Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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.
¨
The pro forma financial information included in
this Amendment has been presented for informational purposes only, is based on various adjustments and assumptions and is not necessarily
indicative of the financial position or results of operations of GNL that would have occurred had the transactions described in the Original
Form 8-K been completed as of the dates indicated, nor is such information necessarily indicative of GNL’s financial position
or results of operations for any future periods.
(a) Financial Statements of Businesses Acquired.
The financial statements of Modiv required by Item 9.01(a) of
Form 8-K were filed as Exhibits 99.2 and 99.3 to the Original Form 8-K and are incorporated herein by reference.
(b) Pro Forma Financial Information.
The unaudited pro forma condensed combined balance
sheet of GNL as of June 30, 2026, the unaudited pro forma condensed combined statements of operations of GNL for the six months ended
June 30, 2026 and for the year ended December 31, 2025, and the notes related thereto, are filed as Exhibit 99.4 hereto
and incorporated herein by reference.
(d) Exhibits.
Pursuant to the requirements
of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
Exhibit 99.4
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL
INFORMATION
The following unaudited pro
forma condensed combined financial statements and notes thereto present the unaudited pro forma condensed combined balance sheet as of
June 30, 2026 and the unaudited pro forma condensed combined statements of operations for the six months ended June 30, 2026
and the year ended December 31, 2025. The unaudited pro forma condensed combined financial information was prepared in accordance
with Article 11 of Regulation S-X in order to give effect to the Merger (as defined and described below) and the assumptions and
adjustments described in the accompanying notes to the unaudited pro forma condensed combined financial statements.
On August 12, 2026
(the “Acquisition Date”), Global Net Lease, Inc. (“GNL” or the “Company”), together with its
direct and indirect subsidiaries, GNL Motion Merger Sub, LLC (“REIT Merger Sub”), Global Net Lease Operating Partnership,
L.P. (the “OP”) and GNL Motion OpCo Merger Sub, LLC (“OpCo Merger Sub”) consummated the transactions contemplated
by the Agreement and Plan of Merger (the “Merger Agreement”) with Modiv Industrial, Inc. (NYSE: MDV) (“Modiv”)
and Modiv Operating Partnership, LP (the “Modiv Operating Partnership”).
Pursuant to the terms and
conditions of the Merger Agreement, on the Acquisition Date, (i) Modiv merged with and into REIT Merger Sub with REIT Merger Sub
continuing as the surviving entity (the “Modiv Merger”) and (ii) contemporaneously with the Modiv Merger, OpCo Merger
Sub merged with and into the Modiv Operating Partnership, with the Modiv Operating Partnership being the surviving entity (the “OpCo
Merger” and, together with the Modiv Merger, the “Merger”).
The following unaudited pro
forma condensed combined financial statements have been prepared by applying the acquisition method of accounting with GNL treated as
the acquiror for accounting purposes. The unaudited pro forma condensed combined financial statements are based on the historical consolidated
financial statements of GNL and historical consolidated financial statements of Modiv as adjusted to give effect to the Merger.
The unaudited pro forma condensed
combined financial information is qualified in its entirety and should be read in conjunction with the accompanying notes to the unaudited
pro forma condensed combined financial statements as well as the following documents:
| · | The separate historical financial statements of GNL as of and for the six months ended June 30, 2026
and the related notes included in GNL’s Quarterly Report on Form 10-Q for the period ended June 30, 2026. |
| · | The separate historical financial statements of GNL as of and for the year ended December 31, 2025
and the related notes included in GNL’s Annual Report on Form 10-K for the year ended December 31, 2025. |
| · | The separate historical financial statements of Modiv as of and for the six months ended June 30,
2026 and the related notes included in Modiv’s Quarterly Report on Form 10-Q for the period ended June 30, 2026, which
have been incorporated by reference into the Company’s current report on Form 8-K/A with which these pro forma financial statements
are filed. |
| · | The separate historical financial statements of Modiv as of and for the year ended December 31, 2025
and the related notes included in Modiv’s Annual Report on Form 10-K for the year ended December 31, 2025, which have
been incorporated by reference into the Company’s current report on Form 8-K/A with which these pro forma financial statements
are filed. |
The unaudited pro forma condensed
combined balance sheet as of June 30, 2026 gives effect to the Merger as if it had occurred on June 30, 2026. The unaudited
pro forma condensed combined statements of operations for the six months ended June 30, 2026, and the year ended December 31,
2025 give effect to the Merger as if it had occurred on January 1, 2025.
These unaudited pro forma
condensed combined financial statements have been prepared for informational purposes only, based on assumptions and estimates that GNL’s
management considers appropriate. GNL has not completed the detailed valuation work necessary to finalize the required estimated fair
values and estimated lives of Modiv’s assets acquired and liabilities assumed and the related allocation of the purchase price,
and the final allocation of the purchase price will be determined after completion of an analysis to determine the estimated fair value
of Modiv’s assets and liabilities, and associated tax adjustments. The pro forma adjustments contained herein reflect management's
best estimates based on information available as of the date of the unaudited pro forma condensed combined financial statements and are
subject to change as additional information becomes available and additional analyses are performed. GNL’s management believes these
assumptions provide a reasonable basis for presenting the material effects directly attributable to the Merger, and that the adjustments
have been appropriately applied throughout these financial statements. As these unaudited pro forma condensed combined financial statements
have been prepared based on these assumptions, the final amounts recorded may differ materially from the information presented herein.
