Financial Analysis

NOTE 10 COMMITMENTS AND CONTINGENCIES Legal matters From time to time, the Company may be involved in litigation related to claims arising out of its operations in the normal course of business. As of December 31, 2025, the Company is not involved in any pending or threatened legal proceedings that it believes could reasonably be expected to have a material adverse effect on its financial condition, results of operations, or cash flows. Employment and Related Golden Parachute Agreement Bryan McLaren On May 23, 2018, the Company and Mr. McLaren, the Companys Chief Executive Officer, Chief Financial Officer and Chairman of the Board, entered into an employment agreement (the 2018 Employment Agreement). Pursuant to the terms of the 2018 Employment Agreement, the Company agreed to continue to pay Mr. McLaren his then-current base annual salary of $215,000, and to award Mr. McLaren with an annual and/or quarterly bonus payable in either cash and/or equity of no less than 2% of the Companys net income for the associated period. The 2018 Employment Agreement has a term of 10 years. The term and Mr. McLarens employment will terminate (a Termination) in any of the following circumstances: (i) immediately, if Mr. McLaren dies; (ii) immediately, if Mr. McLaren receives benefits under the long-term disability insurance coverage then provided by the Company or, if no such insurance is in effect, upon Mr. McLarens disability; (iii) on the expiration date, as the same may be extended by the …

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NOTE 6 NOTES PAYABLE On December 31, 2025 and 2024, notes payable consisted of the following: December 31, 2025 December 31, 2024 Note payable - East West Bank $ 4,358,038 $ 4,404,279 Notes payable - 23616 Land Contract 1,335,322 1,367,262 Note payable 23634 Land Contract 379,688 398,726 Note payable - Surprise, AZ property 1,620,000 1,020,000 Total principal due on notes payable 7,693,048 7,190,267 Less: debt discount (152,921 ) (178,593 ) Notes payable, net $ 7,540,127 $ 7,011,674 East West Bank Swap Note On July 11, 2022, Zoned Arizona entered into a Loan Agreement (the Loan Agreement), dated as of July 11, 2022, by and between Zoned Arizona and East West Bank (the Bank). Pursuant to the terms of the Loan Agreement, subject to and upon the satisfaction of the terms and conditions of the Loan Agreement, Zoned Arizona could request advances under a multiple access loan (MAL) during the term of the MAL. On July 11, 2022, in connection with the Loan Agreement, Zoned Arizona paid loan and other fees of $176,472, and in connection with the First Amendment to the Loan Agreement discussed below, paid additional fees of $8,124. These loan and other fees aggregating $184,596 were reflected as a debt discount and are being amortized ratably and charged to interest expense over the term of the related debt. At any time before July 11, 2023, Zoned Arizona could elect to commence paying principal together with interest on the MAL (the Early Amortization Election) in accordance with the …

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For the years ended December 31, 2025 and 2024, revenues associated with Significant Tenant leases described above are summarized as follows: For the Year Ended December 31, 2025 % of Total Revenues For the Year Ended December 31, 2024 % of Total Revenues Broken Arrow $ 1,161,867 28.1 % $ 1,120,431 29.5 % VSM 657,979 15.9 % 656,736 17.3 % Rapid Fish 573,203 13.8 % 589,478 15.6 % Total $ 2,393,049 57.8 % $ 2,366,645 62.4 %

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NOTE 13 - INCOME TAXES The Company maintains deferred tax assets and liabilities that reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The deferred tax assets on December 31, 2025 and 2024 consist of net operating loss carryforwards. The net deferred tax asset has been fully offset by a valuation allowance because of the uncertainty of the attainment of future taxable income. For the years ended December 31, 2025 and 2024, the components of (loss) income before income taxes were as follows: 2025 2024 Domestic $ (2,854,415 ) $ 573,958 Total loss before income taxes $ (2,854,415 ) $ 573,958 The following table reconciles the U.S. federal statutory income tax rate to the Companys effective income tax rate for the year ended December 31, 2025: Year Ended December 31, 2025 Amount Percent Statutory federal income tax benefit $ (158,427 ) (21.0 )% State taxes, net of federal benefit (49,037 ) (6.5 )% Permanent items 57,915 7.7 % Change in valuation allowance 149,549 19.8 % Total $ - 0.0 % As previously disclosed for the year ended December 31, 2024, prior to the adoption of ASU 2023-09, the effective income tax rate differed from the federal statutory income tax rate as follows: Years Ended December 31, 2024 Income tax expense at U.S. statutory rate $ 120,531 Income tax expense state 37,307 Permanent differences (30,847 ) Change in valuation allow …

