (“Chino Valley”)

was organized in the State of Arizona on April 15, 2014.

Kingman Property Group, LLC (“Kingman”)

was organized in the State of Arizona on April 15, 2014.

Green Valley Group, LLC (“Green Valley”)

organized in the State of Arizona on April 15, 2014.

Zoned Arizona Properties, LLC (“Zoned Arizona”)

was organized in the State of Arizona on June 2, 2017.

Zoned Advisory Services, LLC (“Zoned Advisory”)

was organized in the State of Arizona on July 27, 2018.

Zoned Properties Brokerage, LLC (“Arizona Brokerage”)

was organized in the State of Arizona on March 17, 2021.

ZP Data Platform 1, LLC (“ZP Data 1”) was

organized in the State of Arizona on April 14, 2021 (inactive).

ZP Data Platform 2, LLC (“ZP Data 2”) was

organized in the State of Arizona on June 21, 2022.

ZP RE Holdings, LLC (“ZPRE Holdings”) was

organized in the State of Arizona on September 20, 2022.

ZP Brokerage MS, LLC (“Mississippi Brokerage”)

was organized in the State of Mississippi on October 4, 2022 (inactive and dissolved on January 13, 2025).

ZP Brokerage FL, LLC (“Florida Brokerage”)

was organized in the State of Florida on October 20, 2022.

ZP Brokerage AL, LLC (“Alabama Brokerage”)

was organized in the State of Alabama on October 20, 2022 (inactive and dissolved on January 9, 2025).

ZP RE MI Woodward, LLC (“ZP Woodward”)

was organized in the State of Michigan on November 22, 2022

ZP Brokerage MO, LLC (“Missouri Brokerage”)

was organized in the State of Missouri on November 30, 2022 (inactive and dissolved on January 13, 2025).

ZP RE IL Ashland, LLC (“ZP Ashland”) was

organized in the State of Illinois on February 14, 2024.

Properties, LLC (“Chino Valley”) was organized in the State of Arizona on April 15, 2014.

Kingman Property Group,

LLC (“Kingman”) was organized in the State of Arizona on April 15, 2014.

Green Valley Group, LLC

(“Green Valley”) organized in the State of Arizona on April 15, 2014.

Zoned Arizona Properties,

LLC (“Zoned Arizona”) was organized in the State of Arizona on June 2, 2017.

Zoned Advisory Services,

LLC (“Zoned Advisory”) was organized in the State of Arizona on July 27, 2018.

Zoned Properties Brokerage,

LLC (“Arizona Brokerage”) was organized in the State of Arizona on March 17, 2021.

ZP Data Platform 1, LLC

(“ZP Data 1”) was organized in the State of Arizona on April 14, 2021 (inactive).

ZP Data Platform 2, LLC

(“ZP Data 2”) was organized in the State of Arizona on June 21, 2022.

ZP RE Holdings, LLC (“ZPRE

Holdings”) was organized in the State of Arizona on September 20, 2022.

ZP Brokerage MS, LLC (“Mississippi

Brokerage”) was organized in the State of Mississippi on October 4, 2022 (inactive and dissolved on January 13, 2025).

ZP Brokerage FL, LLC (“Florida

Brokerage”) was organized in the State of Florida on October 20, 2022.

ZP Brokerage AL, LLC (“Alabama

Brokerage”) was organized in the State of Alabama on October 20, 2022 (inactive and dissolved on January 9, 2025).

ZP RE MI Woodward, LLC

(“ZP Woodward”) was organized in the State of Michigan on November 22, 2022

ZP Brokerage MO, LLC (“Missouri

Brokerage”) was organized in the State of Missouri on November 30, 2022 (inactive and dissolved on January 13, 2025).

ZP RE IL Ashland, LLC (“ZP

Ashland”) was organized in the State of Illinois on February 14, 2024.

ZP RE AZ DYSART.

LLC (“ZP Dysart”) was

organized in the State of Arizona on May 24, 2024.

Dysart”) was organized in the State of Arizona on May 24, 2024.

The Company also maintains a 50% equity interest in two joint ventures

(see Note 5).

We believe in the value of building long-term

relationships with our tenants, clients and the local communities in which our properties are located in order to position the Company

for short-term success and long-term growth backed by sophisticated, safe, and sustainable assets.

which are inactive as of December 31, 2025.

On January 15, 2026,

the Company entered into an Asset Purchase Agreement (the “MBO APA”) by and among the Company, Zoned Arizona, ZP Dysart,

ZPRE Holdings (collectively, Zoned Arizona, ZP Dysart and ZPRE Holdings, the “Real Property Sellers” and, together with the

Company, the “Seller Parties” and each, a “Seller Party”), and BPB Partners, LLC (the “Buyer”).

Buyer is owned by Bryan McLaren, the Company’s Chairman of the Board, Chief Executive Officer and Chief Financial Officer;

Blackwell, the Company’s President and Chief Operating Officer;

and Patrick Moroney.

Pursuant to the terms

of the MBO APA, the Seller Parties agreed to sell to the Buyer, and the Buyer agreed to purchase from the Seller Parties, subject to

the terms of the MBO APA, all of the Seller Parties’ rights, title and interest in and to the Company’s business, as described

in the Company’s filings with the Securities and Exchange Commission (the “Business”), and the assets, properties and

rights of the Seller Parties, subject to modification as set forth in the MBO APA, and other than the Excluded Assets (as defined in

the MBO APA) (the “Assets”).

The Assets include, among other things, (i) the real property located at 410 S.

Madison Drive,

(ii) the real property located at 13150 W.

Bell Road, Surprise, AZ;

(iii) the real property located at 3455 S.

Ashland Avenue,

(iv) the Company’s membership interests in ZPRE Holdings, Arizona Brokerage, Florida Brokerage, ZP Data 2, ZP Ohio

B, LLC (“ZP Ohio B”), and Zoneomics Green, LLC (“Zoneomics Green”);

(v) all rights under all contracts to which

any Seller Party is a party or is bound as of the closing date that is related to the Business;

(vi) all intellectual property of the

Seller Parties;

(vii) all prepaid expenses, security deposits, and certain other operational assets;

and (vii) potentially certain additional

assets that may be acquired by the Seller Parties prior to the closing of the MBO, as discussed below.

Closing of the MBO is

subject to certain closing conditions, including, but not limited to, approval by the Company’s stockholders and the Buyer obtaining

If the MBO APA is approved

by the Company’s stockholders, as required, the Company expects that the closing of the MBO will take place by the end of 2026.

Assuming that the MBO APA is approved by the Company’s stockholders, as required, and the Company can successfully sell and liquidate

100% of the Company’s assets and operations, the Company expects (i) to pay off any remaining debt, settle any remaining accounts

and agreements, liquidate the Company’s outstanding preferred shares, and then distribute the net available balance of cash to

stockholders as a return of capital through a special dividend, and (ii) to subsequently complete a reverse merger or other transaction

involving the public company.

Business—Management Buyout Asset Purchase Agreement” for additional information regarding the MBO APA and the MBO.

Additionally, on December 31, 2025, the Company,

through its wholly owned subsidiaries Chino Valley, Green Valley, and Kingman (collectively, the “Landlords”), entered into

Amended and Restated Absolute Net Lease Agreements (the “A&R Leases”) with the respective tenant entities Broken Arrow

Herbal Center, Inc.

(Chino Valley and Green Valley) and CJK, Inc.

(Kingman) (each, a “Tenant”), each with an effective date

of January 1, 2026.

Each A&R Lease provides for an initial term of 14 years commencing January 1, 2026 and ending December 31, 2039,

unless earlier terminated pursuant to its terms.

The A&R Leases was contingent upon, among other conditions, the consummation of

a change of control transaction involving the Tenant(s), including the transfer of majority ownership and control of the applicable Tenant

to A&R Consultants, LLC (or its designee) and the transfer of the applicable cannabis license to A&R Consultants, LLC (or its

designee).The contingencies were resolved on March 31, 2026.

The A&R Leases include, among other provisions, (i) a right of first

refusal with a right of first refusal period of up to 60 days and (ii) a short-term exclusive option that permits the Tenant to purchase,

on an all-or-none basis, the three leased properties (Chino Valley, Green Valley and Kingman) for an aggregate purchase price of $9.0

million (the “Purchase Option”).

The Purchase Option originally stated that the Purchase Option may be exercised during an

option period ending March 30, 2026;

however, the parties have subsequently agreed that optionee will have until April 10, 2026 to exercise

the Purchase Option, and if exercised, requires a closing no later than June 30, 2026.

The Purchase Option contemplates (a) a $400,000

non-refundable earnest money deposit to be applied toward the down payment, (b) a $4.0 million cash down payment at closing, and (c)

$5.0 million of seller financing.

The seller financing would bear interest at 7% per annum over a 36-month term with payments calculated

on a 15-year amortization schedule and a balloon payment at maturity, and would be secured by loan documentation (including a loan agreement,

promissory note and deeds of trust) against all three properties.

The properties would be conveyed on an as-is/where-is basis without

representations or warranties from the applicable landlord/seller.

In connection with the anticipated change of control transaction for

the Chino Valley Tenant, on December 30, 2025, the Company, through Chino Valley Properties, LLC, entered into a Consent of Landlord

and Agreement Regarding Lease (the “Consent Agreement”) with Broken Arrow Herbal Center, Inc., AC Management Group, LLC (the

existing guarantor), A&R Consultants, LLC (the new guarantor) and Elevate Holdings, Group, LLC.

The Consent Agreement provided, among

other things, that the Landlord’s consent to the sale transaction was conditioned on the payment to Landlord at closing of (i) $389,984

for past due rent, additional rent and late charges and (ii) $965,000 as compensation for rent concessions reflected in the A&R Lease, both of which was received by the Company on March 31, 2026.

Upon receipt of such amounts, the Consent Agreement provided for the release of the existing guarantor from liability for periods after

closing and A&R Consultants, LLC executed a new guaranty of the A&R Lease.

The core of our business operations involves

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a defined set of hours of operation.

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

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

Due to the complex nature of the Company’s

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that it owns, develops and leases.

As of March 2025, the Company leases land and/or building space at the seven properties in its portfolio

to licensed and regulated cannabis tenants in areas with established cannabis regulations and zoning procedures.

Four of the leased properties

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

cannabis cultivation and processing facilities, and one property is land leased currently under development to for a regulated cannabis

retail dispensary.

The Company considers the two cultivation sites in its portfolio as legacy properties and may consider selling or

leveraging those properties to unlock equity and create capital availability in the future.

The Zoned Properties investment thesis has

evolved over the years as the cannabis industry has emerged, and is currently focused on investing capital into direct-to-consumer properties,

located in state-markets with robust cannabis consumer demand in the industry.

Our primary focus is on investing in the acquisition

and development of new properties to grow the equity value of our real estate portfolio, and as such we may consider refinancing and/or

selling an asset when the circumstances and opportunity present a value opportunity for the Company.

Zoned Properties is in pursuit of property acquisitions

that can be characterized as consumer-facing, retail dispensary properties that are positioned to be leased to regulated cannabis retail

dispensary tenants under net leasing structures.

As of March 2025, the Company has additional agreements in place contractually securing

the rights to acquire prospective investment properties with prospective regulated cannabis tenants located in Delaware, Kentucky, Illinois,

In the coming quarters and years, the Company plans to initiate and target its investment activity in additional potential

state-markets with robust cannabis consumer demand.