These unaudited pro forma condensed combined financial statements are not intended to reflect what GNL's actual financial condition or
results of operations would have been had the Merger occurred on the dates indicated, nor are they intended to be indicative of GNL's
future financial position or results of operations. Further, these unaudited pro forma condensed combined financial statements do not
reflect any operating synergies, cost savings or revenue enhancements that may result from the Merger, the costs to integrate the operations
of GNL and Modiv, or the costs necessary to achieve those operating synergies, cost savings and revenue enhancements.
GLOBAL NET LEASE, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE
SHEET
AS OF JUNE 30, 2026
(In thousands, except share and per share amounts)
| | |
HISTORICAL
GNL | | |
HISTORICAL
MODIV AS
RECLASSIFIED | | |
PRO FORMA
TRANSACTIONS
ADJUSTMENTS | | |
PRO
FORMA
GNL
COMBINED | |
| | |
| | |
(Note 2) | | |
(Note 4) | | |
| |
| ASSETS | |
| | | |
| | | |
| | | |
| | |
| Real estate investments, at cost: | |
| | | |
| | | |
| | | |
| | |
| Land | |
$ | 636,934 | | |
$ | 108,600 | | |
$ | 9,260 | (a) | |
$ | 754,794 | |
| Buildings, fixtures and improvements | |
| 3,468,728 | | |
| 388,749 | | |
| (21,613 | )(b) | |
| 3,835,864 | |
| Construction in progress | |
| 406 | | |
| — | | |
| — | | |
| 406 | |
| Acquired intangible lease assets | |
| 492,330 | | |
| 15,100 | | |
| 37,659 | (c) | |
| 545,089 | |
| Total real estate investments, at cost | |
| 4,598,398 | | |
| 512,449 | | |
| 25,306 | | |
| 5,136,153 | |
| Less accumulated depreciation and amortization | |
| (989,221 | ) | |
| (75,498 | ) | |
| 75,498 | (d) | |
| (989,221 | ) |
| Total real estate investments, net | |
| 3,609,177 | | |
| 436,951 | | |
| 100,804 | | |
| 4,146,932 | |
| Real estate assets held for sale | |
| 33,834 | | |
| — | | |
| — | | |
| 33,834 | |
| Assets related to discontinued operations | |
| — | | |
| — | | |
| — | | |
| — | |
| Cash and cash equivalents | |
| 153,640 | | |
| 21,626 | | |
| — | (e) | |
| 175,266 | |
| Restricted cash | |
| 14,352 | | |
| — | | |
| — | | |
| 14,352 | |
| Derivative assets, at fair value | |
| 978 | | |
| 1,705 | | |
| (451 | )(f) | |
| 2,232 | |
| Unbilled straight-line rent | |
| 71,952 | | |
| 25,595 | | |
| (25,595 | )(g) | |
| 71,952 | |
| Operating lease right-of-use asset | |
| 60,958 | | |
| — | | |
| — | | |
| 60,958 | |
| Prepaid expenses and other assets | |
| 53,636 | | |
| 1,783 | | |
| — | | |
| 55,419 | |
| Multi-tenant disposition receivable, net | |
| 2,475 | | |
| — | | |
| — | | |
| 2,475 | |
| Deferred tax assets | |
| 5,105 | | |
| — | | |
| — | | |
| 5,105 | |
| Goodwill | |
| 45,516 | | |
| — | | |
| 876 | (h) | |
| 46,392 | |
| Deferred financing costs, net | |
| 14,465 | | |
| — | | |
| — | | |
| 14,465 | |
| Total Assets | |
$ | 4,066,088 | | |
$ | 487,660 | | |
$ | 75,634 | | |
$ | 4,629,382 | |
| | |
| | | |
| | | |
| | | |
| | |
| LIABILITIES AND EQUITY | |
| | | |
| | | |
| | | |
| | |
| Mortgage notes payable, net | |
$ | 986,880 | | |
$ | 23,590 | | |
$ | (23,590 | )(i) | |
$ | 986,880 | |
| Credit facility term loan, net | |
| — | | |
| 249,749 | | |
| (249,749 | )(j) | |
| — | |
| Revolving credit facility | |
| 472,946 | | |
| — | | |
| 316,514 | (k) | |
| 789,460 | |
| Senior notes, net | |
| 940,019 | | |
| — | | |
| — | | |
| 940,019 | |
| Acquired intangible lease liabilities, net | |
| 15,781 | | |
| 6,604 | | |
| 7,159 | (l) | |
| 29,544 | |
| Derivative liabilities, at fair value | |
| 1,797 | | |
| — | | |
| — | | |
| 1,797 | |
| Accounts payable and accrued expenses | |
| 42,771 | | |
| 4,208 | | |
| 4,813 | (m) | |
| 51,792 | |
| Operating lease liability | |
| 40,043 | | |
| — | | |
| — | | |
| 40,043 | |
| Prepaid rent | |
| 26,962 | | |
| 1,341 | | |
| — | | |
| 28,303 | |
| Deferred tax liability | |
| 17,403 | | |
| — | | |
| — | | |
| 17,403 | |
| Dividends payable | |
| 11,623 | | |
| 2,054 | | |
| (2,054 | )(n) | |
| 11,623 | |
| Real estate liabilities held for sale | |
| 164 | | |
| — | | |
| — | | |
| 164 | |
| Liabilities related to discontinued operations | |
| 596 | | |
| — | | |
| — | | |
| 596 | |
| Total Liabilities | |
| 2,556,985 | | |
| 287,546 | | |
| 53,093 | | |
| 2,897,624 | |
| Commitments and contingencies | |
| — | | |
| — | | |
| — | | |
| — | |
| Stockholders’ Equity: | |
| | | |
| | | |
| | | |
| | |
| Preferred stock, at par | |
| 240 | | |
| 2 | | |
