8-K
Zoned Properties, Inc. (ZDPY)
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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): November12, 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, #205Scottsdale, 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) |
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| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
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Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which<br><br> 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 andFinancial Condition.
On November 12, 2020, Zoned Properties, Inc. (the “Company”) issued a press release announcing its financial results for the three and nine month periods ended September 30, 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 November 12, 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 Statementsand Exhibits.
(d) Exhibits.
| Exhibit No. | Description |
|---|---|
| 99.1 | Press release of the registrant dated November 12, 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: November 12, 2020 | /s/ Bryan McLaren |
| Bryan McLaren | |
| Chief Executive Officer & Chief Financial Officer |
2
Exhibit 99.1
Zoned Properties Reports Third Quarter2020 Financial Results
Large-Scale Development Expansion Proceedsas Arizona Voters Pass Prop 207
SCOTTSDALE, Ariz., November 12, 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 nine and three-month periods ended September 30, 2020.
Nine Months and Third Quarter 2020 CompanyHighlights
| ● | Zoned Properties successfully leveraged its Arizona property portfolio to receive a commitment<br>of at least $8 Million from our Significant Tenant, to be applied toward infrastructure expansion. |
|---|---|
| ● | To date, nearly $5 Million of the $8 Million committed has been invested in the expansion projects<br>located in Arizona. Construction and development work has made significant progress toward completion of the current phase of expansion,<br>with anticipated operational readiness in 2021. |
| --- | --- |
| ● | Zoned Properties completed a $100,000 strategic investment into a start-up cannabis franchise organization<br>that is now in the final stages of its anticipated launch. Zoned Properties expects to play a significant role with the cannabis<br>franchise related to the intricacies of strategic capital investment and commercial real estate development in the regulated cannabis<br>industry. |
| --- | --- |
| ● | In Arizona, and across the nation, the passage of regulated cannabis ballot measures reflect the<br>overwhelming support from the majority of American voters for the regulated cannabis industry. |
| --- | --- |
Nine Months and Third Quarter 2020 FinancialResults
| ● | Revenue decreased 10.5% to $302,772 for the third quarter of 2020, compared to $338,339 for the<br>third quarter of 2019. This decrease in revenues was primarily attributable to a decrease in advisory revenues of $42,191, or 70.2%,<br>offset by an increase in rent revenues of $6,624, or 2.4%. |
|---|---|
| ● | Operating expenses decreased 18.1% to $249,021 for the third quarter of 2020, compared to $304,052<br>for the third quarter of 2019. |
| --- | --- |
| ● | Income from operations increased 56.8% to $53,751 for the third quarter of 2020, compared to income<br>from operations of $34,287 for the third quarter of 2019, an increase of $19,464. |
| --- | --- |
| ● | Net income was $25,089, or $0.00 per basic and diluted share, for the third quarter of 2020, compared<br>to net income of $3,987, or $0.00 per basic and diluted share, for the third quarter of 2019. |
| --- | --- |
| ● | Net cash provided by operating activities was $48,470 for the nine months ended September 30, 2020,<br>compared to $219,433 for the nine months ended September 30, 2019. |
| --- | --- |
| ● | As of September 30, 2020, Zoned Properties had cash of $577,763, compared to $639,781 as of December<br>31, 2019. |
| --- | --- |
“It has been an exciting year for Zoned Properties as we continue expanding our operational footprint in Arizona, developing our national advisory services with new client projects and advisory professionals, and prepare for the launch of a new cannabis franchise concept,” commented Bryan McLaren, Chief Executive Officer of Zoned Properties. “We are empowered by Arizona voters and voters across the nation, who spoke up on election day to pass regulated cannabis measures on the ballot. Our expansion projects in Arizona could not have come at a better time, as we prepare for an exciting new adult-use marketplace and the completion of new operational square footage at our facilities in Arizona will lead to a material increase in leasing revenue for Zoned Properties.”
