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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2020
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from____________to____________
Commission file number: 000-55776
RW HOLDINGS NNN REIT, INC.
(Exact name of registrant as specified in its charter)
Maryland47-4156046
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer Identification No.)
120 Newport Center Drive, Newport Beach, CA
92660
(Address of principal executive offices)(Zip Code)
(855) 742-4862
(Registrant’s telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act.
Title of each classTrading symbols(s)Name of each exchange on which registered
NoneNoneNone
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  No 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes  No 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


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Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting company
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.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  No 
As of October 31, 2020, there were 23,890,719 shares of Class C common stock outstanding and 188,063 shares of Class S common stock outstanding.


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RW HOLDINGS NNN REIT, INC.
FORM 10-Q
INDEX
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FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and we intend that such forward-looking statements be subject to the safe harbor provisions created thereby. For this purpose, any statements made in this Quarterly Report on Form 10-Q that are not historical or current facts may be deemed to be forward-looking statements. Without limiting the generality of the foregoing, words such as “anticipates,” “believes,” “seeks,” “estimates,” “expects,” “intends,” “continue,” “can,” “may,” “plans,” “potential,” “projects,” “should,” “could,” “will,” “would” or similar expressions and the negatives of those expressions are intended to identify forward-looking statements. Such statements include, but are not limited to, any statements about our plans, strategies, and prospects and are subject to certain risks and uncertainties, as well as known and unknown risks, which could cause actual results to differ materially from those projected or anticipated. Therefore, such statements are not intended to be a guarantee of our performance in future periods.
The forward-looking statements included herein represent our management’s current expectations and assumptions based on information available as of the date of this report. These statements involve numerous known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Readers should carefully review these risks, as well as the additional risks described in other documents we file from time-to-time with the Securities and Exchange Commission (the “SEC”). In light of the significant risks and uncertainties inherent in the forward-looking information included herein, the inclusion of such information should not be regarded as a representation by us or any other person that such results will be achieved, and readers are cautioned not to place undue reliance on such forward-looking information, which speak only as of the date of this report.
Moreover, we operate in an evolving environment. New risks and uncertainties emerge from time-to-time and it is not possible for our management to predict all risks and uncertainties, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual future results to be materially different from those expressed or implied by any forward-looking statements. The following are some, but not all, of the assumptions, risks, uncertainties and other factors that could cause our actual results to differ materially from our forward-looking statements:
We are subject to risks associated with deteriorating economic conditions resulting from the novel coronavirus (“COVID-19”) pandemic and related disruptions in the financial markets.
The magnitude and duration of the COVID-19 pandemic and its impact on our tenants, operations and liquidity is uncertain as of the filing date of this Quarterly Report on Form 10-Q and may continue to have an adverse impact on our business and results of operations.
We may be unable to renew leases, lease vacant space or re-lease space as leases expire on favorable terms or at all.
We are subject to risks associated with tenant, geographic and industry concentrations with respect to our properties.
Our properties, intangible assets and other assets may be subject to further impairment charges.
We are subject to competition in the acquisition and disposition of properties and in the leasing of our properties, and we may be unable to acquire or dispose of, or lease, our properties on advantageous terms.
We could be subject to risks associated with bankruptcies or insolvencies of tenants or from tenant defaults generally.
We have substantial indebtedness, and may incur additional secured or unsecured debt, which may affect our ability to pay distributions, expose us to interest rate fluctuation risk, impose limitations on how we operate and expose us to the risk of default under our debt obligations.
We may not be able to extend or refinance existing indebtedness before it becomes due.
We may not be able to attain or maintain profitability.
The only sources of cash for distributions to investors will be cash flow from our operations (including sales of properties) or any net proceeds that result from financing or refinancing our properties or, in limited circumstances, proceeds from our offering.
We may not generate cash flows sufficient to pay our distributions to stockholders or meet our debt service obligations.
We may be affected by risks resulting from losses in excess of insured limits.
We may fail to qualify as a REIT for U.S. federal income tax purposes.
Risks of security breaches through cyber-attacks, cyber intrusions or otherwise, as well as other significant disruptions of our information technology networks and related systems, could adversely affect our business and results of operations.