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NOTE 12 OPERATING LEASE RIGHT-OF-USE (ROU) ASSETS AND OPERATING LEASE LIABILITY On March 15, 2022, the Company entered to an Assumption of Lease and Consent Agreement with a landlord, whereby the landlord consented to the assignment of an office lease, as amended, from the original tenant to the Company. The lease term began on March 15, 2022 and expired on November 30, 2024, provided the Company has the option to extend the lease for an additional five years. On June 3, 2024 the Company extended the lease for an additional 24 months through November 30, 2026. Effective December 1, 2024, the monthly base rent shall be $3,665 per month through November 30, 2025, $3,775 from December 1, 2025 through November 30, 2026, $3,887 from December 1, 2026 through November 30, 2027, and $4,004 from December 1, 2027 through November 30, 2028. In adopting ASC Topic 842, Leases (Topic 842) on January 1, 2019, the Company had elected the package of practical expedients which permitted it not to reassess under the new standard its prior conclusions about lease identification, lease classification and initial direct costs (see Note 2). In addition, the Company elected not to apply ASC Topic 842 to arrangements with lease terms of 12 months or less. Upon signing of the Assumption of Lease and Consent Agreement on March 15, 2022 and the new lease effective December 1, 2024, the Company analyzed the leases and determined it is required to record a lease liability and a right of use asset on its c …

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Recently issued accounting pronouncements The Company adopted Accounting Standards Update (ASU), 2023-09, Improvements to Income Tax Disclosures in the current year. The ASU requires greater disaggregation of information about a reporting entitys effective tax rate reconciliation and information on income taxes paid. The ASU applies to all entities subject to income taxes and is intended to help investors better understand an entitys exposure to potential changes in jurisdictional tax legislation and assess income tax information that affects cash flow forecasts and capital allocation decisions. The ASU is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The Company adopted ASU 203-09 during the year ended December 31, 2025 using a retrospective approach and is complying with the related disclosure requirements in Note 13, Income Taxes. In November 2024, the FASB issued ASU 2024-03, Income StatementReporting Comprehensive IncomeExpense Disaggregation Disclosures (Subtopic 220-40), which requires entities to provide more detailed disaggregation of expenses in the income statement, focusing on the nature of the expenses rather than their function. The new disclosures will require entities to separately present expenses for significant line items, including but not limited to, depreciation, amortization, and employee compensation. Entities will also be required to provide a qualitative description of the amounts remaining in relevant …

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NOTE 8 RELATED PARTY TRANSACTION Indemnification agreements On August 23, 2021, the Company entered into indemnification agreements with each of its directors and executive officers. In general, these indemnification agreements require the Company to indemnify a director and officer to the fullest extent permitted by law against liabilities that may arise in connection with that directors service as a director and officer for the Company. Additionally, the Company shall advance expenses incurred as a result of any proceeding against them as to which they could be indemnified. Since August 2021, the Company has not maintained an officers and directors insurance policy. See Note 14 Subsequent Events for subsequent related party transaction. …

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NOTE 11 SEGMENT REPORTING The Company operates in two operating and reportable segments which consist of (1) the operations, leasing and management of its leased commercial properties, herein known as the Property Investment Portfolio segment, and (2) advisory and brokerage services related to commercial properties, herein known as the Real Estate Services segment. The Company has determined that these reportable segments were strategic business units that offer different products. Currently, these reportable segments are being managed separately based on the fundamental differences in their operations. The Companys Property Investment Portfolio segment generates revenues from its operating leases with its tenants. Rental income is accounted for pursuant to ASC Topic 842 Leases and includes base rents that each tenant pays in accordance with the terms of its respective lease and is reported on a straight-line basis over the non-cancellable term of the lease, which includes the effects of rent abatements under the leases. The Companys Real Estate Services segment generates revenues which includes brokerage revenues consisting of real estate sales commissions and assignment fees, and revenues from advisory services for services performed pursuant to its consulting agreements with clients. Corporate and unallocated amounts that do not relate to a reportable segment have been allocated to Corporate & Unallocated. The Companys CODM is its Chief Executive Officer . The decision …

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NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation and principles of consolidation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) and include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated upon consolidation. Going concern consideration These consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in these consolidated financial statements, the Company had a net loss of $2,854,415 and had cash provided by operations of $781,476 during the year ended December 31, 2025. Additionally, as of December 31, 2025, the Company had cash of $837,767 and stockholders equity of $3,067,626. Furthermore, on December 31, 2025 and effective January 1, 2026, the Company entered into Amended and Restated Absolute Net Lease Agreements with certain tenants (See Note 14 Subsequent Events). The Amended and Restated Absolute Net Lease Agreements 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, three leased properties (Chino Valley, Green Valley and Kingm …

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NOTE 14 SUBSEQUENT EVENTS 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 are 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). Pursuant to the A&R Leases, A&R Consultants, LLC will provide a guaranty of payment and performance in favor of each Landlord. Base rent under the A&R Leases varies by property and is set forth in the respective rent schedules (including, for example, monthly base rent of $3,500 for the Green Valley property and $4,000 for the Kingman property, and a step-up schedule for the Chino Valley property). The A&R Leases include, among other provisions, (i) a right of first refusal with a right of first ref …

SubsequentEventsTextBlock · excerpt; the full note is in the filing