| (2 | )(o) | |
| 240 | |
| Common stock, at par | |
| 3,440 | | |
| 11 | | |
| 193 | (p) | |
| 3,644 | |
| Additional paid-in capital | |
| 4,205,625 | | |
| 338,171 | | |
| (155,089 | )(q) | |
| 4,388,707 | |
| Treasury stock | |
| — | | |
| (7,112 | ) | |
| 7,112 | (r) | |
| — | |
| Accumulated other comprehensive income | |
| 16,480 | | |
| 755 | | |
| (755 | )(s) | |
| 16,480 | |
| Accumulated deficit | |
| (2,716,682 | ) | |
| (170,579 | ) | |
| 165,766 | (t) | |
| (2,721,495 | ) |
| Total Stockholders’ Equity | |
| 1,509,103 | | |
| 161,248 | | |
| 17,225 | | |
| 1,687,576 | |
| Non-controlling interest | |
| — | | |
| 38,866 | | |
| 5,316 | (u) | |
| 44,182 | |
| Total Equity | |
| 1,509,103 | | |
| 200,114 | | |
| 22,541 | | |
| 1,731,758 | |
| Total Liabilities and Equity | |
$ | 4,066,088 | | |
$ | 487,660 | | |
$ | 75,634 | | |
$ | 4,629,382 | |
GLOBAL NET LEASE, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT
OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2025
(In thousands, except share and per share amounts)
| | |
HISTORICAL
GNL | | |
HISTORICAL
MODIV AS
RECLASSIFIED | | |
PRO FORMA
TRANSACTIONS
ADJUSTMENTS | | |
PRO FORMA
GNL
COMBINED | |
| | |
| | |
(Note 2) | | |
(Note 5) | | |
| |
| Revenue from tenants | |
$ | 221,761 | | |
$ | 23,397 | | |
$ | (463 | )(a) | |
$ | 244,695 | |
| | |
| | | |
| | | |
| | | |
| | |
| Expenses: | |
| | | |
| | | |
| | | |
| | |
| Property operating | |
| 26,325 | | |
| 1,729 | | |
| — | | |
| 28,054 | |
| Impairment charges | |
| 14,810 | | |
| — | | |
| — | | |
| 14,810 | |
| Merger, transaction and other costs | |
| 10,948 | | |
| 3,403 | | |
| — | | |
| 14,351 | |
| General and administrative | |
| 24,028 | | |
| 2,711 | | |
| — | | |
| 26,739 | |
| Equity-based compensation | |
| 7,984 | | |
| 1,548 | | |
| — | | |
| 9,532 | |
| Depreciation and amortization | |
| 83,124 | | |
| 7,364 | | |
| 3,179 | (c) | |
| 93,667 | |
| Total expenses | |
| 167,219 | | |
| 16,755 | | |
| 3,179 | | |
| 187,153 | |
| Operating income before gain on dispositions of real estate investments | |
| 54,542 | | |
| 6,642 | | |
| (3,642 | ) | |
| 57,542 | |
| Gain on dispositions of real estate investments | |
| 31,129 | | |
| 7,542 | | |
| — | | |
| 38,671 | |
| Operating income | |
| 85,671 | | |
| 14,184 | | |
| (3,642 | ) | |
| 96,213 | |
| Other income (expense): | |
| | | |
| | | |
| | | |
| | |
| Interest expense | |
| (78,011 | ) | |
| (7,957 | ) | |
| 2,577 | (d) | |
| (83,391 | ) |
| Loss on extinguishment and modification of debt | |
| (13,618 | ) | |
| — | | |
| — | | |
| (13,618 | ) |
| Gain on derivative instruments | |
| 2,763 | | |
| — | | |
| — | | |
| 2,763 | |
| Unrealized gains on undesignated foreign currency advances and other hedge ineffectiveness | |
| 1,816 | | |
| — | | |
| — | | |
| 1,816 | |
| Income from unconsolidated investment in a real estate property | |
| — | | |
| 38 | | |
| — | (e) | |
| 38 | |
| Other income | |
| 450 | | |
| (75 | ) | |
| — | | |
| 375 | |
| Total other (expense) income, net | |
| (86,600 | ) | |
| (7,994 | ) | |
| 2,577 | | |
| (92,017 | ) |
| Net (loss) income before income tax | |
| (929 | ) | |
| 6,190 | | |
| (1,065 | ) | |
| 4,196 | |
| Income tax expense | |
| (6,417 | ) | |
| — | | |
| — | | |
| (6,417 | ) |
| (Loss) income from continuing operations | |
| (7,346 | ) | |
| 6,190 | | |
| (1,065 | ) | |
| (2,221 | ) |
| Net (income) loss attributable to non-controlling interest | |
| — | | |
| (902 | ) | |
| 949 | (f) | |
| 47 | |
| Preferred stock dividends | |
| (21,872 | ) | |
| (1,548 | ) | |
| 1,548 | (g) | |
| (21,872 | ) |
| Net (loss) income from continuing operations attributable to common stockholders | |
$ | (29,218 | ) | |
$ | 3,740 | | |
$ | 1,432 | | |
$ | (24,046 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Basic and Diluted Loss Per Share: | |
| | | |
| | | |
| | | |
| | |
| Net loss per share from continuing operations attributable to common stockholders — Basic and Diluted | |
$ | (0.14 | ) | |
| | | |
| | | |
$ | (0.11 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Weighted average common shares outstanding — Basic and Diluted (h) | |
| 212,681,722 | | |
| | | |
| | | |
| 233,069,479 | |
GLOBAL NET LEASE, INC
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT
OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2026
(In thousands, except share and per share amounts)
| | |
HISTORICAL
GNL | | |
HISTORICAL
MODIV AS
RECLASSIFIED | | |
PRO FORMA
TRANSACTIONS