Our forward-looking statements contained in this Quarterly Report on Form 10-Q should be read in light of the risk factors identified above and the additional risks and uncertainties described in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2019 and our Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2020 and June 30, 2020.
Except as required by law, we assume no obligation to update any forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future. We qualify all of our forward-looking statements by these cautionary statements.
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PART I – FINANCIAL INFORMATION
Item 1 – Financial Statements
RW HOLDINGS NNN REIT, INC.
Condensed Consolidated Balance Sheets
(Unaudited)
September 30,
2020
December 31, 2019
Assets
Real estate investments:
Land$74,082,722 $86,775,988 
Buildings and improvements276,926,627 309,904,890 
Tenant origination and absorption costs24,274,555 27,266,610 
Total investments in real estate property375,283,904 423,947,488 
Accumulated depreciation and amortization(28,856,496)(20,411,794)
Total investments in real estate property, net (Note 4)346,427,408 403,535,694 
Investment in unconsolidated entity (Note 5)10,085,476 10,388,588 
Total real estate investments, net356,512,884 413,924,282 
Real estate investments held for sale, net (Note 4)23,033,118  
Total real estate investments379,546,002 413,924,282 
Cash and cash equivalents8,745,052 6,823,568 
Restricted cash265,654 113,362 
Tenant receivables, net (Note 6)6,958,611 6,224,764 
Above-market lease intangibles, net910,501 1,251,734 
Due from affiliates (Note 9) 2,332 
Prepaid expenses and other assets2,317,708 1,867,777 
Interest rate swap derivatives 34,567 
Assets related to real estate investments held for sale864,008  
Operating lease right-of-use asset 2,386,877 
Goodwill, net17,320,857 50,588,000 
Intangible assets, net5,587,932 7,700,000 
Total assets$422,516,325 $490,917,263 
Liabilities and Equity
Mortgage notes payable, net (Note 7)$179,001,117 $194,039,207 
Mortgage notes payable related to real estate investments held for sale, net14,671,370  
Total mortgage notes payable, net193,672,487 194,039,207 
Unsecured credit facility, net5,967,729 7,649,861 
Short-term notes payable 4,800,000 
Economic relief notes payable527,000  
Accounts payable, accrued and other liabilities (Note 6)7,944,998 11,555,161 
Share repurchases payable1,393,275  
Below-market lease intangibles, net13,274,833 14,591,359 
Due to affiliates (Note 9) 630,820 
Interest rate swap derivatives (Note 8)2,006,997 1,021,724 
Liabilities related to real estate investments held for sale3,934,795  
Operating lease liability 2,386,877 
Total liabilities228,722,114 236,675,009 
Commitments and contingencies (Note 10)
Redeemable common stock8,282,554 14,069,692 
Preferred stock, $0.001 par value, 50,000,000 shares authorized, no shares issued and outstanding
  
Class C common stock $0.001 par value, 300,000,000 shares authorized, 24,008,115 and 23,647,466 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively
24,008 23,647 
Class S common stock $0.001 par value, 100,000,000 shares authorized, 188,425 and 186,606 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively
188 187 
Additional paid-in-capital227,745,917 220,714,676 
Cumulative distributions and net losses(92,861,456)(31,168,948)
Total shareholders' equity134,908,657 189,569,562 
Noncontrolling interests in the Operating Partnership50,603,000 50,603,000 
Total equity185,511,657 240,172,562 
Total liabilities and equity$422,516,325 $490,917,263 
See accompanying notes to condensed consolidated financial statements.
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RW HOLDINGS NNN REIT, INC.
