Exhibit 99.2
 
 
NYSE: MDV

QUARTERLY SUPPLEMENTAL DATA
 
September 30, 2022
 

Modiv Inc.
Supplemental Information - Third Quarter 2022

Table of Contents
 
     
About the Data
3
     
Company Overview
4
     
Financial Results
 
 
Statements of Operations - Last Five Quarters
5
 
Statements of Comprehensive (Loss) Income - Last Five Quarters
6
 
Earnings Per Share - Last Five Quarters
7
 
FFO and AFFO - Last Five Quarters
8
 
Adjusted EBITDA - Last Five Quarters
9
 
Leverage Ratio
10
Balance Sheets and Capitalization
 
 
Capitalization
11
 
Balance Sheets
12
 
Debt Overview
13
 
Credit Facility and Mortgage Notes Covenants
14
     
Real Estate
 
 
Acquisitions
15
 
Dispositions
16
 
Top 10 Tenants
17
 
Property Type
17
 
Industry Diversification
18
 
Geographic Diversification
19
 
Lease Expirations
20
     
Appendix
 
 
Disclosures Regarding Non-GAAP and Other Metrics
21

2

About the Data
 
This data and other information described herein are as of and for the three months ended September 30, 2022 unless otherwise indicated. Future performance may not be consistent with past performance and is subject to change and inherent risks and uncertainties. This information should be read in conjunction with Modiv Inc.'s Quarterly Report on Form 10-Q for the quarter ended September 30, 2022, including the financial statements and management's discussion and analysis of financial condition and results of operations.
 
Forward Looking Statements
 
Information set forth herein contains forward-looking statements, which reflect our current views regarding our business, financial performance, growth prospects and strategies, market opportunities, and market trends. Forward-looking statements include all statements that are not historical facts. In some cases, you can identify these forward-looking statements by the use of words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “approximately,” “projects,” “predicts,” “intends,” “plans,” “estimates,” “anticipates,” or the negative version of these words or other comparable words. All of the forward-looking statements herein are subject to various risks and uncertainties. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions, and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond our control. Although we believe that the expectations reflected in such forward-looking statements are based on reasonable assumptions, our actual results, performance, and achievements could differ materially from those expressed in or by the forward-looking statements and may be affected by a variety of risks and other factors. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from such forward-looking statements. These factors include, but are not limited to, risks and uncertainties related to the COVID-19 pandemic and its related impacts on us and our tenants, general economic conditions, including but not limited to impacts of the Russian war against Ukraine, supply-chain disruptions, increases in the rate of inflation and interest rates, local real estate conditions, tenant financial health, and property acquisitions and the timing of these acquisitions. These and other risks, assumptions, and uncertainties are described in our filings with the SEC, which are available on the SEC’s website at www.sec.gov. You are cautioned not to place undue reliance on any forward-looking statements included herein. All forward-looking statements are made as of the date of this document and the risk that actual results, performance, and achievements will differ materially from the expectations expressed or referenced herein will increase with the passage of time. We undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments, or otherwise, except as required by law.

3

Company Overview
 
Modiv Inc. (NYSE:MDV) (“Modiv”, the “Company”, “we”, “us” and “our”) is an internally managed real estate investment trust (“REIT”) that acquires, owns and manages a diversified portfolio of predominantly single-tenant net-lease real estate properties. The Company primarily invests in industrial and retail properties that are mission critical to tenants. Driven by innovation and an investor-first focus, Modiv is committed to providing investors with Monthly Dividends. As of September 30, 2022, Modiv had a $545 million real estate portfolio (based on estimated fair value) comprised of 3.2 million square feet of aggregate leasable area. For more information, please visit: www.modiv.com.
 
Management Team:
Independent Directors:
   
Aaron S. Halfacre
Adam S. Markman
Chief Executive Officer and Director
Chairman of the Board
   
Raymond J. Pacini
Asma Ishaq
Chief Financial Officer and Secretary
 
   
Sandra G. Sciutto
Curtis B. McWilliams
Chief Accounting Officer
 
   
John C. Raney
Thomas H. Nolan, Jr.
Chief Legal Officer
 
   
William R. Broms
Kimberly Smith
Chief Investment Officer
 
   
 
Connie Tirondola
 
Investor Inquiries:
Megan McGrath, Financial Profiles, Inc.
Mmcgrath@finprofiles.com
310-622-8248
 
Transfer Agent:
Computershare Trust Company, N.A.
150 Royall Street
Canton, MA 02021
800-736-3001

4

Modiv Inc.
Condensed Consolidated Statements of Operations - Last Five Quarters

(Unaudited)

   
Three Months Ended
 
   
September 30,
2022
   
June 30,
2022
   
March 31,
2022
   
December 31,
2021
   
September 30,
2021
 
Rental income (a)
 
$
10,212,418
   
$
10,394,118
   
$
9,648,649
   
$
7,899,149
   
$
10,241,690
 
                                         
Expenses:
                                       
General and administrative
   
1,838,388
     
1,615,182
     
2,106,183
     
2,186,563
     
2,930,578
 
Stock compensation
   
549,240
     
679,747
     
511,865
     
629,539
     
743,609
 
Depreciation and amortization
   
3,598,592
     
3,682,681
     
3,300,492
     
3,449,407
     
3,814,503
 
Interest expense
   
2,514,838
     
1,197,154
     
1,568,175
     
1,874,867
     
1,831,545
 
Property expenses (b)
   
2,063,892
     
1,965,885
     
2,764,592
     
1,580,629
     
1,658,437
 
Impairment of goodwill and intangible assets (c)
   
     
     
17,320,857
     
3,767,190
     
 
Total expenses
   
10,564,950
     
9,140,649
     
27,572,164
     
13,488,195
     
10,978,672
 
                                         
Other operating income (loss):
                                       
Gain on sale of real estate investments
   
4,671,284
     
1,002,101
     
7,400,777
     
3,271,289
     
4,242,771
 
Operating income (loss)
   
4,318,752
     
2,255,570
     
(10,522,738
)
   
(2,317,757
)
   
3,505,789
 
                                         
Other income (expense):
                                       
Interest income
   
1,665
     
1,763
     
13,435
     
19,958
     
1,270
 
Income from investment in unconsolidated entity
   
64,358
     
66,868
     
95,464
     
53,337
     
75,403
 
Loss on early extinguishment of debt (d)
   
     
     
(1,725,318
)
   
     
 
Other (a)
   
65,992
     
66,143
     
65,993
     
65,993
     
65,993
 
Other (expense) income, net
   
132,015
     
134,774
     
(1,550,426
)
   
139,288
     
142,666
 
                                         
Net income (loss)
   
4,450,767
     
2,390,344
     
(12,073,164
)
   
(2,178,469
)
   
3,648,455
 
Less: net income (loss) attributable to noncontrolling interest in Operating Partnership
   
528,540
     
219,214
     
(1,928,029
)
   
     
 
Net income (loss) attributable to Modiv Inc.
   
