ZDPY 8-K
Zoned Properties, Inc. (ZDPY)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
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Item 2.02. Regulation FD Disclosure.
On November 14, 2023, Zoned Properties, Inc. (the “Company”) issued a press release announcing its financial results for the three and nine months ended September 30, 2023. 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 November 14, 2023, 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 Statement and Exhibits.
(d) Exhibits
| Exhibit No. | Description | |
| 99.1 | Press release issued by the registrant on November 14, 2023. | |
| 99.2 | Investor presentation to be delivered by management of the registrant. | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
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: November 14, 2023 | /s/ Bryan McLaren |
| Bryan McLaren | |
| Chief Executive Officer & Chief Financial Officer |
2
Exhibit 99.1
Zoned Properties Reports Strong Third Quarter 2023 Financial Results Posting Positive Net Income and Revenue Growth of 17%
Robust Balance Sheet Enables Investment Portfolio Scaling
SCOTTSDALE, AZ., November 14, 2023 /AccessWire/ — Zoned Properties®, Inc. (“Zoned Properties” or the “Company”) (OTCQB: ZDPY), a leading real estate development firm for emerging and highly regulated industries, including legalized cannabis, today announced its third quarter financial results and operational highlights. The following results pertain to the three and nine months ended September 30, 2023.
Financial Highlights:
| ● | Revenues were $720,450 for the quarter ended September 30, 2023, compared to revenues of $614,988 for the quarter ended September 30, 2022, representing an increase of 17.2%. | |
| ● | Revenues were $2,181,091 for the nine months ended September 30, 2023, compared to revenues of $2,052,341 for the nine months ended September 30, 2022, representing an increase of 6.3%. | |
| ● | The Company reported net income of $114,523 for the quarter ended September 30, 2023, as compared to a net loss of $77,328 for the quarter ended September 30, 2022. | |
| ● | The Company reported a net loss of $152,966 for the nine months ended September 30, 2023, compared to a net loss of $142,087 for the nine months ended September 30, 2022. | |
| ● | Operating expenses were $671,338 for the quarter ended September 30, 2023, compared to $660,251 for the quarter ended September 30, 2022, representing an increase of 1.7%. | |
| ● | The Company had cash on hand of $3.01 million as of September 30, 2023, compared to cash on hand of $3.28 million as of June 30, 2023. |
Management Commentary:
“We are delighted to report outstanding operating and financial performance for the third quarter whilst contending with challenging market conditions. As we move through the remainder of the year into 2024, we see our underlying business trends as extremely positive with our market strategy producing steady revenue growth, positive cash flow, and net profitability. With a focus on direct-to-consumer real estate that is leased to the best-in-class cannabis retailers in the industry, we have the balance sheet to support our near-term expansion objectives and plan to remain active. Maintaining a strong balance sheet in this market environment positions us extremely well to deploy capital on more favorable terms. We continue using our nationwide services network and property technology to provide the Company with a competitive edge when identifying excellent investment prospects. We have a full pipeline of acquisitions, and we continue to utilize our extremely disciplined capital allocation approach. Since we have a clear view of the properties we are pursuing, we anticipate further capital deployment over the near term,” said Bryan McLaren, Chief Executive Officer of Zoned Properties.
“Moreover, the team acknowledges the disconnect between the Company fundamentals and our valuation, and in the near future, we will provide shareholders with an update on our strategy to maximize shareholder value.”
