Zoned Properties, Inc 8-K, filed May 14, 2020
Zoned Properties, Inc. (ZDPY)
About this 8-K
Zoned Properties, Inc filed this 8-K on May 14, 2020.
Items reported
- Item 2.02: Financial results
- Item 7.01: Regulation FD disclosure
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): May 14, 2020
| Zoned Properties, Inc. |
| (Exact Name of Registrant as Specified in its Charter) |
| Nevada |
| (State or Other Jurisdiction of Incorporation) |
| 000-51640 | 46-5198242 | |
| (Commission File Number) | (IRS Employer Identification No.) | |
| 14269 N. 87th
Street, #205 Scottsdale, AZ |
85260 | |
| (Address of Principal Executive Offices) | (Zip Code) |
(Registrant’s telephone number, including area code): (877) 360-8839
N/A
(Former name, former address and former fiscal year, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2.)
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| N/A | N/A | N/A |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition.
On May 14, 2020, Zoned Properties, Inc. (the “Company”) issued a press release announcing its financial results for the three month period ended March 31, 2020. A copy of this press release is attached hereto as Exhibit 99.1 and incorporated herein by reference. The information contained in the website is not a part of this current report on Form 8-K.
Item 7.01. Regulation FD Disclosure.
Beginning May 14, 2020, the Company’s management will deliver the investor presentation attached hereto as Exhibit 99.2 and incorporated herein by reference.
The information included in this Current Report on Form 8-K, including Exhibits 99.1 and 99.2, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing. The information set forth under this Item 7.01 shall not be deemed an admission as to the materiality of any information in this Current Report on Form 8-K.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit No. | Description | |
| 99.1 | Press release of the registrant dated May 14, 2020. | |
| 99.2 | Investor presentation to be delivered by management of the registrant. |
1
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| ZONED PROPERTIES, INC. | |
| Dated: May 14, 2020 | /s/ Bryan McLaren |
| Bryan McLaren | |
| Chief Executive Officer & Chief Financial Officer |
2
Exhibit 99.1
Zoned Properties Reports First Quarter 2020 Financial Results
SCOTTSDALE, Ariz., May 14, 2020 /BusinessWire/ -- Zoned Properties®, Inc. (OTCQB: ZDPY), a strategic real estate development firm whose primary mission is to provide real estate and sustainability services for the regulated cannabis industry, positioning the company for property acquisitions and revenue growth, today announced its financial results for the three-month period ended March 31, 2020.
First Quarter 2020 Financial Results
| ● | Zoned Properties completed a $100,000 strategic investment into a start-up cannabis franchise organization in the form of a convertible debenture. |
| ● | Revenue increased 9.4% to $303,869, compared to $277,736 for the first quarter of 2019. This increase in revenues was primarily attributable to a decrease in rent revenues from Zoned Properties’ significant tenant of $1,242, or less than 1%, offset by an increase in advisory revenues from our significant tenant of $23,375, and an increase in third party advisory revenues of $4,000. |
| ● | Operating expenses increased 2.2% to $370,571, compared to $362,427 for the first quarter of 2019. |
| ● | Loss from operations was $66,702, as compared to a loss from operations of $84,691 for the first quarter of 2019, a decrease of $17,989. |
| ● | Net loss was $96,770, or $(0.01) per basic and diluted share, for the first quarter of 2020, compared to net loss of $6,787, or $(0.00) per basic and diluted share, for the first quarter of 2019. |
| ● | Net cash provided by operating activities was $98,625 for the first quarter of 2020, compared to $89,508 for the first quarter of 2019. |
| ● | As of March 31, 2020, Zoned Properties had cash of $628,841, compared to $639,781 as of December 31, 2019. |
“Our first quarter 2020 financial results mark an exciting milestone for Zoned Properties, as we have begun investing our cash position into strategic market growth opportunities,” commented Bryan McLaren, Chief Executive Officer of Zoned Properties.
“We believe the ability to leverage our property portfolio in Arizona is on the immediate horizon as the State’s marketplace advances efforts to transition into an adult-use classification. Leveraging our portfolio successfully could allow for significant development expansion, rental revenue growth, and investment opportunities. We have focused on an anti-dilutive and value-driven approach to scaling Zoned Properties with sound business fundamentals and healthy financing tactics, something we believe will ultimately benefit shareholders. Now more than ever, a sustainable and community-based value proposition means scalability, which we believe is the key to long-term value.”