3,922,227
     
2,171,130
     
(10,145,135
)
   
(2,178,469
)
   
3,648,455
 
Preferred stock dividends (e)
   
(921,875
)
   
(921,875
)
   
(921,875
)
   
(921,875
)
   
(143,403
)
Net income (loss) attributable to common stockholders
 
$
3,000,352
   
$
1,249,255
   
$
(11,067,010
)
 
$
(3,100,344
)
 
$
3,505,052
 
                                         
Earnings (loss) per share attributable to common stockholders
                                       
Basic
 
$
0.40
   
$
0.17
   
$
(1.47
)
 
$
(0.41
)
 
$
0.47
 
Diluted
 
$
0.35
   
$
0.14
   
$
(1.47
)
 
$
(0.41
)
 
$
0.40
 
                                         
Weighted-average number of common shares outstanding
                                       
Basic
   
7,449,968
     
7,478,973
     
7,533,158
     
7,531,167
     
7,531,559
 
Diluted (f)
   
10,180,543
     
10,221,490
     
7,533,158
     
7,531,167
     
8,750,875
 
                                         
Distributions declared per common share (g)
 
$
0.2875
   
$
0.2875
   
$
0.3875
   
$
0.2875
   
$
0.2625
 

(a)
Rental income includes tenant reimbursements for property expenses. During the three months ended September 30, 2021, the Company reclassified $65,993 related to asset management fees earned on the Company's 72.71% tenant-in-common interest (“TIC Interest”) in an industrial property in Santa Clara, California to conform with the December 31, 2021 and later presentation.
 
(b)
Property expenses for the third quarter of 2022 include increased property taxes, repair and maintenance and property management fees compared with the comparable quarter of 2021, primarily related to the growth of our portfolio. These expenses are largely offset by tenant reimbursements included in rental income. Property expenses for the first quarter of 2022 also include $587,000 in write-offs of costs related to our proposed acquisition of 10 properties leased to Walgreens which we abandoned due to inability to obtain the mortgage servicer's approval prior to the contract termination date of February 18, 2022 and changes in market conditions.
 
(c)
Goodwill, which relates to the 2019 acquisition of our former sponsor’s crowdfunding platform, was impaired in the first quarter of 2022 in accordance with GAAP given that the market value of the Company’s common stock is materially below our historical net asset value and the book value of our equity. The impairment of intangible assets in the fourth quarter of 2021 relates to the Company’s decision to terminate its crowdfunding operations.
 
(d)
Loss on early extinguishment of debt for the first quarter of 2022 includes non-recurring charges for (i) $1,164,998 in non-cash write-offs of deferred financing costs upon refinancing 20 mortgages and the prior credit facility with the KeyBank credit facility and mortgage repayments related to four asset sales; (ii) $615,336 of mortgage prepayment fees; and (iii) $733,000 of swap termination fees related to four of the mortgages refinanced with the KeyBank credit facility and the related write-off of unrealized valuation losses of $788,016.
 
(e)
On September 17, 2021, the Company sold 2,000,000 shares of its 7.375% Series A Cumulative Redeemable Perpetual Preferred Stock, $0.001 par value in an underwritten public offering at $25.00 per share.
 
(f)
Diluted shares outstanding in the second and third quarters of 2022 and the third quarter of 2021 include Class C, Class M, Class P and Class R OP Units since the Company reported net income for those quarters. Diluted shares outstanding for periods when the Company reported a net loss do not include the OP Units since they would be anti-dilutive.
 
(g)
The Company increased the annual distribution rate on its common stock from $1.05 per share to $1.15 per share effective October 1, 2021. Distributions declared during the first quarter of 2022 include a one-time 13th distribution for 2021 of $0.10 per share for stockholders of record on January 6, 2022.

5

Modiv Inc.
Condensed Consolidated Statements of Comprehensive Income (Loss) - Last
Five Quarters

(Unaudited)

   
Three Months Ended
 
   
September 30,
2022
   
June 30,
2022
   
March 31,
2022
   
December 31,
2021
   
September 30,
2021
 
Net income (loss)
 
$
4,450,767
   
$
2,390,344
   
$
(12,073,164
)
 
$
(2,178,469
)
 
$
3,648,455
 
Other comprehensive  income:
                                       
Unrealized holding gain on interest rate swap designated as a cash flow hedge (a)
   
4,255,906
     
     
     
     
 
Comprehensive income (loss)
   
8,706,673
     
2,390,344
     
(12,073,164
)
   
(2,178,469
)
   
3,648,455
 
Net income (loss) attributable to noncontrolling interest in Operating Partnership
   
528,540
     
219,214
     
(1,928,029
)
   
     
 
Other comprehensive income attributable to noncontrolling interest in Operating Partnership:
                                       
Unrealized holding gain on interest rate swap designated as a cash flow hedge
   
637,429
     
     
     
     
 
Comprehensive income (loss) attributable noncontrolling interest in Operating Partnership
   
1,165,969
     
219,214
     
(1,928,029
)
   
     
 
Comprehensive income (loss) attributable to Modiv Inc.
 
$
7,540,704
   
$
2,171,130
   
$
(10,145,135
)
 
$
(2,178,469
)
 
$
3,648,455
 

(a)
Reflects the change in fair value of the hedged derivative instrument for the three months ended September 30, 2022 that was designated as a cash flow hedge for financial accounting purposes beginning July 1, 2022.

