Zoned Properties Reports Fourth Quarter and Full-Year 2017 Financial Results

News provided by

Zoned Properties, Inc.

Mar 13, 2018, 08:00 ET

SCOTTSDALE, Ariz., March 13, 2018 /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 12-month periods ended December 31, 2017.

Letter to Shareholders

2017 Highlights
2017 Highlights

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.

Fourth Quarter 2017 Financial Results

  • Revenue decreased 2% to $533,000, compared to $543,000 for the fourth quarter of 2016, reflecting a decrease in third party revenue due to the sale of a building in Tempe, AZ in March 2017, offset by an increase in revenues generated from related party leases.
  • Operating expenses decreased 50% to $329,000, down from $652,000 for the fourth quarter of 2016.
  • Income from operations was $204,000 for the fourth quarter of 2017, compared to a loss from operations of $109,000 for the fourth quarter last year.
  • Net income was $189,000, or $0.01 per basic and diluted share, compared to a net loss of $(166,000), or $(0.01) per basic and diluted share, for the fourth quarter of 2016.
  • As of December 31, 2017, the Company had cash of $824,000, compared to $366,000 as of December 31, 2016.

Full-Year 2017 Financial Results

  • Revenue increased 14% to $2.1 million, compared to $1.9 million for the full-year 2016.
  • Operating expenses decreased 33% to $1.4 million, down from $2.1 million for the full-year 2016.
  • Inclusive of the one-time gain of approximately $832,000 on the sale of a property in Tempe, AZ. recognized in the first quarter of 2017, net income was $1.4 million, or $0.07 per basic and diluted share, compared to a net loss of $(502,000), or $(0.03) per basic and diluted share, for the full-year 2016.
  • Net cash provided by operating activities was $54,000 for the full-year 2017 compared to net cash used in operating activities of $3,100 for the full-year 2016.

"At the start of 2017 we expressed our optimism about achieving profitability through increased monthly rental revenue streams and lower operating expenses, and we achieved those goals with revenue growth of 14% and a reduction in our operating expenses of more than 30% to drive net income of $1.4 million and positive cash from operations for the full year," commented Bryan McLaren, Chief Executive Officer of Zoned Properties. "Our 2017 accomplishments not only drove impressive financial results, but also laid the groundwork for us to further invest in other projects to replicate our successes and further drive value for our shareholders."

Supplemental Information Regarding Current Portfolio of Rental Properties

At December 31, 2017


Tempe, AZ (a)

Gilbert,
AZ *

Green
Valley,
AZ

Chino
Valley,
AZ

Kingman,
AZ

Total

Total Rentable Sq. Ft.

60,000

Land

1,440

40,000

1,497

102,937

Sq. Ft. Rented (as of 12/31/17)

27,500

N/A

1,440

10,000

1,497

37,500

Vacant Rentable Sq. Ft.

32,500

N/A

0

30,000

0

65,437

Total # of Tenants

2

1

1

1

1

Annual Base Rent (2018) (b)

482,600

15,000

133,619

796,250

168,782

1,596,251

Annual Base Rent (2019) (b)

617,600

0

140,300

836,062

177,221

1,771,183

(a)    In addition to base rent received from tenants, the company leases 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 the company's consolidated financial statements.

* The company leases the entire undeveloped 34,717 square feet land parcel to a tenant.

"In 2018, we plan to further leverage our success, experience and industry relationships to capitalize on demand for high-quality, expert property development through our Strategic Advisory Services," added McLaren. "We are already actively engaged with a number of prospective clients to develop licensed medical marijuana facilities in several states, building a pipeline for future growth. Our strong track record of success puts us in an enviable position of being highly selective with the projects we accept and commit resources to."

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. Zoned Properties is an accredited member of the Better Business Bureau, the Forbes Real Estate Council, and the U.S. Green Building Council. The Company focuses on the strategic development of commercial properties that face unique zoning challenges; identifying solutions that could potentially have a major impact on cash flow and property value. Zoned Properties targets commercial properties that can be acquired and re-zoned or permitted 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

Consolidated Balance Sheets







As of

As of






 December 31,


 December 31,







2017

2016









 ASSETS






 Cash




$       824,240

$        366,024

 Rental properties, net


7,170,322

6,878,584

 Rental property held for sale, net


-

1,140,891

 Deferred rent receivable


-

16,462

 Deferred rent receivable - related parties


1,708,734

1,006,171

 Real estate tax escrow


-

39,487

 Note receivable - related party


182,365

-

 Prepaid expenses and other current assets


127,902

140,010

 Property and equipment, net


35,768

40,212

 Security deposits



2,890

8,158









 Total Assets



$  10,052,221

$     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 



8,896

78,311

 Accrued expenses



48,468

96,748

 Accrued expenses - related parties


33,600

85,541

 Deferred revenues



28,750

4,750

 Security deposits payable - related parties


71,800

70,000

 Security deposits payable


5,864

21,964









 Total Liabilities



2,217,378

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 December 31, 2017 and 2016 ($1.00 per share liquidation preference)  


2,000

2,000


Common stock: $.001 par value, 100,000,000 shares authorized;  17,345,497 and 17,210,318 issued and outstanding at December 31, 2017 and 2016, respectively

17,345

17,210


Additional paid-in capital

20,630,649

20,352,528

Accumulated deficit

(12,815,151)

(14,193,053)









 Total Stockholders' Equity


7,834,843

6,178,685









 Total Liabilities and Stockholders' Equity


$  10,052,221

$     9,635,999









 See accompanying notes to consolidated financial statements.

