Zoned Properties Reports Third Quarter 2018 Financial Results

News provided by

Zoned Properties, Inc.

Nov 13, 2018, 16:05 ET

SCOTTSDALE, Ariz., Nov. 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 nine-month periods ended September 30, 2018.

Third Quarter 2018 Financial Results

  • Revenues were $263,000, compared to $535,000 for the third quarter of 2017.
  • Operating expenses were $270,000, down 17.2% compared to $326,000 for the third quarter of 2017.
  • Net income was $13,000, or $0.00 per basic and diluted share, compared to $182,000, or $0.01 per basic and diluted share, for the third quarter of 2017.
  • Cash provided by operating activities was $282,000 for the first nine months of 2018 compared to cash used by operating activities of $110,000 for the first nine months of 2017.
  • As of September 30, 2018, the Company had cash of $685,000, compared to $824,000 as of December 31, 2017.

"Zoned Properties continues to increase its operating efficiencies and has been expanding its strategic advisory practice," commented Bryan McLaren, Chief Executive Officer. "The company is well positioned to use its foundational portfolio of property assets as a platform for business expansion and diversification of services. Our expanded team is in the process of bidding to provide professional services to municipal governing bodies for the implementation of regulatory policies in new markets."

"The end of 2018 and 2019 will be heavily focused on growth of a diversified revenue stream," added Mr. McLaren. "We intend to accomplish this by prospecting new advisory services across the country for private and municipal clients. We believe that strategic real estate advisory services are likely to emerge as the growth engine for Zoned Properties and are moving to take advantage of new opportunities to create sustainable shareholder value."

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.

Use of Non-GAAP Financial Information

The Company measures its performance primarily through growth in revenue and operating profit.  In addition to the consolidated financial statements presented in accordance with GAAP, management uses certain non-GAAP measures to measure its operating performance, including operating expenses, exclusive of a one-time non-cash write-off related to deferred rent receivables.  A definition of the components of operating expenses, exclusive of a one-time non-cash write-off related to deferred rent receivables, and a reconciliation to the most directly comparable GAAP financial measure has been provided.

During the third quarter of 2018, the Company incurred a one-time non-cash write-off of $1.9 million related to deferred rent receivables. Operating expenses, exclusive of this one-time non-cash write-off related to deferred rent receivables, is presented to enhance an understanding of the operating results and is not intended to represent operating expenses or results of operations. The use of operating expenses, exclusive of the one-time non-cash write-off related to deferred rent receivables, provides a clearer understanding of normal, recurring operating results of the Company.

This non-GAAP measure is not in accordance with, and should not be used as an alternative to, measures prepared in accordance with GAAP.  In addition, non-GAAP measures are not based on any comprehensive set of accounting rules or principles. Non-GAAP measures have limitations in that they do not reflect all of the amounts associated with the Company's results of operations as determined in accordance with GAAP. Non-GAAP measures should only be used to evaluate our results of operations in conjunction with the corresponding GAAP measures.

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

















As of

As of






 September 30,


 December 31,







2018

2017






 (Unaudited)


 (Audited)

 ASSETS






 Cash




$         685,045

$         824,240

 Rental properties, net


7,395,808

7,170,322

 Deferred rent receivable - related parties


-

1,708,734

 Note receivable - related party


46,447

182,365

 Prepaid expenses and other current assets


130,749

127,902

 Property and equipment, net


30,463

35,768

 Security deposits



600

2,890









 Total Assets



$      8,289,112

$   10,052,221









 LIABILITIES AND STOCKHOLDERS' EQUITY














 LIABILITIES:







 Convertible notes payable - related parties


$      2,020,000

$      2,020,000

 Accounts payable 



-

8,896

 Accrued expenses



93,857

48,468

 Accrued expenses - related parties


34,500

33,600

 Deferred revenues



3,000

28,750

 Security deposits payable - related parties


71,800

71,800

 Security deposits payable


6,032

5,864









 Total Liabilities



2,229,189

2,217,378









 Commitments and Contingencies














 STOCKHOLDERS' EQUITY:






Preferred stock, $0.001 par value, 5,000,000 shares authorized; 2,000,000 shares issued and outstanding at September 30, 2018 and December 31, 2017 ($1.00 per share liquidation preference)  