Over the past few years, the Company has completed

a strategic shift in focus towards direct-to-consumer real estate that is leased to the best-in-class cannabis retailers in the industry.

The Company will continue to utilize its proprietary property technology as a competitive edge when identifying investment properties.

As of April 1, 2026, the Company leases land and/or building space at the seven properties in its

portfolio to licensed and regulated cannabis tenants in areas with established cannabis regulations and zoning procedures.

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

as regulated cannabis cultivation and processing facilities, and one property is land leased currently under development to for a regulated

cannabis retail dispensary.

There are significant challenges that take place

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and Michigan, each highly regulated markets for the legalized cannabis industry.

The Company intends to replicate this business model

across the nation as markets mature and rules and regulations are established.

The process for obtaining zoning authorizations

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through due diligence in order to meet the Company’s standards.

As of March 2025, we are the sole member of 13

As of April 1, 2026, we are the sole member of

13 limited liability companies:

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Florida Brokerage, ZPRE Holdings, ZP Woodward, ZP Dysart, and ZP Ashland.

Seven of these entities—Zoned Arizona, Green Valley,

Kingman, Chino Valley, ZPRE Holdings, ZP Woodward, and ZP Dysart have acquired land and/or real property and own our properties.

Many of the best-known, state-licensed cannabis

operators from across the United States have approached Zoned Properties for strategic partnership related to the acquisition and leasing

of retail dispensary properties and/or real estate services related to cannabis real estate projects.

We are continuously evaluating

these opportunities as we expand our investment property pipeline.

Zoned Properties has built an active cannabis real estate investment

and services ecosystem in which we are exploring various development partnerships, preferred service provider arrangements, and partnerships

with capital funding sources.

Seven of these entities—Zoned Arizona, Green Valley, Kingman,

Chino Valley, ZPRE Holdings, ZP Woodward, and ZP Dysart have acquired land and/or real property and own our properties.

As it relates to the regulated cannabis industry,

we are strictly a non-plant touching organization.

We believe that we are well positioned to benefit from ancillary development opportunities

that the regulated cannabis industry presents without having to deal with the risk of directly cultivating, distributing, or dispensing

the product, which is still illegal under federal law.

Our initial real estate services and property

acquisition targets have been in Arizona.

Recently, we have expanded real estate services, namely advisory services and brokerage services,

across multiple state markets, and we have acquired properties in Michigan and Illinois.

We believe that Arizona, Michigan and Illinois

have established state-regulated cannabis programs with robust regulatory frameworks for licensing and operating within their respective

regulatory marketplaces (i.e.

the business environment in which our clients and tenants operate) and have strong consumer demand to support

the business operators in their respective state marketplaces (i.e.

the consumers that support our clients’ and tenants’

business operations).

The Company expects to target expansion into new state marketplaces for both its real estate services and its acquisition

of properties into its property investment portfolio that have strong growth trends in both regulatory frameworks and consumer demand.

The Company believes these are two of the most important market factors that have influence related to the value of real estate development

and property investment potential.

The Company currently believes that the challenges

of operating as a public company in the regulated cannabis space have created a capital environment that will not allow for the continued

expansion of the Company and/or the continued operations of the Company’s core business.

As such, and as previously disclosed, the

Company believes it is in the best interest of its shareholders to liquidate 100% of the Company’s assets and operations, and subsequently

return net cash available back to its shareholders.

See “—Management Buyout Asset Purchase Agreement” below.

Management Buyout Asset Purchase Agreement

On January 15, 2026, the Company entered into

the MBO APA by and among the Seller Parties and the Buyer.

The Buyer is owned by Bryan McLaren, the Company’s Chairman of the Board,

Chief Executive Officer and Chief Financial Officer;

Berekk Blackwell, the Company’s President and Chief Operating Officer;

Patrick Moroney.

The Company formed the Committee, consisting

of its three independent directors, that has reviewed, negotiated and overseen the MBO APA and the other transaction documents and the

The Committee approved the MBO APA, the other transaction documents and the MBO, prior to its execution.

The MBO APA and the other

transaction documents and the MBO were also approved by the full Board prior to its execution.

Pursuant to the terms of the MBO APA, the Seller

Parties agreed to sell to the Buyer, and the Buyer agreed to purchase from the Seller Parties, subject to the terms of the MBO APA, all

of the Seller Parties’ rights, title and interest in and to the Business, and the Assets.

The Assets include, among other things,

(i) the real property located at 410 S.

Madison Drive, Tempe, AZ;

(ii) the real property located at 13150 W.

Bell Road, Surprise, AZ;

(iii) the real property located at 3455 S.

Ashland Avenue, Chicago, IL;

(iv) the Company’s membership interests in ZPRE Holdings,

Arizona Brokerage, Florida Brokerage, ZP Data 2, ZP Ohio B, and Zoneomics Green;

(v) all rights under all contracts to which any Seller

Party is a party or is bound as of the closing date that is related to the Business;

(vi) all intellectual property of the Seller Parties;

(vii) all prepaid expenses, security deposits, and certain other operational assets;

and (vii) potentially certain additional assets

that may be acquired by the Seller Parties prior to the closing of the MBO, as discussed below.

Subject to adjustment as set forth in the MBO

APA, the purchase price for the Assets will be $7,000,000, less the Assumed Indebtedness (as defined in the MBO APA) (the “Purchase

The parties to the MBO APA acknowledged and agreed

that between January 15, 2026 and the date of the closing of the MBO, the Company or one or more affiliates of the Company may acquire

or invest in additional real estate assets (“Additional Assets”).

Upon acquisition of or investment in the Additional Assets,

(i) such Additional Assets shall be deemed included in the “Assets” for purposes of the MBO APA, (ii) the Purchase Price

will be increased by the amount of the cash purchase price paid therefor by the Company or its affiliate, (iii) the Purchase Price will

be decreased by the amount of any cash and/or debt instruments issued by the Company or its affiliate to the seller of such Additional

Assets (the “Additional Asset Acquisition Indebtedness”), and (iv) such Additional Asset Acquisition Indebtedness will be

deemed included in the assumed liabilities pursuant to the MBO APA.

The parties to the MBO APA also acknowledged

and agreed that between January 15, 2026 and the closing of the MBO, the Company may sell the real estate assets located at 23622-23634

Woodward Avenue, Pleasant Ridge, MI (the “Pleasant Ridge Assets”) to a third party for a purchase price to be determined.

The Pleasant Ridge Assets are not currently included in the “Assets” for purposes of the MBO APA.

In the event that the sale

of the Pleasant Ridge Assets is not consummated prior to the closing, then the Pleasant Ridge Assets will be deemed included in the “Assets”

and the Purchase Price will be increased by the amount of the appraisal value of the Pleasant Ridge Assets, as determined as set forth

in the MBO APA.

The parties to the MBO APA further acknowledged

and agreed that between January 15, 2026 and the closing, the Company may sell the real estate assets located at 2144 N.

Chino Valley, AZ;

2095 Northern Avenue, Kingman, AZ;

Commerce Point Place, Green Valley, AZ (collectively, the “CKG

Properties”) to a third party for a total purchase price of $9,000,000 (the “CKG Purchase Price”), of which $4,000,000

is expected to be paid in cash and $5,000,000 is expected to be paid via a promissory note payable to the Company (the “CKG Note”).

In the event that the sale of the CKG Properties is not consummated prior to the closing, then the CKG Properties will be deemed included

in the “Assets” and the Purchase Price will be increased by the amount of the CKG Purchase Price.

If the sale of the CKG

Properties is consummated prior to the closing, then the CKG Properties will not be included in the “Assets,” but the CKG

Note will be included in the “Assets” for purposes of the MBO APA, and the Purchase Price will be increased by the principal

amount of the CKG Note.

Pursuant to the terms

of the MBO APA, the MBO APA may be terminated at any time prior to the closing by:

(a) The mutual

agreement of the parties, each in their sole discretion;

(b) The Company

or by Buyer if there shall be in effect a final non-appealable order, judgment, injunction or decree entered by or with a governmental

entity restraining, enjoining or otherwise prohibiting the consummation of the MBO;

if there shall have been a breach in any material respect of any representation, warranty, covenant or agreement on the part of any Seller

Party, which breach has not been cured within 10 days after receipt of notice of such breach by the Company;

(d) The Company

if there shall have been a breach in any material respect of any representation, warranty, covenant or agreement on the part of Buyer,

which breach has not been cured within 10 days after receipt of notice of such breach by Buyer;

(e) Any party

in the event that the closing has not occurred by September 30, 2026, which date may be extended by 90 days as set forth in the MBO APA;

notice by Buyer to the Company, if there shall have been a “Seller Material Adverse Effect” (as defined in the MBO APA) following

the Effective Date which is uncured for at least 20 business days after written notice by the Buyer;

(g) The Buyer,

during the 180-day period following the Effective Date, if the Buyer determines that its due diligence review is not satisfactory for

any reason in its sole discretion;

(h) The Company,

in the event it receives a proposal on terms more favorable to the Company’s stockholders than those set forth in the MBO APA,

subject to the terms of the MBO APA, prior to the date that is the later of (i) the date on which the Company receives stockholder approval

as set forth in the MBO APA, and July 14, 2026 (the date on which the Buyer’s due diligence period expires).

The closing of the MBO

is subject to certain closing conditions, including, but not limited to, (i) the Company and the Committee having received an opinion

as to the fairness of the transactions, from a financial point of view, to the shareholders of the Company, and such opinion remaining

valid and in full force and effect as of the closing;

(ii) MBO APA and the transactions set forth therein being approved by both (1)

the shareholders of the Company holding a majority of the voting power of the Company, as required by Nevada law, and (2) shareholders

of the Company holding a majority of the voting power of the Company, but excluding for such purposes any such shareholder, and shares

or stock of the Company, held by any persons who own, control or have any interest in the Buyer (i.e., a ‘majority of the minority’

uninterested shareholders);

(iii) receipt of any required regulatory approvals;

(iv) raising by the Buyer of the capital required, in

its sole discretion, to fund the Purchase Price;

and (v) other customary closing conditions.

The MBO APA contains customary representations,

warranties and covenants.

If the MBO APA is approved

by the Company’s stockholders, as required, the Company expects that the closing of the MBO will take place by the end of 2026.

Assuming that the MBO APA is approved by the Company’s stockholders, as required, and the Company can successfully sell and liquidate

100% of the Company’s assets and operations, the Company expects (i) to pay off any remaining debt, settle any remaining accounts

and agreements, liquidate the Company’s outstanding preferred shares, and then distribute the net available balance of cash to

stockholders as a return of capital through a special dividend, and (ii) to subsequently complete a reverse merger or other transaction

involving the public company.

Recent Corporate History and Transactions

Our property located in Chino Valley, AZ is leased

Lease Agreements with Significant Tenants

Our property located in Chino Valley is leased

by Broken Arrow Herbal Center, Inc.

(“Broken Arrow”), doing business as Hana Dispensaries.

Our property located in Green Valley, AZ is leased

by Broken Arrow, doing business as Hana Dispensaries.

Our property located in Kingman, AZ is leased

Our property located in Tempe, AZ is leased by

VSM, LLC (“VSM”), doing business as Green Dot Labs.

Our property located in Pleasant Ridge, MI is

leased by Rapid Fish, LLC (“Rapid Fish”), doing business as NOXX Cannabis.