Operational Highlights:
| ● | Zoned Properties is consistently securing contractual rights for new real estate acquisition targets that have been positioned for long-term lease opportunities to best-in-class cannabis dispensary retailers in new and exciting state markets. The Company has secured a controlling interest or is in the process of negotiating controlling interest related to properties located in Arizona, Illinois, and Missouri. |
| ● | The Company's Property Investment Portfolio of owned properties remains strong with 100% occupied assets net-leased to consumer-focused and brand-centric cannabis tenants with a weighted average lease term of 15 years. |
| ● | Zoned Properties continues to build out its proprietary cannabis technology platform, REZONE, in preparation for commercial launch. REZONE is a zoning and mapping software solution focusing on democratizing real estate information for the regulated cannabis industry in partnership with Zoneomics. The platform is built on the foundations of Artificial Intelligence (“AI”) and Machine Learning algorithms that can intelligently collect, rationalize and categorize vast streams of real estate data layers, with a focus on cannabis-related data. This data is then provided to users in a business-ready format. The platform allows users to search for parcels or survey entire markets and visualize the available green zone parcels, identify potential setback issues and gain other valuable insights according to local zoning codes. The primary objective is to help users capture cannabis real estate insights with ease. |
About Zoned Properties, Inc. (OTCQB: ZDPY):
Zoned Properties is a leading real estate development firm for emerging and highly regulated industries, including legalized cannabis. The Company is redefining the approach to commercial real estate investment through its integrated growth services. Headquartered in Scottsdale, Arizona, Zoned Properties has developed a full spectrum of integrated growth services to support its real estate development model; the Company’s Property Technology, Advisory Services, Commercial Brokerage, and Investment Portfolio divisions collectively cross-pollinate within the model to drive project value associated with complex real estate projects. With national experience and a team of experts devoted to the emerging cannabis industry, Zoned Properties is addressing the specific needs of a modern market in highly regulated industries. Zoned Properties does 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”). Zoned Properties corporate headquarters are located at 8360 E. Raintree Dr., Suite 230, Scottsdale, Arizona. For more information, call 877-360-8839 or visit www.ZonedProperties.com.
Twitter: @ZonedProperties
LinkedIn: @ZonedProperties
Safe Harbor Statement
This press release contains forward-looking statements. 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.
Investor Relations
Zoned Properties, Inc.
Bryan McLaren
Tel (877) 360-8839
www.zonedproperties.com
Exhibit 99.2
November 2023 Corporate Presentation OTCQB: ZDPY www. ZonedProperties .com
2 Safe Harbor Statement This presentation contains forward - looking statements . 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 . The Company is 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 . Currently, all of the properties in the Company’s portfolio are open to its Significant Tenants and will remain open pursuant to state and local government requirements . The Company did not experience in 2020 or 2021 and does not foresee in 2022 , any material changes to its operations from COVID - 19 . The Company’s 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 the Company does not anticipate an impact on its operations, it cannot estimate the duration of the pandemic and potential impact on its 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 the Company’s business, including weakened demand for its properties and a decreased ability to raise additional capital when needed on acceptable terms, if at all . Forward Looking Statements
Table of Contents I. Company Overview II. Revenue Divisions III. Market Landscape IV. Financial Performance V. Executive Management VI. Capital Structure VII. Investment Thesis 3
Company Overview
Company Philosophy 5 Our Mission To provide a full - spectrum of Real Estate Services for the Regulated Cannabis Industry, positioning the Company for Real Estate Investments & Revenue Growth. Our Vision To Integrate Legacy Cannabis into Modern Communities through Real Estate Development Projects. Our Values Sophistication | Safety | Sustainability | Stewardship
