Subjects: ERN, ACC
Zoned Properties Reports Fourth Quarter and Full-Year 2017 Financial Results
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
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."
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Supplemental Information Regarding Current Portfolio of Rental Properties | ||||||
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At December 31, 2017 | ||||||
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Tempe, AZ (a) |
Gilbert, |
Green |
Chino |
Kingman, |
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 |
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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 |
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Annual Base Rent (2019) (b) |
617,600 |
0 |
140,300 |
836,062 |
177,221 |
1,771,183 |
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(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. | ||||||
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(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. | ||||||
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* 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
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Zoned Properties, Inc. and Subsidiaries | ||||||||
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Consolidated Balance Sheets | ||||||||
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As of |
As of | |||||||
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December 31, |
December 31, | |||||||
|
2017 |
2016 | |||||||
|
ASSETS |
||||||||
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Cash |
$ 824,240 |
$ 366,024 | ||||||
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Rental properties, net |
7,170,322 |
6,878,584 | ||||||
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Rental property held for sale, net |
- |
1,140,891 | ||||||
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Deferred rent receivable |
- |
16,462 | ||||||
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Deferred rent receivable - related parties |
1,708,734 |
1,006,171 | ||||||
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Real estate tax escrow |
- |
39,487 | ||||||
|
Note receivable - related party |
182,365 |
- | ||||||
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Prepaid expenses and other current assets |
127,902 |
140,010 | ||||||
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Property and equipment, net |
35,768 |
40,212 | ||||||
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Security deposits |
2,890 |
8,158 | ||||||
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Total Assets |
$ 10,052,221 |
$ 9,635,999 | ||||||
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LIABILITIES AND STOCKHOLDERS' EQUITY |
||||||||
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LIABILITIES: |
||||||||
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Mortgage payable |
$ - |
$ 2,100,000 | ||||||
|
Convertible note payable |
- |
500,000 | ||||||
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Convertible notes payable - related parties |
2,020,000 |
500,000 | ||||||
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Accounts payable |
8,896 |
78,311 | ||||||
|
Accrued expenses |
48,468 |
96,748 | ||||||
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Accrued expenses - related parties |
33,600 |
85,541 | ||||||
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Deferred revenues |
28,750 |
4,750 | ||||||
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Security deposits payable - related parties |
71,800 |
70,000 | ||||||
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Security deposits payable |
5,864 |
21,964 | ||||||
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Total Liabilities |
2,217,378 |
3,457,314 | ||||||
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Commitments and Contingencies |
||||||||
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STOCKHOLDERS' EQUITY: |
||||||||
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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 | ||||||
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Additional paid-in capital |
20,630,649 |
20,352,528 | ||||||
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Accumulated deficit |
(12,815,151) |
(14,193,053) | ||||||
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Total Stockholders' Equity |
7,834,843 |
6,178,685 | ||||||
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Total Liabilities and Stockholders' Equity |
$ 10,052,221 |
$ 9,635,999 | ||||||
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See accompanying notes to consolidated financial statements. | ||||||||
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Zoned Properties, Inc. and Subsidiaries | ||||||||||
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Consolidated Statements of Operations | ||||||||||
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For the Years Ended |
Three Months Ended | |||||||||
|
December 31, |
December 31, | |||||||||
|
2017 |
2016 |
2017 |
2016 | |||||||
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(Unaudited) |
(Unaudited) | |||||||||
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REVENUES: |
||||||||||
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Rental revenues |
$ 80,180 |
$ 239,178 |
$ 12,187 |
$ 61,269 | ||||||
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Rental revenues - related parties |
2,033,684 |
1,614,530 |
521,075 |
481,569 | ||||||
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Total revenues |
2,113,864 |
1,853,708 |
533,262 |
542,838 | ||||||
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OPERATING EXPENSES: |
||||||||||
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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 | ||||||
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Depreciation and amortization |
225,220 |
181,899 |
57,455 |
55,989 | ||||||
|
Property operating expenses |
112,555 |
79,101 |
22,033 |
24,160 | ||||||
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Real estate taxes |
90,821 |
111,186 |
24,333 |
27,627 | ||||||
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Settlement expense |
20,500 |
87,500 |
- |
- | ||||||
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Total operating expenses |
1,416,698 |
2,125,949 |
329,321 |
651,610 | ||||||
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INCOME (LOSS) FROM OPERATIONS |
697,166 |
(272,241) |
203,941 |
(108,772) | ||||||
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OTHER (EXPENSES) INCOME: |
||||||||||
|
Interest expenses |
(42,983) |
(192,492) |
- |
(48,123) | ||||||
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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 |
- | ||||||
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Interest income |
8,504 |
- |
2,882 |
- | ||||||
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Total other (expenses) income, net |
680,736 |
(229,335) |
(14,668) |
(56,873) | ||||||
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INCOME (LOSS) BEFORE INCOME TAXES |
1,377,902 |
(501,576) |
189,273 |
(165,645) | ||||||
|
PROVISION FOR INCOME TAXES |
- |
- |
- |
- | ||||||
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NET INCOME (LOSS) |
$1,377,902 |
$(501,576) |
$ 189,273 |
$(165,645) | ||||||
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NET INCOME (LOSS) PER COMMON SHARE: |
||||||||||
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Basic |
$ 0.07 |
$ (0.03) |
$ 0.01 |
$ (0.01) | ||||||
|
Diluted |
$ 0.07 |
$ (0.03) |
$ 0.01 |
$ (0.01) | ||||||
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WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: |
||||||||||
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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 | ||||||
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Zoned Properties, Inc. and Subsidiaries | ||||
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Consolidated Statements of Cash Flows | ||||
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For the Years Ended | ||||
|
December 31, | ||||
|
2017 |
2016 | |||
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CASH FLOWS FROM OPERATING ACTIVITIES |
||||
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Net income (loss) |
$ 1,377,902 |
$(501,576) | ||
|
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |
||||
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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 | ||
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Change in operating assets and liabilities: |
||||
|
Deferred rent receivable |
- |
(7,553) | ||
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Deferred rent receivable - related parties |
(702,563) |
(639,158) | ||
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Real estate tax escrow |
39,487 |
6,585 | ||
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Note receivable |
(182,365) |
- | ||
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Prepaid expenses and other assets |
12,108 |
(28,951) | ||
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Security deposits |
5,268 |
- | ||
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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) | ||
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NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES |
53,923 |
(3,092) | ||
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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) | ||
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NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES |
1,484,293 |
(912,348) | ||
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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) |
- | ||
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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 | ||
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SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION |
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|
Interest paid |
$ 225,087 |
$ 192,500 | ||
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SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: |
||||
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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 |
$ - | ||
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Reclassification of rental property to rental property held for sale |
$ - |
$1,140,891 | ||
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See accompanying notes to consolidated financial statements. | ||||
SOURCE Zoned Properties, Inc.
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