ADJUSTMENTS | | |
PRO FORMA
GNL
COMBINED | |
| | |
| | |
(Note 2) | | |
(Note 5) | | |
| |
| Revenue from tenants | |
$ | 495,286 | | |
$ | 46,387 | | |
$ | (2,633 | )(a) | |
$ | 539,040 | |
| | |
| | | |
| | | |
| | | |
| | |
| Expenses: | |
| | | |
| | | |
| | | |
| | |
| Property operating | |
| 51,206 | | |
| 3,460 | | |
| — | | |
| 54,666 | |
| Impairment charges | |
| 157,532 | | |
| 5,814 | | |
| — | | |
| 163,346 | |
| Merger, transaction and other costs | |
| 6,662 | | |
| — | | |
| 4,813 | (b) | |
| 11,475 | |
| General and administrative | |
| 52,753 | | |
| 5,811 | | |
| — | | |
| 58,564 | |
| Equity-based compensation | |
| 12,514 | | |
| 2,915 | | |
| — | | |
| 15,429 | |
| Depreciation and amortization | |
| 191,189 | | |
| 15,087 | | |
| 5,999 | (c) | |
| 212,275 | |
| Goodwill impairment | |
| 7,134 | | |
| — | | |
| — | | |
| 7,134 | |
| Total expenses | |
| 478,990 | | |
| 33,087 | | |
| 10,812 | | |
| 522,889 | |
| Operating income before gain on dispositions of real estate investments | |
| 16,296 | | |
| 13,300 | | |
| (13,445 | ) | |
| 16,151 | |
| Gain on dispositions of real estate investments | |
| 94,687 | | |
| 2,520 | | |
| — | | |
| 97,207 | |
| Operating income (loss) | |
| 110,983 | | |
| 15,820 | | |
| (13,445 | ) | |
| 113,358 | |
| Other (expense) income: | |
| | | |
| | | |
| | | |
| | |
| Interest expense | |
| (194,718 | ) | |
| (16,917 | ) | |
| 6,157 | (d) | |
| (205,478 | ) |
| Loss on extinguishment and modification of debt | |
| (11,222 | ) | |
| — | | |
| — | | |
| (11,222 | ) |
| Loss on derivative instruments | |
| (10,676 | ) | |
| — | | |
| — | | |
| (10,676 | ) |
| Unrealized losses on undesignated foreign currency advances and other hedge ineffectiveness | |
| (12,644 | ) | |
| — | | |
| — | | |
| (12,644 | ) |
| Income from unconsolidated investment in a real estate property | |
| — | | |
| 758 | | |
| — | (e) | |
| 758 | |
| Other income | |
| 4,331 | | |
| 893 | | |
| — | | |
| 5,224 | |
| Total other (expense) income, net | |
| (224,929 | ) | |
| (15,266 | ) | |
| 6,157 | | |
| (234,038 | ) |
| Net (loss) income before income tax | |
| (113,946 | ) | |
| 554 | | |
| (7,288 | ) | |
| (120,680 | ) |
| Income tax expense | |
| (21,801 | ) | |
| — | | |
| — | | |
| (21,801 | ) |
| (Loss) income from continuing operations | |
| (135,747 | ) | |
| 554 | | |
| (7,288 | ) | |
| (142,481 | ) |
| Net loss attributable to non-controlling interest | |
| — | | |
| 514 | | |
| 2,360 | (f) | |
| 2,874 | |
| Preferred stock dividends | |
| (43,743 | ) | |
| (3,202 | ) | |
| 3,202 | (g) | |
| (43,743 | ) |
| Net loss from continuing operations attributable to common stockholders | |
$ | (179,490 | ) | |
$ | (2,134 | ) | |
$ | (1,726 | ) | |
$ | (183,350 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Basic and Diluted Loss Per Share: | |
| | | |
| | | |
| | | |
| | |
| Net loss per share from continuing operations attributable to common stockholders — Basic and Diluted | |
$ | (0.81 | ) | |
| | | |
| | | |
$ | (0.77 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Weighted average common shares outstanding — Basic and Diluted (h) | |
| 223,255,282 | | |
| | | |
| | | |
| 243,643,039 | |
NOTES TO THE UNAUDITED PRO FORMA CONDENSED
COMBINED FINANCIAL STATEMENTS
Note 1 — Description of Transaction
On the Acquisition Date,
GNL consummated the transactions contemplated by the Merger Agreement, thereby acquiring Modiv through the merger of Modiv with and into
REIT Merger Sub and the merger of OpCo Merger Sub with and into the Modiv Operating Partnership. As a result of the Merger, Modiv became
a wholly-owned subsidiary of GNL.
Under the terms of the Merger
Agreement, Modiv stockholders received 1.975 newly-issued shares of GNL Common Stock, par value $0.01 (“GNL Common Stock”)
for each share of Modiv’s Class C Common Stock, par value $0.001 (the “Modiv Common Stock”). Also, holders of Modiv’s
Class C limited partnership units (the “Modiv Class C Units”) received 1.975 newly-issued units of limited partnership
interest in the OP (the “GNL OP Units”). In addition, GNL repaid Modiv’s (1) $23.7 million mortgage notes payable
(the “Modiv Mortgage Notes Payable”), (2) $250 million credit facility term loan (the “Modiv Term Loan”)
and (3) 7.375% Series A Cumulative Redeemable Perpetual Preferred Stock, par value $0.001 (the “Modiv Preferred Stock”)
upon consummation of the Merger, using proceeds from GNL’s revolving credit facility (the “GNL Revolving Credit Facility”).
