UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

 

 

FORM 8-K

 

 

 

CURRENT REPORT PURSUANT TO

SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

Date of Report (Date of earliest event reported): August 23, 2016

 

Zoned Properties, Inc.
(Exact Name of Registrant as Specified in its Charter)
 
Nevada
(State or Other Jurisdiction of Incorporation)

 

000-51640   46-5198242
(Commission File Number)   (IRS Employer Identification No.)
     

14300 N. Northsight Blvd., #208

Scottsdale, AZ

  85260
(Address of Principal Executive Offices)   (Zip Code)

 

(Registrant’s telephone number, including area code): 407-257-0400

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2.)

 

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230 425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240 14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240 14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240 13e-4(c))

 

 

 

   

 

 

Item 1.01. Entry into a Material Definitive Agreement.

 

On August 23, 2016, Zoned Properties, Inc. (the “Company”) entered into a second amendment to commercial lease (the “Amendment”) with C3C3 Group, LLC (“C3C3”) and Alan Abrams, effective September 1, 2016. Pursuant to the terms of the Amendment, the leased property was expanded from 5,000 square feet to 15,000 square feet and the monthly rental rate was increased, such that the monthly rent for the premises will be as follows:

 

Months 1-12     -     $ 13,500.00  
Months 13-18     -     $ 13,500.00  
Months 19-24     -     $ 25,500.00  
Months 25-36     -     $ 49,500.00  
Months 37-48     -     $ 52,500.00  
Months 49-60     -     $ 55,125.00  
Months 61-72     -     $ 57,881.25  
Months 73-84     -     $ 60,775.31  
Months 85-96     -     $ 63,814.08  
Months 97-108     -     $ 67,004.78  
Months 109-120     -     $ 67,004.78  
Months 121-132     -     $ 67,004.78  
Months 133-144     -     $ 67,004.78  
Months 145-156     -     $ 67,004.78  
Months 157-168     -     $ 67,004.78  
Months 169-180     -     $ 67,004.78  
Months 181-192     -     $ 67,004.78  
Months 193-204     -     $ 67,004.78  
Months 205-216     -     $ 67,004.78  
Months 217-228     -     $ 67,004.78  
Months 229-240     -     $ 67,004.78  

 

C3C3 is owned by Mr. Abrams, a significant stockholder of the Company. Christopher Carra, a significant stockholder of the Company, is president of C3C3.

 

The foregoing description of the Amendment is not a complete description of all of the parties’ rights and obligations under the Amendment and is qualified in its entirety by reference to the Amendment, a copy of which is filed as Exhibit 10.1 to this current report on Form 8-K and incorporated herein by reference.

 

Item 7.01. Regulation FD Disclosure.

 

On August 25, 2016, the Company issued a press release regarding certain business updates, including entry into the Amendment. A copy of this press release is attached hereto as Exhibit 99.1 and incorporated herein by reference. The information contained in the website is not a part of this current report on Form 8-K.

 

Item 9.01. Financial Statements and Exhibits.

 

The exhibits listed in the following Exhibit Index are furnished as part of this current report on Form 8-K.

 

Exhibit No.   Description
10.1   Second Amendment to Commercial Lease by and between Zoned Properties, Inc., C3C3 Group, LLC and Alan Abrams.
99.1   Press release of Zoned Properties, Inc. dated August 25, 2016.

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  ZONED PROPERTIES, INC.
   
Dated: August 25, 2016 /s/ Bryan McLaren
  Bryan McLaren
  Chief Executive Officer

 

 

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Exhibit 10.1

 

SECOND AMENDMENT TO COMMERCIAL LEASE AGREEMENT

 

This Second Amendment to the Commercial Lease Agreement (the “SECOND AMENDMENT”) is made this 1 st day of September, 2016, (the “EFFECTIVE” DATE) by and between Zoned Properties, Inc., C3C3 Group, LLC. and Alan Abrams, Individually as Personal Guarantor.

 

WITNESSETH :

 

WHEREAS, Landlord and Tenant heretofore entered into a Commercial Lease Agreement (the “LEASE”) executed and effective as of August 15, 2015 for the lease on the facilities commonly known as 410 S. Madison Dr. Suite 1, Tempe Arizona 85281; and

 

WHEREAS, The Landlord has invested capital into the property for expansion of the facilities for use by the Tenant, including by not limited to an expansion of utilities and an expansion of cultivation space; and

 

WHEREAS, The parties hereto desire to change the rental rate of the monthly rental payment and the size of the operating premises to reflect the expanded facilities; and

 

WHEREAS, all defined terms used in the Lease shall have the same meaning herein as therein.

 

NOW, THEREFORE, in consideration of the mutual covenants herein contained, and for good and valuable consideration, the sufficiency and receipt of which is acknowledged, the Parties agree to the following amendments to the language of the Lease:

 

1. 2.01 Premises : The Premises shall be amended as per the Premises description attached as an updated “ Amended Exhibit C ” to the original Lease Agreement.
     
2. 5.01 Base Rent : The Base Rent shall be amended as per the Rental Schedule attached as an updated “ Amended Exhibit B ” to the original Lease Agreement.

 

[Signature Page to Follow]

 

  1  

 

 

Your signature below will indicate that you agree to the terms and conditions as set forth herein dated September 01, 2016:

 

Zoned Properties, Inc.   C3C3 Group, LLC.
         
