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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 June 30, 2022
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: 001-40814
MODIV INC.
(Exact name of registrant as specified in its charter)
Maryland
47-4156046
(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)
(888) 686-6348
(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 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 (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 


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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.
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 July 31, 2022, there were 7,456,830 shares of Class C common stock outstanding.


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Modiv Inc.
FORM 10-Q
INDEX
2

Table of Contents
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 have only a limited operating history, and the prior performance of our real estate investments or real estate programs sponsored by us or our affiliates may not be indicative of our future results.
We are subject to disruptions in the financial markets and uncertain economic conditions that could adversely affect market rental rates, commercial real estate values and our ability to secure debt financing at interest rates acceptable to us or at all, to service future debt obligations, or to pay distributions to our stockholders.
The current COVID-19 pandemic, including the emergence of any future variants of COVID-19, and any future outbreak of other highly infectious or contagious diseases, could materially and adversely impact or disrupt our financial condition, results of operations, cash flows and performance.
The continuing developments in the Russian war against Ukraine and sanctions which have been announced by the United States and other countries against Russia have caused and may continue to cause significant uncertainty in the market, adding to continuing concerns about supply chain disruptions, inflation and increases in interest rates in the market in which we operate.
Volatility in stock and bond markets, particularly the rapid rise in yields on U.S. Treasury securities, may negatively impact our operating results.
Listing on the New York Stock Exchange (the “NYSE”) does not guarantee an active and liquid market for our Class C common stock, and the market price and trading volume of our Class C common stock may fluctuate significantly.
Our 7.375% Series A Cumulative Redeemable Perpetual Preferred Stock, $0.001 par value per share (“Series A Preferred Stock”), is senior to our Class C common stock, and the interests of our common stockholders could be diluted by the issuance of additional preferred stock and by other transactions in the future.
We may fail to continue to qualify as a real estate investment trust (“REIT”) for U.S. federal income tax purposes, which could adversely affect our operations and our ability to make distributions.
We may be unable to renew leases, lease vacant space or re-lease space as leases expire on favorable terms or at all.
If we fail to diversify our investment portfolio, downturns relating to certain geographic regions, industries or business sectors may have a more significant adverse impact on our assets and our ability to pay distributions than if we had a diversified investment portfolio.
We are subject to risks related to tenant concentration, and an adverse development with respect to a large tenant could materially and adversely affect us.
Our properties 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.
Cost inflation may adversely affect our financial condition and results of operations.
Restrictions on share ownership contained in our charter may inhibit market activity in shares of our stock and restrict our business combination opportunities.
We may not be able to attain or maintain profitability and we may not generate cash flows sufficient to pay distributions to stockholders or meet our debt service obligations.
We may be affected by risks resulting from losses in excess of insured limits.
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., Risk Factors, of our Annual Report on Form 10-K for the year ended December 31, 2021.
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.
3