Note 2 — Basis of Presentation
The GNL and Modiv historical
financial information has been derived from the consolidated financial statements included in GNL’s and Modiv’s Quarterly
Reports on Form 10-Q for the six months ended June 30, 2026, and GNL’s and Modiv’s Annual Reports on Form 10-K
for the year ended December 31, 2025, which have been incorporated by reference into the Company’s current report on Form 8-K/A
with which these pro forma financial statements are filed. Additionally, the accompanying unaudited pro forma condensed combined financial
information was prepared in accordance with Article 11 of SEC Regulation S-X. Certain historical amounts of Modiv have been reclassified
to conform to GNL’s financial statement presentation (see below).
The unaudited pro forma condensed
combined financial information is qualified in its entirety and should be read in conjunction with the accompanying notes to the unaudited
pro forma condensed combined financial statements as well as the following documents:
| · | The separate historical financial statements of GNL as of and for the six months ended June 30, 2026
and the related notes included in GNL’s Quarterly Report on Form 10-Q for the period ended June 30, 2026. |
| · | The separate historical financial statements of GNL as of and for the year ended December 31, 2025
and the related notes included in GNL’s Annual Report on Form 10-K for the year ended December 31, 2025. |
| · | The separate historical financial statements of Modiv as of and for the six months ended June 30,
2026 and the related notes included in Modiv’s Quarterly Report on Form 10-Q for the period ended June 30, 2026. |
| · | The separate historical financial statements of Modiv as of and for the year ended December 31, 2025
and the related notes included in Modiv’s Annual Report on Form 10-K for the year ended December 31, 2025. |
The unaudited pro forma condensed
combined financial information was prepared using the acquisition method of accounting in accordance with Accounting Standards Codification
(ASC) 805, Business Combinations, which requires the determination of the acquiror, the merger date, the fair value of assets and liabilities
of the acquiree and the measurement of goodwill. GNL’s management has determined that GNL represents the accounting acquiror in
the Merger based on an analysis of the criteria outlined in ASC 805 and the facts and circumstances specific to these transactions. As
a result, GNL will record the business combination in its financial statements and will apply the acquisition method to account for the
assets acquired and liabilities assumed from Modiv. Applying the acquisition method includes recording the identifiable assets acquired
and liabilities assumed at their fair values, and recording goodwill for the excess of the purchase price over the aggregate fair value
of the identifiable assets acquired and liabilities assumed in the Merger.
To prepare the unaudited
pro forma condensed combined financial information, GNL adjusted Modiv’s assets and liabilities to their estimated combined fair
values based on preliminary valuation work. As of the date of this filing, GNL has not completed the detailed valuation work necessary
to finalize the required estimated fair values and estimated lives of Modiv’s assets to be acquired and liabilities to be assumed
and the related allocation of the purchase price. The final allocation of the purchase price will be determined after completion of an
analysis to determine the estimated fair value of Modiv’s assets and liabilities, and associated tax adjustments. Accordingly, the
final acquisition accounting adjustments may be materially different from the unaudited pro forma adjustments.
NOTES TO THE UNAUDITED PRO FORMA CONDENSED
COMBINED FINANCIAL STATEMENTS
Adjustments to Historical Modiv Balance
Sheet
To conform the presentation
of Modiv’s historical balance sheet as of June 30, 2026 to GNL’s balance sheet presentation, the following adjustments
to Modiv’s historical balance sheet were made:
| · | Tenant origination and absorption costs on Modiv’s June 30, 2026 balance sheet of $13.5 million
was reclassified to GNL’s acquired intangible lease assets. |
| · | Above-market lease intangibles, net of $1.1 million on Modiv’s June 30, 2026 balance sheet
was reclassified as follows: |
| ◦ | $1.6 million of gross above-market lease intangibles has been reclassified to GNL’s acquired
intangible lease assets, and |
| ◦ | $0.4 million of accumulated amortization related to above-market lease intangibles has been reclassified
to GNL’s accumulated depreciation and amortization. |
| · | Tenant deferred rent and other receivables on Modiv’s June 30, 2026 balance sheet of $25.8 million
was reclassified as follows: |
| ◦ | $25.6 million of straight-line rent has been reclassified to GNL’s unbilled straight-line rent,
and |
| ◦ | $0.2 million of tenant rent and reimbursements has been reclassified to GNL’s prepaid expenses and
other assets. |
| · | Unearned rent included in accounts payable, accrued and other liabilities on Modiv’s June 30,
2026 balance sheet of $1.3 million has been reclassified to GNL’s prepaid rent. |
Adjustments to Historical Modiv Statements
of Operations
To conform the presentation
of Modiv’s historical statements of operations to GNL’s statements of operations presentation, the following adjustments to
Modiv’s historical statements of operations were made:
| · | Interest and other income in Modiv’s June 30, 2026 statement of operations of $0.1 million
has been reclassified to GNL’s other income. |
| · | Loss on other investments in Modiv’s June 30, 2026 statement of operations of $0.2 million
has been reclassified to GNL’s other income. |
| · | Interest and other income in Modiv’s December 31, 2025 statement of operations of $0.9 million
has been reclassified to GNL’s other income. |
Note 3 — Preliminary Purchase Price Allocation
Estimated Preliminary Purchase Price
The following table presents
a preliminary purchase price estimate to affect the Merger. The estimated equity consideration portion of the preliminary purchase price
was based on the outstanding share or unit count as of June 30, 2026 and the closing price of GNL’s Common Stock as of August 12,
2026.