6

Modiv Inc.
Earnings (Loss) Per Share - Last Five Quarters

(Unaudited)

   
Three Months Ended
 
   
September 30,
2022
   
June 30,
2022
   
March 31,
2022
   
December 31,
2021
   
September 30,
2021
 
Numerator - Basic:
                             
Net income (loss)
 
$
4,450,767
   
$
2,390,344
   
$
(12,073,164
)
 
$
(2,178,469
)
 
$
3,648,455
 
Net (income) loss attributable to noncontrolling interest in Operating Partnership
   
(528,540
)
   
(219,214
)
   
1,928,029
     
     
 
Preferred stock dividends
   
(921,875
)
   
(921,875
)
   
(921,875
)
   
(921,875
)
   
(143,403
)
Net income (loss) attributable to common stockholders
 
$
3,000,352
   
$
1,249,255
   
$
(11,067,010
)
 
$
(3,100,344
)
 
$
3,505,052
 
                                         
Numerator - Diluted:
                                       
Net income (loss)
 
$
4,450,767
   
$
2,390,344
   
$
(12,073,164
)
 
$
(2,178,469
)
 
$
3,648,455
 
Less: preferred stock dividends
   
(921,875
)
   
(921,875
)
   
(921,875
)
   
(921,875
)
   
(143,403
)
Net income (loss) attributable to common stockholders
 
$
3,528,892
   
$
1,468,469
   
$
(12,995,039
)
 
$
(3,100,344
)
 
$
3,505,052
 
                                         
Denominator:
                                       
Weighted average shares outstanding - basic
   
7,449,968
     
7,478,973
     
7,533,158
     
7,531,167
     
7,531,559
 
Operating Partnership Units - Class C (a)
   
1,312,382
     
1,312,382
     
     
     
 
Operating Partnership Units - other (b)
   
1,418,193
     
1,430,135
     
     
     
1,219,316
 
Weighted average shares outstanding - diluted
   
10,180,543
     
10,221,490
     
7,533,158
     
7,531,167
     
8,750,875
 
                                         
Earnings (loss) per share attributable to common stockholders:
                                       
Basic
 
$
0.40
   
$
0.17
   
$
(1.47
)
 
$
(0.41
)
 
$
0.47
 
Diluted
 
$
0.35
   
$
0.14
   
$
(1.47
)
 
$
(0.41
)
 
$
0.40
 


(a)
The Company issued 1,312,382 Class C OP Units in connection with its January 18, 2022 acquisition of a KIA auto dealership property in an “UPREIT” transaction. These units were not included in the computation of Diluted EPS for the quarter ended March 31, 2022 because their effect would be anti-dilutive.
 
(b)
During the three months ended March 31, 2022 and December 31, 2021, the weighted average dilutive effect of 1,347,958 and 1,213,173 shares, respectively, related to Operating Partnership units were excluded from the computation of Diluted EPS because their effect would be anti-dilutive. There were no other outstanding securities or commitments to issue common stock that would have a dilutive effect for the periods then ended.

7

Modiv Inc.
FFO and AFFO - Last Five Quarters

(Unaudited)

   
Three Months Ended
 
   
September 30,
2022
   
June 30,
2022
   
March 31,
2022
   
December 31,
2021
   
September 30,
2021
 
Net income (loss) (in accordance with GAAP)
 
$
4,450,767
   
$
2,390,344
   
$
(12,073,164
)
 
$
(2,178,469
)
 
$
3,648,455
 
Preferred stock dividends
   
(921,875
)
   
(921,875
)
   
(921,875
)
   
(921,875
)
   
(143,403
)
Net income (loss) attributable to common stockholders and Class C OP Units
   
3,528,892
     
1,468,469
     
(12,995,039
)
   
(3,100,344
)
   
3,505,052
 
FFO adjustments:
                                       
Add:   Depreciation and amortization
   
3,598,592
     
3,682,681
     
3,300,492
     
3,290,588
     
3,342,713
 
Amortization of lease incentives
   
176,296
     
75,655
     
71,394
     
53,203
     
86,694
 
Depreciation and amortization for unconsolidated investment in a real estate property
   
192,551
     
190,468
     
190,468
     
189,439
     
182,324
 
Less:   Gain on sale of real estate investments, net
   
(4,671,284
)
   
(1,002,101
)
   
(7,400,777
)
   
(3,271,289
)
   
(4,242,771
)
FFO attributable to common stockholders and Class C OP Units
   
2,825,047
     
4,415,172
     
(16,833,462
)
   
(2,838,403
)
   
2,874,012
 
AFFO adjustments:
                                       
Add:   Amortization of corporate intangibles (a)
   
     
     
     
158,819
     
471,790
 
 Impairment of goodwill and intangible assets (a)
   
     
     
17,320,857
     
3,767,190
     
 
 Stock compensation (b)
   
549,240
     
679,747
     
511,865
     
629,542
     
743,609
 
 Deferred financing costs (c)
   
101,783
     
101,781
     
1,266,725
     
162,200
     
7,393
 
 Non-recurring loan prepayment penalties
   
     
     
615,336
     
     
 
 Swap termination costs
   
     
     
733,000
     
     
 
 Amortization of above-market lease intangibles
   
43,763
     
32,456
     
32,456
     
32,456
     
32,454
 
Acquisition fees and due diligence expenses, including abandoned pursuit costs (d)
   
44,863
     
4,639
     
586,669
     
(16,100
)
   
474,429
 
Less:   Deferred rents
   
(237,164
)
   
(699,053
)
   
(110,505
)
   
1,138,991
     
(247,716
)
Unrealized gain on interest rate swaps
   
59,000
     
(589,997
)
   
(788,016
)
   
(285,982
)
   
(166,338
)
Amortization of below-market lease intangibles
   
(258,652
)
   
(349,810
)
   
(363,074
)
   
(363,074
)
   
(364,573
)
Other adjustments for unconsolidated investment in a real estate property
   
(188
)
   
(188
)
   
(188
)
   
(6,191
)
   
(12,195
)
AFFO attributable to common stockholders and Class C OP Units (e)
 
$
3,127,692
   
$
3,594,747
   
$
2,971,663
   
$
2,379,448
   
$
3,812,865
 
                                         
Weighted average shares outstanding:
                                       
Basic
   
7,449,968
     
7,478,973
     
7,533,158
     
7,531,167
     
7,531,559
 
Fully diluted (f) (g)
   
10,180,543
     
10,221,490
     
10,193,498
     
8,744,340
     
8,750,875
 
FFO per share:
                                       
Basic
 
$
0.38
   
$
0.59
   
$
(2.23
)
 
$
(0.38
)
 
$
0.38
 
Fully diluted
 
$
0.28
   
$
0.43
   
$
(2.23
)
 
$
(0.38
)
 
$
0.33
 
AFFO per share:
                                       
Basic
 
$
0.42
   
$
0.48
   
$
0.39
   
$
0.32
   
$
0.51
 
Fully diluted (e)
 
$
0.31
   
$
0.35
   
$
0.29
   
$
0.27
   
$
0.44
 

(a)
Intangible assets reflected the Company’s investment in its crowdfunding platform which was impaired in the fourth quarter of 2021 due to the Company’s decision to terminate its crowdfunding operations. Goodwill, which relates to the 2019 acquisition of our former sponsor’s crowdfunding platform, was impaired in the first quarter of 2022 in accordance with GAAP given that the market value of the Company’s common stock was materially below our historical net asset value and the book value of our equity.
 