Condensed Consolidated Statements of Operations
(Unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2020201920202019
Rental income:$9,557,191 $6,125,957 $29,888,620 $17,907,668 
Expenses:
Fees to affiliates (Note 9) 812,349  2,436,386 
General and administrative2,522,719 918,636 7,447,082 2,312,081 
Depreciation and amortization4,304,470 2,393,725 13,420,256 7,176,716 
Interest expense2,732,528 1,738,791 9,196,061 5,975,866 
Property expenses1,677,055 1,362,661 5,480,411 3,537,249 
Impairment of real estate investment properties (Note 4)  9,506,525  
Impairment of goodwill and intangible assets (Note 3)  34,572,403  
Reserve for (reversal of) loan guarantee (Note 6)(4,359) 3,120,678  
Total expenses11,232,413 7,226,162 82,743,416 21,438,298 
Less: Expenses reimbursed by Former Sponsor (Note 9) (96,104) (332,336)
Expenses, net11,232,413 7,130,058 82,743,416 21,105,962 
Other operating income:
Gain on sale of real estate investments (Note 4)1,693,642  1,693,642  
Real estate operating income (loss)18,420 (1,004,101)(51,161,154)(3,198,294)
Other (expense) income:
Lease termination expense (Note 10)(1,175,192) (1,175,192) 
Interest income51 45,940 4,873 56,971 
Income from investments in unconsolidated entities, net92,617 37,570 239,028 167,558 
Other  (4,855) 
Total other (expense) income, net(1,082,524)83,510 (936,146)224,529 
Net loss$(1,064,104)$(920,591)$(52,097,300)$(2,973,765)
Net loss per share, basic and diluted (Note 2)$(0.04)$(0.06)$(2.17)$(0.20)
Weighted-average number of common shares outstanding, basic and diluted24,225,210 15,809,624 24,059,227 14,754,347 
Distributions declared per common share$0.136 $0.176 $0.311 $0.528 
See accompanying notes to condensed consolidated financial statements.
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RW HOLDINGS NNN REIT, INC.
Condensed Consolidated Statements of Equity
Three Months Ended September 30, 2020 and 2019
(Unaudited)
Common StockAdditional
Paid-in
Capital
Cumulative
Distributions
and Net
Losses
Total
Stockholders'
Equity
Noncontrolling Interests in the Operating PartnershipTotal
Equity
Class CClass S
SharesAmountsSharesAmounts
Balance, June 30, 202024,137,134 $24,137 187,649 $188 $228,696,741 $(89,661,537)$139,059,529 $50,603,000 $189,662,529 
Issuance of common stock
299,431 300 776 — 2,101,388 — 2,101,688 — 2,101,688 
Stock compensation expense
26,250 26 — — 183,724 — 183,750 — 183,750 
Class P OP Units compensation expense— — — — 88,784 — 88,784 — 88,784 
Offering costs— — — — (158,826)— (158,826)— (158,826)
Repurchase of common stock
(454,700)(455)— — (3,165,894)— (3,166,349)— (3,166,349)
Distributions declared
— — — — — (2,135,815)(2,135,815)— (2,135,815)
Net loss— — — — — (1,064,104)(1,064,104)— (1,064,104)
Balance, September 30, 202024,008,115 $24,008 188,425 $188 $227,745,917 $(92,861,456)$134,908,657 $50,603,000 $185,511,657 
Common StockAdditional
Paid-in
Capital
Cumulative
Distributions
and Net
Losses
Total
Stockholders'
Equity
Noncontrolling Interests in the Operating PartnershipTotal
Equity
Class CClass S
SharesAmountsSharesAmounts
Balance, June 30, 201915,313,171 $15,313 166,448 $166 $144,011,702 $(23,214,573)$120,812,608 $ $120,812,608 
Issuance of common stock
988,121 988 19,812 20 10,238,741 — 10,239,749 — 10,239,749 
Stock compensation expense
10,334 10 — — 104,990 — 105,000 — 105,000 
Offering costs— — — — (307,068)— (307,068)— (307,068)
Reclassification to redeemable common stock— — — — 2,823,079 — 2,823,079 — 2,823,079 
Repurchase of common stock
(394,954)(395)— — (3,935,287)— (3,935,682)— (3,935,682)
Distributions declared
— — — — — (2,784,235)(2,784,235)— (2,784,235)
Net loss— — — — — (920,591)(920,591)— (920,591)
Balance, September 30, 201915,916,672 $15,916 186,260 $186 $152,936,157 $(26,919,399)$126,032,860 $ $126,032,860 
See accompanying notes to condensed consolidated financial statements.
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RW HOLDINGS NNN REIT, INC.
