Zoned Properties' Net Income Soars 168% on Strong Revenue Growth

TL;DR

**ZDPY is showing strong growth in cannabis real estate, but its heavy reliance on a few key tenants makes it a risky bet.**

AI Summary

Zoned Properties, Inc. (ZDPY) reported a significant increase in net income to $172,184 for the six months ended June 30, 2025, up from $64,190 in the prior year, representing a 168% increase. Total revenues grew to $1,912,326 for the six months ended June 30, 2025, compared to $1,529,378 in the same period of 2024, a 25% increase. This was driven by a 10% increase in Property Investment Portfolio revenues to $1,518,518 and a substantial 148% increase in Real Estate Services revenues to $393,808. The company's cash position decreased slightly to $985,847 as of June 30, 2025, from $1,019,980 at December 31, 2024. Operating expenses decreased by 6.6% to $1,211,367 for the six months ended June 30, 2025, primarily due to lower professional fees and brokerage fees. A key business change includes the dissolution of inactive brokerage subsidiaries in Mississippi, Alabama, and Missouri in early 2025, streamlining operations. The company faces risks from its significant reliance on the regulated cannabis industry and a high concentration of revenues from 'Significant Tenants,' which accounted for 61.4% of total revenues for the six months ended June 30, 2025. Strategic outlook involves continued focus on acquiring value-add real estate in the regulated cannabis industry and leveraging its proprietary property technology.

Why It Matters

This filing reveals Zoned Properties' continued growth in the niche, high-growth cannabis real estate sector, demonstrating its ability to generate significant net income and positive cash flow from operations. For investors, the substantial increase in net income and revenue, particularly in real estate services, indicates a strengthening business model beyond just property leasing. The competitive landscape in cannabis real estate is evolving, and ZDPY's focus on 'direct-to-consumer real estate' and 'proprietary property technology' suggests an attempt to differentiate itself. However, the high concentration of revenue from 'Significant Tenants' (61.4%) presents a notable risk, as any issues with these tenants could severely impact ZDPY's financial health, a critical factor for market stability and investor confidence.

Risk Assessment

Risk Level: medium — The company's risk level is medium due to its significant concentration of revenue from 'Significant Tenants,' which accounted for 61.4% of total revenues for the six months ended June 30, 2025. Additionally, ZDPY operates primarily within the regulated cannabis industry, which is subject to evolving federal and state laws, posing regulatory uncertainty.

Analyst Insight

Investors should closely monitor ZDPY's tenant diversification efforts and any legislative changes impacting the cannabis industry. While growth is strong, the concentration risk warrants caution; consider this a speculative play with potential for high reward but also significant downside if key tenants falter or regulations shift unfavorably.

Financial Highlights

debt To Equity

1.71

revenue

$1,912,326

operating Margin

N/A

total Assets

$16,675,653

total Debt

$9,293,097

net Income

$172,184

eps

N/A

gross Margin

N/A

cash Position

$985,847

revenue Growth

+25%

Revenue Breakdown

Key Numbers

• $172,184 — Net Income (Increased 168% for the six months ended June 30, 2025, from $64,190 in 2024.)
• $1,912,326 — Total Revenues (Increased 25% for the six months ended June 30, 2025, from $1,529,378 in 2024.)
• $393,808 — Real Estate Services Revenues (Increased 148% for the six months ended June 30, 2025, from $158,760 in 2024.)
• $985,847 — Cash (As of June 30, 2025, a slight decrease from $1,019,980 at December 31, 2024.)
• $569,790 — Net Cash Provided by Operating Activities (For the six months ended June 30, 2025, up from $246,788 in 2024.)
• 61.4% — Revenue from Significant Tenants (Percentage of total revenues for the six months ended June 30, 2025, indicating high customer concentration.)
• $137,309 — Loss from Interest Rate Swap (For the six months ended June 30, 2025, compared to an income of $146,646 in 2024.)
• $6,074,476 — Total Stockholders' Equity (As of June 30, 2025, an increase from $5,860,514 at December 31, 2024.)
• $13,449,638 — Rental Properties, net (As of June 30, 2025, an increase from $13,024,936 at December 31, 2024.)
• 12,030,829 — Common Shares Outstanding (As of August 13, 2025.)