(b)
Stock compensation expense includes (i) amortization of the Class P OP Units granted to the Company’s Chief Executive Officer and Chief Financial Officer on December 31, 2019; (ii) amortization of the Class R OP Units granted to all of the Company’s employees, including the Chief Executive Officer and Chief Financial Officer, on January 25, 2021; and (iii) stock granted to the Company’s independent directors each quarter as partial consideration for their service as directors.
 
(c)
Deferred financing costs for the first quarter of 2022 primarily reflect non-cash write-offs of such costs upon refinancing 20 mortgages with the KeyBank credit facility and mortgage repayments related to four asset sales.
 
(d)
Abandoned pursuit costs for the first quarter of 2022 primarily reflect the Company’s decision not to extend the February 18, 2022 termination date for its agreement to purchase a portfolio of 10 properties leased to Walgreens, which the Company abandoned due to inability to obtain the mortgage servicer's approval prior to the contract termination date and changes in market conditions.
 
(e)
The $467,055 decrease in AFFO for the third quarter of 2022 compared with the second quarter of 2022 primarily reflects a $755,000 increase in interest expense on our revolving credit facility due to rising interest rates, partially offset by a $462,000 decrease in deferred rents.
 
(f)
The increase in Diluted shares outstanding beginning in the first quarter of 2022 primarily reflects the issuance of 1,312,382 Class C interests in our operating partnership (OP Units”) as partial consideration for the acquisition of a retail property located on Interstate 405 in Carson, CA, leased to a KIA auto dealership.
 
(g)
Includes the Class C, Class M, Class P and Class R OP Units to compute the weighted average number of shares for each of the three quarters ended in 2022 presented above and the Class M, Class P and Class R OP Units to compute the weighted average number of shares for each of the two quarters ended in 2021 presented above.

8

Modiv Inc.
Adjusted EBITDA - Last Five Quarters

(Unaudited)

   
Three Months Ended
 
   
September 30,
2022
   
June 30,
2022
   
March 31,
2022
   
December 31,
2021
   
September 30,
2021
 
Net income (loss)
 
$
4,450,767
   
$
2,390,344
   
$
(12,073,164
)
 
$
(2,178,469
)
 
$
3,648,455
 
                                         
Add:   Depreciation and amortization
   
3,598,592
     
3,682,681
     
3,300,492
     
3,449,407
     
3,814,503
 
Depreciation and amortization for unconsolidated investment in a real estate property
   
192,551
     
190,468
     
190,468
     
189,439
     
182,324
 
Interest expense
   
2,514,838
     
1,197,155
     
1,568,175
     
1,874,867
     
1,831,545
 
Loss on early extinguishment of debt (a)
   
     
     
1,725,318
     
     
 
Interest expense on unconsolidated investment in real estate property
   
98,624
     
98,135
     
97,645
     
100,257
     
100,788
 
Impairment of goodwill and intangible assets (b)
   
     
     
17,320,857
     
3,767,190
     
 
Stock compensation
   
549,240
     
679,747
     
511,865
     
629,542
     
743,609
 
Write-off of due diligence costs related to abandoned acquisition of 10 properties leased to Walgreens
   
     
     
587,000
     
     
 
Less:  Gain on sale of real estate investments
   
(4,671,284
)
   
(1,002,101
)
   
(7,400,777
)
   
(3,271,289
)
   
(4,242,771
)
Adjusted EBITDA
 
$
6,733,328
   
$
7,236,429
   
$
5,827,879
   
$
4,560,944
   
$
6,078,453
 
                                         
Annualized adjusted EBITDA
 
$
26,933,311
   
$
28,945,716
   
$
23,311,516
   
$
18,243,776
   
$
24,313,812
 
                                         
Net debt:
                                       
Debt
 
$
201,365,536
   
$
201,425,173
   
$
165,509,220
   
$
183,033,756
   
$
182,146,897
 
Debt of unconsolidated investment in real estate property (c)
   
9,544,130
     
9,599,182
     
9,653,689
     
9,709,710
     
9,764,171
 
Cash and restricted cash
   
(5,726,888
)
   
(11,705,449
)
   
(25,344,063
)
   
(58,407,520
)
   
(54,710,887
)
Cash of unconsolidated investment in real estate property (c)
   
(341,007
)
   
(585,357
)
   
(458,948
)
   
(502,041
)
   
(487,490
)
   
$
204,841,771
   
$
198,733,549
   
$
149,359,898
   
$
133,833,905
   
$
136,712,691
 
                                         
Net debt / Adjusted EBITDA
   
7.6x

   
6.9x

   
6.4x

   
7.3x

   
5.6x


(a)
Loss on early extinguishment of debt includes non-recurring charges for (i) $1,164,998 in non-cash write-offs of deferred financing costs upon refinancing 20 mortgages and the prior credit facility with the KeyBank credit facility and mortgage repayments related to four asset sales; (ii) $615,336 of mortgage prepayment fees; and (iii) $733,000 of swap termination fees related to refinancing four mortgages with the KeyBank credit facility and the related write-off of unrealized valuation losses of $788,016.
 
(b)
Goodwill, which relates to the 2019 acquisition of our former sponsor’s crowdfunding platform, was impaired in the first quarter of 2022 in accordance with GAAP given that the market value of the Company’s common stock is materially below our historical net asset value and the book value of our equity. The impairment of intangible assets in the fourth quarter of 2021 relates to the Company’s decision to terminate its crowdfunding operations.
 
