Modiv Provides Clarity on Reverse Stock Split Proposal

Modiv Industrial, Inc. (“Modiv Industrial”, “Modiv”, the “Company”, “we” or “our”), (NYSE:MDV), the only public REIT exclusively focused on acquiring industrial manufacturing real estate, today issued the following message from the CEO to provide clarity regarding the rationale and impact of the reverse stock proposal set forth in the Company’s proxy statement for its 2025 Annual Meeting of Stockholders:

“A few weeks ago, we filed our 2025 annual proxy statement. We have received a small number of inquiries regarding the reverse stock split proposal that we put forth. Given that there appears to be a pattern of confusion (not surprising given the legalese of the proxy), we decided to send this missive out so that everyone can hopefully receive a clearer explanation straight from the horse’s mouth. I have attempted to present this in a digestible format but there is a lot of content to understand so please do not hesitate to email us, as needed, at the email address listed down below. Here it goes…

Background –

The fourth proposal in our proxy statement seeks stockholder approval to give the Company the right, but not the obligation, to implement a reverse stock split of our common stock only (not the Series A Preferred Stock) anywhere between 1:500 to 1:1,500 at any time prior to December 31, 2026. That’s a very large reverse split, far greater than the 1:10 that any company can do without stockholder approval. Without full context, an investor might surmise that we want to make Modiv’s share price $7,500 per share or higher – which would not be very retail investor friendly. I am here to tell you that is NOT the case at all and the reverse split (which would be followed by a forward split that I will describe a bit later) is purely an administrative function intended to reduce cost and potentially increase liquidity. Before I get into the sausage making of how it would work, let me step back and tell you why we are even seeking approval.

For those new to our name and unaware of our history, we are the only direct-to-retail crowdfunded REIT to ever publicly list on a stock exchange and we did that in early 2022. However, our legacy enterprise first started raising capital directly (with no brokers/advisors) from individual retail investors as early as 2012 back when crowdfunding was hoping to be the next big thing and long before I joined in 2018. Thousands upon thousands of investors made very small investments, in some cases as small as $500. They were issued shares in the predecessor REIT and they collected dividends but the shares couldn’t be freely traded and their ability to sell their shares was very limited. It was basically a very high risk start up that happened to buy real estate. When I joined, my job was to make the Company more mainstream or “institutional” which included cleaning up the real estate portfolio, providing stockholders full liquidity, reducing headcount and wherever possible making the Company more efficient and less costly. It is from this original mission that the reverse stock split proposal is derived.