Zoned Properties, Inc. (ZDPY) Reports First Quarter 2018 Financial Results

 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-month period ended March 31, 2018.

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.

First Quarter 2018 Financial Results

• Revenue decreased 1% to $533,000, compared to $540,000 for the first quarter of 2017, reflecting a decrease in third party revenue due to the sale of a building in Tempe, AZ in March 2017, partially offset by an increase in rent revenues.
• Operating expenses decreased 6% to $382,000, down from $406,000 for the first quarter of 2017.
• Income from operations increased 13% to $151,000, up from $134,000 for the first quarter of 2017.
• Net income was $123,000, or $0.01 per basic and diluted share, compared to $134,000, or $0.01 per basic and diluted share, excluding a one-time gain of approximately $832,000 on the sale of a property in Tempe, Arizona, for the first quarter of 2017.
• Net cash provided by operating activities was $202,000 for the first three months of 2018 compared to $13,000 for the first three months of 2017.
• As of March 31, 2018, the Company had cash of $917,000, compared to $824,000 as of December 31, 2017.

“Our first quarter financial results met expectations from the performance of our business model prior to May 1, 2018 which consisted of a single revenue stream comprised of fixed lease payments with fixed annual escalators,” commented Bryan McLaren, Chief Executive Officer of Zoned Properties. “The continued profitability, strong cash generation and improved operating income helped set the stage for a pivot to a new and exciting business model, one which we believe will enable the Company to capitalize on future growth opportunities.”

“Moving forward, we are expanding our business model to include a more robust fee structure for advisory services, while maintaining the stability of our lease model,” added McLaren. “As announced earlier this month, we are transitioning our business strategy to better position Zoned Properties to benefit from the growth of the medical marijuana industry by aligning our interests with our tenants and clients. We have added a second, contracted revenue stream with greater upside potential compared to our previous fixed lease payments and have introduced a new model for future client engagements. Most importantly, this new lease structure and business model lifts the ceiling on revenue growth and enables us to grow our top line more rapidly in tandem with our clients and more in line with the growth of the industry as a whole,” continued McLaren. “In connection with the new business model, the Company will write off its deferred rent receivable, resulting in a one-time, non-operational charge of approximately $1.8 millionin the second quarter of 2018. In addition, due to a decrease in collections of base rent of approximately $600,000, partially offset by lower operating expenses of $50,000 to $75,000, the company expects to report some net losses for the remainder of 2018. With respect to cash flow from operations, we expect the impact to be minimal.”

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.