UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  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): September 26, 2019

RW Holdings NNN REIT, Inc.
(Exact Name of Registrant as Specified in Its Charter)
                   
Maryland
(State or other jurisdiction of incorporation )

 
000-55776
(Commission File Number)

 

47-4156046
(I.R.S. Employer
Identification No.)
         
3090 Bristol Street, Suite 550, Costa Mesa, California
92626
(Address of principal executive offices)
(Zip Code)
 
(855) 742-4862
(Registrant’s telephone number, including area code)
 
None
(Former name or former address, if changed since last report)

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:

☐          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))

Securities registered pursuant to Section 12(b) of the Act:
Title of each class
 
Trading Symbol(s)
 
Name of each exchange on which registered
None
 
None
 
None

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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 7.01   Regulation FD Disclosure

On September 27, 2019, RW Holdings NNN REIT, Inc. (the “Company”) issued a press release regarding the information disclosed below under Item 8.01 of this Current Report on Form 8-K.  A copy of the press release is attached hereto as Exhibit 99.1 and incorporated herein by reference.

Pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”), the information in this Item 7.01, including Exhibit 99.1 and information set forth therein, is deemed to have been furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended (the “Securities Act”) or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 8.01   Other Events

As the Company has previously disclosed, since 2017, the SEC has been conducting an investigation related to, among other things, the advertising and sale of securities in connection with the Company’s registered public offering of securities and compliance with broker-dealer regulations. The Company cooperated with the SEC in this matter.

Recently, the Company’s sponsor, BrixInvest, LLC (the “Sponsor”), proposed a settlement of the investigation to the SEC and, on September 26, 2019, the SEC accepted the settlement and entered an order (the “Order”) instituting proceedings against the Sponsor pursuant to Section 8A of the Securities Act and Section 21C of the Exchange Act. The Company is not a party to the settlement and understands that the staff of the enforcement division of the SEC does not to intend to recommend any action against the Company.

Under the settlement, the Sponsor, without denying or admitting any substantive findings in the Order, consented to entry of the Order, finding violations by it of Section 5(b)(1) of the Securities Act and Section 15(a) of the Exchange Act.  The Order does not find that the Sponsor violated any anti-fraud provisions of the federal securities laws or any other law and does not find any criminal violations or any scienter based violation involving the offer and sale of securities.

Under the terms of the Order, the Sponsor agreed to (i) cease-and-desist from committing or causing any future violations of Section 5(b) of the Securities Act and Section 15(a) of the Exchange Act, (ii) pay to the SEC a civil money penalty in the amount of $300,000 within 14 days of the entry of the Order, and (iii) undertake that any real estate investment trust which is or was formed, organized, or advised by it, including the Company, will not distribute securities except through a registered broker-dealer.  Although the Company is not a party to the settlement or the Order, the Sponsor’s undertaking in the Order will result in the securities the Company issues in any offering, including its registered public offering, being distributed only through a registered broker-dealer.
Item 9.01          Financial Statements and Exhibits

(d)          Exhibits.

Exhibit No.
Description
SIGNATURE

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.

   
RW HOLDINGS NNN REIT, INC.
   
(Registrant)
       
Dated:  September 26, 2019
By:
/s/ Raymond J. Pacini
   
Name:
Raymond J. Pacini
   
Title:
Chief Financial Officer
Exhibit 99.1

Rich Uncles Resolves SEC Inquiry

BrixInvest LLC, the current external advisor to RW Holdings NNN
REIT, Inc. successfully reached a settlement with the SEC


COSTA MESA, Calif., Sep. 27, 2019 /PRNewswire/ --  BrixInvest, LLC (“LLC” or “Rich Uncles”), the current external advisor to multiple real estate investment trusts (“REITs”), including RW Holdings NNN REIT, Inc. (“NNN REIT”), has successfully reached a settlement with the Securities and Exchange Commission (“SEC”), resolving the previously disclosed fact-finding investigation into the LLC. As part of the settlement, the SEC accepted the offer that allows NNN REIT to continue its offering through a FINRA registered broker-dealer.

