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): December 28, 2023
Modiv Industrial, Inc.
(Exact name of registrant as specified in its charter)
Maryland
  
001-40814
  
47-4156046
(State or other jurisdiction of incorporation)
  
(Commission File Number)
  
(I.R.S. Employer Identification No.)

200 S. Virginia Street, Suite 800
    
Reno, Nevada
  
89501
(Address of principal executive offices)
  
(Zip Code)

Registrant’s telephone number, including area code: (888) 686-6348
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
         
Class C Common Stock, $0.001 par value per share
  
MDV
  
New York Stock Exchange
         
7.375% Series A Cumulative Redeemable Perpetual Preferred Stock, $0.001 par value per share
  
MDV.PA
  
New York Stock Exchange

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.
Entry Into a Material Definitive Agreement
 
On December 28, 2023, Modiv Industrial, Inc. (“Modiv Industrial” or the “Company”), entered into a First Amendment (the “First Amendment”) to the Agreement of Purchase and Sale by and among the Company, certain subsidiaries of the Company, Generation Income Properties, L.P., a Delaware limited partnership, and Generation Income Properties, Inc., a Maryland corporation (“GIPR”), dated August 10, 2023. Pursuant to the First Amendment, in the event that GIPR elects to redeem the 2,400,000 shares of GIPR Series A Preferred Stock (the “GIPR Preferred Stock”) that the Company received as partial consideration for the sale of 13 retail and office properties to GIPR in August 2023 for shares of GIPR common stock, then the Company and its affiliates (including Modiv Operating Partnership, LP, a Delaware limited partnership (“Modiv OP”)), may retain up to 7.5% of such shares of GIPR common stock and, subject to the satisfaction of certain conditions, agree to distribute the remaining shares of GIPR common stock to the Company’s stockholders and holders of Class C Units of Modiv OP. Prior to the First Amendment, subject to the satisfaction of certain conditions, the Company and Modiv OP were obligated to distribute all of the shares of GIPR common stock to the Company’s stockholders and holders of Class C Units of Modiv OP in the event that GIPR elected to redeem the GIPR Preferred Stock for shares of GIPR common stock. The foregoing description of the First Amendment is not complete and is qualified in its entirety by reference to the full text of the First Amendment, a copy of which is filed herewith as Exhibit 10.1 and is incorporated herein by reference.

Item 7.01.
Regulation FD Disclosure.
 
Press Release
On December 29, 2023, the Company issued a press release announcing that on December 29, 2023, it received notice from GIPR, that on January 31, 2024, GIPR will redeem the GIPR Preferred Stock for GIPR common stock. Furthermore, on December 29, 2023, the Board of Directors of the Company (the “Board”) declared a stock distribution on the Company’s Class C common stock, $0.001 par value per share (the “Common Stock”), and Modiv OP’s Class C Units of 0.28 shares of GIPR common stock for each share of Modiv Industrial Common Stock held by the Company’s stockholders and each Class C Unit of Modiv OP held by Modiv OP’s Class C Unit holders as of the record date of January 17, 2024, which will be paid on or about January 31, 2024; provided that no fractional shares of GIPR common stock shall be distributed on Modiv Industrial Common Stock or Modiv OP Class C Units and, instead, as to any fractional shares, the Company will round down to the nearest whole share of GIPR common stock.  The information set forth in Item 7.01 of this Current Report on Form 8-K and in the attached Exhibit 99.1 is deemed to be “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. The information set forth in Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed incorporated by reference into any filing under the Exchange Act or the Securities Act of 1933, as amended, regardless of any general incorporation language in such filing.

Item 8.01.
Other Events.
 
