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Zoned Properties Reports Third Quarter 2018 Financial Results

SCOTTSDALE, Ariz., Nov. 13, 2018 /PRNewswire/ -- Zoned Properties, Inc. (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

 

Cision

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