Our property located in Chicago, IL is leased

by JG IL LLC (“Justice Grown”), doing business as Justice Cannabis Co.

(“Broken Arrow”), doing business as JARS Cannabis.

Our property located in Green Valley is leased

by Broken Arrow, doing business as JARS Cannabis.

Our property located in Kingman is leased by

(“CJK”), doing business as JARS Cannabis.

Our property located in Tempe is leased by VSM,

LLC (“VSM”), doing business as Green Dot Labs.

Our property located in Pleasant Ridge is leased

by Rapid Fish, LLC (“Rapid Fish”), doing business as NOXX Cannabis.

Our property located in Chicago is leased by

JG IL LLC (“Justice Grown”), doing business as Justice Cannabis Co.

Our land located in Surprise, AZ is leased by

The Pharm, LLC (“Sunday Goods”).

doing business as Sunday Goods.

Chino Valley, Arizona

The Pharm, LLC (“Sunday Goods”), doing business as Sunday Goods.

Chino Valley, AZ

On May 1, 2018, Chino Valley and Broken Arrow

entered into a Licensed Medical Marijuana Facility Triple Net (NNN) Lease Agreement dated May 1, 2018 between Chino Valley and Broken

Arrow (the “2018 Chino Valley Lease”), with a term of 22 years, expiring April 30, 2040.

The 2018 Chino Valley Lease provided

for payment by Broken Arrow of a fixed monthly base rent of $35,000, as well as real property taxes, personal property taxes, privilege,

sales, rental, excise, use and/or other taxes (excluding income or estate taxes) levied upon or assessed against Chino Valley.

pursuant to the terms of the 2018 Chino Valley Lease, Broken Arrow agreed to maintain insurance in full force during the term of the

2018 Chino Valley Lease and any other period of occupancy of the premises by Broken Arrow.

On January 1, 2019, Chino Valley and Broken

Arrow entered into that the First Amendment to the 2018 Chino Valley Lease, pursuant to which the monthly base rent was increased from

$35,000 to $40,000.

Except for the increase in base rent, the terms of the 2018 Chino Valley Lease remain in full force and effect.

On May 29, 2020, Chino Valley and Broken Arrow

entered into a Second Amendment to the 2018 Chino Valley Lease, as amended (the “2020 Chino Valley Amendment”), effective

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Pursuant to the terms of the 2020 Chino Valley Amendment, among other things, the base rent

was adjusted to $32,800 per month.

Any increase in the rentable area of the leased premises will result in an increase in all amounts

calculated based on the same, including, without limitation, base rent.

Pursuant to the terms of the 2020 Chino Valley Amendment, the

parties agreed that if there is any change in laws such that the dispensing, sale or cultivation of marijuana upon the premises is prohibited

or materially and adversely affected as mutually and reasonably determined by Chino Valley and Broken Arrow, Broken Arrow may terminate

the 2018 Chino Valley Lease, as amended, by delivering written notice to Chino Valley, together with a termination payment which shall

be the sum of (i) any unpaid rent and interest, plus (ii) 5% of the base rent which would have been earned after termination for the

balance of the term.

In addition, the parties agreed that from the period from the Effective Date to June 30, 2022 (the “Improvement

Period”), Broken Arrow will and/or Broken Arrow will cause its affiliate, CJK, to invest a combined total of at least $8,000,000

of improvements (“Investment by Tenants”) in and to the property that is the subject of the Chino Valley Lease and the property

that is the subject of the Tempe Lease (discussed below, and collectively referred to as the “Facilities”).

The Company’s

Significant Tenants have completed the Investment by Tenants to the Facilities totaling in excess of $8,000,000 and have satisfied the

contractual obligations related to the same.

was adjusted to $32,800 per month, and the base rent was abated from June 1, 2020 to July 31, 2020.

Any increase in the rentable area

of the leased premises will result in an increase in all amounts calculated based on the same, including, without limitation, base rent.

Pursuant to the terms of the 2020 Chino Valley Amendment, the parties agreed that if there is any change in laws such that the dispensing,

sale or cultivation of marijuana upon the premises is prohibited or materially and adversely affected as mutually and reasonably determined

by Chino Valley and Broken Arrow, Broken Arrow may terminate the 2018 Chino Valley Lease, as amended, by delivering written notice to

Chino Valley, together with a termination payment which shall be the sum of (i) any unpaid rent and interest, plus (ii) 5% of the base

rent which would have been earned after termination for the balance of the term.

In addition, the parties agreed that from the period

from the Effective Date to June 30, 2022 (the “Improvement Period”), Broken Arrow or its affiliate, CJK, will invest a combined

total of at least $8,000,000 of improvements (“Investment by Tenants”) in and to the property that is the subject of the

Chino Valley Lease and the property that is the subject of the Tempe Lease (discussed below, and collectively referred to as the “Facilities”).

The Company’s Significant Tenants completed the Investment by Tenants to the Facilities totaling in excess of $8,000,000 and have

satisfied the contractual obligations related to the same.

On August 23, 2021, Chino Valley and Broken Arrow

entered into the Third Amendment (the “Third Chino Valley Amendment”) to the 2018 Chino Valley Lease, as amended (the “Chino

Valley Lease”), effective September 1, 2021.

The parties previously agreed that the base rental payments under the Chino Valley

Lease would increase commensurate to any and all expanded and operational square footage on the premises by calculating the fixed rate

of $0.82 per square foot per month by the new operational square footage.

Accordingly, in the Third Chino Valley Amendment, the parties

agreed that, as of September 1, 2021, the rental payment is increased to $55,195 per month base rental payment, plus additional rental

payments, as a result of the increase in the square footage to 67,312 square feet of operational space.

This lease modification qualifies

as a separate contract as the modification grants the tenant additional right of use not included in the original lease, as amended,

and the increase in monthly rent payments is commensurate with the standalone price for the additional square footage being leased.

entered into the Third Amendment (the “Third Chino Valley Amendment”) to the 2018 Chino On August 23, 2021, Chino Valley

and Broken Arrow entered into the Third Amendment (the “Third Chino Valley Amendment”) to the 2018 Chino Valley Lease, as

amended (the “Chino Valley Lease”), effective September 1, 2021.

The parties previously agreed that the base rental payments

under the Chino Valley Lease would increase commensurate to any and all expanded and operational square footage on the premises by calculating

the fixed rate of $0.82 per square foot per month by the new operational square footage.

Accordingly, in the Third Chino Valley Amendment,

the parties agreed that, as of September 1, 2021, the rental payment is increased to $55,195 per month base rental payment, plus additional

rental payments, as a result of the increase in the square footage to 67,312 square feet of operational space.

This lease modification

qualified as a separate contract as the modification grants the tenant additional right of use not included in the original lease, as

amended, and the increase in monthly rent payments is commensurate with the standalone price for the additional square footage being

On January 24, 2022 and effective on March 1,

6 unchanged sentences

into the premises, which was capitalized as a lease incentive receivable and is recognized on a straight-line basis over the remaining

lease term as a reduction to the lease income.

Pursuant to the terms of the Fourth Chino Valley Amendment, effective March 1, 2022, the

monthly base rent was increased to $87,581, representing an increase from $0.82 per square foot to $0.90 per square foot, for all current

and future operational square footage that may be developed as the premises continues to expand.

Green Valley, Arizona

lease term as a reduction to the property investment portfolio revenues.

Pursuant to the terms of the Fourth Chino Valley Amendment,

effective March 1, 2022, the monthly base rent was increased to $87,581, representing an increase from $0.82 per square foot to $0.90

per square foot, for all current and future operational square footage that may be developed as the premises continue to expand.

During 2025, Broken Arrow faced operational challenges

that impaired their ability to meet contractual rent obligations.

As of December 31, 2025, Broken Arrow remitted approximately 7% of

the September to December 2025 rent due.

On September 29, 2025, the Company delivered a notice of default to Broken Arrow.

and Broken Arrow have entered into a Consent Agreement (see Note 14 – Subsequent Events on our consolidated financial statements)

providing for an agreement by Broken Arrow to complete payment of the full rent amount outstanding.

The Company received the full rent

amount outstanding on March 31, 2026.

On December 31, 2025, Chino Valley entered into

an Amended and Restated Absolute Net Lease Agreements with Broken Arrow Inc.

with an effective date of January 1, 2026 (See Note 14 -

Subsequent Events on our consolidated financial statements).

As discussed above, the A&R Leases include,

among other provisions, (i) a right of first refusal with a right of first refusal period of up to 60 days and (ii) a short-term exclusive

option that permits the Tenant to purchase, on an all-or-none basis, the three leased properties (Chino Valley, Green Valley and Kingman)

for an aggregate purchase price of $9.0 million (the “Purchase Option”).

The Purchase Option originally stated that the Purchase

Option may be exercised during an option period ending March 30, 2026;

however, the parties have subsequently agreed that optionee will

have until April 10, 2026 to exercise the Purchase Option, and if exercised, requires a closing no later than June 30, 2026.

Option contemplates (a) a $400,000 non-refundable earnest money deposit to be applied toward the down payment, (b) a $4.0 million cash

down payment at closing, and (c) $5.0 million of seller financing.

Green Valley, AZ

On May 1, 2018, Green Valley and Broken Arrow

entered into a Licensed Medical Marijuana Facility Triple Net (NNN) Lease Agreement dated May 1, 2018 between Green Valley and Broken

Arrow (the “Green Valley Lease”), with a term of 22 years, expiring April 30, 2040.

The Green Valley Lease provided for payment

by Broken Arrow of a fixed monthly base rent of $3,500, as well as real property taxes, personal property taxes, privilege, sales, rental,

excise, use and/or other taxes (excluding income or estate taxes) levied upon or assessed against Chino Valley.

In addition, pursuant

to the terms of the Green Valley Lease, Broken Arrow agreed to maintain insurance in full force during the term of the Green Valley Lease

and any other period of occupancy of the premises by Broken Arrow.

On May 29, 2020, Green Valley and Broken Arrow

entered into the First Amendment (the “Green Valley Amendment”) to the Green Valley Lease, effective May 31, 2020.

to the terms of the Green Valley Amendment, among other things, the parties agreed to abate the fixed base rent of $3,500 from June 1,

2020 to July 31, 2020.

In addition, the Green Valley Amendment provides that any increase in the rentable area of the leases premises

will result in an increase in all amounts calculated based on the same, including, without limitation, base rent.

The parties also agreed

that if there is any change in laws such that the dispensing, sale or cultivation of marijuana upon the premises is prohibited or materially

and adversely affected as mutually and reasonably determined by Green Valley and Broken Arrow, Broken Arrow may terminate the Green Valley

Lease by delivering written notice to Green Valley, together with a termination payment which shall be the sum of (i) any unpaid rent

and interest, plus (ii) 5% of the base rent which would have been earned after termination for the balance of the term.

Tempe, Arizona

Valley Amendment provides that any increase in the rentable area of the leases premises will result in an increase in all amounts calculated

based on the same, including, without limitation, base rent.

The parties also agreed that if there is any change in laws such that the

dispensing, sale or cultivation of marijuana upon the premises is prohibited or materially and adversely affected as mutually and reasonably

determined by Green Valley and Broken Arrow, Broken Arrow may terminate the Green Valley Lease by delivering written notice to Green

Valley, together with a termination payment which shall be the sum of (i) any unpaid rent and interest, plus (ii) 5% of the base rent

which would have been earned after termination for the balance of the term.

