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): October 1, 2017
| 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.) | |
|
14269 N. 87th Street, #205 Scottsdale, AZ |
85260 | |
| (Address of Principal Executive Offices) | (Zip Code) |
(Registrant’s telephone number, including area code): (877) 360-8839
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)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01. Entry into a Material Definitive Agreement.
Effective October 1, 2017, Zoned Properties, Inc. (the “Company”) entered into a third amendment to commercial lease (the “Amendment”) with C3C3 Group, LLC (“C3C3”) and Alan Abrams, and Zoned Arizona Properties, LLC (“Zoned Arizona”). Pursuant to the terms of the Amendment, the leased property was expanded and the monthly rental rate was increased, such that the monthly rent for the premises will be as follows:
| August 1, 2015 – July 31, 2016 | - | $ | 13,500.00 | |||||
| August 1, 2016 – January 31, 2017 | - | $ | 13,500.00 | |||||
| February 1, 2017 – October 30, 2017 | - | $ | 25,500.00 | |||||
| November 1, 2017 – March 31, 2018 | - | $ | 30,500.00 | |||||
| April 1, 2018 – July 31, 2018 | - | $ | 35,500.00 | |||||
| August 1, 2018 – July 31, 2019 | - | $ | 45,500.00 | |||||
| August 1, 2019 – July 31, 2020 | - | $ | 55,500.00 | |||||
| August 1, 2020 – July 31, 2021 | - | $ | 58,275.00 | |||||
| August 1, 2021 – July 31, 2022 | - | $ | 61,188.75 | |||||
| August 1, 2022 – July 31, 2023 | - | $ | 64,248.19 | |||||
| August 1, 2023 – July 31, 2024 | - | $ | 67,460.60 |
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 October 3, 2017, 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.
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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: October 3, 2017 | /s/ Bryan McLaren |
| Bryan McLaren | |
| Chief Executive Officer |
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Exhibit 10.1
THIRD AMENDMENT TO COMMERCIAL LEASE AGREEMENT
This Third Amendment to the Commercial Lease Agreement (the “THIRD AMENDMENT”) is made this 1 st day of October, 2017, (the “EFFECTIVE” DATE) by and between Zoned Properties, Inc. (the “Landlord”), C3C3 Group, LLC (the “Tenant”). and Alan Abrams, Individually as Personal Guarantor (the “Guarantor”).
WITNESSETH :
WHEREAS, Landlord, Tenant, and Guarantor heretofore entered into a Commercial Lease Agreement (the “LEASE”) executed and effective as of August 15, 2015 for the lease of the facilities commonly known as 410 S. Madison Dr. Suite #1, Tempe Arizona 85281 (the “Tempe Property”); and
WHEREAS, Landlord, Tenant, and Guarantor heretofore entered into a FIRST LEASE AMENDMENT and SECOND LEASE AMENDMENT (the “Lease Amendments”) incorporated by reference, the most recent of which was dated September 01, 2016;
WHEREAS, Landlord has transferred and recorded property title of the Tempe Property into its wholly owned subsidiary, Zoned Arizona Properties, LLC (the “Subsidiary”), and in doing so has assigned its rights and interests in the Lease to its Subsidiary; and
WHEREAS, The Landlord has invested capital into the property for expansion of the facilities for use by the Tenant, including but not limited to an expansion of utilities and an expansion of operational space; and
WHEREAS, The parties hereto desire to amend the Premises and the Base Rent of the monthly rental payment under the Lease 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 amendment 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 October 01, 2017:
|
Zoned Properties, Inc. |
Zoned Arizona Properties, LLC. | |||
| By: | /s/ Bryan McLaren | By: | /s/ Bryan McLaren | |
| Name: | Bryan McLaren | Name: | Bryan McLaren | |
| Title: | CEO | Title: | Authorized Agent | |
| Alan Abrams, Individually. | C3C3 Group, LLC. | |||
| By: | /s/ Alan Abrams | By: | /s/ Christopher Carra | |
| Name: | Alan Abrams | Name: | Christopher Carra | |
| Title: | Personal Guarantor | Title: | President | |
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AMENDED EXHIBIT B: BASE RENT SCHEDULE
| Year | Start Date | End Date |
Monthly Base
Rent |
Annual Base
Rent |
Base Rent
Rate |
Rentable Area | ||||||||||||||
| 1 | 08/01/2015 | 07/31/2016 | $ | 13,500.00 | $ | 162,000.00 | $ | 32.40 | 5,000 | |||||||||||
| 2 | 08/01/2016 | 01/31/2017 | $ | 13,500.00 | $ | 162,000.00 | $ | 10.80 | 15,000 | |||||||||||
| 2 | 02/01/2017 | 10/30/2017 | $ | 25,500.00 | $ | 306,000.00 | $ | 20.40 | 15,000 | |||||||||||
| 3 | 11/01/2017 | 03/31/2017 | $ | 30,500.00 | $ | 366,000.00 | $ | 12.20 | 30,000 | |||||||||||
| 3 | 04/01/2018 | 07/31/2018 | $ | 35,500.00 | $ | 426,000.00 | $ | 14.20 | 30,000 | |||||||||||
| 4 | 08/01/2018 | 07/31/2019 | $ | 45,500.00 | $ | 546,000.00 | $ | 18.20 | 30,000 | |||||||||||
| 5 | 08/01/2019 | 07/31/2020 | $ | 55,500.00 | $ | 666,000.00 | $ | 22.20 | 30,000 | |||||||||||
| 6 | 08/01/2020 | 07/31/2021 | $ | 58,275.00 | $ | 699,300.00 | $ | 23.31 | 30,000 | |||||||||||
| 7 | 08/01/2021 | 07/31/2022 | $ | 61,188.75 | $ | 734,265.00 | $ | 24.48 | 30,000 | |||||||||||