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PART I – FINANCIAL INFORMATION
Item 1 – Financial Statements
Modiv Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
June 30,
2022
December 31, 2021
Assets
Real estate investments:
Land$107,569,641 $61,005,402 
Buildings and improvements327,472,940 251,246,290 
Equipment4,429,000  
Tenant origination and absorption costs21,384,224 21,504,210 
Total investments in real estate property460,855,805 333,755,902 
Accumulated depreciation and amortization(43,728,520)(37,611,133)
Total investments in real estate property, net417,127,285 296,144,769 
Unconsolidated investment in a real estate property9,956,517 9,941,338 
Total real estate investments, net427,083,802 306,086,107 
Real estate investments held for sale, net 31,510,762 
Total real estate investments427,083,802 337,596,869 
Cash and cash equivalents11,705,449 55,965,550 
Restricted cash 2,441,970 
Receivable from early termination of lease1,446,767 1,836,767 
Tenant receivables8,059,635 5,996,919 
Above-market lease intangibles, net626,107 691,019 
Prepaid expenses and other assets6,766,867 5,856,255 
Interest rate swap derivative589,997  
Assets related to real estate investments held for sale 788,296 
Goodwill, net 17,320,857 
Total assets$456,278,624 $428,494,502 
Liabilities and Equity
Mortgage notes payable, net$44,608,815 $152,223,579 
Mortgage notes payable related to real estate investments held for sale, net 21,699,912 
Total mortgage notes payable, net44,608,815 173,923,491 
Credit facility revolver6,775,000 8,022,000 
Credit facility term loan, net148,850,050  
Accounts payable, accrued and other liabilities8,733,757 11,844,881 
Below-market lease intangibles, net10,175,284 11,102,940 
Interest rate swap derivatives 788,016 
Liabilities related to real estate investments held for sale 383,282 
Total liabilities219,142,906 206,064,610 
Commitments and contingencies (Note 11)
7.375% Series A cumulative redeemable perpetual preferred stock, $0.001 par value, 2,000,000 shares authorized, issued and outstanding as of June 30, 2022 and December 31, 2021, respectively
2,000 2,000 
Class C common stock, $0.001 par value, 300,000,000 shares authorized; 7,643,992 shares issued and 7,456,562 shares outstanding as of June 30, 2022 and 7,426,636 shares issued and outstanding as of December 31, 2021
7,644 7,427 
Class S common stock, $0.001 par value, 100,000,000 shares authorized; no shares and 63,768 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively
 64 
Additional paid-in-capital275,922,227 273,441,831 
Treasury stock, at cost, 187,430 shares and no shares held as of June 30, 2022 and December 31, 2021, respectively
(3,253,902) 
Cumulative distributions and net losses(116,491,382)(101,624,430)
Total Modiv Inc. equity156,186,587 171,826,892 
Noncontrolling interests in the Operating Partnership80,949,131 50,603,000 
Total equity237,135,718 222,429,892 
Total liabilities and equity$456,278,624 $428,494,502 
See accompanying notes to condensed consolidated financial statements.
4

Table of Contents
Modiv Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
Three Months Ended
June 30,
Six Months Ended
June 30,
2022202120222021
Rental income$10,394,118 $9,107,008 $20,042,767 $18,081,878 
Expenses:
General and administrative1,615,182 1,932,635 3,721,365 4,618,621 
Stock compensation expense679,747 767,087 1,191,612 1,371,732 
Depreciation and amortization3,682,681 3,978,323 6,983,173 8,003,026 
Interest expense1,197,154 2,098,649 2,765,329 3,879,785 
Property expenses1,965,885 1,874,033 4,730,477 3,621,233 
Reversal of impairment of real estate investment property (400,999) (400,999)
Impairment of goodwill  17,320,857  
Total expenses9,140,649 10,249,728 36,712,813 21,093,398 
Other operating loss:
Gain on sale of real estate investments1,002,101  8,402,878 289,642 
Operating income (loss)2,255,570 (1,142,720)(8,267,168)(2,721,878)
Other income (expense):
Interest income1,763 51 15,198 100 
Income from unconsolidated investment in a real estate property66,868 74,834 162,332 147,302 
Gain on forgiveness of economic relief note payable   517,000 
Loss on early extinguishment of debt  (1,725,318) 
Other66,143 65,992 132,136 151,985 
Other income (expense), net134,774 140,877 (1,415,652)816,387 
Net income (loss)2,390,344 (1,001,843)(9,682,820)(1,905,491)
Less: net income (loss) attributable to noncontrolling interest in Operating Partnership219,214  (1,708,815) 
Net income (loss) attributable to Modiv Inc.2,171,130 (1,001,843)(7,974,005)(1,905,491)
Preferred stock dividends(921,875) (1,843,750) 
Net income (loss) attributable to common stockholders$1,249,255 $(1,001,843)$(9,817,755)$(1,905,491)
Net income (loss) per share attributable to common stockholders
Basic$0.17 $(0.13)$(1.31)$(0.25)
Diluted$0.14 $(0.13)$(1.31)$(0.25)
Weighted-average number of common shares outstanding
Basic7,478,973 7,614,196 7,505,673 7,630,401 
Diluted10,221,490 7,614,196 7,505,673 7,630,401 
Distributions declared per common share$0.2875 $0.2625 $0.6750 $0.5250 
See accompanying notes to condensed consolidated financial statements.
5