On December 31, 2025, Green Valley entered into

an Amended and Restated Absolute Net Lease Agreements with Broken Arrow, with an effective date of January 1, 2026 (See Note 14 -Subsequent

Events on our consolidated financial statements).

On May 1, 2018, and amended on May 29, 2020,

Zoned Arizona and CJK entered into that certain Licensed Medical Marijuana Facility Triple Net (NNN) Lease Agreement dated May 1, 2018

between Zoned Arizona and CJK (the “Tempe Lease”), with a term of 22 years, expiring April 30, 2040.

The Tempe Lease provided

for payment by CJK of a fixed monthly base rent of $33,500, as well as real property taxes, personal property taxes, privilege, sales,

rental, excise, use and/or other taxes (excluding income or estate taxes) levied upon or assessed against Zoned Arizona.

pursuant to the terms of the Tempe Lease, CJK agreed to maintain insurance in full force during the term of the Tempe Lease and any other

period of occupancy of the premises by CJK.

On May 29, 2020, Zoned Arizona and CJK entered

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Chino Valley Lease and the property that is the subject of the Tempe Lease.

If Broken Arrow and/or CJK fails to deliver to the Company

receipted bills for hard and soft costs of improvements to the Facilities totaling at least $8,000,000 on or before June 30, 2022, Broken

Arrow and CJK will be in default under the Chino Valley Lease and Tempe Lease, as amended.

The Company’s Significant Tenants have

completed the Investment by Tenants to the Facilities totaling in excess of $8,000,000 and have satisfied the contractual obligations

related to the same.

In connection with a promissory note, on July

11, 2022 and reaffirmed on December 7, 2022, the Company entered into a Deed of Trust Agreement that secures the Company’s performance

under the promissory note.

The Deed of Trust Agreement transfers and assigns to the lender the right to sell the assets of Tempe and

rights to rental income in case of default under the promissory note.

The Company’s Significant Tenants have completed the

Investment by Tenants to the Facilities totaling in excess of $8,000,000 and have satisfied the contractual obligations related to the

In connection with a promissory note (See Note

8), on July 11, 2022 and reaffirmed on December 7, 2022, the Company entered into a Deed of Trust Agreement that secures the Company’s

performance under the promissory note.

The Deed of Trust Agreement transfers and assigns to the lender the right to sell the assets of

Tempe and rights to rental income in case of default under the promissory note.

On November 30, 2022, Zoned Arizona, CJK, and

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(i) VSM paid Zoned

Arizona $300,000 (the “Assignment Price”), (ii) VSM agreed to commit at least $3,000,000 to be spent toward capital improvements

Arizona $300,000 (the “Assignment Fee”), (ii) VSM agreed to commit at least $3,000,000 to be spent toward capital improvements

to the Premises within two years after the effective date of the Tempe Second Amendment (the “Capital Commitment”), (iii)

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No other terms of the Tempe Lease were modified.

Pursuant to the Financial Accounting Standards

Board’s (“FASB”) Accounting Standards Codification (“ASC”) 842-10-25, the lease modification was not accounted

for as a separate contract and the Company shall account for the modification as if it were a termination of the existing lease and the

creation of a new lease that commenced on the effective date of the modification.

Accordingly, the Company recorded the $300,000 as a

contract liability and will amortize the $300,000 Assignment Fees into rental revenue on a straight-line basis over the remaining term

of the lease through April 2040.

On December 31, 2024 and 2023, contract liability related to this lease modification amounted to $264,115

and $281,340, respectively, which has been included in contract liabilities on the accompanying consolidated balance sheets.

Therefore, the Company’s accounting

for the lease remained unchanged subsequent to the Tempe Second Amendment and Assignment.

Pursuant to ASC 842-10-25, the lease modification

was not accounted for as a separate contract and the Company accounted for the modification as if it were a termination of the existing

lease and the creation of a new lease that commenced on the effective date of the modification.

Accordingly, the Company recorded the

$300,000 as a contract liability and will amortize the $300,000 Assignment Fees into rental revenue on a straight-line basis over the

remaining term of the lease through April 2040.

On December 31, 2025 and 2024, contract liability related to this lease modification

amounted to $246,890 and $264,115, respectively, which has been included in contract liabilities on the accompanying consolidated balance

As of June 1, 2025, VSM has satisfied the Capital

Commitment and completed more than $3,000,000 worth of improvements to the Tempe property.

Additionally, on the Tempe property, the Company

leases parking lot space for an antenna location to a third party.

Kingman, Arizona

On May 1, 2018, Kingman and CJK entered into

a Licensed Medical Marijuana Facility Triple Net (NNN) Lease Agreement dated May 1, 2018 between Kingman and CJK (the “Kingman

Lease”), with a term of 22 years, expiring April 30, 2040.

The Kingman Lease provides for payment by CJK of a fixed monthly base

rent of $4,000, as well as real property taxes, personal property taxes, privilege, sales, rental, excise, use and/or other taxes (excluding

income or estate taxes) levied upon or assessed against Kingman.

In addition, pursuant to the terms of the Kingman Lease, CJK agreed

to maintain insurance in full force during the term of the Kingman Lease and any other period of occupancy of the premises by CJK.

On May 29, 2020, Kingman and CJK entered into

the First Amendment (the “Kingman Amendment”) to the Kingman Lease, effective May 31, 2020.

Pursuant to the terms of the

Kingman Amendment, among other things, the parties agreed to abate the $4,000 base rent from June 1, 2020 to July 31, 2020.

the Kingman Amendment provides that any increase in the rentable area of the leases premises will result in an increase in all amounts

calculated based on the same, including, without limitation, base rent.

The parties also agreed that if there is any change in laws such

that the dispensing, sale or cultivation of cannabis upon the premises is prohibited or materially and adversely affected as mutually

and reasonably determined by Kingman and CJK, CJK may terminate the Kingman Lease by delivering written notice to Kingman, together with

a termination payment which shall be the sum of (i) any unpaid rent and interest, plus (ii) 5% of the base rent which would have been

earned after termination for the balance of the term.

On November 30, 2022, Kingman and CJK entered into the Second Amendment (the “Kingman

Second Amendment”) to the Licensed Medical Marijuana Facility Triple Net (NNN) Lease Agreement dated May 1, 2018 between Kingman

Pursuant to the terms of the Kingman Second Amendment, CJK agreed to grant Kingman a right to terminate the Kingman Lease upon

15 days’ prior written notice in Kingman’s sole discretion, without any obligation to do so, provided that Kingman may not

exercise this right to terminate if CJK is operating its business as a going concern at the premises which is the subject of the Kingman

On August 2, 2023, the Company entered into a

The Kingman Amendment provides

that any increase in the rentable area of the leases premises will result in an increase in all amounts calculated based on the same,

including, without limitation, base rent.

The parties also agreed that if there is any change in laws such that the dispensing, sale

or cultivation of marijuana upon the premises is prohibited or materially and adversely affected as mutually and reasonably determined

by Kingman and CJK, CJK may terminate the Kingman Lease by delivering written notice to Kingman, together with a termination payment

which shall be the sum of (i) any unpaid rent and interest, plus (ii) 5% of the base rent which would have been earned after termination

for the balance of the term.

On November 30, 2022, Kingman and CJK entered

into the Second Amendment (the “Kingman Second Amendment”) to the Licensed Medical Marijuana Facility Triple Net (NNN) Lease

Agreement dated May 1, 2018 between Kingman and CJK.

Pursuant to the terms of the Kingman Second Amendment, CJK agreed to grant Kingman

a right to terminate the Kingman Lease upon 15 days’ prior written notice in Kingman’s sole discretion, without any obligation

to do so, provided that Kingman may not exercise this right to terminate if CJK is operating its business as a going concern at the premises

which is the subject of the Kingman Lease.

On August 2, 2023, the Company consented to a

Sublease Agreement (the “Sublease”) with CJK and a subtenant in connection with the Company’s Kingman property.

3 unchanged sentences

of this Sublease or otherwise by consent of the Company, CJK and Subtenant.

The subtenant shall have two options to extend

the Sublease Term by one year periods each (each a “Sublease Term Extension” and collectively the “Sublease Term Extensions”),

which shall be exercisable by Subtenant no later than 90 days prior to the expiration of the Sublease Term, as may be extended.

Pursuant to the Kingman Lease, if pursuant to

any assignment or sublease, CJK receives rent, either initially or over the Term of the assignment or sublease, in excess of the Rent

called for hereunder, or in the case of this sublease of a portion of the Premises in excess of such Rent fairly allocable to such portion,

after appropriate adjustments to assure that all other payments called for hereunder are appropriately taken into account, CJK shall

pay to the Company, as Additional Rent hereunder, 50% of the excess of each such payment of rent received by CJK.

Accordingly, the Company

shall receive additional rent of $3,500 per month during the term of the sublease.

Additionally, the subtenant paid a security deposit

of $22,000 per the terms of the sublease.

The Company and CJK agreed to split the Security Deposit at 68% (the Company received $14,960

of the $22,000 Security Deposit), of which $14,960 was included in security deposits payable on the accompanying consolidated balance

sheet as of December 31, 2023.

Upon expiration of the Sublease, the Security Deposit of $14,960 was refunded to the subtenant.

Pleasant Ridge, Michigan

The subtenant had two options to extend the Sublease Term

by one-year periods each (each a “Sublease Term Extension” and collectively the “Sublease Term Extensions”),

which were exercisable by Subtenant no later than 90 days prior to the expiration of the Sublease Term, as may be extended.

2024, the Sublease was not renewed and the Sublease expired.

Upon expiration of the Sublease, the Security Deposit of $14,960 was refunded

to the subtenant.

The Kingman Lease remains in place;

however, the Kingman property is currently non-operational.

On December 31, 2025, Kingman entered into an

Amended and Restated Absolute Net Lease Agreements with CJK, Inc., with an effective date of January 1, 2026 (See Note 14 - Subsequent

Events on our consolidated financial statements).

Pleasant Ridge, MI

On November 29, 2022, ZP Woodward, as landlord,

entered into a Licensed Cannabis Facility Absolute Net Lease Agreement (the “Woodward Lease”) with Rapid Fish 2 LLC, as tenant

(“Woodward Tenant”), whereby ZP Woodward leased the Woodward Property located in Pleasant Ridge.

Michigan to the Woodward

The Woodward Lease commenced on December 1, 2022 and has a term of 14 years and 4 months through March 1, 2037, with two 5-year

options to extend the term, exercisable by the Woodward Tenant pursuant to the terms and conditions of the Woodward Lease.

Lease contains customary obligations of the Woodward Tenant consistent with an absolute triple net lease agreement, including (i) the

payment of real property taxes, personal property taxes, privilege, sales, rental, excise, use and/or other taxes (excluding income or

estate taxes), (ii) payment of insurance premiums and operating costs of ZP Woodward related to the operation of the Woodward Property,

and (iii) maintenance and repair obligations to maintain the Woodward Property in first-class retail condition.

(“Woodward Tenant”), whereby ZP Woodward leased the “Woodward Property” located in Pleasant Ridge, Michigan to

the Woodward Tenant.