Zoned Properties, Inc. and Subsidiaries

Consolidated Statements of Operations





 For the Years Ended


 Three Months Ended 





 December 31,


 December 31,





2017

2016

2017

2016








(Unaudited)

(Unaudited)

 REVENUES:










 Rental revenues


$    80,180

$  239,178

$     12,187

$     61,269

 Rental revenues - related parties


2,033,684

1,614,530

521,075

481,569












 Total revenues


2,113,864

1,853,708

533,262

542,838











 OPERATING EXPENSES:










 Compensation and benefits


569,215

472,728

123,814

106,529

 Professional fees


232,887

989,506

66,885

385,268

 General and administrative expenses


165,500

204,029

34,801

52,037

 Depreciation and amortization


225,220

181,899

57,455

55,989

 Property operating expenses


112,555

79,101

22,033

24,160

 Real estate taxes


90,821

111,186

24,333

27,627

 Settlement expense


20,500

87,500

-

-












 Total operating expenses


1,416,698

2,125,949

329,321

651,610











 INCOME (LOSS) FROM OPERATIONS


697,166

(272,241)

203,941

(108,772)











 OTHER (EXPENSES) INCOME:









    Interest expenses


(42,983)

(192,492)

-

(48,123)

    Interest expenses - related parties


(129,288)

(35,000)

(30,300)

(8,750)

    Gain (loss) on sale of property and equipment


831,753

(1,843)

-

-

    Other income


12,750

-

12,750

-

    Interest income


8,504

-

2,882

-












 Total other (expenses) income,  net


680,736

(229,335)

(14,668)

(56,873)











 INCOME (LOSS) BEFORE INCOME TAXES


1,377,902

(501,576)

189,273

(165,645)











 PROVISION FOR INCOME TAXES


-

-

-

-











 NET INCOME (LOSS)


$1,377,902

$(501,576)

$   189,273

$(165,645)











 NET INCOME (LOSS) PER COMMON SHARE:










 Basic


$        0.07

$     (0.03)

$         0.01

$      (0.01)

 Diluted


$        0.07

$     (0.03)

$         0.01

$      (0.01)











 WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:










 Basic


17,309,446

17,150,944

17,309,446

17,150,944

 Diluted


17,482,142

17,150,944

17,482,142

17,150,944

Zoned Properties, Inc. and Subsidiaries

Consolidated Statements of Cash Flows



 For the Years Ended



December 31,


2017

2016





CASH FLOWS FROM OPERATING ACTIVITIES



Net income (loss)

$ 1,377,902

$(501,576)

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:



Depreciation and amortization expense

225,220

181,899

Stock-based compensation

223,375

249,125

Stock option expense

14,806

559,578

Stock-based settlement expense

10,500

65,625

(Gain) loss from sale of property and equipment

(831,753)

1,843

Change in operating assets and liabilities:



Deferred rent receivable

-

(7,553)

Deferred rent receivable - related parties

(702,563)

(639,158)

Real estate tax escrow

39,487

6,585

Note receivable

(182,365)

-

Prepaid expenses and other assets

12,108

(28,951)

Security deposits

5,268

-

Accounts payable

(69,415)

41,514

Accrued expenses

(26,406)

4,704

Accrued expenses  - related parties

(51,941)

28,999

Deferred revenues

24,000

4,750

Security deposits payable - related party

1,800

43,750

Security deposits payable

(16,100)

(14,226)





NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES

53,923

(3,092)





CASH FLOWS FROM INVESTING ACTIVITIES



Acquisition of buildings and improvements

(497,309)

(910,314)

Cash received from sale of property and equipment

1,984,188

500

Acquisition of property and equipment

(2,586)

(2,534)





NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES

1,484,293

(912,348)





CASH FLOWS FROM FINANCING ACTIVITIES



Proceeds from convertible debt - related parties

2,020,000

-

Repayment of convertible note - related party

(500,000)

-

Repayment of convertible note

(500,000)

-

Repayment of mortgage payable

(2,100,000)

-





NET CASH USED IN FINANCING ACTIVITIES

(1,080,000)

-





NET INCREASE (DECREASE) IN CASH

458,216

(915,440)





CASH, beginning of year

366,024

1,281,464





CASH, end of year

$   824,240

$   366,024





SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION



Interest paid

$   225,087

$   192,500





SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:



Common stock issued for buildings and improvements

$       7,700

$     60,000

Issuance of common stock for future services

$               -

$       5,375

Common stock issued for accrued settlement payable

$     21,875

$               -

Reclassification of rental property to rental property held for sale

$               -

$1,140,891










See accompanying notes to consolidated financial statements.

SOURCE Zoned Properties, Inc.