6 Investment Portfolio Commercial real estate leased to licensed cannabis operators, currently consists of properties in Arizona & Michigan focused on growth towards direct - to - consumer real estate Commercial Brokerage The Company’s fully licensed, in - house brokerage team is expanding nationally to service sale and lease transactions for the cannabis real estate market Property Technology (PropTech) The Company’s innovative, home - grown tech tool (REZONE) is the Company’s flagship PropTech project, visualizing complex zoning conditions in localities across the country Site Identification Advisory The Company’s consulting division works nationally at identifying, developing, and delivering qualified cannabis commercial real estate opportunities A legacy company focused on regulated cannabis real estate, Zoned Properties, Inc . ( OTCQB : ZDPY ) offers a full - spectrum of commercial real estate services and a property investment portfolio focused on the legalized cannabis industry . Founded in 2014 , Zoned Properties has spent the last decade developing an intricate knowledge of the local, state, and regional zoning and permitting requirements that impact localities across the country, making Zoned Properties a hub for members of the cannabis and/or commercial real estate industries looking to buy, sell, or invest in the commercial cannabis real estate market . Company Overview
Revenue Divisions
8 Total Pleasant Ridge, MI Kingman, AZ Green Valley, AZ Chino Valley, AZ Tempe, AZ Dispensary Dispensary Dispensary Cultivation Cultivation Current Use March 2037 April 2040 April 2040 April 2040 April 2040 Lease End Date 2,326,935 24,306 13,939 57,769 2,072,149 158,772 Land Area (SQF) 177,441 17,192 1,497 1,440 97,312 60,000 Rentable Building Area (SQF) $2,330,590 $579,567 $48,000 $42,000 $1,050,970 $610,053** Annual Base Rent Revenue* $13.13 $33.71 $32.06 $29.17 $10.80 $10.17** Annualized Base Rent (P/SQF)* $36,789,264 $8,024,892 $796,000 $696,500 $17,428,580 $9,843,292** Total Lifetime Rent Remaining The Company’s real estate services have been intentionally positioned and designed to feed a strong pipeline of acquisition targets to its Property Investment Portfolio, currently consisting of five properties in Arizona and Michigan expected to produce over $2.3mm of annual rental revenue in FY2023. Investment Portfolio Properties MI AZ Investment Portfolio *Figures are calculated as Straight - Line Accounting per GAAP, as of Q3 2023 **Includes Rent from an on - site Commercial Antenna Lease
9 Direct to Consumer (DTC) Real Estate Strategy Warehouse / Logistics Delivery Hubs Retail Dispensaries Investment Portfolio Metrics Portfolio Strategy & Metrics Lease Occupancy Rate 100% Leased Weighted Average Lease Term 15 Years Portfolio Value at 7.5% Cap Rate Annual Rental Revenue* $2.3 Million YoY Rental Revenue Growth YTD* 44% Growth $31 Million *Figures are calculated as Straight - Line Accounting per GAAP, as of Q3 2023
10 Development Project for future dispensary property located in Pleasant Ridge, Michigan. The Investment Property was acquired through multiple parcel transactions in December 2022 & February 2023 for $4.3 Million, including $1.85 Million in seller financing, which allowed Zoned Properties to further leverage its capital stack at attractive rates. The Investment Property is leased to NOXX Cannabis under a long - term, absolute - net lease agreement, which will produce an approximate 13.5% Cap Rate when straight - lined over the term of the lease agreement. The lease includes 3% annual increases in base rent over the life of the lease term, yielding approximately $580,000 in annual base rental revenue when straight - lined over the life of the lease term. NOXX Cannabis is a Michigan - based vertical cannabis company providing the best brands at the best prices, through innovation, quality, and inclusivity. Project Highlights Artist’s rendering (front) Artist’s rendering (rear) Recent Transaction Spotlight
11 National Footprint Property Technology • Zoned Properties has opened in - house brokerage offices in 5 state markets and is actively recruiting new Boots - on - the - Ground teams in new state markets to capture national opportunities • Additional regional partnerships can provide Zoned Properties Brokerage access to dozens of new state markets • Our competitive positioning is fortified by combining both third - party & in - house CRE property technology to continuously evolve Zoned’s proprietary tech - stack • We use our PropTech solutions to inform clients on unique acquisition & leasing opportunities as a result of changes in local zoning and permitting regulations Since 2021, Zoned Properties Brokerage has closed over $80 million of commercial real estate deals for clients. Marketing Capabilities • The Company has established relationships and partnerships with some of the leading online marketing and listing services for cannabis commercial real estate • Our Commercial Brokerage also has the capability to directly showcase cannabis properties throughout the Zoned Properties national network Commercial Brokerage
The Company’s Advisory team combines decades of commercial real estate experience with proprietary Property Technology that works to identify sites that can be specifically zoned , permitted , and developed for commercial cannabis uses. 12 Site Identification Advisory Zoning & Permitting x Municipal zoning, regulatory, and permitting review x Custom GIS Mapping solutions x Complex project development Codes & Regulations x State and municipal regulatory development requirements x Variable regulatory monitoring x Client liaison with Design/AEC Strategy & Planning Our advisors focus on the unique details of each client project in order to: x Advise on strategy for project delivery success x Assess projects risks and development plans Site Identification & Advisory Services The Zoned Properties team has successfully guided hundreds of commercial cannabis projects across dozens of state markets .