The Woodward Lease commenced on December 1, 2022 and had a term of 14 years and 4 months through March 1, 2037,

with two 5-year options to extend the term, exercisable by the Woodward Tenant by written notice to ZP Woodward given not later than

180 days prior to the expiration of the then current term on the same terms and conditions as provided in this Lease.

The Woodward Lease

contains customary obligations of the Woodward Tenant consistent with an absolute triple net lease agreement, including (i) the payment

of real property taxes, personal property taxes, privilege, sales, rental, excise, use and/or other taxes (excluding income or estate

taxes), (ii) payment of insurance premiums and operating costs of ZP Woodward related to the operation of the Woodward Property, and

(iii) maintenance and repair obligations to maintain the Woodward Property in first-class retail condition.

The Woodward Lease includes

2 unchanged sentences

rent that would otherwise have been due for the months from December 2022 to March 2023.

Subsequent to the abatement period.

Lease provides for payment by the tenant of monthly base rent beginning at $40,319 per month and increasing by 3% per year over the term

Subsequent to the abatement period, the Woodward

Lease provided for payment by the tenant of monthly base rent beginning at $40,319 per month and increasing by 3% per year over the term

of the lease, as well as real property taxes, personal property taxes, privilege, sales, rental, excise, use and/or other taxes (excluding

3 unchanged sentences

by the tenant.

The tenant shall have the option, exercisable by written notice to ZP Woodward given not later than 180 days prior to

the expiration of the then current term, to extend the term for two further terms of five years each on the same terms and conditions

as provided in this Lease.

On May 14, 2023, ZP Woodward entered into an

Assignment and Assumption of Lease (“Assignment”) whereby the Woodward Lease was assigned from Rapid Fish 2 LLC (“Old

Tenant”) to Rapid Fish LLC (“New Tenant”).

Old Tenant and New Tenant share common ownership.

The assignment of the

Woodward Lease is conditioned upon issuance by the City of Pleasant Ridge, Michigan of a final cannabis business license to New Tenant

and ZP Woodward’s receipt of a fully executed Reaffirmation of Guaranty from the guarantors of the Woodward Lease.

The Assignment

contains other terms as are customary for a document of this type.

On May 1, 2024, ZP Woodward and Rapid Fish, LLC

6 unchanged sentences

Amended Rental Payment Schedule

The First Amendment provides that as long as the

Company’s Conditions, as outlined in this First Amendment, are satisfied including a Renovation Completion Commitment, the Rental

Payment Schedule of the Lease will be amended to the schedule set forth in the First Amendment.

The First Amendment provides that as long as

the Company’s Conditions, as outlined in this First Amendment, are satisfied including a Renovation Completion Commitment, the

Rental Payment Schedule of the Lease will be amended to the schedule set forth in the First Amendment.

Capital Commitment

1 unchanged sentence

of the Capital Commitment as follows:

Tenant shall cause a total of at least $850,000 to be spent toward capital improvements to the Premises

(the “Commitment Improvements” and/or the “Capital Commitment”).

Any such Commitment Improvements shall be made

in accordance with the Lease as amended.

Commitment Improvements to be counted toward satisfying the Capital Commitment shall include

capital improvements to the Premises and any part thereof, as well as other improvements approved in advance in writing by the Company,

and shall exclude soft costs, permit, design, architectural and engineering fees, and legal fees.

Tenant acknowledges that the Capital

Commitment is material to the Company and the Company would not have agreed to enter into this First Amendment but for Tenant’s

Tenant shall cause a total of at least $850,000 to be spent toward capital improvements to the

Premises (the “Commitment Improvements” and/or the “Capital Commitment”).

Any such Commitment Improvements shall

be made in accordance with the Lease as amended.

Commitment Improvements to be counted toward satisfying the Capital Commitment shall

include capital improvements to the Premises and any part thereof, as well as other improvements approved in advance in writing by the

Company, and shall exclude soft costs, permit, design, architectural and engineering fees, and legal fees.

Tenant acknowledges that the

Capital Commitment is material to the Company and the Company would not have agreed to enter into this First Amendment but for Tenant’s

obligations in this paragraph.

If the Capital Commitment is not completed in the prescribed time period, as evidenced by invoices or similar

documentation reasonably acceptable to the Company, Tenant’s failure shall constitute an Event of Default under the Lease.

If the Capital Commitment is not completed in the prescribed time period, as evidenced by invoices or

similar documentation reasonably acceptable to the Company, Tenant’s failure shall constitute an Event of Default under the Lease.

Renovation Completion Commitment

1 unchanged sentence

of the Renovation Completion Commitment as follows:

Tenant shall cause its Capital Commitment at the Premises (the “Renovation Completion

Commitment”) to be completed within three (3) months after the First Amendment Effective Date (the “Renovation Completion

Commitment Date”).

In order to satisfy the Renovation Completion Commitment, Tenant must satisfy the following prior to the Renovation

Completion Commitment Date (i) deliver to the Company the appropriate deliverables evidencing renovation completion (the “Renovation

Completion Deliverables”) (as defined below) (ii) open for business to the public for its intended Use of the Premises (the “Store

Opening”), (iii) and complete its first bona fide sale to the public.

The Renovation Completion Deliverables include the following:

(x) Tenant has furnished to the Company a copy of a commercially reasonably detailed final cost breakdown for Tenant’s Work and

the Company has inspected the Premises to confirm that Tenant’s Work has been completed in a good and workmanlike manner according

to the Tenant’s Approved Plans;

(y) Tenant has furnished to the Company commercially reasonable final affidavits and final lien

releases from Tenant’s general contractor, if any, all subcontractors and all material suppliers for all labor and materials performed

or supplied as part of Tenant’s Work (whether or not the Allowance is applicable thereto);

(z) a copy of the certificate of occupancy

from the governmental authority having jurisdiction has been delivered to the Company.

Tenant acknowledges that the Renovation Completion

Commitment is material to the Company and the Company would not have agreed to enter into this First Amendment but for Tenant’s

obligations in this paragraph.

If the Renovation Completion Commitment is not completed in the prescribed time period, Tenant’s

failure shall constitute an Event of Default under the Lease.

the Company shall grant Tenant up to two (2) additional 30-day extension

upon request, so long as at the time of the extension the site is conducting inspections toward certificate of occupancy.

Tenant shall cause its Capital Commitment at the Premises (the “Renovation

Completion Commitment”) to be completed within three (3) months after the First Amendment Effective Date (the “Renovation

Completion Commitment Date”).

In order to satisfy the Renovation Completion Commitment, Tenant must satisfy the following prior

to the Renovation Completion Commitment Date (i) deliver to the Company the appropriate deliverables evidencing renovation completion

(the “Renovation Completion Deliverables”) (as defined below) (ii) open for business to the public for its intended Use of

the Premises (the “Store Opening”), (iii) and complete its first bona fide sale to the public.

The Renovation Completion

Deliverables include the following:

(x) Tenant has furnished to the Company a copy of a commercially reasonably detailed final cost breakdown

for Tenant’s Work and the Company has inspected the Premises to confirm that Tenant’s Work has been completed in a good and

workmanlike manner according to the Tenant’s Approved Plans;

(y) Tenant has furnished to the Company commercially reasonable final

affidavits and final lien releases from Tenant’s general contractor, if any, all subcontractors and all material suppliers for

all labor and materials performed or supplied as part of Tenant’s Work (whether or not the Allowance is applicable thereto);

a copy of the certificate of occupancy from the governmental authority having jurisdiction has been delivered to the Company.

acknowledges that the Renovation Completion Commitment is material to the Company and the Company would not have agreed to enter into

this First Amendment but for Tenant’s obligations in this paragraph.

If the Renovation Completion Commitment is not completed in

the prescribed time period, Tenant’s failure shall constitute an Event of Default under the Lease.

the Company shall grant Tenant

up to two (2) additional 30-day extension upon request, so long as at the time of the extension the site is conducting inspections toward

certificate of occupancy.

The First Amendment also provides that if within

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to the North Lot, and (z) does not cause any encumbrance or legal liability to the remaining properties at the Premises;

then within 30

days of the Company’s receipt of written confirmation from all appropriate parties that all requirements noted above have been satisfied,

at the Company sole discretion, the Company agrees that the parties shall enter into a Lease Amendment acknowledging the same and modifying

Tenant’s lease base rental rate to be reduced by $3,846 for the Lease.

30 days of the Company’s receipt of written confirmation from all appropriate parties that all requirements noted above have been

satisfied, at the Company sole discretion, the Company agrees that the parties shall enter into a Lease Amendment acknowledging the same

and modifying Tenant’s lease base rental rate to be reduced by $3,846 for the Lease.

Reaffirmation of Guarantee

In consideration of the First Amendment, the Guarantors

executed and delivered a Reaffirmation of Guaranty (the “Reaffirmation of Guaranty”) effective as of the First Amendment Effective

Date, May 3, 2024.

Related to the Guaranty and the Original Guarantors, the Company agreed, that so long as there are no uncured Events

of Default and Tenant remains in good standing under the Lease, then the Original Guarantors shall be released of their guarantees following

the original lease term of fourteen and a half (14.5) years.

The Company also agreed that, provided the Company has given written approval,

at its discretion, which shall not be unreasonably withheld, then the Original Guarantors may be permitted to transfer the obligations

under their Guarantees in the event of a Permitted Transfer, on to a new Guarantor(s) that are of at least equal or greater credit than

the Original Guarantors, to be determined by the Company in its discretion, which shall not be unreasonably withheld.

Chicago, Illinois

On December 15, 2023, ZPRE Holdings entered into

an Agreement Regarding Purchase and Sale Contract (the “Agreement”), effective as of December 15, 2023, by and between Keystone,

as assignor, and ZPRE Holdings as assignee.

Pursuant to the terms of the Agreement, Keystone agreed to assign to ZPRE Holdings its right,

title and interest in that certain Purchase and Sale Agreement dated May 5, 2022, by and between the Seller and Keystone, as amended

(the “Original PSA”).

Pursuant to the terms of the Original PSA, the Seller agreed to sell to Keystone certain real property

located at 3499, 3451, and 3455 South Ashland Avenue, Chicago, Illinois, 60608 (the “Ashland Avenue Property”) in exchange

for a purchase price of $1,250,000, to be paid by Keystone (the “Purchase Price”).

Pursuant to the terms of the Agreement,

ZPRE Holdings agreed to deposit the following amounts into escrow:

(i) $40,000, representing reimbursement to Keystone or its designee

for the earnest money deposit paid under the terms of the Original PSA, (ii) assignment fees of $185,000, and (iii) $1,210,000, representing

the Purchase Price less the $40,000 earnest money payment.

On January 19, 2024, the Company paid these funds in the aggregate amount

In consideration of the First Amendment, the

Guarantors executed and delivered a Reaffirmation of Guaranty (the “Reaffirmation of Guaranty”) effective as of May 3, 2024.

Related to the Guaranty and the Original Guarantors, the Company agreed, that so long as there are no uncured Events of Default and Tenant

remains in good standing under the Lease, then the Original Guarantors shall be released of their guarantees following the original lease

term of 14.5 years.

The Company also agreed that, provided the Company has given written approval, at its discretion, which shall not

be unreasonably withheld, then the Original Guarantors may be permitted to transfer the obligations under their Guarantees in the event

of a Permitted Transfer, on to a new Guarantor(s) that are of at least equal or greater credit than the Original Guarantors, to be determined

by the Company in its discretion, which shall not be unreasonably withheld.