Table of Contents
Modiv Inc.
Condensed Consolidated Statements of Equity
Three Months Ended June 30, 2022 and 2021
(Unaudited)
Preferred StockClass CAdditional
Paid-in
Capital
Cumulative
Distributions
and Net
(Losses) Income
Total
Modiv Inc.
Equity
Noncontrolling Interests in the Operating PartnershipTotal
Equity
Common StockTreasury Stock
SharesAmountsSharesAmountsSharesAmounts
Balance, March 31, 20222,000,000 $2,000 7,601,081 $7,601 $275,371,078 (50,863)$(852,721)$(115,598,562)$158,929,396 $81,107,213 $240,036,609 
Issuance of common stock - distribution reinvestments— — 42,911 43 711,180 — — — 711,223 — 711,223 
OP Units compensation expense— — — — 597,247 — — — 597,247 — 597,247 
Offering costs— — — — (757,278)— — — (757,278)— (757,278)
Repurchase of common stock— — — — — (136,567)(2,401,181)— (2,401,181)— (2,401,181)
Dividends declared, preferred stock— — — — — — — (921,875)(921,875)— (921,875)
Distributions declared, common stock— — — — — — — (2,142,075)(2,142,075)— (2,142,075)
Distributions declared, Class C OP Units— — — — — — — — — (377,296)(377,296)
Net income — — — — — — — 2,171,130 2,171,130 219,214 2,390,344 
Balance, June 30, 20222,000,000 $2,000 7,643,992 $7,644 $275,922,227 (187,430)$(3,253,902)$(116,491,382)$156,186,587 $80,949,131 $237,135,718 
Preferred StockCommon StockAdditional
Paid-in
Capital
Cumulative
Distributions
and Net
Losses
Total
Modiv Inc.
Equity
Noncontrolling Interests in the Operating PartnershipTotal
Equity
Class CClass S
SharesAmountsSharesAmountsSharesAmounts
Balance, March 31, 2021 $ 7,524,210 $7,524 63,101 $63 $216,444,117 $(94,908,010)$121,543,694 $50,603,000 $172,146,694 
Issuance of common stock— — 75,600 76 230 — 1,804,469 — 1,804,545 — 1,804,545 
Stock compensation expense— — 4,470 4 — — 109,996 — 110,000 — 110,000 
OP Units compensation expense— — — — — — 657,087 — 657,087 — 657,087 
Offering costs— — — — — — (400,788)— (400,788)— (400,788)
Reclassification of common stock— — — — — — (626,133)— (626,133)— (626,133)
Repurchase of common stock— — (113,866)(114)— — (2,671,650)— (2,671,764)— (2,671,764)
Distributions declared, common stock— — — — — — — (1,976,511)(1,976,511)— (1,976,511)
Net loss— — — — — — — (1,001,843)(1,001,843)— (1,001,843)
Balance, June 30, 2021 $ 7,490,414 $7,490 63,331 $63 $215,317,098 $(97,886,364)$117,438,287 $50,603,000 $168,041,287 
See accompanying notes to condensed consolidated financial statements.
6

