Zoned Properties Reports 20.3% Revenue Growth but Posts Net Loss in Q1 2026

Zoned Properties, Inc. reported its financial results for the first quarter of 2026, revealing total revenues of $1.17 million, a 20.3% increase from $974,552 in the same period last year. The revenue growth was primarily driven by a significant rise in real estate services revenues, which surged by 95% to $416,706, attributed to increased commissions and assignment fees. However, property investment portfolio revenues slightly declined by 0.7% to $755,730, reflecting challenges in the rental income segment.

Operating expenses for the quarter rose sharply to $1.05 million, up 91.6% from $545,781 in the prior year. This increase was largely due to higher professional fees, which jumped 83.3% to $142,510, and the introduction of brokerage fees amounting to $370,617. Notably, compensation and benefits expenses decreased by 40.4% to $170,179, primarily due to a reduction in stock-based compensation following the cancellation of unvested stock options. As a result, the company reported a loss from operations of $126,568, a significant decline from the income of $428,771 recorded in the previous year.

The company’s net loss for the quarter was $54,660, compared to a net income of $145,858 in the same quarter of 2025. This shift was influenced by increased interest expenses and a loss from derivative instruments, despite a decrease in total other expenses. The company’s cash position improved significantly, with cash increasing to $2.5 million from $837,767 at the end of 2025, bolstered by strong cash flow from operations of $1.63 million.

In terms of strategic developments, Zoned Properties is actively pursuing a management buyout (MBO) agreement, which involves selling substantially all of its assets to a company owned by its management team. The MBO is contingent upon shareholder approval and is expected to close by the end of 2026. Additionally, the company has entered into a real estate purchase agreement to sell three properties for $9 million, which is anticipated to further enhance its liquidity.

Looking ahead, the company faces challenges related to its property investment portfolio, particularly following the sale of its Woodward properties, which may impact future rental revenues. The management has indicated that while current cash reserves are sufficient to meet operational needs for the next 12 months, additional capital may be required to support ongoing operations and potential acquisitions. The company remains focused on navigating the complexities of the regulated cannabis industry while managing its financial health and operational strategies.