Key Players & Entities

• Zoned Properties, Inc. (company) — registrant
• ZDPY (company) — ticker symbol
• Securities and Exchange Commission (regulator) — filing oversight
• East West Bank (company) — counterparty for interest rate swap
• Chino Valley Properties, LLC (company) — wholly owned subsidiary
• Kingman Property Group, LLC (company) — wholly owned subsidiary
• Green Valley Group, LLC (company) — wholly owned subsidiary
• Zoned Advisory Services, LLC (company) — wholly owned subsidiary
• Arizona Brokerage (company) — wholly owned subsidiary
• ZP Ashland (company) — wholly owned subsidiary

FAQ

Risk Factors

• Cannabis Industry Dependence [high — regulatory]: The company's significant reliance on the regulated cannabis industry exposes it to evolving legal and regulatory landscapes. Changes in state or federal laws could materially impact ZDPY's operations and profitability.
• Customer Concentration [high — financial]: Revenues from 'Significant Tenants' accounted for 61.4% of total revenues for the six months ended June 30, 2025. Loss of any of these key tenants could have a material adverse effect on financial performance.
• Operational Streamlining Impact [medium — operational]: The dissolution of inactive brokerage subsidiaries in Mississippi, Alabama, and Missouri in early 2025 aims to streamline operations. While intended to reduce costs, the execution and impact on service delivery need to be monitored.
• Interest Rate Swap Volatility [medium — financial]: The company experienced a loss of $137,309 from its interest rate swap for the six months ended June 30, 2025, compared to an income of $146,646 in the prior year. This highlights sensitivity to interest rate fluctuations and derivative performance.
• Decreasing Cash Position [low — financial]: Cash decreased slightly to $985,847 as of June 30, 2025, from $1,019,980 at December 31, 2024. While still substantial, a continued downward trend could impact liquidity for future investments or operational needs.

Industry Context

Zoned Properties operates within the regulated cannabis industry, a sector characterized by rapid growth but also significant regulatory uncertainty and evolving legal frameworks. The competitive landscape includes other real estate investment and service companies, with a growing focus on specialized niches like cannabis-compliant properties. Industry trends point towards increasing institutionalization and consolidation, requiring companies like ZDPY to demonstrate operational efficiency and strategic foresight.

Regulatory Implications

The company's primary regulatory exposure stems from its deep involvement in the cannabis sector. Compliance with state-specific regulations for cannabis operations, including real estate leasing and property management, is critical. Any shifts in federal or state cannabis legalization policies could significantly alter the operating environment and ZDPY's business model.

What Investors Should Do

1. Monitor customer concentration risk
2. Analyze the sustainability of Real Estate Services growth
3. Evaluate the impact of operational streamlining
4. Assess the company's liquidity and cash flow generation

Key Dates

• 2025-06-30: End of Second Quarter Reporting Period — Period for which the reported financial results (revenue, net income, cash position) are current.
• 2025-01-01: Dissolution of inactive brokerage subsidiaries — Streamlining of operations, potentially impacting future operating expenses and reporting structure.
• 2025-08-13: Common Shares Outstanding reported — Provides context for per-share metrics and potential dilution.

Glossary

Property Investment Portfolio Revenues

Revenue generated from the company's investments in real estate properties, likely including rental income. (Core revenue stream for ZDPY, showing steady growth.)

Real Estate Services Revenues

Revenue generated from providing services related to real estate, such as brokerage, consulting, or property management. (A rapidly growing segment for ZDPY, indicating successful expansion or increased demand for services.)

Accumulated Deficit

The cumulative net losses of a company since its inception, offset by any net income. (ZDPY still has a significant accumulated deficit, indicating a history of losses despite recent profitability.)

Operating lease right of use asset, net

An asset recognized under lease accounting standards representing the right to use an asset for the lease term. (Reflects the company's use of leased properties, impacting balance sheet and expense recognition.)

Interest rate swap asset/liability

A financial derivative used to exchange interest rate payments. It can gain or lose value based on interest rate movements. (ZDPY's swap position resulted in a loss in the current period, impacting net income.)

Year-Over-Year Comparison

Zoned Properties, Inc. has demonstrated strong top-line growth, with total revenues increasing by 25% to $1,912,326 for the six months ended June 30, 2025, compared to the prior year. This growth is complemented by a significant 168% surge in net income to $172,184, indicating improved profitability. While operating expenses saw a reduction of 6.6%, driven by lower professional and brokerage fees, the company faces ongoing risks related to customer concentration and its dependence on the volatile cannabis industry, with a notable shift in its interest rate swap performance from income to a loss.