(c)
Includes the Company's 72.71% pro rata share of the tenant-in-common's mortgage note payable and cash.

9

Modiv Inc.
Leverage ratio

(Unaudited)
 
In connection with entering into the KeyBank credit facility on January 18, 2022, the Company modified the calculation of its leverage ratio to conform with the definition in the KeyBank credit facility as set forth below.

   
September 30,
2022
   
December 31, 2021 (d)
 
Total Asset Value
           
Cash and cash equivalents (a)
 
$
5,726,888
   
$
58,407,520
 
Borrowing base value (b)
   
425,311,049
     
362,497,305
 
Other real estate value (c)
   
90,670,000
     
130,670,000
 
Pro-rata share of unconsolidated investment
   
28,567,029
     
28,728,063
 
Total asset value
 
$
550,274,966
   
$
580,302,888
 
                 
Indebtedness
               
Credit facility revolver
 
$
6,775,000
   
$
55,775,000
 
Credit facility term loan
   
150,000,000
     
100,000,000
 
Mortgage debt (c)
   
44,590,536
     
66,833,439
 
Pro-rata share of unconsolidated investment
   
9,544,130
     
9,709,710
 
Total indebtedness
 
$
210,909,666
   
$
232,318,149
 
                 
Leverage Ratio
   
38
%
   
40
%

(a)
The decrease in cash and cash equivalents primarily reflects the use of cash to fund a portion of the acquisitions during the first nine months of 2022.
 
(b)
The increase in the borrowing base value reflects the additions of (i) an industrial property acquired in January 2022 and leased to Kalera, Inc.; (ii) eight industrial properties acquired in April 2022 which are leased to Lindsay; and (iii) the Producto and Valtir acquisitions in July and August  2022. These additions were partially offset by the three office properties sold in June, August and September 2022.
 
(c)
The decrease in other real estate value and mortgage debt reflects the four property dispositions in February 2022.
 
(d)
The December borrowing base value reflects a pro forma adjustment to include acquisition of the KIA auto dealership property on January 18, 2022 and the credit facility amounts reflect pro forma adjustments to reflect debt balances as of the January 18, 2022 closing of the facility, including borrowing to fund a portion of the KIA auto dealership property acquisition.

10

Modiv Inc.
Capitalization as of September 30, 2022

(Unaudited)


PREFERRED EQUITY
     
7.375% Series A Cumulative Redeemable Perpetual Preferred Stock
 
$
50,000,000
 
% of Total Capitalization
   
13
%
         
COMMON EQUITY
       
Shares of Class C Common Stock
   
7,464,781
 
OP Units (Class M, Class P, Class R and Class C)
   
2,818,689
 
Total Class C Common Stock and OP Units
   
10,283,470
 
Price Per Share / Unit at September 30, 2022
 
$
14.60
 
IMPLIED EQUITY MARKET CAPITALIZATION
 
$
150,138,662
 
% of Total Capitalization
   
37
%
         
DEBT
       
Mortgage Debt
       
Costco Property
 
$
18,850,000
 
Taylor Fresh Foods Property
   
12,350,000
 
Sutter Health Property
   
13,390,536
 
Total Mortgage Debt
 
$
44,590,536
 
KeyBank Credit Facility
       
Revolver (a)
 
$
6,775,000
 
Term Loan (a)
   
150,000,000
 
Total Credit Facility
 
$
156,775,000
 
TOTAL DEBT
 
$
201,365,536
 
% of Total Capitalization
   
50
%
% of Total Debt - Floating Rate Debt (b)
   
3
%
% of Total Debt - Fixed Rate Debt (b)
   
97
%
% of Total Debt
   
100
%
ENTERPRISE VALUE
       
Total Capitalization
 
$
401,504,198
 
Less: Cash and Cash Equivalents
   
(5,726,888
)
Enterprise Value
 
$
395,777,310
 

(a)
In April 2022, the Company borrowed $44,000,000 to fund the acquisition of an eight-property portfolio of industrial properties leased to Lindsay Precast, LLC (the “Lindsay Acquisition”), drew the remaining $50,000,000 available under the Term loan commitment and reduced the Revolver to $14,775,000 in connection with the swap purchase described below. During the third quarter of 2022, the Company borrowed $28,000,000 to fund the Producto and Valtir  acquisitions in July 2022 and made $28,000,000 in principal payments on the Revolver in September with cash generated by office property sales during the quarter to reduce interest expense.
 
(b)
On May 10, 2022, we purchased a five-year swap at 2.258% on our $150,000,000 term loan that results in a fixed interest rate of 3.858% when our leverage ratio is less than or equal to 40%. As part of this transaction, we sold a one-time option to terminate the swap on December 31, 2024, which reduced the swap rate. Under our Credit Agreement, the interest rate will continue to vary based on our leverage ratio.

11

Modiv Inc.
Condensed Consolidated Balance Sheets

(Unaudited)
 
   
September 30,
2022
   
December 31, 2021
 
Assets
           
Real estate investments:
           
Land
 
$
107,564,295
   
$
61,005,402
 
Buildings and improvements
   
337,335,727
     
250,723,446
 
Equipment
   
4,429,000
     
 
Tenant origination and absorption costs
   
20,074,123
     
22,027,054
 
Total investments in real estate property
   
469,403,145
     
333,755,902
 
Accumulated depreciation and amortization
   
(44,025,915
)
   