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-lookingstatements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities ExchangeAct of 1934, as amended. All statements other than statements of historical facts included in this press release are forward-lookingstatements. In some cases, forward-looking statements can be identified by words such as “believe,” “expect,”“anticipate,” “plan,” “potential,” “continue” or similar expressions. Such forward-lookingstatements include risks and uncertainties, and there are important factors that could cause actual results to differ materiallyfrom those expressed or implied by such forward-looking statements. These factors, risks and uncertainties are discussed in theCompany’s filings with the Securities and Exchange Commission. Investors should not place any undue reliance on forward-lookingstatements since they involve known and unknown, uncertainties and other factors which are, in some cases, beyond the Company’scontrol which could, and likely will, materially affect actual results, levels of activity, performance or achievements. Any forward-lookingstatement reflects the Company’s current views with respect to future events and is subject to these and other risks, uncertaintiesand assumptions relating to operations, results of operations, growth strategy and liquidity. The Company assumes no obligationto publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differmaterially 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 Organizationdeclared 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 severityof the outbreak and its impact on the economic environment and our business is uncertain. Currently, all of the properties in ourportfolio 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 revenueat these properties and they have continued to make rental payments in full and on time and we believe the tenants’ liquidityposition 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 tenantsare otherwise unable or unwilling to make rental payments. In addition, a severe or prolonged economic downturn could result ina variety of risks to our business, including weakened demand for our properties and a decreased ability to raise additional capitalwhen 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
Exhibit99.2
Investor Presentation November 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 November 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 November 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 . Currently, 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 November 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 Maximizing Prosperity in Local Communities by creating a Paradigm for Sustainable Development in Emerging I ndustries , including the Regulated Cannabis Industry. Sophistication, Safety, Sustainability, Stewardship 877 - 360 - 8839 | @ZonedProperties OTCQB: ZDPY I November 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 November 2020
Source: Newfrontierdata.com THE MARKET OPPORTUNITY 877 - 360 - 8839 | @ZonedProperties OTCQB: ZDPY I November 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 November 2020
ZONED 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 drive our pipeline of acquisition & growth opportunities. 877 - 360 - 8839 | @ZonedProperties OTCQB: ZDPY I November 2020 Growth driven by Corporate Social Responsibility for the Regulated Cannabis Industry.
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 November 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 November 2020
ZONED BROKERAGE TEAM STRATEGY Real Estate transactions in the regulated cannabis industry can be extremely challenging. That’s why we created our own licensed brokerage team to directly guide clients through the process towards a successful transaction. 877 - 360 - 8839 | @ZonedProperties OTCQB: ZDPY I November 2020
ZONED FRANCHISE PARTNER STRATEGY • We believe Franchise Organizations are strong drivers of real estate development and investment opportunities. • Zoned Properties has partnered with & invested in a start - up cannabis franchise organization that we believe will allow us to leverage our network & real estate division to potentially expand across a multi - state platform. • Through our convertible debenture, Zoned Properties has the opportunity to convert this investment toward a 33% ownership stake in the franchise organization. 877 - 360 - 8839 | @ZonedProperties OTCQB: ZDPY I November 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 November 2020 877 - 360 - 8839 | @ZonedProperties