During the third quarter of 2025, New Tenant faced operational challenges

that impaired its ability to meet contractual rent obligations.

Beginning in July 2025, New Tenant remitted approximately 50% of the rent

In August 2025, the Company sent a demand notice to New Tenant to remit full payment of outstanding rent.

In September 2025,

New Tenant remitted full payment of all outstanding rent that was previously due and has received all rent payments due through December

Subsequent to year-end 2025, the Company sent New Tenant at the Woodward Property a written notice default related to the New

Tenant’s failure to i) make timely rental payments and ii) fulfill its obligations related to non-monetary terms under the Woodward

As of the date of this filing, the Company remains in discussions with New Tenant about curing these events of default and regarding

future operations at the Woodward Property.

In an effort to avoid litigation related to the defaults under the lease, the Company is currently

in negotiations to sell the Woodward Property to the New Tenant for approximately $600,000 in cash plus the assumption of the notes payable

outstanding on the Woodward Property.

If the Company sells the Woodward Property for $600,000, the net carrying value of the Woodward

Property of approximately $2,700,000 would exceed the $600,000 sale price by $2,100,000.

While the Company believes the sale is likely

to occur, there is a possibility that the sale will fail to occur, in which case there is a strong likelihood that the New Tenant will

be unable to continue paying rent, causing an ongoing default under the lease.

Based on these conditions, our projected future cash flows,

anticipated holding periods, and market conditions have changed.

Accordingly, during the year ended December 31, 2025, we recorded an

impairment loss of $2,100,000.

On January 19, 2024, ZPRE Holdings and Keystone

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Keystone’s right, title and interest in and to the Original PSA to purchase the “Ashland Avenue Property”.

On January 19, 2024, the

transactions contemplated by the Agreement and Assignment and Assumption Agreement closed and ZPE Holdings completed the acquisition

of the Ashland Avenue Property under the Original PSA, as assigned.

The completed transactions were subject to closing costs, commissions,

and fees customary to the acquisition of real estate, including a $65,000 commission payable and a $79,634 sponsor fee payable.

19, 2024, the transactions contemplated by the Agreement and Assignment and Assumption Agreement closed and ZPE Holdings completed the

acquisition of the Ashland Avenue Property under the Original PSA, as assigned.

The completed transactions were subject to closing costs,

commissions, and fees customary to the acquisition of real estate, including a $65,000 commission payable and a $79,634 sponsor fee payable.

On January 18, 2024, ZPRE Holdings entered into

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Pursuant to the terms of

the Lease, ZPRE Holdings agreed to lease the Ashland Avenue Property to Justice Grown for use as a licensed recreational adult-use (and,

if permitted, medical) cannabis dispensary in accordance with Illinois law.

The Justice Grown Lease has a term of 15 years, with four

five-year renewal terms.

the Lease, ZPRE Holdings agreed to lease the Ashland Avenue Property located in Chicago, IL to Justice Grown for use as a licensed recreational

adult-use (and, if permitted, medical) cannabis dispensary in accordance with Illinois law.

The Justice Grown Lease has a term of 15

years, with four five-year renewal terms.

Under the Justice Grown Lease, the Company’s

tenant is responsible for constructing a new retail dispensary building on the Ashland Avenue Property.

In 2025, the Company was notified

that a vehicle crashed into the building at the Ashland Avenue Property, causing significant structural damage.

The City of Chicago declared

the building unsafe and ordered its demolition (See Note 4).

As such, the Ashland Avenue Property remains a vacant lot of land.

upon the most recent information received by the Company from Justice Grown, the Company believes that the development of the new retail

dispensary building will still be completed, and the tenant will open for business in late 2027;

however, challenges related to the ongoing

permitting and development process required through the City of Chicago may continue to cause delays.

The Company’s tenant is expected

to continue to pay full rent pursuant to the Justice Grown Lease.

If Justice Grown does not construct the new building, the Company may

need to pursue recovery through legal claims.

In connection with the damage and demolition of the building, during the year ended December

31, 2025, the Company recorded an impairment loss of $1,018,716.

On January 2, 2024, ZPRE Holdings entered into

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and Sunday Goods, as tenant.

Pursuant to the terms of the Sunday Goods Lease, ZPRE 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.

Pursuant to the terms of the Sunday Goods Lease, ZPRE 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.

Goods Lease has a term of 15 years, with four five-year renewal terms.

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provide a tenant improvement allowance for up to $1,000,000 to Sunday Goods to be reimbursed in tranches following completion of tenant’s

Pursuant 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 ZPRE

Holdings arising under the Contingent Lease.

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

on July 13, 2024.

Pursuant to the Sunday Goods Lease, beginning in July 2025, Sunday Goods shall pay monthly base rent of $25,000

through June 2026, with an annual increase of 3% per annum through June 2040.

During the year ended December 31, 2025, the Company paid $1,000,000 to Sunday Goods as a tenant improvement allowance.

The $1,000,000

payment to the tenant were used by the tenant to construct a building on the land as well as for the buildout of the property.

ZP Dysart will own the building and related improvements at the end of the lease, the $1,000,000 tenant improvement allowance was capitalized

to rental properties and are being depreciated on a straight-line basis over the useful life of the building and related improvements

beginning in September 2025.

In September 2025, Sunday Goods completed the construction of a new retail dispensary building on the Surprise

Property and opened for business.

Pursuant 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 ZPRE Holdings arising under the Contingent Lease.

As of July 8, 2024, all contingencies were satisfied and the Contingent

Lease commenced on July 13, 2024.

Pursuant to the Sunday Goods Lease, beginning in July 2025, Sunday Goods began paying monthly

base rent of $25,000 which shall be paid through June 2026, with an annual increase of 3% per annum through June 2040.

On March 3, 2025, ZP Dysart entered into a First

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(the “Allowance Payments”) provided by Landlord shall be made to Tenant as follows:

(#1) $300,000 to be paid upon the full

execution of the First Amendment to the Lease;

(#2) $150,000 to be paid on April 01, 2025 (#3) $150,000 to be paid on May 01, 2025, and

(#4) the remaining $400,000 of the Allowance shall be withheld by Landlord until completion of the Tenant’s Work on the Property;

provided however, Landlord’s obligation to disburse the final $400,000 (Payment #4 of the Allowance Payments) is expressly conditioned

upon Landlord’s receipt of the following “Allowance Deliverables”:

(i) Tenant has furnished to Landlord a copy of a

commercially reasonably detailed final cost breakdown for Tenant’s Work and Landlord has inspected the Premises to confirm that

Tenant’s Work has been completed in a good and workmanlike manner according to the Tenant’s Approved Plans;

(ii) Tenant has

furnished to Landlord commercially reasonable final affidavits and final lien releases from Tenant’s general contractor, and if

any, all subcontractors and all material suppliers for all labor and materials performed or supplied as part of Tenant’s Work (whether

or not the Allowance is applicable thereto);

and (iii) a copy of the certificate of occupancy from the governmental authority having jurisdiction

has been delivered to Landlord.

Throughout the project, Tenant shall be required to provide Landlord with ongoing accounting reflecting

a commercially reasonable breakdown of the Tenant’s Work paid for with the Allowance Payments, and also a current Form W-9, Request

for Taxpayer Identification Number and Certification, executed by Tenant.

(#1) $300,000 was paid upon the

full execution of the First Amendment to the Lease;

(#2) $150,000 was paid on March 28, 2025;

(#3) $150,000 to be paid on May

and (#4) the remaining $400,000 of the Allowance was paid on October 21, 2025 upon completion of the Tenant’s Work

on the Property;

provided however, Landlord’s obligation to disburse the final $400,000 (Payment #4 of the Allowance Payments)

is expressly conditioned upon Landlord’s receipt of the following “Allowance Deliverables”:

(i) Tenant has furnished

to Landlord a copy of a commercially reasonably detailed final cost breakdown for Tenant’s Work and Landlord has inspected the

Premises to confirm that Tenant’s Work has been completed in a good and workmanlike manner according to the Tenant’s Approved

(ii) Tenant has furnished to Landlord commercially reasonable final affidavits and final lien releases from Tenant’s general

contractor, and if any, all subcontractors and all material suppliers for all labor and materials performed or supplied as part of Tenant’s

Work (whether or not the Allowance is applicable thereto);

and (iii) a copy of the certificate of occupancy from the governmental authority

having jurisdiction has been delivered to Landlord.

Throughout the project, Tenant shall be required to provide Landlord with ongoing

accounting reflecting a commercially reasonable breakdown of the Tenant’s Work paid for with the Allowance Payments, and also a

current Form W-9, Request for Taxpayer Identification Number and Certification, executed by Tenant.

Property Investment Portfolio

The Company considers tenants whose annual base

The Company considers a tenant whose annual base

rent exceeds over 10% of the Company’s annual rental income to be a significant tenant.

The Tempe Lease, Chino Valley Lease, and the

Woodward Lease are considered significant and the tenants are referred to as the Significant Tenants.

The Tempe Lease (leased by VSM), the Chino

Valley Lease and Green Valley Lease (leased by Broken Arrow), and the Woodward Lease located in Pleasant Ridge (leased by Rapid Fish)

are considered significant and the tenants are referred to as the Significant Tenants.

During the years ended December 31, 2025 and

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above are summarized as follows:

Woodward lease *

Broken Arrow (Chino Valley)

Woodward lease (Michigan)

As of December 31, 2025 and 2024, the Company

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Additionally, the Company had an asset concentration

related its Surprise, AZ property, which leased approximately 10.6% of the Company’s total assets of the Company.

Through December

31, 2024, all rental payments have been made on a timely basis.

related its Surprise, AZ property, which leased approximately 19.4% of the Company’s total assets as of December 31, 2025.

Future minimum lease payments to be received,

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Future annual base rent:

Investment in Joint Ventures and Equity Investments

Investment in equity method unconsolidated

joint venture

On December 31, 2025 and 2024, the Company held

investments with aggregate carrying values of $4,923.

The entities listed below are partially owned by the Company.

The Company accounts

for these investments under the equity method of accounting as the Company exercises significant influence but does not exercise financial

and operating control over these entities.

Investments are reviewed for changes in circumstance or the occurrence of events that suggest

an other than temporary event where the Company’s investment may not be recoverable.

On May 1, 2021, the Company entered into a Limited

Liability Company Operating Agreement (the “Zoneomics Green Operating Agreement”) with a non-affiliated joint venture partner

in connection with the formation of Zoneomics Green, LLC (“Zoneomics Green”), a Delaware limited liability company formed

on May 1, 2021.

Zoneomics Green’s goal is to utilize advanced property technology to provide solutions for property identification

in regulated industries such as regulated cannabis.

Pursuant to the Zoneomics Green Operating Agreement, the Company purchased 50 units

of Zoneomics Green for a capital contribution of $90,000, which represents 50% of the membership interests of Zoneomics Green and the

other joint venture partner received 50% of the membership interests for the contribution of its intellectual property and a number of

non-monetary contributions.

identified in the Zoneomics Green Operation Agreement but provided no capital contributions.

Each unit represents,

with respect to any member, such member’s:

(i) interest in Zoneomics Green’s capital, (ii) share of Zoneomics Green’s

net profits and net losses (and specially allocated items of income, gain, and deduction), and the right to receive distributions of

net cash flow from Zoneomics Green, (iii) right to inspect Zoneomics Green’s books and records, and (iv) right to participate in

the management of and vote on matters coming before the members as provided in the Zoneomics Green Operating Agreement.