13 Property Technology • Zoned Properties’ innovative home - grown tool, REZONE , visualizes decades of zoning and permit conditions in cities and townships across the country . • The volume, quality, and breadth of the cannabis real estate data included in REZONE is unparalleled, providing Zoned with unique competitive position within the cannabis industry . • The Company expects to begin monetizing the platform in 2023 . • Zoned Properties has invested $50,000 in AnamiTech, alongside the launch of their flagship PropTech platform, GreenSpace Pro , that has focused its property technology platform on project management tools and solutions for the cannabis operators, regulators, and project teams. • GreenSpace Pro platform utilized in over 100 locations across various state markets by major cannabis brands including Cookies, Embarc, and Stiiizy Real estate industry experts believe that Property Technology (PropTech) will become a significant driver of growth and scale in highly regulated real estate marketplaces, especially the legalized cannabis industry .
Market Landscape
15 $ 38.8 B Current Industry Size (1) 35 % Industry Growth (2020 - 2021) (1) 91% of Adults Support Legalization (2) 38 States with Cannabis Legalization 11,022 Dispensary Licenses as of January 2023 (3) 16% of All US Adults Smoke Marijuana (4) 11.8% Projected Industry CAGR (5) 40,000 US Localities that Govern Cannabis Regulations Bullish Industry Environment (1) MJBizDaily (2) Pew Research Center (3) Cannabiz Media (4) Gallup (5) IBIS
16 The Cannabis industry has seen unprecedented geographic growth within the last 15 years. As of May 2023, 38 states and the District of Columbia have approved the legalization and regulation of cannabis programs at the state level; either medicinally, recreationally, or in a limited capacity (i.e., CBD with THC). Geographic Industry Expansion State Adoption (1) Dispensaries Annual Industry Sales Public Approval (2) 11 <500 n/a 32% 23 954 (4) $3.1 Billion (3) 53% 37 11,022 (5) $38.8 Billion (3) 91% 40 >15,000 $57.0 Billion (6) 93% 2010 2015 2023 Proj. 2030 (1) DISA (2) Pew Research Center (3) MJ Biz Daily (4) CNBC (5) Cannabis Media (6) Forbes
Financial Performance
$302,772 $387,365 $614,988 $720,450 $25,089 ($95,495) ($77,328) $114,523 ($200,000) ($100,000) $0 $100,000 $200,000 $300,000 $400,000 $500,000 $600,000 $700,000 $800,000 Q3 2020 Q3 2021 Q3 2022 Q3 2023 Total Revenue Net Income Quarterly Performance (Q3 2023) 18 Total Revenue & Consolidated Net Income 41% increase in Property Investment Portfolio revenue (YoY) 49% reduction in Real Estate Services revenue (YoY) 17% increase in Total Revenue (YoY) 2% increase in Total Operating Expense (YoY) Net Income of approximately $114k versus a Net Loss of $77k in the previous corresponding period Financial Highlights Operational Highlights Zoned Properties has secured contractual rights for new real estate acquisition targets that have been positioned for lease opportunities to best - in - class cannabis dispensary retailers. The Company currently has properties secured in Arizona and Missouri, and has initiated state acquisition campaigns in Illinois and Maryland.