Condensed Consolidated Statements of Equity
Nine Months Ended September 30, 2020 and 2019
(Unaudited)
Common StockAdditional
Paid-in
Capital
Cumulative
Distributions
and Net
Losses
Total
Stockholders'
Equity
Noncontrolling Interests in the Operating PartnershipTotal
Equity
Class CClass S
SharesAmountsSharesAmounts
Balance, December 31, 201923,647,466 $23,647 186,606 $187 $220,714,676 $(31,168,948)$189,569,562 $50,603,000 $240,172,562 
Issuance of common stock
1,757,559 1,758 3,755 3 16,192,166 — 16,193,927 — 16,193,927 
Stock compensation expense
38,931 39 — — 313,295 — 313,334 — 313,334 
Class P OP Units compensation expense— — — — 266,350 — 266,350 — 266,350 
Offering costs— — — — (981,748)— (981,748)— (981,748)
Reclassification to redeemable common stock— — — — 4,393,863 — 4,393,863 — 4,393,863 
Repurchase of common stock
(1,435,841)(1,436)(1,936)(2)(13,152,685)— (13,154,123)— (13,154,123)
Distributions declared
— — — — — (9,595,208)(9,595,208)— (9,595,208)
Net loss— — — — — (52,097,300)(52,097,300)— (52,097,300)
Balance, September 30, 202024,008,115 $24,008 188,425 $188 $227,745,917 $(92,861,456)$134,908,657 $50,603,000 $185,511,657 
Common StockAdditional
Paid-in
Capital
Cumulative
Distributions
and Net
Losses
Total
Stockholders'
Equity
Noncontrolling Interests in the Operating PartnershipTotal
Equity
Class CClass S
SharesAmountsSharesAmounts
Balance, December 31, 201812,943,294 $12,943 17,594 $18 $119,247,245 $(16,167,437)$103,092,769 $ $103,092,769 
Issuance of common stock
3,795,112 3,795 168,666 168 40,241,277 — 40,245,240 — 40,245,240 
Stock compensation expense
20,669 21 — — 209,979 — 210,000 — 210,000 
Offering costs— — — — (1,206,930)— (1,206,930)— (1,206,930)
Reclassification to redeemable common stock— — — — 2,823,079 — 2,823,079 — 2,823,079 
Repurchase of common stock
(842,403)(843)— — (8,378,493)— (8,379,336)— (8,379,336)
Distributions declared
— — — — — (7,778,197)(7,778,197)— (7,778,197)
Net loss— — — — — (2,973,765)(2,973,765)— (2,973,765)
Balance, September 30, 201915,916,672 $15,916 186,260 $186 $152,936,157 $(26,919,399)$126,032,860 $ $126,032,860 
See accompanying notes to condensed consolidated financial statements.
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RW HOLDINGS NNN REIT, INC.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Nine Months Ended
September 30, 2020September 30, 2019
Cash Flows from Operating Activities:
Net loss$(52,097,300)$(2,973,765)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization13,420,256 7,176,716 
Stock compensation expense522,183 281,667 
Deferred rents(1,027,863)(991,009)
Amortization of deferred lease incentives45,903 45,903 
Amortization of deferred financing costs and premium796,810 511,336 
Amortization of above-market lease intangibles134,412 72,784 
Amortization of below-market lease intangibles(1,157,951)(355,793)
Impairment of real estate investment properties9,506,525  
Impairment of goodwill and intangible assets34,572,403  
Gain on sale of real estate investments(1,693,642) 
Unrealized loss on interest rate swap valuation1,019,840 1,095,547 
Income from investments in unconsolidated entities(239,028)(167,558)
Distributions from investments in unconsolidated entities542,140 716,215 
Change in operating assets and liabilities:
Increase in tenant receivables(563,259)(319,773)
Increase in prepaid and other assets(513,161)(102,872)
Increase in accounts payable, accrued and other liabilities1,171,868 541,315 
Decrease in due to affiliates(628,488)(967,518)
Net cash provided by operating activities3,811,648 4,563,195 
Cash Flows from Investing Activities:
Additions to existing real estate investments(600,291)(181,972)
Additions to intangible assets(566,102) 
Net proceeds from sale of real estate investments15,364,073  
Payment of tenant improvements (3,387,699)
Payment of acquisition fees to affiliate (5,459)
Costs related to pending merger with an affiliate (1,005,523)
Additions to lease incentives(990,000) 
Refund of refundable purchase deposit 100,000 