Stock Distribution of GIPR Common Stock Declared
On December 29, 2023, the Board authorized and the Company declared a stock distribution on the Common Stock and the Modiv OP Class C Units, at a rate of 0.28 shares of GIPR common stock per share of Modiv Industrial Common Stock and per Class C Unit of Modiv OP, which will be payable to holders of record of the Common Stock and Modiv OP Class C Units as of the close of business on January 17, 2024 (the “GIPR Distribution”). The GIPR Distribution will be payable on or about January 31, 2024.
Safe Harbor Statement
There is no guarantee that the Company’s Board will authorize, or that the Company will declare, additional dividends in the future, and the amount of future dividends, if any, and the authorization and payment thereof, will be determined by the Board based on the Company’s financial condition and such other factors as the Board deems relevant. The Company’s operating performance and the timing and amount of future dividends is subject to risks and uncertainties as described under “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.
2
Item 9.01.
Financial Statements and Exhibits.
 
(d) Exhibits
 
Exhibit No.
Description
     
 
 
 
     
 
104
Cover Page Interactive Data File – the cover page XBRL tags are embedded within the Inline XBRL document

3
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.
 
MODIV INDUSTRIAL, INC.
(Registrant)
   
 
By:
/s/ RAYMOND J. PACINI
   
Name:
Raymond J. Pacini
   
Title:
Chief Financial Officer
       
Date: December 29, 2023
      


 4
Exhibit 10.1

FIRST AMENDMENT TO AGREEMENT OF PURCHASE AND SALE

THIS FIRST AMENDMENT TO AGREEMENT OF PURCHASE AND SALE (this “Amendment”) is made and entered into as of December 28, 2023, by and among (i) Modiv Industrial, Inc. (formerly known as Modiv Inc.)(“Modiv”), (ii) each entity identified as a Seller on the signature pages to this Amendment (collectively and together with Modiv, “Seller”), (iii) Generation Income Properties, L.P., a Delaware limited partnership (“GIPR OP”), and (iv) Generation Income Properties, Inc. (“GIPR” together with GIPR OP, collectively, “Buyer”, and together with Seller, the “Parties”).
 
RECITALS
 
WHEREAS, Seller and Buyer entered into that certain Agreement of Purchase and Sale, dated as of August 10, 2023 (the “Purchase Agreement”).

WHEREAS, capitalized terms used in this Amendment and not defined herein shall have the meaning ascribed to them in the Purchase Agreement.

WHEREAS, pursuant to Section 7.12 of the Purchase Agreement, the Parties may amend the Purchase Agreement in a writing signed by the Parties.

WHEREAS, the Parties desire to amend the Purchase Agreement to allow Seller and its affiliates to retain 7.5% of the Underlying Shares that may be issued to Modiv or its affiliates upon redemption of the GIPR Preferred Stock.

NOW, THEREFORE, in consideration of good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:


 1.
Section 3.7(a) of the Purchase Agreement is hereby amended and restated in its entirety as follows:

(a)          Subject to receipt of approval from Modiv’s lenders to make a distribution of the Underlying Shares to Modiv’s shareholders and Modiv OP unit holders and any applicable regulatory approvals or legal restrictions, as soon as reasonably practicable and subject to GIPR’s cooperation, following the issuance to Modiv or an Affiliate of Modiv of the Underlying Shares pursuant to a redemption of the Share Consideration under the Articles Supplementary, Modiv or its Affiliates, as the case may be, shall declare a dividend of, or otherwise distribute, that number of Underlying Shares to the shareholders of Modiv and Modiv OP unit holders, that results in Modiv and its Affiliates (including Modiv OP) owning no more than 7.5%, in the aggregate, of the Underlying Shares. From the date of issuance to Modiv or an Affiliate of Modiv of the Underlying Shares until the distribution to Modiv’s shareholders and Modiv OP unit holders as described in the foregoing, Modiv shall provide notice to Buyer in advance of granting any ownership waivers to any Person exempting such Person from an ownership limit with respect to the outstanding shares of Modiv’s capital stock.  For the avoidance of doubt, if all of the Underlying Shares are issued to Modiv OP, then this Section shall require Modiv OP to distribute that number of Underlying Shares to the Modiv OP unit holders, including Modiv, and Modiv shall, as soon as reasonably practicable, distribute such shares to the shareholders of Modiv, so that following such distribution Modiv and its Affiliates (including Modiv OP) will own no more than 7.5%, in the aggregate, of the Underlying Shares.
 