The transactions

discussed above resulted in a joint venture, in accordance with ASC 323-10 – Investments- Equity and Joint Ventures, between

the Company and the non-affiliated party.

Each of the entities has 50% equity ownership and voting rights, and joint control in Zoneomics

In June 2021, the Company contributed $90,000 to Zoneomics Green.

Currently, the Zoneomics Green team has completed the creation

of the foundational design, technology platform, and market positioning for Zoneomics Green to launch in the cannabis industry.

in order to successfully launch, the technology platform relies upon a required merchant banking component.

While Company management

knew this risk was a major factor going into the investment, it was not foreseen exactly when an appropriate merchant banking solution

would be available given the federal status of regulated cannabis and specifically the federal banking status as it relates to regulated

cannabis, even for ancillary services such as Zoneomics Green.

The regulatory status related to cannabis banking reform and regulation

at the federal level, which the Zoneomics platform relies upon, is uncertain and the Company believes it is appropriate to cause an impairment

of the Zoneomics Green investment at this time, while also understanding that Company believes Zoneomics Green may still create material

value for the Company in the future.

Additionally, the Company is using the Zoneomics Green technology within its own business to generate

leads for new projects.

The Company has no further financial or investment obligations at this time.

Accordingly, on December 31, 2023,

the Company recorded an other-than-temporary impairment loss of $45,000 because it was determined that the fair value of its equity method

investment in Zoneomics was less than its carrying value.

Based on management’s evaluation, it was determined that due to market

and regulatory conditions, implementing the Company’s business model was at risk and that the Company’s ability to recover

the carrying amount of the investment in Zoneomics was impaired.

an investment with carrying values of $0 and $4,923, respectively, in Zoneomics Green, LLC (“Zoneomics Green”), a Delaware

limited liability company formed on May 1, 2021 and owned 50% by the Company.

The Company accounts for this investment under the equity

method of accounting as the Company exercises significant influence but does not exercise financial and operating control over this entity.

Investments are reviewed for changes in circumstance or the occurrence of events that suggest an other than temporary event where the

Company’s investment may not be recoverable.

The Zoneomics Green team has completed the creation of the foundational design, technology

platform, and market positioning for Zoneomics Green to launch in the cannabis industry;

however, the project has stalled over the past

In order to successfully launch, the technology platform needs to rely upon a required merchant banking component, which is has

been unable to identify.

The Company does not currently know when an appropriate merchant banking solution will become available given

the federal status of regulated cannabis and specifically the federal banking status as it relates to regulated cannabis, even for ancillary

services such as Zoneomics Green.

The regulatory status related to cannabis banking reform and regulation at the federal level remains

uncertain and the Company believes it is appropriate to cause an impairment of the Zoneomics Green investment at this time.

has no further financial or investment obligations at this time.

On December 31, 2023, the Company recorded an other-than-temporary impairment

loss of $45,000 because it was determined that the fair value of its equity method investment in Zoneomics was less than its carrying

Based on management’s evaluation, it was determined that due to market and regulatory conditions, implementing the Company’s

business model was at risk and that the Company’s ability to recover the carrying amount of the investment in Zoneomics was impaired.

During the years ended December 31, 2025 and 2024, the Company recorded a loss from equity method unconsolidated joint ventures of $3,352

and $0, respectively,

Investments in cost method investees

The Company accounts for its interests in entities

where the Company has virtually no influence over operating and financial policies under the cost method of accounting.

In such cases,

the Company’s original investments are recorded at the cost to acquire the interest and any distributions received are recorded

During the year ended December 31, 2025, through its wholly-owned subsidiary ZPRE Holdings, the Company invested $84,110 in

ZP Ohio B, LLC, for a 5% ownership interest in ZP Ohio B LLC, which is being accounted for under the cost method and reflected on the

accompanying consolidated balance sheet under “investment in cost-method investees.” ZP Ohio B LLC plans on developing several

This investment is subject to the Company’s impairment review policy.

On June 24, 2022, the Company’s wholly-owned

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The Company’s ownership percentage is less than 20% and it does not have the ability

to exercise significant influence as described in ASC 323-10-15-6.

to exercise significant influence.

This equity instrument does not have a readily determinable fair value.

Accordingly, the Company elected to measure this equity security at its cost minus impairment, if any.

If the Company identifies observable

price changes in orderly transactions for the identical or a similar investment of the same issuer, the Company shall measure the equity

security at fair value as of the date that the observable transaction occurred.

If the Company subsequently elects to measure this equity

security at fair value, the Company shall measure all identical or similar investments of the same issuer, including future purchases

of identical or similar investments of the same issuer, at fair value.

The election to measure this equity security at fair value shall

be irrevocable.

Any resulting gains or losses on the securities for which that election is made shall be recorded in earnings at the

time of the election.

On December 31, 2024 and 2023, investment in equity securities amounted to $50,000.

Accordingly, pursuant to ASC

321-10-35-2, the Company elected to measure this equity security at its cost minus impairment.

If the Company identifies observable price

changes in orderly transactions for the identical or a similar investment of the same issuer, the Company shall measure the equity security

at fair value as of the date that the observable transaction occurred.

If the Company subsequently elects to measure this equity security

at fair value, the Company shall measure all identical or similar investments of the same issuer, including future purchases of identical

or similar investments of the same issuer, at fair value.

The election to measure this equity security at fair value shall be irrevocable.

Any resulting gains or losses on the securities for which that election is made shall be recorded in earnings at the time of the election.

On December 31, 2025, based on its qualitative impairment assessment, the Company impaired its equity investment and recorded an impairment

loss on equity securities of $50,000.

Tenants and Clients

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Our operations will also be subject to regulations normally incident to business operations,

such as occupational safety and health acts, workmen’s compensation statutes, unemployment insurance legislation and income tax

such as occupational safety and health acts, workers’ compensation statutes, unemployment insurance legislation and income tax

and social security related regulations.

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We expect regulations to get tighter as time

Many jurisdictions have moved toward “Green Zoning” hubs, though others have increased setbacks from residential

areas and schools following the 2025-2026 legislative sessions.

Federal and State Regulation of Cannabis

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in a schedule.

Cannabis is classified as a Schedule I drug.

federal law, a Schedule I drug or substance has a high potential

for abuse, no accepted medical use in the United States, and a lack of accepted safety for the use of the drug under medical supervision.

The United States Food and Drug Administration (the “FDA”) has approved Epidiolex, which contains a purified form of cannabidiol

(“CBD”), a non-psychoactive cannabinoid found in the cannabis plant, for the treatment of seizures associated with two epilepsy

The FDA has not approved cannabis or cannabis derived compounds as a safe and effective drug for any other indication.

While historically classified as a Schedule I drug, cannabis is currently in the final stages of being reclassified to

Schedule III following a December 2025 executive order.

federal law, a Schedule I drug has a high potential for abuse and

no accepted medical use.

Schedule III drugs are classified as having a moderate to low potential for physical and psychological dependence

and have currently accepted medical uses.

The United States Food and Drug Administration (the “FDA”) has approved Epidiolex,

which contains a purified form of cannabidiol (“CBD”), a non-psychoactive cannabinoid found in the cannabis plant, for the

treatment of seizures associated with two specific epilepsy conditions.

The FDA has not approved cannabis or cannabis derived compounds

as a safe and effective drug for any other indication, though it has issued updated guidance on clinical trials for Schedule III substances.

In the United States, cannabis is largely regulated

at the state level.

State laws regulating cannabis are in direct conflict with the federal CSA, which makes cannabis use and possession

federally illegal.

State laws regulating cannabis are in direct conflict with the federal CSA, although the move toward Schedule III

is expected to reduce this conflict for medical-use participants.

Although most U.S.

states authorize medical 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.

The Company faces risks for operating in an industry that is illegal under federal

law, including that third party service providers could suspend or withdraw services.

See section entitled “Risk Factors”

states authorize medical 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.

As of March 2026, over 40 states

have legalized medical or adult-use cannabis.

Due to the conflicting views between state governments

and the federal government regarding cannabis, cannabis businesses are subject to inconsistent laws and regulations.

In response and until

2018, the federal government provided guidance to federal law enforcement agencies and banking institutions through a series of United

States Department of Justice (“DOJ”) memoranda.

The most significant of these memoranda was drafted by former Deputy Attorney

General James Cole in 2013 (the “Cole Memo”).

In response and

until 2018, the federal government provided guidance to federal law enforcement agencies and banking institutions through a series of

United States Department of Justice (“DOJ”) memoranda.

The most significant of these memoranda was drafted by former Deputy

Attorney General James Cole in 2013 (the “Cole Memo”).

The Cole Memo offered guidance to federal enforcement

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victims, and other principles.

The former Attorneys Generals who succeeded former Attorney General

Sessions following his resignation have not provided a clear policy directive for the United States as it pertains to state-legal marijuana-related

The former Attorneys Generals who succeeded former

Attorney General Sessions following his resignation have not provided a clear policy directive for the United States as it pertains to

state-legal marijuana-related activities.

However, as discussed herein, during his term, President Joseph R.

Biden, announced multiple mass pardons and clemency of

persons who had been convicted of simple marijuana possession under federal law and initiated a regulatory process under the CSA to move

cannabis from Schedule I to Schedule III.

However, with the recent re-election of President Donald J.

Trump, who took office on January

20, 2025, the future of the rescheduling process is uncertain.

2018 Farm Bill

Biden, announced multiple

mass pardons and clemency of persons who had been convicted of simple marijuana possession under federal law and initiated a regulatory

process under the CSA to move cannabis from Schedule I to Schedule III.

However, the future of the rescheduling process is uncertain

since President Donald J.

Trump took office on January 20, 2025.

The DOJ, under Attorney General Pamela Bondi,

has not formally reinstated the Cole Memo.

However, the administration’s focus has shifted toward “states’ rights”

and the acceleration of the Schedule III reclassification.

While federal enforcement remains a risk, the primary focus of federal authorities

in 2026 has been on the illicit market and the “total THC” restrictions on hemp products.

2018 Farm Bill & 2026 Appropriations Act

Following the passage of the Agriculture Improvement

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0.3% dry weight volume is classified as hemp and has been removed from the CSA.

Hemp and products derived from it that are lawfully cultivated

or manufactured in accordance with the 2018 Farm Bill, U.S.

Department of Agriculture regulations and applicable state laws may now be

sold into commerce and transported across state lines.

The 2018 Farm Bill explicitly preserves the authority of the FDA to regulate certain

products containing cannabis or cannabis-derived compounds such as CBD under the federal Food, Drug and Cosmetic Act (“FD&C

Act”) and Section 351 of the Public Health Service Act.

In conjunction with the enactment of the 2018 Farm Bill, the FDA released

a statement about the regulatory status of CBD, noting the FDA’s position that it is unlawful to introduce food containing added

CBD into interstate commerce, or to market CBD products as, or in, dietary supplements, regardless of whether the substances are hemp-derived.

In January 2023, the FDA issued a statement in connection with its denial of three citizen petitions requesting that the agency engage

in rulemaking to establish regulations under which CBD derived from hemp could be legally marketed as a dietary ingredient in foods and

dietary supplements.