Refundable purchase deposit (2,000,000)
Net cash provided by (used in) investing activities13,207,680 (6,480,653)
Cash Flows from Financing Activities:
Borrowings from unsecured credit facility4,260,000 4,869,000 
Repayments of unsecured credit facility(6,000,000)(13,869,000)
Proceeds from mortgage notes payable35,705,500 6,350,000 
Principal payments on mortgage notes payable(36,421,500)(14,557,433)
Proceeds from economic relief notes payable527,000  
Principal payments on short-term notes payable(4,800,000) 
Refundable loan deposits (171,000)
Payments of deferred financing costs to third parties(389,662)(175,311)
Payments of financing fees to affiliates (63,500)
Proceeds from issuance of common stock and investor deposits10,378,762 34,559,949 
Payments of offering costs(981,748)(1,206,930)
Liabilities for (payments of) selling commissions on Class S common stock1,916 (632)
Repurchases of common stock(13,154,123)(8,379,336)
Distributions paid to common stockholders(4,071,697)(1,901,575)
Net cash (used in) provided by financing activities(14,945,552)5,454,232 
Net increase in cash, cash equivalents and restricted cash2,073,776 3,536,774 
Cash, cash equivalents and restricted cash, beginning of period6,936,930 8,755,928 
Cash, cash equivalents and restricted cash, end of period$9,010,706 $12,292,702 
Supplemental Disclosure of Cash Flow Information:
Cash paid for interest$5,062,906 $4,372,246 
Supplemental Schedule of Noncash Investing and Financing Activities:
Reclassification to redeemable common stock$4,393,863 $2,823,079 
Reinvested distributions from common stockholders$5,815,165 $5,685,291 
Real estate investments held for sale, net$23,033,118 $ 
Assets related to real estate investments held for sale$864,008 $ 
Mortgage notes payable related to real estate investments held for sale, net$14,671,370 $ 
Liabilities related to real estate investments held for sale$3,934,795 $ 
Increase in share repurchases payable$1,393,275 $619,159 
Accrued distributions$291,654 $937,863 
Unpaid capitalized costs related to pending merger with an affiliate$ $620,647 
See accompanying notes to condensed consolidated financial statements.
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RW HOLDINGS NNN REIT, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
NOTE 1. BUSINESS AND ORGANIZATION
RW Holdings NNN REIT, Inc. (the “Company”) was incorporated on May 14, 2015 as a Maryland corporation. The Company has the authority to issue 450,000,000 shares of stock, consisting of 50,000,000 shares of preferred stock, $0.001 par value per share, 300,000,000 shares of Class C common stock, $0.001 par value per share, and 100,000,000 shares of Class S common stock, $0.001 par value per share. The Company was formed to primarily invest in single-tenant income-producing properties located in the United States, which are leased to creditworthy tenants under long-term net leases. The Company’s goal is to generate current income for investors and long-term capital appreciation in the value of its properties.
The Company holds its investments in real property through special purpose limited liability companies which are wholly-owned subsidiaries of RW Holdings NNN REIT Operating Partnership, LP, a Delaware limited partnership (the “Operating Partnership”), or Katana Merger Sub, LP (“Merger Sub”), which is described below. The Operating Partnership was formed on January 28, 2016. The Company is the sole general partner of and owned a 99% partnership interest in the Operating Partnership prior to the completion of the Self-Management Transaction (defined below) on December 31, 2019. The Company's wholly-owned subsidiary, Rich Uncles NNN LP, LLC, a Delaware limited liability company formed on May 13, 2016 (“NNN LP”), owned the remaining 1% partnership interest in the Operating Partnership and was the sole limited partner of the Operating Partnership prior to the completion of the Self-Management Transaction on December 31, 2019.