| (in thousands) | |
Notes | |
Amount | | |
Consideration Type |
| Fair value of GNL Common Stock issued to holders of Modiv Common Stock | |
3a | |
$ | 183,286 | | |
GNL Common Stock |
| Fair value of GNL OP Units issued to holders of Modiv’s Class C OP Units | |
3b | |
| 44,182 | | |
GNL OP Units |
| Total equity consideration | |
| |
| 227,468 | | |
|
| Cash used to repay the Modiv Mortgage Notes Payable, the Modiv Term Loan and the Modiv Preferred Stock | |
3c | |
| 316,514 | | |
Cash |
| Total estimated preliminary purchase price | |
| |
$ | 543,982 | | |
|
NOTES TO THE UNAUDITED PRO FORMA CONDENSED
COMBINED FINANCIAL STATEMENTS
| (3a) | The following table presents the fair value
of GNL Common Stock issued to holders of Modiv Common Stock: |
| | |
Modiv
Common
Stock | |
| Outstanding shares of Modiv Common Stock as of June 30, 2026 | |
| 10,323,670 | |
| Conversion ratio per Merger Agreement | |
| 1.975 | |
| Subtotal | |
| 20,389,248 | |
| Fractional shares paid in cash (see (3c) below) | |
| (1,491 | ) |
| Total number of shares of GNL Common Stock issued | |
| 20,387,757 | |
| Closing price of GNL Common Stock as of August 12, 2026 | |
$ | 8.99 | |
| Fair value of GNL Common Stock issued to holders of Modiv Common Stock (in thousands) | |
$ | 183,286 | |
| (3b) | The following table presents the fair value of GNL OP Units issued to holders of Modiv Class C OP Units: |
| | |
Modiv Class C
Units | |
| Modiv’s Class C OP Units outstanding as of June 30, 2026 (1) | |
| 2,488,371 | |
| Conversion ratio per Merger Agreement | |
| 1.975 | |
| Subtotal | |
| 4,914,532 | |
| Fractional OP Units paid in cash (see (3c) below) | |
| (6 | ) |
| Total number of GNL OP Units issued | |
| 4,914,526 | |
| Closing price of GNL Common Stock as of August 12, 2026 | |
$ | 8.99 | |
| Fair value of GNL OP Units issued to holders of Modiv’s Class C OP Units (in thousands) | |
$ | 44,182 | |
(1) The conversion of Modiv’s unvested
Class X OP Units into vested Class C OP Units occurred immediately prior to the closing of the Merger.
| (3c) | The following table presents the cash used to repay the Modiv Mortgage Notes Payable, the Modiv Term Loan, the Modiv Preferred Stock
and cash paid in lieu of GNL Common Stock and GNL OP Units: |
| | |
As of | |
| | |
June 30, 2026 | |
| Cash used to repay: | |
| | |
| Modiv’s Mortgage Notes Payable, including accrued interest | |
$ | 23,742 | |
| Modiv Term Loan, including accrued interest | |
| 250,458 | |
| Modiv
Preferred Stock (1) | |
| 42,301 | |
| Cash paid in lieu of GNL Common Stock and GNL OP Units | |
| 13 | |
| Total cash used | |
$ | 316,514 | |
(1) Represents
1,677,588 shares of Modiv Preferred Stock outstanding as of June 30, 2026 multiplied by the $25.00 liquidation preference and accrued
dividends.
NOTES TO THE UNAUDITED PRO FORMA CONDENSED
COMBINED FINANCIAL STATEMENTS
The following table presents
the total number of shares of GNL Common Stock issued to holders of Modiv Common Stock and the resulting par value:
| | |
Total | |
| Total number of shares of GNL Common Stock issued to holders of Modiv Common Stock (per 3(a) above) | |
| 20,387,757 | |
| Par value per share of GNL Common Stock | |
$ | 0.01 | |
| Par value of shares of GNL Common Stock issued to holders of Modiv Common Stock (in thousands) | |
$ | 204 | |
Preliminary Purchase Price Allocation
The following table presents
the preliminary purchase price allocation to assets acquired and liabilities assumed, as if the Merger had occurred on June 30, 2026:
| (in thousands) | |
As of June 30, 2026 | |
| Total estimated preliminary purchase price | |
$ | 543,982 | |
| Assets Acquired: | |
| | |
| Land | |
$ | 117,860 | |
| Buildings, fixtures and improvements | |
| 367,136 | |
| Total tangible assets | |
| 484,996 | |
| Acquired intangible assets: | |
| | |
| In-place leases | |
| 41,575 | |
| Above-market lease assets | |
| 11,184 | |
| Total acquired intangible lease assets | |
| 52,759 | |
| Cash and cash equivalents | |
| 21,626 | |
| Derivative assets, at fair value | |
| 1,254 | |
| Prepaid expenses and other assets | |
| 1,783 | |
| Total assets acquired | |
$ | 562,418 | |
| | |
| | |
| Liabilities Assumed: | |
| | |
| Acquired intangible lease liabilities | |
$ | 13,763 | |
| Accounts payable and accrued expenses | |
| 4,208 | |
| Prepaid rent | |
| 1,341 | |
| Total liabilities assumed | |
$ | 19,312 | |
| Estimated preliminary fair value of net assets acquired | |
$ | 543,106 | |
| Goodwill | |
$ | 876 | |
The purchase price allocation
presented above has not been finalized. The final determination of the allocation of the purchase price will be based on the fair value
of the assets acquired and liabilities assumed as of the Acquisition Date. The final determination of these estimated fair values, the
assets’ useful lives and the depreciation and amortization methods are dependent upon certain valuations and other analyses that
have not yet been completed, and as previously stated could differ materially from the amounts presented in the unaudited pro forma condensed
combined financial statements. The final determination will be completed as soon as practicable but no later than one year after Acquisition
Date. Any increase or decrease following the Merger in the fair value of the net assets acquired, as compared to the information shown
herein, could change the portion of the purchase consideration allocable to goodwill and could impact the operating results presented
in the unaudtied pro forma condensed combined GNL financial statements herein, due to differences in the allocation of the purchase consideration,
as well as changes in the depreciation and amortization related to some of the acquired assets.
