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): October 14, 2019

RW Holdings NNN REIT, Inc.
(Exact name of registrant as specified in its charter)

Maryland
 
000-55776
 
47-4156046
(State or other jurisdiction
 
(Commission
 
(I.R.S. Employer
of incorporation)
 
File Number)
 
Identification No.)

3090 Bristol Street, Suite 550
   
Costa Mesa, California
 
92626
(Address of principal executive offices)
 
(Zip Code)

Registrant’s telephone number, including area code: (855) 742-4862

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 1.01.
Material Agreements.

Amendment to Advisory Agreement

On October 14, 2019, RW Holdings NNN REIT, Inc. (the “Company”), entered into an agreement with BrixInvest, LLC (“BrixInvest”), the Company’s sponsor and advisor, to amend the Second Amended and Restated Advisory Agreement with BrixInvest, effective as of August 11, 2017, as further amended on August 3, 2018 and August 9, 2019 (the “Third Amendment”). The Third Amendment provides that the Company will pay all future organization and offering costs, and it will no longer be reimbursed by BrixInvest for the Company’s investor relations personnel costs after September 30, 2019, and BrixInvest agreed to terminate its right to receive 3% of all offering proceeds as reimbursement for organization and offering costs paid by BrixInvest.

Item 8.01.
Other Events.

Amended and Restated Share Repurchase Program

 On October 14, 2019, the Company amended and restated its share repurchase program for its Class C common stock (the “Shares”) to clarify the requirement that Shares be held for 90 days before they will be accepted for redemption by excluding Shares acquired pursuant to the Company’s distribution reinvestment plan or automatic investment program if the applicable stockholder has held their initial investment for at least 90 days.

Furthermore, the share repurchase program was amended to allow the Company to repurchase all of the Shares owned by a stockholder if, as a result of a request for repurchase, such stockholder will own Shares having a value of less than $500 (based on the Company’s most-recently published offering price per Share).

As previously announced on September 19, 2019, the Company will temporarily suspend its share repurchase program on October 19, 2019 and the share repurchase program will remain suspended until such time, if any, as the Company’s board of directors, in its discretion, may approve the reinstatement of the share repurchase program.

Item 9.01
Financial Statements and Exhibits.

(d)          Exhibits.

Exhibit No.
 
Description
4.1
 
Amended and Restated Share Repurchase Program (Class C Common Stock)
     
 
Amendment No. 3 To Second Amended and Restated Advisory Agreement of  RW Holdings NNN REIT, Inc.
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)
   
 
By:
/s/ Raymond J. Pacini
   
Name:
Raymond J. Pacini
   
Title:
Chief Financial Officer

Date: October 17, 2019


Exhibit 4.1

Amended and Restated Share Repurchase Program (Class C Common Stock)

The shares of Class C common stock (the “Shares”) of RW Holdings NNN REIT, Inc. (the “Corporation” or “our” or “we”) are currently not listed on a national securities exchange or included for quotation on a national securities market, and currently there is no intention to list the Shares. In order to provide the Corporation’s stockholders with some liquidity, this Share Repurchase Program (the “Program”) has been adopted to enable stockholders to sell their Shares to the Corporation in limited circumstances. Stockholders may present for repurchase all or a portion of their Shares to the Corporation in accordance with the procedures outlined in this Program. Shares must be held for 90 days after they have been issued to the applicable stockholder before the Corporation will accept requests for repurchase, except for Shares acquired pursuant to the Corporation’s distribution reinvestment plan or automatic investment program if the applicable stockholder has held their initial investment for at least 90 days. Upon such presentation, the Corporation may, subject to the conditions and limitations described below, repurchase the Shares presented for cash to the extent there are sufficient funds available for the repurchase. No fees will be paid to the Advisor or its affiliates to complete any transactions under the Program.

Repurchase Price

The prices at which Shares will be repurchased are as follows:


•
For those Shares held by the stockholder for less than one year, 97% of the most recently published net asset value (“NAV“) per Share or in the absence of a published NAV per share, $9.86 per Share (which is equal to 97% of the $10.16 per share price in the Corporation’s current offering);


•
For those Shares held by the stockholder for at least one year but less than two years, 98% of the most recently published NAV per Share or in the absence of a published NAV per Share, $9.96 per share (which is equal to 98% of the $10.16 per Share price in the current offering);


•
For those Shares held by the stockholder for at least two years but less than three years, 99% of the most recently published NAV per Share or in the absence of a published NAV per share, $10.06 per Share (which is equal to 99% of the $10.16 per Share price in the current offering); and


•
For those Shares held by the stockholders for at least three years, 100% of the most recently published NAV per Share.