2,000

2,000


Common stock: $0.001 par value, 100,000,000 shares authorized; 17,441,552 and 17,345,497 issued and outstanding at September 30, 2018 and December 31, 2017, respectively





17,442

17,345

Additional paid-in capital

20,738,321

20,630,649

Accumulated deficit

(14,697,840)

(12,815,151)









 Total Stockholders' Equity


6,059,923

7,834,843









 Total Liabilities and Stockholders' Equity


$      8,289,112

$   10,052,221

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,






2018

2017

2018

2017












 REVENUES:










 Rental revenues


$       12,876

$       13,291

$       37,279

$       67,993

 Rental revenues - related parties


249,638

522,103

937,137

1,512,609













 Total revenues


262,514

535,394

974,416

1,580,602












 OPERATING EXPENSES:










 Compensation and benefits


63,766

107,173

318,748

445,401

 Professional fees


63,052

45,381

220,551

166,002

 General and administrative expenses


46,046

44,118

123,572

130,699

 Depreciation and amortization


74,198

59,580

201,102

167,765

 Property operating expenses


971

28,163

37,270

90,522

 Real estate taxes


22,038

21,206

66,332

66,488

 Settlement expense


-

20,500

-

20,500

     Impairment loss


-

-

1,853,539

-













 Total operating expenses


270,071

326,121

2,821,114

1,087,377












 (LOSS) INCOME FROM OPERATIONS


(7,557)

209,273

(1,846,698)

493,225












 OTHER (EXPENSES) INCOME:










    Interest expenses


-

-

-

(42,983)

    Interest expenses - related parties


(30,300)

(30,300)

(90,900)

(98,988)

    Other income


50,000


50,000

-

    Gain on sale of property and equipment


-

-

-

831,753

    Interest income


1,229

2,836

4,909

5,622













 Total other (expenses) income,  net


20,929

(27,464)

(35,991)

695,404












 (LOSS) INCOME BEFORE INCOME TAXES


13,372

181,809

(1,882,689)

1,188,629












 PROVISION FOR INCOME TAXES


-

-

-

-












 NET (LOSS) INCOME


$       13,372

$  181,809

$(1,882,689)

$1,188,629












 NET (LOSS) INCOME PER COMMON SHARE:










 Basic



$           0.00

$        0.01

$        (0.11)

$        0.06

 Diluted



$           0.00

$        0.01

$        (0.11)

$        0.06












 WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:










 Basic



17,436,253

17,318,128

17,422,147

17,299,805

 Diluted



17,436,253

17,930,461

17,422,147

18,142,071

ZONED PROPERTIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)







 For the Nine Months Ended



September 30,


2018

2017





CASH FLOWS FROM OPERATING ACTIVITIES



Net income (loss)

$ (1,882,689)

$ 1,188,629

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



Depreciation and amortization expense

201,102

167,765

Stock-based compensation

84,132

204,000

Stock option expense

23,637

3,962

Stock-based settlement expense

10,500

Gain from sale of property and equipment

-

(831,753)

Impairment loss

1,853,539

-

Change in operating assets and liabilities:



  Rent receivable



(72,335)

  Deferred rent receivable - related parties

(144,805)

(537,756)

Real estate tax escrow

-

39,487

Note receivable

135,918

(179,483)

Prepaid expenses and other assets

(2,847)

6,100

Security deposits

2,290

5,268

Accounts payable

(8,896)

(67,659)

Accrued expenses

45,389

18,427

Accrued expenses  - related parties

900

(52,241)

Deferred revenues

(25,750)

(750)

Deferred revenues

-

1,841

Security deposits payable - related party

-

1,800

Security deposits payable

168

(16,100)





NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES

282,088

(110,298)





CASH FLOWS FROM INVESTING ACTIVITIES



Acquisition of buildings and improvements

(421,283)

(365,863)

Cash received from sale of property and equipment

-

1,984,188

Acquisition of property and equipment

-

(2,586)





NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES

(421,283)

1,615,739





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 (DECREASE) INCREASE IN CASH

(139,195)

425,441





CASH, beginning of period

824,240

366,024





CASH, end of period

$     685,045

$    791,465





SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION



Interest paid

$       90,000

$    192,087





SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:



Common stock issued for accrued settlement payable

$                 -

$      21,875

SOURCE Zoned Properties, Inc.

Related Links

http://www.zonedproperties.com

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