NOTES TO THE UNAUDITED PRO FORMA CONDENSED
COMBINED FINANCIAL STATEMENTS
Note 4 — Pro Forma Adjustments - Unaudited Condensed Combined
Balance Sheet
| (a) | To adjust acquired land to an estimate of their fair values, as follows: |
| | |
As of | |
| (in thousands) | |
June 30, 2026 | |
| Eliminate Modiv’s historical land | |
$ | (108,600 | ) |
| Estimated fair value of land acquired | |
| 117,860 | |
| Total pro forma adjustment | |
$ | 9,260 | |
| (b) | To adjust acquired buildings, fixtures and improvements to an estimate of their fair values, as follows: |
| | |
As of | |
| (in thousands) | |
June 30, 2026 | |
| Eliminate Modiv’s historical buildings and improvements | |
$ | (388,749 | ) |
| Estimated fair value of buildings and improvements acquired | |
| 367,136 | |
| Total pro forma adjustment | |
$ | (21,613 | ) |
Depreciation will be computed using
the straight-line method over the estimated useful lives of up to 40 years for buildings, 15 years for land and building improvements
and the shorter of the useful life or the remaining lease term for tenant improvements and leasehold interests. The estimated fair values
and estimated useful lives are preliminary and subject to change until GNL finalizes its valuations.
| (c) | To adjust acquired intangible lease assets to an estimate of their fair values, as follows: |
| | |
As of | |
| (in thousands) | |
June 30, 2026 | |
| Eliminate Modiv’s historical acquired intangible lease assets | |
$ | (15,100 | ) |
| Estimated fair value of intangible lease assets acquired | |
| 52,759 | |
| Total pro forma adjustment | |
$ | 37,659 | |
The value of in-place leases, exclusive
of the value of above-market and below-market in-place leases, will be amortized to expense over the remaining periods of the respective
leases. The estimated fair values and estimated useful lives are preliminary and subject to change once GNL finalizes its valuations.
| (d) | To eliminate Modiv’s historical accumulated depreciation and amortization. |
| (e) | The table below details the pro forma cash
transactions. |
| | |
As of | |
| (in thousands) | |
June 30, 2026 | |
| Cash received from draws on the GNL Revolving Credit Facility (see (k) below) | |
$ | 316,514 | |
| Cash
used to fully repay the Modiv Mortgage Notes Payable, gross (see Note 3) | |
| (23,742 | ) |
| Cash
used to fully repay the Modiv Term Loan, gross (see Note 3) | |
| (250,458 | ) |
| Cash
used to fully repay the Modiv Preferred Stock (see Note 3) | |
| (42,301 | ) |
| Cash
paid in lieu of GNL Common Stock and GNL OP Units (see Note 3) | |
| (13 | ) |
| Total pro forma adjustment | |
$ | — | |
| (f) | To adjust derivative assets, at fair value to their estimated fair value as of the Acquisition Date. |
| (g) | To eliminate Modiv’s unbilled straight-line rent, which is not treated as a separately recognized asset on the combined company’s
balance sheet. |
NOTES TO THE UNAUDITED PRO FORMA CONDENSED
COMBINED FINANCIAL STATEMENTS
| (h) | To record goodwill based on the preliminary
estimated fair values of Modiv’s assets acquired and liabilities assumed and the related
allocation of the purchase price, as described in Note 2 — Basis of Presentation.
Goodwill is calculated as the difference between the Acquisition Date fair value of the consideration
transferred and the values assigned to the assets acquired and liabilities assumed. Goodwill
is not amortized. |
| (i) | To eliminate the Modiv Mortgage Notes Payable, net of deferred financing costs. GNL repaid the Modiv Mortgage
Notes Payable upon consummation of the Merger. |
| (j) | To eliminate the Modiv Term Loan, net of deferred financing costs. GNL repaid the Modiv Term Loan upon
consummation of the Merger. |
| (k) | To record pro forma GNL Revolving Credit Facility draws, as follows: |
| | |
As of | |
| (in thousands) | |
June 30, 2026 | |
| Draw for repayment of the Modiv Mortgage Notes Payable (see (e) above) | |
$ | 23,742 | |
| Draw for repayment of the Modiv Term Loan (see (e) above) | |
| 250,458 | |
| Draw for repayment of the Modiv Preferred Stock (see (e) above) | |
| 42,301 | |
| Draw for cash paid in lieu of GNL Common Stock and GNL OP Units (see (e) above) | |
| 13 | |
| Total pro forma adjustment | |
$ | 316,514 | |
| (l) | To adjust acquired intangible lease liabilities, net, as follows: |
| | |
As of | |
| (in thousands) | |
June 30, 2026 | |
| Eliminate Modiv’s historical acquired intangible lease liabilities, net | |
$ | (6,604 | ) |
| Estimated fair value of Modiv’s acquired intangible lease liabilities | |
| 13,763 | |
| Total pro forma adjustment | |
$ | 7,159 | |
| (m) | Represents accrual of additional estimated transaction costs to be incurred by GNL subsequent to June 30, 2026. |
| (n) | To eliminate Modiv’s dividends payable. |
| (o) | To eliminate the Modiv Preferred Stock, at par. GNL repaid the Modiv Preferred Stock upon consummation of the Merger. |
| (p) | To eliminate the Modiv Common Stock, at par and record the issuance of GNL Common Stock, at par, as follows: |
| | |
As of | |
| (in thousands) | |
June 30, 2026 | |
| Eliminate Modiv Common Stock, at par | |