About Zoned Properties, Inc. (OTCQB: ZDPY):
Zoned Properties is a strategic real estate development firm whose primary mission is to provide real estate and sustainability services for clients in the regulated cannabis industry, positioning the company for real estate acquisitions and revenue growth. We intend to pioneer sustainable development for emerging industries, including the regulated cannabis industry. We are an accredited member of the Better Business Bureau, the U.S. Green Building Council, and the Forbes Real Estate Council. We focus on investing capital to acquire and develop commercial properties to be leased on a triple-net basis, and engaging clients that face zoning, permitting, development, and operational challenges. We provide development strategies and advisory services that could potentially have a major impact on cash flow and property value. We do 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”).
Website: www.ZonedProperties.com
Twitter: @ZonedProperties
LinkedIN: @ZonedProperties
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.
COVID-19 Statement
In March 2020, the World Health Organization declared COVID-19 a global pandemic and recommended containment and mitigation measures worldwide. We are monitoring this closely, and although operations have not been materially affected by the COVID-19 outbreak to date, the ultimate duration and severity of the outbreak and its impact on the economic environment and our business is uncertain. As of May 14, 2020, all of the properties in our portfolio are open to our Significant Tenants and their customers and will remain open pursuant to state and local government requirements. At this time, we do not foresee any material changes to our operations from COVID-19. Our tenants are continuing to generate revenue at these properties and they have continued to make rental payments in full and on time and we believe the tenants’ liquidity position is sufficient to cover its expected rental obligations. Accordingly, while we do not anticipate an impact on our operations, we cannot estimate the duration of the pandemic and potential impact on our business if the properties must close or if the tenants are otherwise unable or unwilling to make rental payments. In addition, a severe or prolonged economic downturn could result in a variety of risks to our business, including weakened demand for our properties and a decreased ability to raise additional capital when needed on acceptable terms, if at all. At this time, the Company is unable to estimate the impact of this event on its operations.
Investor Relations
Zoned Properties, Inc.
Bryan
McLaren
Tel (877) 360-8839
Investors@zonedproperties.com
www.zonedproperties.com
Exhibit 99.2
Investor Presentation May 2020 | OTCQB: ZDPY A brand new EMERGING INDUSTRY “We are building for an industry that does not yet exist. It’s our responsibility to make sure it gets done right.” - Bryan McLaren OTCQB: ZDPY I May 2020 877 - 360 - 8839 | @ZonedProperties
FORWARD - LOOKING STATEMENTS This presentation release contains forward - looking statements within the meaning of Section 27 A of the Securities Act of 1933 , as amended, and Section 21 E of the Securities Exchange Act of 1934 , as amended . Readers are cautioned not to place undue reliance on these forward - looking statements . Actual results may differ materially from those indicated by these forward - looking statements as a result of risks and uncertainties impacting the Company's business including, increased competition ; the ability of the Company to expand its operations through either acquisitions or internal growth, to attract and retain qualified professionals, and to expand commercial relationships ; general economic conditions ; and other risks detailed from time to time in the Company's filings with the Securities and Exchange Commission . 877 - 360 - 8839 | @ZonedProperties OTCQB: ZDPY I May 2020