However, at any time we are engaged in an offering of shares, the price at which we will repurchase shares will never be greater than the applicable per-share offering price.

For purposes of determining the time period a stockholder has held each Share, the time period begins as of the date the stockholder acquired the Share. As described above, the Shares owned by a stockholder may be repurchased at different prices depending on how long the stockholder has held each Share submitted for repurchase, provided the stockholder has held the Shares for at least 90 days (other than Shares acquired pursuant to the Corporation’s distribution reinvestment plan or automatic investment program if the applicable stockholder has held their initial investment for at least 90 days).

The NAV and NAV per Share generally will be determined annually in the first quarter of each year as of December 31 of the prior year. In addition, the NAV may be updated at any time between annual calculations of NAV to reflect significant events that have been determined to have had a material impact on NAV.

NAV per Share will be published as follows:

(a)          in a Current Report on Form 8-K or in our annual or quarterly reports, all publicly filed with the U.S. Securities and Exchange Commission (the “SEC”), or

(b)          in a separate written notice to the stockholders;
(c)          during any primary offering stage, the NAV information will be set forth in a Prospectus Supplement or Post-Effective Amendment, as required under federal securities laws;

(d)          information about the NAV per Share will be posted on the Corporation’s website (such information may be provided by means of a link to our public filings on the SEC’s website, www.sec.gov) and on the Corporation’s toll-free information line: (1-855-742-4862); and

(e)          in the event that NAV and NAV per Share change during any given year, the new NAV per Share will be announced no later than ten (10) business days prior to the second-to-last business day of the month in which such adjustment occurs.

Limitations on Repurchase

The Corporation may, but is not required to, use available cash not otherwise dedicated to a particular use to pay the repurchase price, including cash proceeds generated from the distribution reinvestment plan, securities offerings, operating cash flow not intended for distributions, borrowings and capital transactions, such as asset sales or refinancings.

In addition, the Corporation may not repurchase shares in an amount that would violate the restrictions on distributions under Maryland law, which prohibits distributions that would cause a corporation to fail to meet statutory tests of solvency.

The Program will be subject to the following additional limitations on the number of Shares that may be repurchased:


•
Repurchases per month will be limited to no more than 2% of our most recently determined aggregate NAV, and for any calendar quarter will be limited to no more than 5% of the most recently determined aggregate NAV, which means the Corporation will be permitted to repurchase Shares with a value of up to an aggregate limit of approximately 20% of aggregate NAV in any 12-month period.


•
The foregoing repurchase limitations will be based on “net repurchases” during a quarter or month, as applicable. The term “net repurchases” means the excess of Share repurchases (capital outflows) over the proceeds from the sale of Shares (capital inflows) for a given period. Thus, for any given calendar quarter or month, the maximum amount of repurchases during that quarter or month will be equal to (1) 5% or 2% (as applicable) of the most recently determined aggregate NAV, plus (2) proceeds from sales of new Shares in the current offering (including purchases pursuant to our distribution reinvestment plan) since the beginning of a current calendar quarter or month, less (3) repurchase proceeds paid since the beginning of the current calendar quarter or month.


•
Alternatively, the Corporation’s board of directors (the “Board”) may choose whether the 5% quarterly limit will be applied to “gross repurchases,” meaning that amounts paid to repurchase Shares would not be netted against capital inflows. If repurchases for a given quarter are measured on a gross basis rather than on a net basis, the 5% quarterly limit could limit the amount of Shares redeemed in a given quarter despite the Corporation receiving a net capital inflow for that quarter.


•
In order for the Board to change the basis of repurchases from net to gross, or vice versa, the Corporation will provide notice to stockholders (i) in a Prospectus Supplement or current or periodic report filed with the SEC; and (ii) in a press release or on our website, at least ten (10) days before the first business day of the quarter for which the new test will apply. The determination to measure repurchases on a gross basis, or vice versa, will only be made for an entire quarter, and not particular months within a quarter.

Procedures for Repurchase

Qualifying stockholders who desire to have their Shares repurchased must give notice as provided on their personal on-line dashboard at www.RichUncles.com. All requests for repurchase must be received by the Corporation at least two (2) business days prior to the end of a month. Shares repurchase requests may be withdrawn, provided they are received by the Corporation at least two (2) business days prior to the end of a month. Shares will be repurchased by the 3rd business day after the end of a month in which a request for repurchase was received and not withdrawn.
If, as a result of a request for repurchase, a stockholder will own Shares having a value of less than $500 (based on the Corporation’s most-recently published offering price per Share), the Corporation reserves the right to repurchase all of the Shares owned by such stockholder.