By: /s/ Bryan McLaren   By: /s/ Christopher Carra
Name: Bryan McLaren   Name: Christopher Carra
Title: CEO   Title: President
         
Alan Abrams, Individually,      
         
By: /s/ Alan Abrams      
Name: Alan Abrams      
Title: Personal Guarantor      

   

  2  

 

 

AMENDED EXHIBIT B: Rental Payment Schedule

 

Year   Months   Start Date   Monthly Payment     Annual
Rental Rate 		    Base
Rental Rate 		    Rentable Area    
1   01-12   8/1/15   $ 13,500.00     $ 162,000.00     $ 32.40       5,000  
2   13-18   8/1/16   $ 13,500.00     $ 162,000.00     $ 10.80       15,000  
2   19-24   2/1/17   $ 25,500.00     $ 306,000.00     $ 20.40       15,000  
3   25-36   8/1/17   $ 49,500.00     $ 594,000.00     $ 29.70       20,000  
4   37-48   8/1/18   $ 52,500.00     $ 630,000.00     $ 31.50       20,000  
5   49-60   8/1/19   $ 55,125.00     $ 661,500.00     $ 33.08       20,000  
6   61-72   8/1/20   $ 57,881.25     $ 694,575.00     $ 34.73       20,000  
7   73-84   8/1/21   $ 60,775.31     $ 729,303.75     $ 36.47       20,000  
8   85-96   8/1/22   $ 63,814.08     $ 765,768.94     $ 38.29       20,000  
9   97-108   8/1/23   $ 67,004.78     $ 804,057.38     $ 40.20       20,000  
10   109-120   8/1/24   $ 67,004.78     $ 804,057.38     $ 40.20       20,000  
11   121-132   8/1/25   $ 67,004.78     $ 804,057.38     $ 40.20       20,000  
12   133-144   8/1/26   $ 67,004.78     $ 804,057.38     $ 40.20       20,000  
13   145-156   8/1/27   $ 67,004.78     $ 804,057.38     $ 40.20       20,000  
14   157-168   8/1/28   $ 67,004.78     $ 804,057.38     $ 40.20       20,000  
15   169-180   8/1/29   $ 67,004.78     $ 804,057.38     $ 40.20       20,000  
16   181-192   8/1/30   $ 67,004.78     $ 804,057.38     $ 40.20       20,000  
17   193-204   8/1/31   $ 67,004.78     $ 804,057.38     $ 40.20       20,000  
18   205-216   8/1/32   $ 67,004.78     $ 804,057.38     $ 40.20       20,000  
19   217-228   8/1/33   $ 67,004.78     $ 804,057.38     $ 40.20       20,000  
20   229-240   8/1/34   $ 67,004.78     $ 804,057.38     $ 40.20       20,000  

 

*Annual Rental Rate escalates at 5% per annum through year 10

 

 

 

 

AMENDED EXHIBIT C: PROPERTY SITE AND LEGAL DESCRIPTION

 

Parcel ID: 124-39-038
   
Property Address: 410 S. Madison Dr. Suite #1
  Tempe, AZ 85281
   
Building and Premises: Tempe Cultivation Site; approximately 15,000 square feet of completed warehouse located in eastern side of the building. The Authority to Operate (ATO) for the Cultivation Site will be held by CJK, Inc.

 

 

 

 

 

 

 

 

Exhibit 99.1

 

Zoned Properties Announces Expansion of Leased Facilities at Medical Marijuana Business Park in Tempe, Arizona

 

Medical Marijuana Tenant Expands from 5,000 to 15,000 square feet

 

SCOTTSDALE, Ariz., August 25, 2016 /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 marijuana industry, today announced that it has signed an amendment to the existing Lease Agreement with its medical marijuana tenant at the company’s Medical Marijuana Business Park in Tempe, Arizona. The amendment will significantly increase the base rent for the property once increased rental payments begin in the first quarter of 2017. Additionally, Zoned Properties has entered into another lease amendment with a second tenant at the property that leases space for an antenna facility. That lease amendment will contribute to increased rental revenue at no additional cost to the company.

 

The licensed medical marijuana facility is expanding its current operation from 5,000 to 15,000 square feet. The tenant intends to have the largest infusion kitchen and processing facility in Arizona and will use the additional 10,000 square feet of space for cultivation and processing. Zoned Properties has reserved a total of 30,000 square feet for the tenant’s future expansions. The lease terms are Triple Net (NNN) and the expanded development will utilize Zoned Properties’ Triple-Set (SSS) development and design model.

 

Bryan McLaren, Chief Executive Officer of Zoned Properties, stated, “This expansion for our tenant is a great example of how quickly an experienced operator can grow their business operations with the availability of a sophisticated facility. An important part of our development strategy is to ensure that development and expansion matches the pace of our tenant’s business operations, giving the tenant time to adjust to increased rental payments based upon their own revenue stream in the marketplace. This strategy helps mitigate default risk in a constantly evolving industry. The 60,000 square foot Medical Marijuana Business Park will give our tenant the opportunity to continue expansion in the future as their business grows, and gives the company the opportunity to develop space for another operator in the near future. We will continue our process of developing relationships with the right set of tenants to bring the property to full capacity.”

 

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. The Company acquires commercial properties that face unique zoning challenges and identifies solutions that can potentially have a major impact on the cash flow and value generated. Zoned Properties targets commercial properties that can be acquired and potentially re-zoned 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.

 

Investor Relations

 

Brett Maas
Managing Partner
Hayden IR
Tel (646) 536-7331    
brett@haydenir.com