COVID - 19 STATEMENT In March 2020 , the World Health Organization declared COVID - 19 a global pandemic and recommended containment and mitigation measures worldwide . We are monitoring this closely, and although operations have not been materially affected by the COVID - 19 outbreak to date, the ultimate duration and severity of the outbreak and its impact on the economic environment and our business is uncertain . As of May 14 , 2020 , all of the properties in our portfolio are open to our Significant Tenants and their customers and will remain open pursuant to state and local government requirements . At this time, we do not foresee any material changes to our operations from COVID - 19 . Our tenants are continuing to generate revenue at these properties and they have continued to make rental payments in full and on time and we believe the tenants’ liquidity position is sufficient to cover its expected rental obligations . Accordingly, while we do not anticipate an impact on our operations, we cannot estimate the duration of the pandemic and potential impact on our business if the properties must close or if the tenants are otherwise unable or unwilling to make rental payments . In addition, a severe or prolonged economic downturn could result in a variety of risks to our business, including weakened demand for our properties and a decreased ability to raise additional capital when needed on acceptable terms, if at all . At this time, the Company is unable to estimate the impact of this event on its operations . 877 - 360 - 8839 | @ZonedProperties OTCQB: ZDPY I May 2020
ZONED PROPERTIES ® , INC. Our MISSION To provide Real Estate & Sustainability Services for the Regulated Cannabis Industry, positioning the company for Property Acquisitions and Revenue Growth. Our VISION Our VALUES Rising Prosperity in Local Communities resulting from a strong paradigm for Sustainable Development in emerging industries, including the Regulated Cannabis Industry. Sophistication, Safety, Sustainability, Stewardship 877 - 360 - 8839 | @ZonedProperties OTCQB: ZDPY I May 2020
COMPANY ORGANIZATION (Real Estate Assets & NNN Leasing Revenue) (Future Charitable Organization) (Advisory Services Revenue) (Commission Based Revenue) 877 - 360 - 8839 | @ZonedProperties TM OTCQB: ZDPY I May 2020
Source: Newfrontierdata.com THE MARKET OPPORTUNITY 877 - 360 - 8839 | @ZonedProperties OTCQB: ZDPY I May 2020
THE MARKET OPPORTUNITY Source: Newfrontierdata.com 877 - 360 - 8839 | @ZonedProperties OTCQB: ZDPY I May 2020
Source: Newfrontierdata.com THE MARKET OPPORTUNITY 877 - 360 - 8839 | @ZonedProperties OTCQB: ZDPY I May 2020
THE MARKET CHALLENGE Regulated Cannabis Industry Market Challenge Properly predicting the risk and success of a regulated operator, which will in turn affect the potential value of the operating property. How can a Real Estate Company, Fund, or Investor effectively identify properties with successful operators for acquisition targets and sale - leaseback opportunities? 877 - 360 - 8839 | @ZonedProperties OTCQB: ZDPY I May 2020
OUR MARKET APPROACH Acquisition & Growth Opportunities Sustainability Services Real Estate Services Research Services Zoned Advisory Services provides Real Estate & Sustainability Services to Regulated Cannabis Clients in order to mitigate the risks common to acquisition & growth opportunities. 877 - 360 - 8839 | @ZonedProperties OTCQB: ZDPY I May 2020
ZONED ADVISORY SERVICES STRATEGY Client & Partner TESTIMONIALS “Our business would not exist without the strategic guidance from Zoned Properties.” – Valera K. Chief Compliance Officer “Zoned Properties has been an excellent partner in this project.” – Ruth M. Development Services Director “The Town of Parachute is excited to see a Zoned Properties development come to town.” – Stuart M. Town Manager We help clients develop Cannabis Projects Let us develop your project, so you can develop your business. Secure Your Property Develop Your Project Sustain Your Profits 877 - 360 - 8839 | @ZonedProperties OTCQB: ZDPY I May 2020
CORPORATE SOCIAL RESPONSIBILITY • Why would a Real Estate company like Zoned Properties ® aim to pioneer Sustainable Development and Corporate Social Responsibility for the Regulated Cannabis industry? • As NAREIT points out in its Sustainability and Investing Overview, "Real estate is not just the physical places where we live, work, and spend our leisure time; it helps unite and define local communities and provides an important investment resource to millions of Americans.” * • We have a chance to Set the Stage & Create the Paradigm for the future of the Cannabis Marketplace by focusing on these efforts. * Source: https://www.reit.com/investing/reits - sustainability OTCQB: ZDPY I May 2020 877 - 360 - 8839 | @ZonedProperties