Table of Contents
Modiv Inc.
Condensed Consolidated Statements of Equity
Six Months Ended June 30, 2022 and 2021
(Unaudited)
Preferred StockCommon StockAdditional
Paid-in
Capital
Cumulative
Distributions
and Net
Losses
Total
Modiv Inc.
Equity
Noncontrolling Interests in the Operating PartnershipTotal
Equity
Class C and Class STreasury Stock
SharesAmountsSharesAmountsSharesAmounts
Balance, December 31, 20212,000,000 $2,000 7,490,404 $7,491 $273,441,831  $ $(101,624,430)$171,826,892 $50,603,000 $222,429,892 
Issuance of common stock -distribution reinvestments— — 108,989 109 2,203,518 — — — 2,203,627 — 2,203,627 
Listed offering of common stock, net— — 40,000 40 114,460 — — — 114,500 — 114,500 
Issuance of Class C OP Units for property acquisition— — — — — — — — — 32,809,551 32,809,551 
Stock compensation expense— — 4,599 4 82,496 — — — 82,500 — 82,500 
OP Units compensation expense— — — — 1,026,612 — — — 1,026,612 — 1,026,612 
Offering costs— — — — (946,690)— — — (946,690)— (946,690)
Repurchase of common stock— — — — — (187,430)(3,253,902)— (3,253,902)— (3,253,902)
Dividends declared, preferred stock— — — — — — — (1,843,750)(1,843,750)— (1,843,750)
Distributions declared, common stock— — — — — — — (5,049,197)(5,049,197)— (5,049,197)
Distributions declared, Class C OP Units— — — — — — — — — (754,605)(754,605)
Net loss— — — — — — — (7,974,005)(7,974,005)(1,708,815)(9,682,820)
Balance, June 30, 20222,000,000 $2,000 7,643,992 $7,644 $275,922,227 (187,430)$(3,253,902)$(116,491,382)$156,186,587 $80,949,131 $237,135,718 
Preferred StockCommon StockAdditional
Paid-in
Capital
Cumulative
Distributions
and Net
Losses
Total
Modiv Inc.
Equity
Noncontrolling Interests in the Operating PartnershipTotal
Equity
Class CClass S
SharesAmountsSharesAmountsSharesAmounts
Balance, December 31, 2020 $ 7,874,541 $7,874 62,860 $63 $224,288,417 $(92,012,686)$132,283,668 $50,603,000 $182,886,668 
Issuance of common stock— — 203,157 203 471 — 4,561,408 — 4,561,611 — 4,561,611 
Stock compensation expense— — 8,521 9 — — 201,241 — 201,250 — 201,250 
OP Units compensation expense— — — — — — 1,191,732 — 1,191,732 — 1,191,732 
Offering costs— — — — — — (810,632)— (810,632)— (810,632)
Reclassification of common stock— — — — — — (1,068,807)— (1,068,807)— (1,068,807)
Repurchase of common stock— — (595,805)(596)— — (13,046,261)— (13,046,857)— (13,046,857)
Distributions declared, common stock— — — — — — — (3,968,187)(3,968,187)— (3,968,187)
Net loss— — — — — — — (1,905,491)(1,905,491)— (1,905,491)
Balance, June 30, 2021 $ 7,490,414 $7,490 63,331 $63 $215,317,098 $(97,886,364)$117,438,287 $50,603,000 $168,041,287 
See accompanying notes to condensed consolidated financial statements.
7

Table of Contents
Modiv Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Six Months Ended June 30,
20222021
Cash Flows from Operating Activities:
Net loss$(9,682,820)$(1,905,491)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization6,983,173 8,003,026 
Stock compensation expense1,191,612 1,371,732 
Amortization of deferred rents(809,558)(702,978)
Amortization of deferred lease incentives147,049 105,541 
Write-offs and amortization of deferred financing costs and premium/discount1,368,507 199,693 
Amortization of above-market lease intangibles64,912 64,913 
Amortization of below-market lease intangibles(712,885)(735,150)
Reversal of impairment of real estate investment property  (400,999)
Impairment of goodwill17,320,857  
Gain on forgiveness of economic relief note payable (517,000)
Gain on sale of real estate investments(8,402,878)(289,642)
Unrealized gain on interest rate swap valuation(589,997)(517,719)
Write-off of unrealized gain on interest rate swaps(788,016) 
Income from unconsolidated investment in a real estate property(162,332)(147,302)
Distributions from unconsolidated investment in a real estate property147,153 161,967 
Change in operating assets and liabilities:
(Increase) decrease in tenant receivables(549,248)569,375 
Decrease (increase) in prepaid and other assets572,422 (229,695)
Decrease in accounts payable, accrued and other liabilities(1,021,479)(1,946,918)
Net cash provided by operating activities5,076,472 3,083,353 
Cash Flows from Investing Activities:
Acquisitions of real estate investments(99,691,164) 
Additions to existing real estate investments(1,546,131)(309,717)
Additions to intangible assets (111,750)
Collection of note receivable390,000  
Collection of receivable from sale of real estate property 1,824,383 
Net proceeds from sale of real estate investments45,257,181 13,221,509 
Refundable purchase deposit(730,780) 
Payment of lease incentives(2,100,000) 
Net cash (used in) provided by investing activities(58,420,894)14,624,425 
Cash Flows from Financing Activities:
Borrowings from credit facility term loan150,000,000  
Borrowings from credit facility revolver, net6,775,000  
Repayments of prior year credit facility revolver, net(