The FDA stated that it is seeking assistance from Congress to create a new regulatory pathway that is better designed

to regulate products that contain hemp derived cannabinoids, including CBD.

In the interim, the FDA stated that products (including dietary

supplements, conventional foods, and animal foods) on the market are at risk of FDA enforcement as the agency deems “appropriate.”

To date, the FDA’s enforcement actions against companies manufacturing CBD products has primarily been limited to the issuance of

warning letters to companies whose products have made prohibited, misleading, and unapproved drug claims.

Various states have also enacted

state-specific laws pertaining to the handling, manufacturing, labeling, and sale of CBD and other hemp consumable products.

states explicitly authorize and regulate the production and sale of hemp-derived CBD consumable products or otherwise provide legal protection

for authorized individuals to engage in such activities, other states restrict the sale of CBD products or prohibit such products outright.

The 2018 Farm Bill’s provisions regarding hemp have been extended through congressional appropriations “riders” following

the 2018 Farm Bill’s expiration in 2023.

It is uncertain whether Congress will further amend the definition of “hemp”

through subsequent legislation.

The Continuing Appropriations and Extensions Act of 2026,

signed in November 2025, has fundamentally narrowed the definition of hemp.

Effective November 12, 2026, finished hemp products must

contain no more than 0.4 mg of “total THC” per container (including Delta-8 and THCA).

This change effectively bans the majority of

intoxicating hemp-derived products (such as Delta-8 gummies and THCA flower) from the “hemp” market, reclassifying them as

“marijuana” under the CSA unless they are brought within a state-licensed cannabis regulatory framework.

The FDA continues

to maintain that CBD is not a legal dietary supplement, and the industry is currently navigating a one-year “runway” before

the new strict THC caps take full effect in late 2026.

Financial Institutions and Banking

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system to take any proceeds from marijuana sales as deposits.

Banks and other financial institutions could be prosecuted and possibly

convicted of money laundering for providing services to cannabis businesses under the United States Currency and Foreign Transactions

Reporting Act of 1970 (the “Bank Secrecy Act”).

Therefore, under the Bank Secrecy Act, banks or other financial institutions

that provide a cannabis business with a checking account, debit or credit card, small business loan, or any other service could be charged

with money laundering or conspiracy.

While there has been no change in U.S.

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The customer due diligence steps include:

with the appropriate state authorities whether the business is duly licensed and registered;

the license application (and related documentation) submitted by the business for obtaining a state license to operate its marijuana-related

Verifying with

the appropriate state authorities whether the business is duly licensed and registered;

Reviewing the

license application (and related documentation) submitted by the business for obtaining a state license to operate its marijuana-related

from state licensing and enforcement authorities available information about the business and related parties;

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customers to be served (e.g., medical versus adult-use customers);

monitoring of publicly available sources for adverse information about the business and related parties;

monitoring for suspicious activity, including for any of the red flags described in this guidance;

Ongoing monitoring

of publicly available sources for adverse information about the business and related parties;

Ongoing monitoring

for suspicious activity, including for any of the red flags described in this guidance;

information obtained as part of customer due diligence on a periodic basis and commensurate with the risk.

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

The move toward Schedule III is expected to ease

some banking restrictions, but legislation remains stalled in the Senate as of March 2026.

FinCEN Guidance from 2014 remains the primary

operational framework for banks, though many institutions are now transitioning their compliance models to accommodate the Schedule III

“Medical/Prescription” model.

Consequently, while banking access is improving, businesses still face higher fees and rigorous

due diligence requirements.

The inability of our current and potential tenants

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Controlled Substances Act Rescheduling

There have been recent

developments regarding the potential for cannabis to be removed from the most restrictive schedule under the CSA, but with the recent

re-election of President Trump, the regulatory process for this so-called “rescheduling” is uncertain.

On October 6, 2022,

President Joe Biden requested that the Secretary of the U.S.

Department of Health and Human Services (“HHS”), Xavier Becerra,

and Attorney General Merick Garland initiate a scientific review of the basis for cannabis’ scheduling under the CSA.

After approximately

11 months of review, on August 29, 2023, HHS Assistant Secretary of Health, Rachel Levine, sent a letter to Drug Enforcement Administration

(“DEA”) Administrator, Anne Milgram, recommending rescheduling marijuana from Schedule I to Schedule III of the CSA.

The recommendation

was based on a scientific and medical review by the FDA with an analysis of the eight factors determinative of control of a substance

under the CSA.

The National Institute on Drug Abuse ("NIDA"), a part of the National Institutes of Health ("NIH"),

agreed with the HHS/FDA recommendation to reclassify cannabis.

May 16, 2024, the DEA issued a Notice of Proposed Rulemaking (“NPRM”) to reclassify marijuana to Schedule III.

adjudicatory proceeding was opened by a DEA Administrative Law Judge (“ALJ”).

the introduction of all evidence, testimony, and briefings in the hearings, the ALJ would issue a final determination on the proposed

rescheduling, However, these proceedings have been indefinitely delayed.

January 13, 2025, the ALJ cancelled a hearing set for January 21, 2025, which effectively pauses the rescheduling process indefinitely

while an interlocutory appeal by two pro-rescheduling participants is considered by the DEA Administrator.

There is no clear timeline

for when the hearings will resume.

During the presidential

campaign in 2024, President Trump publicly stated that his administration would support reclassification of cannabis as a Schedule III

substance and would not stop or reverse a Schedule III determination.

However, it is uncertain whether President Trump, new Attorney

General Pamela Jo Bondi, or President Trump’s nominee for DEA Administrator, Derek Maltz, will withdraw the NPRM or otherwise end

these rescheduling proceedings.

There have been recent developments regarding

the potential for cannabis to be removed from the most restrictive schedule under the CSA, but with the recent re-election of President

Trump, the regulatory process for this so-called “rescheduling” is uncertain.

On December 18, 2025, President Trump signed

an executive order instructing the DOJ and DEA to accelerate the reclassification of cannabis to Schedule III.

While the DEA Administrative

Law Judge (ALJ) hearings were briefly delayed in early 2025, the process has since resumed with an anticipated final rule effective date

in mid-to-late 2026.

Internal Revenue Code, Section 280E

An additional challenge to marijuana-related businesses

is that the provisions of the Internal Revenue Code, Section 280E (“Section 280E”), are being applied by the IRS to businesses

operating in the medical and adult-use marijuana industry.

Section 280E prohibits marijuana businesses from deducting ordinary and necessary

business expenses, forcing them to pay higher effective federal tax rates than similar companies in other industries.

As a result of Section

280E, the effective tax rate for many of the Company’s tenants and clients can be highly variable and depends on how large its ratio

of non-deductible expenses is to its total revenues.

Therefore, businesses in the legal cannabis industry may be less profitable than

they would otherwise be.

If rescheduling were to occur, it is anticipated that the IRS will provide additional guidance on Section 280E

and its applicability to the Company’s business.

That said, legislation has been introduced in the U.S.

House of Representatives

Senate that would make 280E applicable to any trade or business involved in cannabis even if cannabis is rescheduled to Schedule

III under the CSA.

It is not clear whether these bills have a high likelihood of passage.

An additional challenge to marijuana-related

businesses is that the provisions of the Internal Revenue Code, Section 280E (“Section 280E”), are being applied by the IRS

to businesses operating in the medical and adult-use marijuana industry.

As a result of Section 280E, the effective tax rate for many

of the Company’s tenants and clients can be highly variable and depends on how large its ratio of non-deductible expenses is to

its total revenues.

Therefore, businesses in the legal cannabis industry may be less profitable than they would otherwise be.

when the reclassification of cannabis to Schedule III is finalized, Section 280E would no longer apply to state-legal cannabis businesses.

This would allow companies to deduct ordinary business expenses (rent, payroll, marketing) for the first time.

However, until the final

rule is published and effective, Section 280E remains in force for the current tax cycle.

Federal Protections

Moreover, certain temporary federal legislative

enactments that protect the medical marijuana industries have also been in effect for several years.

For instance, certain marijuana

businesses receive a measure of protection from federal prosecution by operation of temporary appropriations measures that have been

enacted into law as amendments (or “riders”) to federal spending bills passed by Congress and signed by the past three presidents.

For instance, in the Appropriations Act of 2015, Congress included a budget “rider” that prohibits the DOJ from expending

any funds to enforce any law that interferes with a state’s implementation of its own medical marijuana laws.

The rider is known

as the “Rohrabacher-Farr Amendment” after its original lead sponsors.

Certain temporary federal legislative enactments

that protect the medical marijuana industries have also been in effect for several years.

For instance, certain marijuana businesses

receive a measure of protection from federal prosecution by operation of temporary appropriations measures that have been enacted into

law as amendments (or “riders”) to federal spending bills passed by Congress and signed by several presidents.

For instance,

in the Appropriations Act of 2015, Congress included a budget “rider” that prohibits the DOJ from expending any funds to

enforce any law that interferes with a state’s implementation of its own medical marijuana laws.

The rider is known as the “Rohrabacher-Farr

Amendment” after its original lead sponsors.

Notably, the Rohrabacher-Farr Amendment has applied

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to political change.

The Rohrabacher-Farr Amendment has been renewed through the current 2026 appropriations cycle.

It continues to prohibit

the DOJ from using federal funds to interfere with state-legal medical marijuana programs, though it notably does not yet extend to adult-use

recreational programs.

In sum, there is no guarantee that state laws

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Unless and until the United States Congress amends the

CSA with respect to marijuana (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.

Currently, in the absence of uniform federal guidance, as had been established

by the Cole Memo, enforcement priorities are determined by respective United States Attorneys, and notwithstanding public statements to

the contrary, federal law enforcement could enforce the CSA – and its criminal prohibition on commercial cannabis activity.

For these reasons, the Company’s investments in the U.S.

market may subject the Company to heightened scrutiny by regulators, stock exchanges, clearing agencies and other U.S.

section entitled “Risk Factors” herein.

CSA with respect to marijuana (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.

Currently, in the absence of uniform federal guidance, as had been

established by the Cole Memo, enforcement priorities are determined by respective United States Attorneys, and notwithstanding public

statements to the contrary, federal law enforcement could enforce the CSA – and its criminal prohibition on commercial cannabis

For these reasons, the Company’s investments

cannabis market may subject the Company to heightened scrutiny by regulators, stock exchanges, clearing agencies and other

See section entitled “Risk Factors” herein.

Although the Company’s activities are believed

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if promulgated, could have on our business.

As of December 31, 2024, we had seven full-time

and part-time employees, including our chief executive officer and chief operating officer.

We have established a national network of

external partners, contractors, and consultants to which we outsource various operational tasks in an effort to minimize administrative

overhead and maximize efficiency.

We believe that a diverse workforce is important

to our success.

We will continue to focus on the hiring the best-qualified individuals for our various workforce needs, with an emphasis

on retention and advancement of women and underrepresented populations, and to cultivate an inclusive and diverse corporate culture.

In the future, we intend to continue to evaluate our use of human capital measures or objectives in managing our business such as the

factors we employ or seek to employ in the development, attraction and retention of personnel and maintenance of diversity in our workforce.

As of December 31, 2025, we had six full-time

and part-time employees, including our chief executive officer, chief financial officer and chief operating officer.

We have established

a national network of external partners, contractors, and consultants to which we outsource various operational tasks in an effort to

minimize administrative overhead and maximize efficiency.

The success of our business is fundamentally

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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 1. Business