 2.
Sections 7.9, 7.10, 7.11, 7.15 and 7.18 of the Purchase Agreement are hereby incorporated herein mutatis mutandis.
 

 3.
Except as modified herein, all terms and conditions of the Purchase Agreement shall remain in full force and effect, which terms and conditions the Parties hereby ratify and confirm.

[Intentionally Left Blank; Signature Pages Follow]

IN WITNESS WHEREOF, the parties hereto have reviewed and executed this Amendment and it is effective as of the date first set forth above.
 
BUYER:
  
   
Generation Income Properties, L.P.,
a Delaware limited partnership
  
     
By:
Generation Income Properties, Inc., its Sole General Partner
  

By:
/s/ DAVID SOBELMAN
Name:
David Sobelman
Title:
Chief Executive Officer

Generation Income Properties, Inc.,
a Maryland corporation
  

By:
/s/ DAVID SOBELMAN
Name:
David Sobelman
Title:
Chief Executive Officer

[Signatures Continue on the Next Page]

IN WITNESS WHEREOF, the parties hereto have reviewed and executed this Amendment and it is effective as of the date first set forth above.

SELLER:
 
Modiv Industrial, Inc.,
A Maryland corporation
 
By:
/s/ RAYMOND J. PACINI
  
Name:
Raymond J. Pacini
  
Its: 
Chief Financial Officer
  

SELLER:
 
ALL THE SELLING ENTITIES LISTED BELOW, each, a California or Nevada limited liability company
 
RU WAG Santa Maria, LLC
RU DG Big Springs, LLC
RU DT Morrow GA, LLC
RU Pre K San Antonio, LLC
RU GSA Vacaville, LLC
RU DG Bakersfield, LLC
RU Exp Maitland FL, LLC
RU DG OHPAME6, LLC
By:
Modiv Operating Partnership, LP,
a Delaware limited liability company,
its sole member
   
By:
Modiv Industrial, Inc.,
a Maryland corporation,
its General Partner
     
 
By:
/s/ RAYMOND J. PACINI
 
Name:
Raymond J. Pacini
 
Its: 
Chief Financial Officer


Exhibit 99.1

Modiv Industrial Declares Distribution of GIPR Common Shares

Management Provides Forward-Looking Thoughts
 
RENO, NV, December 29, 2023 – Modiv Industrial, Inc. (“Modiv Industrial,” “Modiv” or the “Company”) (NYSE:MDV), the only public REIT exclusively focused on acquiring industrial manufacturing real estate properties, today announced the declaration of a stock distribution of Generation Income Properties, Inc. (NASDAQ: GIPR), common stock to the stockholders of Modiv Industrial.

On December 29, 2023, Modiv Industrial received GIPR’s notice that on January 31, 2024, it will redeem the GIPR Series A Preferred Stock that the Company received as partial consideration for its August 2023 sale of 13 retail and office properties to GIPR. Under the contractual agreement with GIPR, Modiv Industrial and Modiv Operating Partnership, LP (“Modiv OP”), will receive 2,794,597 shares of GIPR common stock in exchange for retiring the outstanding 2,400,000 shares of GIPR Series A Preferred Stock. Modiv Industrial and its affiliates, including Modiv OP, will retain approximately 5% of the GIPR common stock received and distribute the remaining shares of GIPR common stock to Modiv Industrial’s common stockholders and holders of Class C units of Modiv OP, which will be payable to holders of record as of the close of business on January 17, 2024. Modiv Industrial’s common stockholders and holders of Modiv OP’s Class C Units will receive 0.28 shares of GIPR common stock for each share of Modiv Industrial common stock or Modiv OP Class C Unit they own as of the record date and this stock distribution will be payable on or about January 31, 2024. No fractional shares of GIPR common stock will be distributed on Modiv Industrial common stock or Modiv OP Class C Units and, instead, as to any fractional shares, the Company will round down to the nearest whole share of GIPR common stock.  The distribution is subject to the Securities and Exchange Commission (the “SEC”) declaring GIPR’s registration statement on Form S-11 effective, which is expected by mid-January.

