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Zoned Properties Reports Third Consecutive Quarter of Net Income

SCOTTSDALE, Ariz.Nov. 13, 2017 /PRNewswire/ — Zoned Properties, Inc. (OTCQX: ZDPY), a strategic real estate development firm whose primary mission is to identify, develop, and lease sophisticated, safe, and sustainable properties in emerging industries, including the licensed medical marijuana industry, today announced its financial results for the three and nine-month periods ended September 30, 2017.

(a) Annual base rent represents amount of cash payments due from tenants and differs from revenues to be recognized on our consolidated financial statements. Comparisons are to Q3 2016.

Recent Achievements

  • Unveiled the Chino Valley Cultivation Facility master plan, for its 47.6-acre property approved for medical marijuana development located in Northern Arizona.
  • Signed another amendment to the existing lease agreement with its anchor tenant at the company’s Medical Marijuana Business Park located in Tempe, Arizona increasing the size of the leased space and monthly rental payments beginning November 1, 2017.
  • Entered into a Binding Letter of Intent with Indoor Harvest Corp. outlining independent agreements to complete three research and development projects for licensed medical marijuana facilities in ArizonaColorado, and Texas.

Third Quarter 2017 Financial Results

  • Revenue increased 10% to $535,000, compared to $487,741 for the third quarter of 2016.
  • Operating expenses decreased 9% to $326,000 from $357,000 for the third quarter of 2016.
  • Income from operations was $209,000 for the third quarter of 2017, compared to $130,000 for the third quarter last year.
  • Net income was $182,000, or $0.01 per basic and diluted share, compared to $74,000, or $0.00 per basic and diluted share, for the third quarter of 2016.
  • As of September 30, 2017, the Company had cash of $791,000, compared to $366,000 as of December 31, 2016.

Nine-Month Period 2017 Financial Results

  • Revenue increased 21% to $1.6 million, compared to $1.3 million for the comparable nine-month period in 2016.
  • Operating expenses decreased 26% to $1.1 million, from $1.5 million for the comparable nine-month period in 2016.
  • Inclusive of the one-time gain of approximately $832,000 on the sale of a property in Tempe, Ariz. recognized in the first quarter of 2017, net income was $1.2 million, or $0.06 per basic and diluted share, compared to a net loss of $(336,000), or $(0.02) per basic and diluted share, for the comparable nine-month period in 2016.
  • Net cash used in operating activities was $110,000 for the nine-month period in 2017 primarily attributable to the payoff of interest on short term debt that was retired in the first quarter, as compared to $118,000 for the comparable 2016 period.

“This was a milestone quarter for Zoned Properties, with continued strong financial performance and the unveiling of the long-term master plan at our 47.6-acre Chino Valley Cultivation Facility,” commented Bryan McLaren, Chief Executive Officer of Zoned Properties. “We are increasing development standards by integrating sophisticated cultivation process designs with principles of sustainable development. We have big ambitions for our Medical Marijuana Business Park in Tempe, Arizona and are moving quickly to advance its development including the finalization of a master plan for the property. With built-in rental escalators and the existing opportunity to more than double our annual rent revenue, Zoned Properties is well-positioned for profitable growth, and poised to build on our leadership position in this industry.”

Supplemental Information Regarding Current Portfolio of Rental Properties

At September 30, 2017

Tempe, AZ (a)

Gilbert,
AZ

Green
Valley,
AZ

Chino
Valley,
AZ

Kingman,
AZ

Total

Total Rentable Sq. Ft.

60,000

*

1,440

40,000

1,497

102,937

Sq. Ft. Rented (as of 9/30/17)

17,500

*

1,440

30,000

1,497

50,437

Vacant Rentable Sq. Ft.

42,500

*

0

10,000

0

52,500

Total # of Tenants

2

1

1

1

1

Annual Base Rent (2017) (b)

$310,075

$15,000

$127,259

$695,000

$160,745

$1,308,079

Annual Base Rent (2018) (b)

$482,600

$15,000

$133,619

$796,250

$168,782

$1,596,251

(a)

In addition to base rent received from our tenants, we lease 800 square feet of property containing a cell tower located on the property to a third party for $1,450 per month, subject to 5-year extensions. Annual base rent from the cell tower lease is not included in this table.

(b)

Annual base rent represents amount of cash payments due from tenants and differs from revenues to be recognized on our consolidated financial statements.

* We lease the entire undeveloped 34,717 square feet land parcel to a tenant.

“Our progress has drawn the interest of others in the industry, and accordingly, we are seeing expanded opportunities to provide Strategic Advisory Services across the country,” added Mr. McLaren. “We are seeking long-term agreements that provide Zoned with an ownership interest in attractive projects, helping us build the company’s portfolio as we identify and work with sophisticated professionals in the industry.”

Letter to Shareholders

Management today published a shareholder letter, designed to further elaborate on the Company’s strategy and recent progress. Interested parties may view this letter here.

About Zoned Properties, Inc. (ZDPY):

Zoned Properties is a strategic real estate development firm whose primary mission is to identify, develop, and lease sophisticated, safe, and sustainable properties in emerging industries, including the licensed medical marijuana industry. The Company acquires commercial properties that face unique zoning challenges and identifies solutions that can potentially have a major impact on the cash flow and property value. Zoned Properties targets commercial properties that can be acquired and re-zoned for specific purposes. Zoned Properties does not grow, harvest, sell or distribute cannabis or any substances regulated under United States law such as the Controlled Substances Act.