(37,611,133
)
Total investments in real estate property, net
   
425,377,230
     
296,144,769
 
Unconsolidated investment in a real estate property
   
9,988,498
     
9,941,338
 
Total real estate investments, net
   
435,365,728
     
306,086,107
 
Real estate investments held for sale, net
   
     
31,510,762
 
Total real estate investments
   
435,365,728
     
337,596,869
 
Cash and cash equivalents
   
5,726,888
     
55,965,550
 
Restricted cash
   
     
2,441,970
 
Receivable from sale of early termination of lease
   
     
1,836,767
 
Tenant receivables
   
8,433,895
     
5,996,919
 
Above-market lease intangibles, net
   
1,939,305
     
691,019
 
Prepaid expenses and other assets
   
6,387,245
     
5,856,255
 
Interest rate swap derivative
   
4,786,903
     
 
Assets related to real estate investments held for sale
   
     
788,296
 
Goodwill
   
     
17,320,857
 
Total assets
 
$
462,639,964
   
$
428,494,502
 
Liabilities and Equity
               
Mortgage notes payable, net
 
$
44,530,130
   
$
152,223,579
 
Mortgage notes payable related to real estate investments held for sale, net
   
     
21,699,912
 
Total mortgage notes payable, net
   
44,530,130
     
173,923,491
 
Credit facility revolver
   
6,775,000
     
 
Credit facility term loan, net
   
148,913,350
     
8,022,000
 
Accounts payable, accrued and other liabilities
   
9,658,378
     
11,844,881
 
Below-market lease intangibles, net
   
9,910,280
     
11,102,940
 
Interest rate swap derivatives
   
     
788,016
 
Liabilities related to real estate investments held for sale
   
     
383,282
 
Total liabilities
   
219,787,138
     
206,064,610
 
                 
Commitments and contingencies
               
                 
7.375% Series A cumulative redeemable perpetual preferred stock, $0.001 par value, 2,000,000 shares authorized, issued and outstanding as of September 30, 2022 and December 31, 2021
   
2,000
     
2,000
 
Class C common stock $0.001 par value, 300,000,000 shares authorized, 7,697,926 shares issued and 7,464,781 shares outstanding as of September 30, 2022, respectively, and 7,426,636 shares issued and outstanding as of December 31, 2021
   
7,698
     
7,427
 
Class S common stock $0.001 par value, 100,000,000 shares authorized, no and 63,768 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively
   
     
64
 
Additional paid-in-capital
   
277,079,074
     
273,441,831
 
Treasury stock, at costs, 233,145 shares and no shares as of September 30, 2022 and December 31, 2021, respectively
   
(3,957,752
)
   
 
Cumulative distributions and net losses
   
(115,634,474
)
   
(101,624,430
)
Accumulated other comprehensive income
   
3,618,477
     
 
Total Modiv Inc. equity
   
161,115,023
     
171,826,892
 
Noncontrolling interests in the Operating Partnership
   
81,737,803
     
50,603,000
 
Total equity
   
242,852,826
     
222,429,892
 
Total liabilities and equity
 
$
462,639,964
   
$
428,494,502
 

12

Modiv Inc.
Debt Overview

(Unaudited)

   
Outstanding Balance
                   
Collateral
 
September 30, 2022
   
December 31, 2021
   
Contractual Interest
Rate
   
Effective
Interest Rate
   
Loan
Maturity
 
Mortgage Notes:
                             
Costco property
 
$
18,850,000
   
$
18,850,000
     
4.85
%
   
4.85
%
 
1/1/30
 
Taylor Fresh Foods property
   
12,350,000
     
12,350,000
     
3.85
%
   
3.85
%
 
11/1/29
 
Sutter Health property
   
13,390,536
     
13,597,120
     
4.50
%
   
4.50
%
 
3/9/24
 
Various mortgage notes repaid on January 18, 2022 (a)
   
     
108,178,317
   
Various
   
Various
   
Various
 
     
44,590,536
     
152,975,437
                       
Plus unamortized mortgage premium
   
145,527
     
204,281
                       
Less unamortized deferred financing costs
   
(205,933
)
   
(956,139
)
                     
Mortgage notes payable, net
   
44,530,130
     
152,223,579
                       
                                       
KeyBank Credit Facility:
                                     
Revolver (a)
   
6,775,000
     
   
(b)
   
(b)
   
1/18/26
 
Term loan (a)
   
150,000,000
     
   
(c)
   
(c)
   
1/18/27
 
Bank of California Credit Facility (a)
   
     
8,022,000
   
(d)
   
(d)
   
n/a
 
Total Credit Facility
   
156,775,000
     
8,022,000
                         
Less unamortized deferred financing costs
   
(1,107,750
)
   
(100,080
)
                       
     
155,667,250
     
7,921,920
                         
Total debt, net
 
$
200,197,380
   
$
160,145,499
                         

(a)
On January 18, 2022, the Company refinanced 20 mortgage notes and its prior credit facility with the KeyBank Credit Facility. During the second quarter of 2022, the Company borrowed $44,000,000 to fund the Lindsay Acquisition, drew the remaining $50,000,000 available under the Term loan commitment and reduced the Revolver to $6,775,000 in June 2022 to reduce interest expense. During the third quarter of 2022, the Company borrowed $28,000,000 to fund the Producto and Valtir acquisitions in July 2022 and made $28,000,000 in principal payments on the Revolver in September with cash generated by office property sales during the quarter to reduce interest expense.
 
(b)
The interest rate on the Revolver is based on the Company's leverage ratio at the end of the prior quarter. With our leverage ratio at 38% as of June 30, 2022, the spread over the Secured Overnight Financing Rate (‘‘SOFR’’), including a 10 basis point credit adjustment, is 165 basis points and the interest rate on the Revolver was 4.7125% as of September 30, 2022. Following the Federal Reserve Bank’s November 2, 2022 increase in the target range for federal funds by 75 basis points, the interest rate on the Revolver is approximately 5.46%. We also pay an annual unused fee of up to 25 basis points on the Revolver, depending on the daily amount of the unused commitment.
 
(c)
On May 10, 2022, we purchased a five-year swap at 2.258% on the $150,000,000 term loan that results in a fixed interest rate of 3.858% when our leverage ratio is less than or equal to 40%. As part of this transaction, we agreed to a one-time option to terminate the swap on December 31, 2024, which reduced the swap rate. Under our Credit Facility, the interest rate will continue to vary based on our leverage ratio.
 
(d)
Under the terms of the prior credit facility with Bank of California, the Company paid a variable rate of interest on outstanding amounts equal to one percentage point over the prime rate published in The Wall Street Journal, provided that the interest rate in effect on any one day was not less than 4.75% per annum.

13

Modiv Inc.
Covenants

Credit Facility and Mortgage Notes Covenants
 
The following is a summary of key financial covenants for the Company’s credit facility and mortgage notes, as defined and calculated per the terms of the facility's credit agreement and the mortgage notes' governing documents, respectively, which are included in the Company's filings with the U.S. Securities and Exchange Commission. These calculations, which are not based on U.S. GAAP measurements are presented to demonstrate that as of September 30, 2022, the Company believes it is in compliance with the covenants.
 