| 8 | 08/01/2022 | 07/31/2023 | $ | 64,248.19 | $ | 770,978.25 | $ | 25.70 | 30,000 | |||||||||||
| 9 | 08/01/2023 | 07/31/2024 | $ | 67,460.60 | $ | 809,527.16 | $ | 26.98 | 30,000 | |||||||||||
| 10 | 08/01/2024 | 07/31/2025 | $ | 67,460.60 | $ | 809,527.16 | $ | 26.98 | 30,000 | |||||||||||
| 11 | 08/01/2025 | 07/31/2026 | $ | 67,460.60 | $ | 809,527.16 | $ | 26.98 | 30,000 | |||||||||||
| 12 | 08/01/2026 | 07/31/2027 | $ | 67,460.60 | $ | 809,527.16 | $ | 26.98 | 30,000 | |||||||||||
| 13 | 08/01/2027 | 07/31/2028 | $ | 67,460.60 | $ | 809,527.16 | $ | 26.98 | 30,000 | |||||||||||
| 14 | 08/01/2028 | 07/31/2029 | $ | 67,460.60 | $ | 809,527.16 | $ | 26.98 | 30,000 | |||||||||||
| 15 | 08/01/2029 | 07/31/2030 | $ | 67,460.60 | $ | 809,527.16 | $ | 26.98 | 30,000 | |||||||||||
| 16 | 08/01/2030 | 07/31/2031 | $ | 67,460.60 | $ | 809,527.16 | $ | 26.98 | 30,000 | |||||||||||
| 17 | 08/01/2031 | 07/31/2032 | $ | 67,460.60 | $ | 809,527.16 | $ | 26.98 | 30,000 | |||||||||||
| 18 | 08/01/2032 | 07/31/2033 | $ | 67,460.60 | $ | 809,527.16 | $ | 26.98 | 30,000 | |||||||||||
| 19 | 08/01/2033 | 07/31/2034 | $ | 67,460.60 | $ | 809,527.16 | $ | 26.98 | 30,000 | |||||||||||
| 20 | 08/01/2034 | 07/31/2035 | $ | 67,460.60 | $ | 809,527.16 | $ | 26.98 | 30,000 | |||||||||||
| * Annual Rental Rate escalates at 5% per annum through year 10 |
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AMENDED EXHIBIT C: PROPERTY SITE AND LEGAL DESCRIPTION
| Parcel ID: | 124-39-038 & 124-39-039A |
| Property Address: |
410 S. Madison Dr. Suites #1, #2, and #3 Tempe, AZ 85281 |
| Building and Premises: | 30,000 total square feet in stages of development at the Tempe Medical Marijuana Business Park; includes 20,000 square feet of developed cultivation and processing space already completed, and 10,000 square feet of un-developed warehouse to be used as storage space until future developments can be completed, located in eastern half of the building. The Authority to Operate (ATO) for the Licensed Medical Marijuana Facilities held by CJK, Inc. |
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Exhibit 99.1
Zoned Properties Announces Expansion of Tempe Medical Marijuana Business Park
Tempe Medical Marijuana Business Park More Than 50% Leased
SCOTTSDALE, Ariz., October 3, 2017 /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 it has signed another amendment to the existing lease agreement with its anchor tenant at the company’s Medical Marijuana Business Park located in Tempe, Arizona. The amendment will increase the size of the space leased and the amount of the monthly rental payments beginning November 1, 2017.
“Expansion at the Tempe Property will drive increased revenue and profitability in the coming quarters as increased monthly rent payments take effect,” commented Bryan McLaren, Chief Executive Officer of Zoned Properties. “Our anchor tenant now occupies more than 50% of the 60,000 square feet of total rentable space under long-term lease agreements with guaranteed rent escalators throughout their terms. As a result of our development efforts, the Tempe Medical Marijuana Business Park has become a premier facility for the industry in Arizona and a consistent income-producing asset for the company.”
The Company previously leased 15,000 square feet to the licensed medical marijuana anchor tenant. The amendment to the lease agreement with the tenant includes an expansion of an additional 15,000 square feet of cultivation space for a total of 30,000 square feet in various stages of development. 20,000 square feet of developed cultivation and processing space has already been completed, and another 10,000 square feet of undeveloped warehouse space will be used as storage space while additional building improvements are completed, ultimately triggering increases in rental revenue. Under the terms of the amended lease agreement, which became effective October 1, 2017, monthly rental payments will increase from the current $25,500 per month to $30,500 per month beginning in the fourth quarter of 2017. Subsequently, monthly rental payments will increase periodically until the expansion is completed and the monthly rent increases to $55,500. Thereafter, annual rental payments escalate at 5% per annum through year 10 of the lease.
The Tempe Medical Marijuana Business Park, which includes an additional 2,500 square feet of leased office and conference space serves as the corporate headquarters of Hana Meds , the premier, anchor tenant of the Tempe Property.
“Our intermediate and long-term plans include developing the remaining 30,000 square feet to be leased to other entities in varying segments within the medical marijuana industry to improve the diversification of our tenant base,” added Mr. McLaren.
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. 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 property value. Zoned Properties targets commercial properties that can be acquired and 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