Following completion of the Self-Management Transaction, the Company, including NNN LP, owns an approximately 87% partnership interest in the Operating Partnership. Daisho OP Holdings, LLC, a formerly wholly-owned subsidiary of BrixInvest (defined below) (“Daisho”) which was spun off from BrixInvest on December 31, 2019, was issued and held 657,949.5 units of Class M limited partnership interest (the “Class M OP Units”), or an approximate 12% limited partnership interest, in the Operating Partnership as of December 31, 2019. The Class M OP Units were distributed to the members of Daisho during 2020. In connection with the Self-Management Transaction, the Company's Chief Executive Officer and Chief Financial Officer were issued an aggregate of 56,029 units of Class P limited partnership interest (the “Class P OP Units”) in the Operating Partnership and thereby own the remaining approximate 1% limited partnership interest in the Operating Partnership.
The Company was externally managed by its former advisor, Rich Uncles NNN REIT Operator, LLC (the “Former Advisor”), a Delaware limited liability company, pursuant to the Second Amended and Restated Advisory Agreement dated August 11, 2017, as amended (the “Advisory Agreement”), through December 31, 2019. The Former Advisor was wholly-owned by the Company’s former sponsor, BrixInvest, LLC (f/k/a Rich Uncles, LLC) (“BrixInvest” or the “Former Sponsor”), a Delaware limited liability company, whose members include Aaron S. Halfacre and Raymond Wirta, the Company’s Chief Executive Officer and Chairman of the Board, respectively. On each of June 24, 2015 and December 31, 2015, the Company issued 10,000 shares of its Class C common stock to the Former Sponsor, for a total of 20,000 shares of Class C common stock, at a purchase price of $10.00 per share. Upon completing the Self-Management Transaction, the Former Sponsor's previously held 10,740 shares of the Company’s Class C common stock were canceled.
On December 31, 2019, pursuant to an Agreement and Plan of Merger dated September 19, 2019 (the “Merger Agreement”), Rich Uncles Real Estate Investment Trust I (“REIT I”) merged with and into Merger Sub, a Delaware limited partnership and wholly-owned subsidiary of the Company, with Merger Sub surviving as a direct, wholly-owned subsidiary of the Company (the “Merger”). At such time, the separate existence of REIT I ceased. As a result, the Company issued 8,042,221.6 shares of its Class C common stock to former shareholders of REIT I. In addition, on December 31, 2019, a self-management transaction was completed, whereby the Company, the Operating Partnership, BrixInvest and Daisho effectuated a Contribution Agreement dated September 19, 2019 (the “Contribution Agreement”) pursuant to which the Company acquired substantially all of the assets and assumed certain liabilities of BrixInvest in exchange for 657,949.5 Class M OP Units in the Operating Partnership (the “Self-Management Transaction”). As a result of the completion of the Merger and the Self-Management Transaction, the Company became self-managed (see Note 3).
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RW HOLDINGS NNN REIT, INC.
Notes to Condensed Consolidated Financial Statements (continued)
(Unaudited)
On July 15, 2015, the Company filed a registration statement on Form S-11 (File No. 333-205684) with the SEC to register an initial public offering of a maximum of 90,000,000 of its shares of common stock for sale to the public (the “Primary Offering”). The Company also registered a maximum of 10,000,000 of its shares of common stock pursuant to the Company’s distribution reinvestment plan (the “Registered DRP Offering” and together with the Primary Offering, the “Registered Offering”). The SEC declared the Company’s registration statement effective on June 1, 2016, and on July 20, 2016, the Company began offering shares of common stock to the public. Pursuant to the Registered Offering, the Company sold shares of Class C common stock directly to investors, with a minimum investment in shares of $500. Commencing in August 2017, the Company began selling shares of its Class C common stock only to U.S. persons as defined under Rule 903 promulgated under the Securities Act, and began selling shares of its Class S common stock as a result of the commencement of the Class S Offering (as defined below) to non-U.S. Persons.
On August 11, 2017, the Company began offering up to 100,000,000 shares of Class S common stock exclusively to non-U.S. Persons as defined under Rule 903 promulgated under the Securities Act, pursuant to an exemption from the registration requirements of the Securities Act and in accordance with Regulation S