Form 8-K for ZONED PROPERTIES, INC.
18-Feb-2016
Entry into a Material Definitive Agreement, Regulation FD Disclosure, Fina
Pursuant to the terms of the Chino Valley LOI, the parties agreed to amend the existing lease agreement, dated August 6, 2015, to provide for the lease by Chino Valley to Tenant of approximately 45,000 square feet of space in Chino Valley, Arizona. The monthly rent due, pursuant to the terms of the Chino Valley LOI, will be $70,833.33 beginning June 1, 2016 and $127,500 beginning August 1, 2016; however, the increased rental revenue will be contingent upon the completion of the constructed expansion at the facility. In subsequent years beginning August 1, 2017, there will be a 5% annual increase in the monthly rent. The parties identified a budget of $2,000,000 for developing the property and constructing the tenant improvements.
On February 17, 2016, Zoned Colorado Properties, LLC (“Zoned Colorado”), a wholly owned subsidiary of the Company, entered into a binding letter of intent
(the “Parachute LOI”) with Parachute Development Corporation (“Parachute”)
pursuant to which the parties agreed to the material terms of a purchase agreement to be entered into by the parties.
Pursuant to the terms of the Parachute LOI, the parties will execute a purchase agreement consistent with the terms of the Parachute LOI no later than 45 business days after execution of the Parachute LOI. The purchase agreement will provide for the purchase of property in Parachute, Colorado, by Zoned Colorado and the sale of such property by Parachute. The purchase price of the property will be $499,857. Zoned Colorado will pay 55% of the purchase price in cash. Parachute will finance 45% of the purchase price at an interest rate of 6.5% amortized over a five-year period, with a balloon payment at the end of the fifth year. Payments will be made monthly and there will be no pre-payment penalty.
Zoned Colorado will have a right of first refusal on three additional lots owned by Parachute in Parachute, Colorado.
The Parachute LOI provides that the purchase agreement will be subject to certain contingencies, including that Zoned Colorado must obtain financing for the purchase and development of the property, the grant of a special use permit by the Town of Parachute, and the tenant’s obtaining a license to cultivate on the property.
The foregoing descriptions of the Chino Valley LOI and the Parachute LOI are not complete descriptions of all of the parties’ rights and obligations under the agreements and are qualified in their entireties by reference to the Chino Valley LOI, a copy of which is filed as Exhibit 10.1 to this current report on Form 8-K, and the Parachute LOI, a copy of which is filed as Exhibit 10.2 to this current report on Form 8-K, each of which is incorporated herein by reference.
On February 18, 2016, the Company issued a press release concerning certain business updates. A copy of this press release is attached hereto as Exhibit 99.2 and incorporated herein by reference. The information contained in the website is not a part of this current report on Form 8-K.
Exhibit No. Description
10.1 Binding Letter of Intent dated as of February 16, 2016 between Chino Valley Properties, LLC, C3C3 Group, LLC and Broken Arrow Herbal Center, Inc.
10.2 Binding Letter of Intent dated as of February 17, 2016 between Zoned Colorado Properties, LLC and Parachute Development Corporation.
99.1 Press release of Zoned Properties, Inc. dated February 16, 2016.
99.2 Press release of Zoned Properties, Inc. dated February 18, 2016
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