Unsecured Credit Facility Covenants
 
Required
   
September 30,
2022
 
Maximum leverage ratio
 
<60%

   
38%

Minimum fixed charge coverage ratio
 
>1.50x
     
1.76
 
Maximum secured indebtedness ratio
 
40%

   
8%

Minimum consolidated tangible net worth
 
$210,241,835
   

$286,878,741
 
Minimum investment grade tenants in borrowing base
 
30%

   
40%

Weighted average lease term (years)
 
7
     
13
 

Mortgage Notes Key Covenants
 
Debt service coverage ratio
   
September 30,
2022
 
Costco property
 
N.A.
   
N.A.
 
Taylor Fresh Foods property
   
1.5
     
3.4
 
Sutter Health property
   
1.4
     
2.4
 

14

Modiv Inc.
Real Estate Acquisitions

(Unaudited)
 
The following table summarizes the Company’s property acquisition activity during each of last five quarters ended September 30, 2022.

Q3 2022                      
Tenant and Location
 
Property
Type
 
Area (Square Feet)
   
Lease
Terms
(Years)
   
Annual Rent Increase
   
Acquisition Price
   
Initial Cap Rate
   
Weighted Average
Cap Rate
 
Producto, two properties acquired in upstate New York
 
Industrial
   
72,373
     
20.0
     
2.0
%
 
$
5,343,862
     
7.21
%
   
8.8
%
Valtir, four properties acquired in Ohio, South Carolina, Texas and Utah
 
Industrial
   
293,612
     
20.0
(a)
   
2.3
%
   
23,375,000
     
7.70
%
   
9.7
%
           
365,985
                   
$
28,718,862
             
9.5
%
                                                       
Q2 2022                      
Tenant and Location
 
Property
Type
 
Area (Square Feet)
   
Lease
Terms (Years)
   
Annual Rent Increase
   
Acquisition Price
   
Initial Cap Rate
   
Weighted Average Cap Rate
 
Lindsay Precast, eight properties acquired in Colorado (3), Ohio (2), North Carolina, South Carolina and Florida
 
Industrial
   
618,195
     
25.0
     
2.0
%
 
$
56,150,000
     
6.65
%
   
8.5
%
                                                       
Q1 2022                      
Tenant and Location
 
Property
Type
 
Area (Square Feet)
   
Lease
Terms
(Years)
   
Annual Rent Increase
   
Acquisition Price
   
Initial Cap Rate
   
Weighted Average Cap Rate
 
KIA, Carson, CA
 
Retail
   
72,623
     
25.0
     
2.0
%
 
$
69,275,000
     
5.7
%
   
7.3
%
Kalera, Saint Paul, MN
 
Industrial
   
78,857
     
20.0
     
2.5
%
   
8,079,000
     
7.0
%
   
8.9
%
           
151,480
                   
$
77,354,000
             
8.1
%
                                                       
Q4 2021                      
Tenant and Location
 
Property
Type
 
Area (Square Feet)
   
Lease
Terms
(Years)
   
Annual Rent Increase
   
Acquisition Price
   
Initial Cap Rate
   
Weighted Average Cap Rate
 
Arrow Tru-Line, Archbold, OH
 
Industrial
   
206,155
     
20.0
     
2.0
%
 
$
11,460,000
     
6.7
%
   
8.1
%
                                                       
Q3 2021                      
Tenant and Location
 
Property Type
 
Area (Square Feet)
   
Lease Terms (Years)
   
Annual Rent Increase
   
Acquisition Price
   
Initial Cap Rate
   
Weighted Average Cap Rate
 
Raising Cane’s, San Antonio, TX
 
Retail
   
3,853
     
6.6
     
2.0
%
 
$
3,607,424
     
6.3
%
   
7.1
%

(a)
The South Carolina and Ohio properties have a 25-year master lease and the Texas and Utah properties have a 15-year master lease.

15

Modiv Inc.
Real Estate Dispositions

(Unaudited)
 
The following table summarizes the Company’s property disposition activity during each of last five quarters ended September 30, 2022.
 
Q3 2022
                        
Tenant and Location
 
Property
Type
 
Area (Square Feet)
   
Acquisition Price
   
Disposition Price
   
Net Book Value
   
Disposition Costs
   
Gain on Sale
   
Cap Rate
 
Williams Sonoma, Summerlin, NV
 
Office
   
35,867
   
$
7,211,012
   
$
9,300,000
   
$
7,260,636
   
$
335,748
   
$
1,703,616
     
7.4
%
Wyndham, Summerlin, NV
 
Office
   
41,390
     
10,116,502
     
12,900,000
     
9,299,903
     
632,429
     
2,967,668
     
7.4
%
         
77,257
     
17,327,514
     
22,200,000
     
16,560,539
     
968,177
     
4,671,284
     
7.4
%
                                                             
Q2 2022
                               
Tenant and Location
 
Property
Type
 
Area (Square Feet)
   
Acquisition Price
   
Disposition Price
   
Net Book Value
   
Disposition Costs
   
Gain on Sale
   
Cap Rate
 
EMCOR, Cincinnati, OH
 
Office
   
39,385
   
$
6,138,538
   
$
6,525,000
   
$
5,343,541
   
$
179,358
   
$
1,002,101
     
7.8
%
                                                             
Q1 2022
                               
Tenant and Location
 
Property
Type
 
Area (Square Feet)
   
Acquisition Price
   
Disposition Price
   
Net Book Value
   
Disposition Costs
   
Gain on Sale
   
Cap Rate
 
Bon Secours, Richmond, VA
 
Office
   
72,890
   
$
10,842,907
   
$
10,200,000
   
$
9,768,252
   
$
252,344
   
$
179,404
     
8.1
%
Omnicare, Richmond, VA
 
Flex
   
51,800
     
7,324,370
     
8,760,000
     
6,478,621
     
218,489
     
2,062,890
     
6.8
%
Texas Health, Dallas, TX
 
Office
   
38,794
     
7,689,924
     
7,040,000
     
6,711,271
     
168,352
     
160,377
     
7.9
%
Accredo, Orlando, FL
 
Office
   
63,000
     
10,710,500
     
14,000,000
     
8,552,619
     
449,275
     
4,998,106
     
7.3
%
         
226,484
   
$
36,567,701
   
$
40,000,000
   
$
31,510,763
   
$
1,088,460
   
$
7,400,777
     
7.5
%
                                                             
Q4 2021
                               
Tenant and Location
 
Property
Type
 
Area (Square Feet)
   