PORTFOLIO ANNUAL CASH FLOW OTCQB: ZDPY I November 2020 (As of September 30, 2020) Portfolio Annual Cash Flow Before and After 2020 Lease Amendments Projected Portfolio Cash Flow with Planning Expansion $0 $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 Before Lease Amendments (Prior) After Lease Amendments (Current) After Phase 1 Expansion (Q2 2021) After Phase 2 Expansion (Q2 2022) Total Property Portfolio Gilbert Green Valley Kingman Tempe Chino Valley Total Property Portfolio 877 - 360 - 8839 | @ZonedProperties 1 Phase 1 Expansion projected for Q2 2021 Completion. Significant Tenant has contractually agreed to invest $8 Million into Por tf olio for Phase 1 Expansion. 2 Phase 2 Expansion projected for Q2 2022 Completion. Master Plan has been approved for Phase 2 Expansion. Capital Source has n ot yet been identified to complete Phase 2 Expansion. 3 Total Property Portfolio includes approximately 2.3 Million Square Feet of debt - free real estate with vested - rights for future development. 1 2 3
PORTFOLIO DEVELOPED & RENTABLE SQF OTCQB: ZDPY I November 2020 (As of September 30, 2020) Developed & Rentable Square Footage Before and After 2020 Lease Amendments Projected Portfolio Square Footage with Planning Expansion 0 50,000 100,000 150,000 200,000 250,000 Before Lease Amendments (Prior) After Lease Amendments (Current) After Phase 1 Expansion (Q2 2021) After Phase 2 Expansion (Q2 2022) Total Property Portfolio Gilbert Green Valley Kingman Tempe Chino Valley Total Property Portfolio 877 - 360 - 8839 | @ZonedProperties 1 Phase 1 Expansion projected for Q2 2021 Completion. Projected to include approximately 155,000 square feet of developed & ren ta ble square footage. 2 Phase 2 Expansion projected for Q2 2022 Completion. Projected to include approximately 225,000 square feet of developed & ren ta ble square footage. 3 Total Property Portfolio includes approximately 2.3 Million Square Feet of debt - free real estate with vested - rights for future development. 1 2 3
SUMMARY CAPITAL STRUCTURE Book Value (BV) of Total Capital Market Value (MV) of Total Capital 1 $2.02M of Debt + $5.92M of Stockholders’ Equity = $7.94M BV of Total Capital 2 $2.02M of Debt + $4.08M of MV Equity ($0.34/share at 9/30/2020 * 12.01M shares outstanding) = $6.10M MV of Total Capital Total Capital Total Capital Book Value of Equity Total Debt Market Value of Equity Total Debt 67% 33% 75% 25% $7.9M 1 $6.1M 2 (As of September 30, 2020) *$ in millions 877 - 360 - 8839 | @ZonedProperties OTCQB: ZDPY I November 2020
SUMMARY STATEMENTS OF OPERATIONS Year Nine Months Ended Year Ended 9/30/2020 12/31/2019 12/31/2018 12/31/2017 12/31/2016 Total revenues $906,465 $1,260,421 $1,236,930 $2,113,864 $1,853,708 Total operating expenses $909,663 $1,259,706 $3,198,413 $1,416,698 $2,125,949 Interest expenses $90,000 $120,000 - $42,983 $192,492 Interest expenses – related parties $900 $1,200 $121,200 $129,288 $35,000 Net ( loss ) income $(90,608) $(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 $108,204 one - time gain from receipt of utilities rebate. 2 Includes $1.9 million one - time, non - cash write - off of deferred rent receivable. 3 Includes $ 831,753 one - time gain from the sale of property. 877 - 360 - 8839 | @ZonedProperties OTCQB: ZDPY I November 2020 (As of September 30, 2020)
SUMMARY BALANCE SHEETS As of 9/30/2020 12/31/2019 Cash $577,763 $639,781 Rental Properties, net $7,116,736 $7,374,807 Total Debt $2,020,000 $2,020,000 Total Liabilities $2,209,004 $2,193,859 Total Shareholders’ Equity $5,919,046 $5,965,644 $5,919,046 $2,209,004 $8,128,050 Total Shareholders' Equity Total Liabilities Total Assets Summary Balance Sheets as of September 30, 2020 877 - 360 - 8839 | @ZonedProperties OTCQB: ZDPY I November 2020
INDUSTRY LEADERSHIP Executive Councils & Memberships 877 - 360 - 8839 | @ZonedProperties OTCQB: ZDPY I November 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 November 2020
ZONED PROPERTIES ® , INC. TIGHT CAPITAL STRUCTURE 12,011,548 COMMON SHARES (As of September 30 , 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 November 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 November 2020