ZONED GROWTH STRATEGY Zoned Advisory Services & Real Estate Teams can generate new revenue while vetting future acquisition targets, feeding our pipeline for property acquisitions and revenue growth. Services Revenue Real Estate Services Services Revenue Sustainability Services Commission Revenue REALTOR® Transactions Active Asset Growth Sale Leaseback Acquisitions Passive Revenue Growth Triple - Net NNN Lease Revenue Client Services Revenue to Support Company Expenses & Growth Portfolio Revenue to Support Shareholder Value 1. Project Research Services • Real Estate Services • Sustainability Services 2. Project Advisory Services • Real Estate Services • Sustainability Services 3. Cannabis Real Estate Team • Commercial Transactions • Buyer/Seller Introductions 4. Property Sale - Leasebacks • With Engaged Advisory Clients • For Successful Operators 5. Property Portfolio Growth • Balance Sheet Asset Ownership • Triple - Net (NNN) Leasing Revenue 877 - 360 - 8839 | @ZonedProperties OTCQB: ZDPY I May 2020
(As of March 31, 2020) SUMMARY PROPERTY PORTFOLIO 5 Properties in the State of Arizona generating Triple - Net NNN Lease Revenue 102,937 Square Feet of Building Space Generating $1,021,800 Revenue 2,234,409 Square Feet of Land to be Developed Undeveloped / Future: Developed / Leased: Chino Valley 2,072,149 Green Valley 57,769 Tempe 158,772 Kingman 13,939 Gilbert 34,717 2,337,346 Square Feet Total Property Portfolio Owned 1 Total Property Portfolio Revenue 2 1 Square footage of Chino Valley Cultivation Facility is not to scale on chart 2 Property Portfolio Revenue generated from 102,937 Square Feet of Developed and Leased Building Space Chino Valley $480,000 Green Valley $42,000 Tempe $419,400 Kingman $48,000 Gilbert $32,400 $1,021,800 Annual Revenue 877 - 360 - 8839 | @ZonedProperties OTCQB: ZDPY I May 2020
SUMMARY CAPITAL STRUCTURE Book Value (BV) of Total Capital Market Value (MV) of Total Capital 1 $2.02M of Debt + $5.91M of Stockholders’ Equity = $7.93M BV of Total Capital 2 $2.02M of Debt + $2.64M of MV Equity ($0.22/share at 3/31/2020 * 12.01M shares outstanding) = $4.66M MV of Total Capital Total Capital Total Capital Book Value of Equity Total Debt Market Value of Equity Total Debt 57% 43% 75% 25% $7.9M 1 $4.7M 2 (As of March 31, 2020) *$ in millions 877 - 360 - 8839 | @ZonedProperties OTCQB: ZDPY I May 2020
SUMMARY STATEMENTS OF OPERATIONS Year Three Months Ended Year Ended 3/31/2020 12/31/2019 12/31/2018 12/31/2017 12/31/2016 Total revenues $303,869 $1,260,421 $1,236,930 $2,113,864 $1,853,708 Total operating expenses $370,571 $1,259,706 $3,198,413 $1,416,698 $2,125,949 Interest expenses $30,000 $120,000 - $42,983 $192,492 Interest expenses – related parties $300 $1,200 $121,200 $129,288 $35,000 Net income / (loss) $(96,770) $(12,281) 1 ($2,027,278) 2 $1,377,902 3 ($501,576) Total Common Shares Outstanding 12,011,548 11,901,548 17,441,552 17,345,497 17,210,318 1 Includes one - time gain of $108,204 from receipt of utilities rebate 2 Reflects Company’s shift to new business model effective May 1, 2018, including $1.9 million one - time, non - cash write - off of de ferred rent receivable 3 Includes one - time gain of $831,753 from the sale of property for the year ended 12/31/2017 877 - 360 - 8839 | @ZonedProperties OTCQB: ZDPY I May 2020 (As of March 31, 2020)
SUMMARY BALANCE SHEETS As of 3/31/2020 12/31/2019 Cash $628,841 $639,781 Rental Properties, net $7,295,331 $7,374,807 Total Debt $2,020,000 $2,020,000 Total Liabilities $2,239,333 $2,193,859 Total Shareholders’ Equity $5,905,366 $5,965,644 $5,905,366 $2,239,333 $8,144,699 Total Shareholders' Equity Total Liabilities Total Assets Summary Balance Sheets as of March 31, 2020 877 - 360 - 8839 | @ZonedProperties OTCQB: ZDPY I May 2020
INDUSTRY LEADERSHIP Executive Councils & Memberships 877 - 360 - 8839 | @ZonedProperties OTCQB: ZDPY I May 2020
David Honaman Independent Director COMPANY LEADERSHIP Bryan McLaren, MBA Chief Executive Officer & Chief Financial Officer Management Board of Directors Bryan McLaren Chairman Alex McLaren Director Art Friedman Independent Director Derek Overstreet Independent Director 877 - 360 - 8839 | @ZonedProperties OTCQB: ZDPY I May 2020
ZONED PROPERTIES ® , INC. TIGHT CAPITAL STRUCTURE 12,011,548 COMMON SHARES (As of March 31, 2020) 2 MILLION SQ. FT. OF PROPERTY OWNERSHIP ( No Toxic Debt) MULTI - STATE EXPERIENCE & PROVEN SUCCESS EXECUTIVE MEMBERSHIPS FORBES, USGBC, NCIA, BBB COMMUNITY FOCUSED REGULATED CANNABIS CO. OVER 5 - YEARS AS PUBLIC COMPANY IN REGULATED CANNABIS CASH FLOW POSITIVE FROM OPERATIONS TRIPLE - NET (NNN) PASSIVE REVENUE STREAM 877 - 360 - 8839 | @ZonedProperties OTCQB: ZDPY I May 2020
FOR MORE INFORMATION COMPANY CONTACT Bryan McLaren ; Chairman, CEO & CFO Zoned Properties, Inc. | Scottsdale, AZ www.ZonedProperties.com | Tel 877.360.8839 | Bryan@ZonedProperties.com 877 - 360 - 8839 | @ZonedProperties OTCQB: ZDPY I May 2020