Based on GIPR’s most recent closing price, the distribution of 0.28 shares of GIPR common stock for each outstanding share of Modiv’s Class C common stock and Class C units of Modiv OP equates to a one-time dividend of $1.11 of GIPR stock, which represents a special dividend yield of 7.4% based on MDV’s most recent closing price.  For those who don’t know, GIPR is also a monthly dividend paying stock that currently pays an annualized dividend of approximately $0.468 per share. If the current dividend rates of GIPR common stock and Modiv common stock remain constant in the future, Modiv stockholders, over a twelve-month period, could potentially receive $1.15 (MDV’s current annualized cash dividend) + $1.11 (GIPR shares) + $0.13 (GIPR’s current annualized cash dividend) for a potential total of $2.39 – which equates to a 16% total annualized dividend yield based on Modiv’s most recent closing price.

“I sincerely hope that everyone reading this has had an enjoyable holiday season spent with family and friends. From the release of third quarter results in November until the release of our 10-K, we have a relatively long period of time between financial filings – the windows where we normally provide business updates. As such, we felt it appropriate to utilize this dividend press release to also provide select updates to our most recent business outlook shared in November. Barring anything material, we do not anticipate providing another business update until the filing of our 10-K. Regardless of the time between updates, rest assured that we are working diligently to execute upon all of our objectives.
 
Business Outlook:

Dispositions – Though still subject to contingencies that may not be fulfilled, we have now entered into three separate legal agreements to sell two of our non-core office properties as well as one of our industrial distribution centers. Specifically, we are under contract to sell our properties currently leased to Cummins located in Nashville, TN, and Levins located in Sacramento, CA. Should the contingencies be met, and there is no assurance they will be, these properties are scheduled to close in 1Q24. Additionally, we are under a letter of intent, and finalizing a purchase contract, with a nationally recognized homebuilder to sell our property currently leased to Costco located in Issaquah, WA. It is contemplated that the property would not sell until 2025. We also have a back-up letter of intent from another nationally recognized homebuilder.

Should we find success with our two anticipated first quarter closings, then we would seek to redeploy the sales proceeds into new property acquisitions. At this time, we have explored numerous potential opportunities in our pipeline with indicated cash cap rates greater than 8%.

Strategic Partner – Since our most recent update, we have now entered into nine separate nondisclosure agreements with a list of potential strategic partners and have provided them access to our due diligence items. As a reminder, our proposed ideal arrangement is a joint venture that would be conducive to the long-term increase in our tradeable float and market capitalization. We recognize that what we want from a joint venture might not be what a potential strategic partner wants – if any proposal isn’t viable for all parties, then we won’t do it.

As we close out 2023, it is easy to look back on the year and see all of the transformational execution our team was able to deliver. I am very thankful for our team, our investors and all of our stakeholders. We look forward to delivering more results in 2024.” – Aaron Halfacre, CEO of Modiv Industrial.

About Modiv Industrial
 
Modiv Industrial, Inc., is an internally managed REIT that is focused on single-tenant net-lease industrial manufacturing real estate. The Company actively acquires critical industrial manufacturing properties with long-term leases to tenants that fuel the national economy and strengthen the nation’s supply chains. Driven by an investor-first focus, Modiv Industrial has over $600 million in real estate assets (based on estimated fair value) comprising more than 4.5 million square feet of aggregate leasable area. For more information, please visit:  www.modiv.com.

Forward-looking Statements
 
Certain statements contained in this press release, other than historical facts, may be considered 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. These statements include, but are not limited to, statements related to pending dispositions, potential joint ventures, annualized dividend rates, future distributions and distributions declared by the Company’s board of directors. Such forward-looking statements are subject to various risks and uncertainties, including but not limited to those described under the section entitled “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 filed with the Securities and Exchange Commission (the “SEC”) on March 13, 2023. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this press release and in the Company’s other filings with the SEC. Any forward-looking statements herein speak only as of the time when made and are based on information available to the Company as of such date and are qualified in their entirety by this cautionary statement. The Company assumes no obligation to revise or update any such statement now or in the future, unless required by law.

Inquiries:
management@modiv.com