Safe Harbor Statement

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical facts included in this press release are forward-looking statements. In some cases, forward-looking statements can be identified by words such as “believe,” “expect,” “anticipate,” “plan,” “potential,” “continue” or similar expressions. Such forward-looking statements include risks and uncertainties, and there are important factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These factors, risks and uncertainties are discussed in the Company’s filings with the Securities and Exchange Commission. Investors should not place any undue reliance on forward-looking statements since they involve known and unknown, uncertainties and other factors which are, in some cases, beyond the Company’s control which could, and likely will, materially affect actual results, levels of activity, performance or achievements. Any forward-looking statement reflects the Company’s current views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to operations, results of operations, growth strategy and liquidity. The Company assumes no obligation to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

Tables Follow

 ZONED PROPERTIES, INC. AND SUBSIDIARIES 

 CONDENSED CONSOLIDATED BALANCE SHEETS 

 (Unaudited) 

As of

As of

 September 30, 

 December 31, 

2017

2016

 ASSETS 

 Cash 

$                 791,465

$                366,024

 Rental properties, net 

7,086,863

6,878,584

 Rental property held for sale, net 

1,140,891

 Rent receivable 

72,335

 Deferred rent receivable 

16,462

 Deferred rent receivable – related parties 

1,543,927

1,006,171

 Real estate tax escrow 

39,487

 Note receivable – related party 

179,483

 Prepaid expenses and other current assets 

133,910

140,010

 Property and equipment, net 

37,536

40,212

 Security deposits 

2,890

8,158

 Total Assets 

$              9,848,409

$             9,635,999

 LIABILITIES AND STOCKHOLDERS’ EQUITY 

 LIABILITIES: 

 Mortgage payable 

$                             –

$             2,100,000

 Convertible note payable 

500,000

 Convertible notes payable – related parties 

2,020,000

500,000

 Accounts payable  

10,652

78,311

 Accrued expenses 

93,301

96,748

 Accrued expenses – related parties 

33,300

85,541

 Deferred revenues 

4,000

4,750

 Deferred revenues – related party 

1,841

 Security deposits payable – related parties 

71,800

70,000

 Security deposits payable 

5,864

21,964

 Total Liabilities 

2,240,758

3,457,314

 Commitments and Contingencies 

 STOCKHOLDERS’ EQUITY: 

Preferred stock, $.001 par value, 5,000,000 shares authorized; 2,000,000 shares issued and outstanding at September 30, 2017 and December 31, 2016 ($1.00 per share liquidation preference)   

2,000

2,000

Common stock: $.001 par value, 100,000,000 shares authorized;  17,311,701 and 17,210,318 issued and outstanding at September 30, 2017 and December 31, 2016, respectively

17,312

17,210

Additional paid-in capital

20,592,763

20,352,528

Accumulated deficit

(13,004,424)

(14,193,053)

 Total Stockholders’ Equity 

7,607,651

6,178,685

 Total Liabilities and Stockholders’ Equity 

$              9,848,409

$             9,635,999

 

 ZONED PROPERTIES, INC. AND SUBSIDIARIES 

 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS 

 (Unaudited) 

 For the Three Months Ended 

 For the Nine Months Ended 

 September 30, 

 September 30, 

2017

2016

2017

2016

 REVENUES: 

 Rental revenues 

$       13,291

$       58,829

$        67,993

$     177,909

 Rental revenues – related parties 

522,103

428,912

1,512,609

1,132,961

 Total revenues 

535,394

487,741

1,580,602

1,310,870

 OPERATING EXPENSES: 

 Compensation and benefits 

107,173

92,814

445,401

366,199

 Professional fees 

45,381

122,038

166,002

604,238

 General and administrative expenses 

44,118

47,692

130,699

151,992

 Depreciation and amortization 

59,580

43,139

167,765

125,910

 Property operating expenses 

28,163

23,913

90,522

54,941

 Real estate taxes 

21,206

27,690

66,488

83,559

 Settlement expense 

20,500

20,500

87,500

 Total operating expenses 

326,121

357,286

1,087,377

1,474,339

 INCOME (LOSS) FROM OPERATIONS 

209,273

130,455

493,225

(163,469)

 OTHER (EXPENSES) INCOME: 

    Interest expenses 

(48,123)

(42,983)

(144,369)

    Interest expenses – related parties 

(30,300)

(8,750)

(98,988)

(26,250)

    Gain (loss) on sale of property and equipment 

831,753

(1,843)

    Interest income 

2,836

5,622

 Total other (expenses) income, net 

(27,464)

(56,873)

695,404

(172,462)

 INCOME (LOSS) BEFORE INCOME TAXES 

181,809

73,582

1,188,629

(335,931)

 PROVISION FOR INCOME TAXES 

 NET INCOME (LOSS) 

$      181,809

$       73,582

$    1,188,629

$   (335,931)

 NET INCOME (LOSS) PER COMMON SHARE: 

 Basic 

$           0.01

$           0.00

$            0.06

$        (0.02)

 Diluted 

$           0.01

$           0.00

$            0.06

$        (0.02)

 WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: 

 Basic 

17,318,128

17,160,228

17,299,805

17,136,148

 Diluted 

17,930,461

17,160,228

18,142,071

17,136,148

 

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SOURCE Zoned Properties, Inc.