Modiv Provides Clarity on Reverse Stock Split Proposal - Seite 2

When we listed the Company on the NYSE in February 2022, we needed a seasoned transfer agent to handle the litany of daily stockholder changes that would be occurring with a publicly traded stock. At that time, we chose Computershare, a globally recognized transfer agent that works with numerous publicly listed companies. When we onboarded all of our existing investors to the Computershare platform (originally it was all handled internally), there were nearly 10,000 separate accounts, each holding varying amounts of shares. Just for reference, that is a very large number of accounts for a company of our size and very atypical (befitting our history) as most newly public companies might have a small handful of accounts directly at the transfer agent with thousands of other accounts indirectly held at brokerage firms given that most companies raise their equity via investment bankers and brokers. Since we didn’t raise our capital that way, we had a ton of accounts and the stockholders who owned these accounts were used to us being both their customer service agent and their investment (whereas most of you get your customer service from your broker not your stock investment).

Computershare was able to put together a service offering for our existing stockholders but it came at a significant cost to the Company – a meaningful six digits expense every year. For those who have ever dealt with the vast majority of transfer agents, then you know they are good at transferring shares and keeping records but their 80’s vintage COBOL-esque software systems don’t provide a good brokerage account experience (as they never intended it to be). Suffice it to say that using a transfer agent account as a brokerage account is like using a rotary phone instead of your smart phone. That fact alone led to numerous accounts transferring out to “street name” where they could hold their shares in their modern brokerage accounts. Further, over the past several years we have made repeated attempts to get investors to move away from the transfer agent into a brokerage account and we have also whittled down the service offering to reduce cost, but the cost still remains relatively high for a small company and every dollar matters to you the stockholders.