“We are pleased that the settlement between our current external advisor and the SEC was approved yesterday,” stated Aaron Halfacre, CEO of NNN REIT. “Since first joining NNN REIT earlier this year, one of my primary objectives was to help our external advisor resolve the SEC matter. Throughout my two-decade career as an investment professional and CFA charter holder, I have worked for institutions that were committed to the highest ethical standards and well accustomed to the strict regulatory environments of FINRA and the SEC. Over the past year, while interacting with the Los Angeles office of the SEC, I have been steadfast in the desire to achieve those same standards in the real estate crowdfunding industry. I am also pleased that NNN REIT’s commitment to conduct its public offering through a registered broker-dealer was helpful in bringing about this resolution.”

“This may be uncommon for an executive in my position, but I wish to say a positive word to the many men and women that work within the SEC. It is a complex organization, with a myriad of departments, but it employs many honest, hardworking individuals doing the very important job of ensuring that investors are always put first.”

“The former executive officers of our external advisor were early real estate crowdfunding pioneers who took steps into the then unclear space of a newly formed industry. If the real estate crowdfunding industry is to grow to its fullest market potential, then I believe it needs to realize that disruptive technology and disintermediated business models can, and should, exist within the framework of FINRA’s rules and standards. I encourage my peers at other real estate crowdfunding companies, if they haven’t already done so, to raise the investor protection standards for our industry by seeking to have their website platforms, that sell their multiple offerings, become registered through a broker-dealer. Prior to joining NNN REIT, I had the pleasure of working at Realty Mogul – one of the first real estate crowdfunding companies to seek FINRA registration, and I am now happy to say that NNN REIT will too,” concluded Mr. Halfacre.
On September 20, 2019, NNN REIT announced that it had entered into a contribution agreement with the LLC, whereby the LLC would contribute substantially all of its assets to NNN REIT’s Operating Partnership. Upon a successful closing of the contribution, NNN REIT would become self-managed and no longer be externally advised by the LLC.

About RW Holdings NNN REIT, Inc.

RW Holdings NNN REIT, Inc. is an incorporated public, non-listed real estate investment trust and was formed to primarily invest, directly or indirectly through investments in real estate owning entities, in single-tenant income-producing properties located in the United States, which are leased to creditworthy tenants under long-term net leases.  As of June 30, 2019, the REIT’s real estate investment portfolio consisted of 24 operating properties, a 72.7% tenant-in-common interest in an office property and one parcel of land in 13 states, including 10 office, nine retail, and five industrial properties with approximately 1,537,000 square feet of aggregate leasable space.

About BrixInvest, LLC

BrixInvest, LLC (f/k/a Rich Uncles, LLC) is an advisor and sponsor of three public, non-listed real estate investment trusts:  Rich Uncles Real Estate Investment Trust I, RW Holdings NNN REIT, Inc., and BRIX REIT, Inc.

Forward-Looking Statements

This press release contains statements that constitute “forward-looking statements,” as such term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and such statements are intended to be covered by the safe harbor provided by the same. These statements are based on management’s current expectations and beliefs and are subject to a number of trends and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements; NNN REIT can give no assurance that its expectations will be attained. Factors that could cause actual results to differ materially from the expectations of NNN REIT include, but are not limited to, the occurrence of any event, change or other circumstances that could give rise to the termination of the contribution agreement; the inability of NNN REIT to engage a registered broker-dealer; general economic conditions; market conditions; legislative and regulatory changes that could adversely affect the business of NNN REIT; and other factors, including those set forth in the Risk Factors section of NNN REIT’s most recent Annual Report on Form 10-K for the year ended December 31, 2018, as updated by NNN REIT’s subsequent Quarterly Reports on Form 10-Q for the periods ended March 31, 2019 and June 30, 2019 filed with the SEC, and other reports filed by NNN REIT with the SEC, copies of which are available on the SEC’s website, www.sec.gov. NNN REIT undertakes no obligation to update these statements for revisions or changes after the date of this release, except as required by law.

Contact:

Jennifer Barber

Chief of Staff

(949) 537-2421

jbarber@richuncles.com