Any determination to repurchase less Shares than requested during any month due to the lack of sufficient funds shall be disclosed to the Corporation’s current and prospective stockholders.

In the event that some but not all of the Shares submitted are repurchased in a given period, Shares submitted for repurchase during such period will be repurchased on a pro rata basis. If, in each of the first two (2) months of a quarter, the 2% monthly repurchase limit is reached and repurchases are reduced pro rata for such months, then in the third and final month of that quarter, the applicable limit for such month will be less than 2% of NAV because repurchases for that month, combined with repurchases for the two previous months, cannot exceed 5% of aggregate NAV.

All unsatisfied repurchase requests must be resubmitted at the start of the next month or quarter, or upon the recommencement of the Program (in the event of its suspension), as applicable, to be eligible for repurchase in a later month.

Notwithstanding anything to the contrary herein, the Corporation understands that there may be instances when the 90-day holding requirement described above would place an undue hardship on a stockholder.  In such extenuating circumstances, the Corporation reserves the right, in its sole discretion, to make exceptions to the 90-day holding requirement.

Amendment, Suspension or Termination of Program and Notice

The Board may amend, suspend or terminate the Program without approval of holders of Shares upon 30 days’ notice, if the Board believes such action is in the best interests of stockholders and the Corporation, including because Share repurchases place an undue burden on our liquidity, adversely affect our operations, adversely affect stockholders whose Shares are not repurchased, or if the Board determines that the funds otherwise available to fund our Share repurchases are needed for other purposes. In addition, the Board may amend, suspend or terminate the Program due to changes in law or regulation, or if the Board becomes aware of undisclosed material information that it believes should be publicly disclosed before Shares are repurchased. Material modifications, including any reduction to the monthly or quarterly limitations on repurchases, and suspensions of the stock repurchase program, will be promptly disclosed (i) in a Prospectus Supplement (or Post-Effective Amendment), or (ii) in a current or periodic report filed with SEC; and (iii) on the Corporation’s website.

Exhibit 10.1

AMENDMENT NO. 3
 TO
SECOND AMENDED AND RESTATED ADVISORY AGREEMENT
OF
RW HOLDINGS NNN REIT, INC.

This Amendment No. 3 (“Amendment”) to the Second Amended and Restated Advisory Agreement, effective as of August 11, 2017, as further amended on August 3, 2018 and August 9, 2019 (the “Agreement”) between and among RW Holdings NNN REIT, Inc. (the “NNN”), Rich Uncles NNN REIT Operator, LLC (the “Advisor”) and BrixInvest, LLC (the “Sponsor”), is hereby entered into as of this 14th day of October, 2019.

RECITALS

WHEREAS, in connection with the Sponsor’s recent settlement with the SEC, all future offerings of NNN common stock must be made through a registered broker dealer;

WHEREAS, in connection with NNN’s planned filing of an update to its Form S-11 that will include disclosures of the new plan of distribution, NNN will agree to pay all future organization and offering costs, and to no longer be reimbursed by the Sponsor for NNN’s Investor Relations personnel costs after September 30, 2019, in exchange for the Sponsor’s agreement to terminate its right to receive 3% of all offering proceeds as reimbursement for organization and offering costs paid by the Sponsor; and

WHEREAS, the execution and delivery of this Amendment has been duly authorized by each of the Board of Directors of NNN, the Sole Manager and Member of the Advisor and the Board of Managers of the Sponsor which have consented to the Amendment and authorized the execution and delivery of this Consent by the Manager.

AMENDMENT

The Agreement is hereby amended as follows:

1.  Section 10 (a) (i) is hereby deleted from the Agreement effective as of October 1, 2019 (the “Effective Date”), together with any and all references to “Organizational and Offering Costs” appearing elsewhere in the Agreement.

IN WITNESS WHEREOF, the undersigned have executed this Amendment effective as of the Effective Date.

NNN:
 
ADVISOR:
 
SPONSOR:
               
RW Holdings NNN REIT, Inc.
 
Rich Uncles NNN REIT Operator, LLC
 
BrixInvest, LLC
               
By:
/s/ RAYMOND J. PACINI
 
By:
BrixInvest, LLC, its Sole Manager and Member
 
By:
/s/ AARON S. HALFACRE
 
Raymond J. Pacini
         
Aaron Halfacre
 
Chief Financial Officer
         
Manager
     
By:
/s/ AARON S. HALFACRE
     
       
Aaron Halfacre
     
       
Manager