$1,260,421 $1,215,262 $1,820,485 $2,660,090 $284,914 $170,040 $489,257 $871,901 $0 $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 $3,000,000 2019 2020 2021 2022 Total Revenue Cash Flow from Operations 19 Annual Performance (FY2022) Total Revenue & Cash Flow from Operations 42.4% increase in Property Investment Portfolio revenue segment (YoY) 46.1% increase in Total Revenue (YoY) 54.5% increase in Real Estate Services revenue segment (YoY) 78.2% increase in Cash Flow from Operations (YoY) Financial Highlights Opened access to Capital Sources for prospective Property Acquisitions & Revenue Growth Diversified Property Investment Portfolio, increasing Annual Rental Revenue to >$2.3 Million Focused on Talent Acquisition to support growing team and national operations expansion Operational Highlights
Executive Management
Executive Management 21 Mr . McLaren has a strong professional background in the social, economic, and environmental development of complex business organizations . Over his professional career, he has successfully implemented large - scale projects for corporate and community organizations . Mr . McLaren has been certified as a Licensed REALTOR, Green Roof Professional, LEED Green Associate, and is an active Forbes Contributor as part of the Forbes Real Estate Council . Prior to his role at Zoned Properties, McLaren worked as a Sustainability Consultant for Waste Management where he led the strategic development and operational implementation of zero - waste programs for Higher Education clients . Sustainable development has been a life - long passion for McLaren, who strives to create a global impact by forging a strong foundation for principles of sustainability in emerging industries . Mr . Blackwell has served as our Chief Operating Officer since July 1 , 2021 , and as our President since July 1 , 2022 . Prior to his appointment to these positions and since September 2020 , Mr . Blackwell served as our Director of Business Development . From December 2018 until June 2021 , Mr . Blackwell also served as President of Daily Jam Holdings LLC . From January 2016 to December 2018 , he served as Vice President of Due North Holdings LLC . Prior to joining the Company, Mr . Blackwell developed domestic and international markets for Kahala Brands, a global franchise organization with more than 3 , 000 retail locations in over a dozen countries . He also led emerging brand and portfolio operations for several private equity groups investing in the restaurant franchise space . Mr . Blackwell earned his B . A . in Finance from Fort Lewis College . Berekk Blackwell | President & Chief Operating Officer Bryan McLaren, MBA | Chairman of the Board & Chief Executive Officer
Capital Structure
23 Capital Structure Common Shares Outstanding* Cash on Hand* 12.2MM $3.0MM Market Capitalization*** $5.7MM Total Full Year Cash Flow from Operations** $871.9K Total Inside Beneficial Ownership** 22% Zoned Properties (OTCQB: ZDPY) Capital Markets Profile * Figures are calculated from Q3 2023 financial reporting filed November 13, 2023 ** Figures are from most recently completed Full Year Financials (FY2022) filed March 28, 2023 *** Market Capitalization calculated as of November 8, 2023
Investment Thesis
25 Property Investment Portfolio Generating >$2.3 Million Passive Rental Revenue (Annually) Focused on Direct - to - Consumer commercial real estate investments within the regulated cannabis industry Competitive Positioning with Access to Unique Pipeline of New Property Acquisitions Zoned Properties has developed an integrated business model that fuels a strong pipeline for property investments. Non - Plant Touching Company in the High Growth Emerging Cannabis Industry The commercial cannabis industry topped $38 billion in 2022, with analysts expecting the industry to reach $57 billion by 203 0 Scalable Growth Model with 8 Years of Publicly Audited Company Financials & Reporting Tight capital structure & operating cash - flow, number of shares outstanding has remained the same since 2018 at 12,201,548 Increasing Ability to Access Capital with Strong Reputation Established Banking Relationships & Capital Broker Partnerships. Secured $4.5mm debt facility @ 7.65%. Investment Thesis
Company Contact Information 26 Bryan McLaren Chairman, CEO, & CFO Zoned Properties, Inc. | Scottsdale, AZ www.ZonedProperties.com Tel 480.351.8193 | [email protected]