Acquisition Price
   
Disposition Price
   
Net Book Value
   
Disposition Costs
   
Gain on Sale
   
Cap Rate
 
Harley Davidson, Bedford, TX
 
Retail
   
70,960
   
$
13,178,286
   
$
15,270,000
   
$
11,608,682
   
$
390,029
   
$
3,271,289
     
6.2
%
                                                             
Q3 2021
                               
Tenant and Location
 
Property
Type
 
Area(Square Feet)
   
Acquisition Price
   
Disposition Price
   
Net Book Value
   
Disposition Costs
   
Gain on Sale
   
Cap Rate
 
Dana. Cedar Park, TX
 
Industrial
   
45,465
   
$
9,452,169
   
$
10,000,000
   
$
5,375,746
   
$
381,483
   
$
4,242,771
     
7.7
%

16

Modiv Inc.
Top 10 Tenants

(Unaudited)

Tenant
 
Industry
 
ABR
   
ABR as a Percentage of Total Portfolio
   
Area
(Square Feet)
   
Square Feet as
a Percentage
of Total
Portfolio
 
KIA of Carson
 
Retail
 
$
3,965,866
     
11
%
   
72,623
     
2
%
Lindsay
 
Industrial
   
3,765,259
     
11
%
   
618,195
     
19
%
Sutter Health
 
Office
   
2,625,767
     
7
%
   
106,592
     
3
%
Costco Wholesale
 
Office
   
2,344,733
     
7
%
   
97,191
     
4
%
AvAir
 
Industrial
   
2,307,204
     
7
%
   
162,714
     
5
%
3M

Industrial
   
1,850,648
     
5
%
   
410,400
     
13
%
Valtir
 
Industrial
   
1,804,722
     
5
%
   
293,612
     
9
%
Taylor Fresh Foods
 
Industrial
   
1,632,761
     
5
%
   
216,727
     
7
%
FUJIFILM Dimatix (a)
 
Industrial
   
1,618,910
     
5
%
   
91,740
     
3
%
Cummins
 
Office
   
1,503,088
     
4
%
   
87,230
     
3
%
Total Top 10 Tenants
     
$
23,418,958
     
67
%
   
2,157,024
     
68
%

(a)
Reflects our 72.71% tenant-in-common interest (“TIC Interest”).
 
Modiv Inc.
Property Type

(Unaudited)
 
Property
 
Number of Properties
   
ABR
   
ABR as a
Percentage of
Total
Portfolio
   
Area (Square Feet)
   
Square Feet as
a Percentage
of Total Portfolio
 
Industrial, including TIC Interest
   
26
   
$
18,689,188
     
54
%
   
2,434,373
     
77
%
Retail
   
13
     
6,559,083
     
19
%
   
234,029
     
7
%
Office
   
8
     
9,595,321
     
27
%
   
508,710
     
16
%
Total Properties
   
47
   
$
34,843,592
     
100
%
   
3,177,112
     
100
%
 
17

Modiv Inc.
Tenant Industry Diversification

(Unaudited)
 
Industry
 
Number of Properties
   
ABR
   
ABR as a Percentage of Total Portfolio
   
Area (Square Feet)
   
Square Feet as a Percentage of Total Portfolio
 
Automobile & Components
   
2
   
$
4,254,034
     
12
%
   
148,623
     
5
%
Transportation
   
5
     
4,111,926
     
12
%
   
456,326
     
14
%
General Retailers
   
11
     
3,774,797
     
11
%
   
204,744
     
6
%
Precast Concrete
   
8
     
3,765,259
     
11
%
   
618,195
     
20
%
Manufacturing
   
5
     
3,556,732
     
10
%
   
430,395
     
14
%
Health Care Equipment & Services
   
1
     
2,625,767
     
8
%
   
106,592
     
3
%
Food, Beverage & Tobacco
   
2
     
2,207,716
     
6
%
   
295,584
     
9
%
Technology Hardware & Equipment
   
2
     
2,199,297
     
6
%
   
130,240
     
4
%
Defense
   
2
     
2,114,208
     
6
%
   
153,633
     
5
%
Materials
   
1
     
1,850,648
     
5
%
   
410,400
     
13
%
Commercial & Professional Services
   
2
     
1,554,499
     
4
%
   
70,567
     
2
%
Consumer Services
   
1
     
924,000
     
3
%
   
50,000
     
2
%
Pharmaceuticals, Biotechnology & Life Sciences
   
1
     
642,722
     
2
%
   
20,800
     
1
%
Energy
   
1
     
445,417
     
1
%
   
26,036
     
1
%
Consumer Durables and Apparel
   
1
     
254,698
     
1
%
   
40,110
     
1
%
Government
   
1
     
322,719
     
1
%
   
11,014
     
%
Hotel & Restaurant
   
1
     
239,153
     
1
%
   
3,853
     
%
Total
   
47
   
$
34,843,592
     
100
%
   
3,177,112
     
100
%
 
18

Modiv Inc.
Tenant Geographic Diversification

(Unaudited)
 
State
 
Number of Properties
   
ABR
   
ABR as a Percentage of Total Portfolio
     
Area (Square Feet)
   
Square Feet as a Percentage of Total Portfolio
 
California
   
13
   
$
13,017,202
     
38
%
     
600,395
     
19
%
Arizona
   
2
     
3,939,965
     
11
%
     
379,441
     
12
%
Ohio
   
7
     
3,118,528
     
9
%
     
644,021
     
20
%
Florida
   
3
     
2,673,359
     
8
%
     
237,329
     
8
%
Washington
   
1
     
2,344,733
     
7
%
     
97,191
     
3
%
Illinois
   
1
     
1,850,647
     
5
%
     
410,400
     
13
%
Tennessee
   
1
     
1,503,088
     
4
%
     
87,230
     
3
%
Texas
   
4
     
1,471,927
     
4
%
     
95,766
     
3
%
North Carolina
   
2
     
1,361,924
     
4
%
     
134,576
     
4
%
South Carolina
   
2
     
876,124
     
3
%
     
129,909
     
4
%
Colorado
   
3
     
831,323
     
2
%
     
98,994
     
4
%
Minnesota
   
1
     
574,956