Key Financial Figures

• $0.0001 — er of shares of common stock, par value $0.0001 per share, outstanding as of August 13,
• $1.00 — on June 30, 2025 and December 31, 2024 ($1.00 per share liquidation preference or $ 2

Filing Documents

• ea0252167-10q_zoned.htm (10-Q) — 1379KB
• ea025216701ex31-1_zoned.htm (EX-31.1) — 11KB
• ea025216701ex31-2_zoned.htm (EX-31.2) — 11KB
• ea025216701ex32-1_zoned.htm (EX-32.1) — 4KB
• image_001.jpg (GRAPHIC) — 1KB
• 0001213900-25-076062.txt ( ) — 8002KB
• zdpy-20250630.xsd (EX-101.SCH) — 60KB
• zdpy-20250630_cal.xml (EX-101.CAL) — 49KB
• zdpy-20250630_def.xml (EX-101.DEF) — 310KB
• zdpy-20250630_lab.xml (EX-101.LAB) — 605KB
• zdpy-20250630_pre.xml (EX-101.PRE) — 335KB
• ea0252167-10q_zoned_htm.xml (XML) — 1192KB

Financial Information

Part I. Financial Information 1

Financial Statements

Item 1. Financial Statements 1 Consolidated Balance Sheets – June 30, 2025 (unaudited) and December 31, 2024 1 Consolidated Statements of Operations – Three and Six Months Ended June 30, 2025 and 2024 (unaudited) 2 Consolidated Statements of Changes in Stockholders' Equity – Three and Six Months Ended June 30, 2025 and 2024 (unaudited) 3 Consolidated Statements of Cash Flows – Six Months Ended June 30, 2025 and 2024 (unaudited) 4 Notes to Unaudited Consolidated Financial Statements 5

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 39

Quantitative and Qualitative Disclosures about Market Risk

Item 3. Quantitative and Qualitative Disclosures about Market Risk 49

Controls and Procedures

Item 4. Controls and Procedures 49

Other Information

Part II. Other Information 50

Legal Proceedings

Item 1. Legal Proceedings 50

Risk Factors

Item 1A. Risk Factors 50

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 50

Defaults Upon Senior Securities

Item 3. Defaults Upon Senior Securities 50

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 50

Other Information

Item 5. Other Information 50

Exhibits

Item 6. Exhibits 51

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements ZONED PROPERTIES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS June 30, December 31, 2025 2024 ( Unaudited ) ASSETS Cash $ 985,847 $ 1,019,980 Accounts receivable 217,434 370,110 Deferred rent 987,309 747,504 Lease incentive receivable 408,257 422,018 Rental properties, net 13,449,638 13,024,936 Prepaid expenses and other assets 23,456 32,101 Escrow deposits 188,056 169,875 Capitalized project costs 208,049 207,000 Property and equipment, net 7,190 8,584 Operating lease right of use asset, net 59,112 78,255 Investment in unconsolidated joint ventures and cost-method investee 89,033 4,923 Investment in equity securities 50,000 50,000 Interest rate swap asset - 44,581 Security deposits 2,272 2,272 Total Assets $ 16,675,653 $ 16,182,139 LIABILITIES AND STOCKHOLDERS' EQUITY LIABILITIES: Convertible note payable $ 2,000,000 $ 2,000,000 Notes payable, net 7,293,097 7,011,674 Accounts payable 54,145 117,225 Accrued expenses 412,524 433,788 Lease liability 59,496 78,310 Contract liabilities 312,111 318,951 Derivative liability - interest rate swap, at fair value 92,728 - Security deposits payable 377,076 361,677 Total Liabilities 10,601,177 10,321,625 Commitments and Contingencies (Note 10) STOCKHOLDERS' EQUITY: Preferred stock, $ 0.001 par value, 5,000,000 shares authorized; 2,000,000 shares issued and outstanding on June 30, 2025 and December 31, 2024 ($1.00 per share liquidation preference or $ 2,000,000 ) 2,000 2,000 Common stock: $ 0.001 par value, 100,000,000 shares authorized; 12,201,516 and 12,201,516 shares issued on June 30, 2025 and December 31, 2024, respectively, and 12,030,829 and 12,087,829 shares outstanding on June 30, 2025 and December 31, 2024, respectively 12,202 12,202 Additional paid-in capital 21,577,480 21,508,844 Treasury stock, at cost ( 170,687 and 113,687 shares on June 30, 2025 and D

View Full Filing

View this 10-Q filing on SEC EDGAR