$ | (11 | ) |
| GNL Common Stock, at par, issued in the Merger (see Note 3) | |
| 204 | |
| Total pro forma adjustment | |
$ | 193 | |
NOTES TO THE UNAUDITED PRO FORMA CONDENSED
COMBINED FINANCIAL STATEMENTS
| (q) | To record the additional paid in capital portion of the merger consideration, at fair value less par, eliminate Modiv’s additional
paid-in capital, as follows: |
| | |
As of | |
| (in thousands) | |
June 30, 2026 | |
| Eliminate Modiv’s historical additional paid-in capital | |
$ | (338,171 | ) |
| Estimated fair value of GNL Common Stock issued to holders of Modiv Common Stock (see Note 3) | |
| 183,286 | |
| Less: par value of GNL Common Stock issued in the Merger (see Note 3) | |
| (204 | ) |
| Total pro forma adjustment | |
$ | (155,089 | ) |
| (r) | To eliminate Modiv’s treasury stock. |
| (s) | To eliminate Modiv’s accumulated other comprehensive income. |
| (t) | To adjust accumulated deficit, as follows: |
| | |
As of | |
| (in thousands) | |
June 30, 2026 | |
| Eliminate Modiv’s historical accumulated deficit | |
$ | 170,579 | |
| Estimated GNL transaction costs to complete the Merger (see Note 5b) | |
| (4,813 | ) |
| Total pro forma adjustment | |
$ | 165,766 | |
| (u) | To adjust non-controlling interest, as follows: |
| | |
As of | |
| (in thousands) | |
June 30, 2026 | |
| Eliminate Modiv’s historical non-controlling interest | |
$ | (38,866 | ) |
| Fair value of GNL OP Units issued for Modiv Class C Units (see Note 3) | |
| 44,182 | |
| Total pro forma adjustment | |
$ | 5,316 | |
Note 5 — Pro Forma Adjustments - Statements of Operations
| (a) | The following table represents revenue adjustments to straight-line rent, below-market lease accretion
and above-market lease amortization using the most recent data for lease terms, assuming an acquisition date of January 1, 2025. |
| | |
Six Months Ended | | |
Year Ended | |
| (in thousands) | |
June 30, 2026 | | |
December 31, 2025 | |
| Adjustments to straight-line rent | |
$ | 117 | | |
$ | (1,491 | ) |
| Adjustments to below-market lease accretion | |
| (22 | ) | |
| (42 | ) |
| Adjustments to above-market lease amortization | |
| (558 | ) | |
| (1,100 | ) |
| Total pro forma adjustment | |
$ | (463 | ) | |
$ | (2,633 | ) |
| (b) | Represents adjustments to transaction costs as follows: |
| | |
Year Ended | |
| (in thousands) | |
December 31, 2025 | |
| Total estimated GNL transaction costs to complete the Merger | |
$ | 12,041 | |
| Transaction costs already recorded in GNL’s June 30, 2026 historical financial statements | |
| (7,228 | ) |
| Total pro forma adjustment | |
| 4,813 | |
NOTES TO THE UNAUDITED PRO FORMA CONDENSED
COMBINED FINANCIAL STATEMENTS
| (c) | To adjust depreciation and amortization expense, as follows: |
| | |
Six Months Ended | | |
Year Ended | |
| (in thousands) | |
June 30, 2026 | | |
December 31, 2025 | |
| Eliminate Modiv’s historical depreciation and amortization expense | |
$ | (7,364 | ) | |
$ | (15,087 | ) |
| Estimated depreciation expense of acquired tangible real estate assets | |
| 7,644 | | |
| 15,288 | |
| Estimated amortization expense of acquired in-place lease assets | |
| 2,899 | | |
| 5,798 | |
| Total pro forma adjustment | |
$ | 3,179 | | |
$ | 5,999 | |
| (d) | To adjust interest expense, as follows: |
| | |
Six Months Ended | | |
Year Ended | |
| (in thousands) | |
June 30, 2026 | | |
December 31, 2025 | |
| Eliminate Modiv’s historical interest expense | |
$ | 7,957 | | |
$ | 16,917 | |
| Additional interest expense attributable to borrowings under the GNL Revolving Credit Facility (1) | |
| (5,380 | ) | |
| (10,760 | ) |
| Total pro forma adjustment — decrease to interest expense | |
$ | 2,577 | | |
$ | 6,157 | |
| (1) | Assumes a draw on the GNL Revolving Credit Facility of $316.5 million at a weighted-average effective
interest rate of 3.40%. A change to the effective interest rate of 0.125% would increase or decrease the additional interest expense attributable
to the GNL Revolving Credit Facility draws (including accordion draws) by $0.2 million for the six months ended June 30, 2026, or
$0.4 million for the year ended December 31, 2025. |
| (e) | Modiv fully acquired this investment property during the first quarter of 2026. The pro forma statements
of operations include $38,000 and $0.8 million, respectively, related to this investment property as income in the historical condensed
consolidated statement of operations for the respective periods. Such income is not expected to recur. Now that this investment property
is a wholly owned investment, going forward, this property’s activity will be included in revenue and property operating expenses
in the consolidated statement of operations. |
| (f) | To adjust net loss attributable to non-controlling interests, as follows: |
| | |
Six Months Ended | | |
Year Ended | |
| (in thousands) | |
June 30, 2026 | | |
December 31, 2025 | |
| Eliminate Modiv’s historical net income (loss) attributable to non-controlling interests | |
$ | 902 | | |
$ | (514 | ) |
| Add non-controlling interest adjustment for issuance of GNL OP Units | |
| 47 | | |
| 2,874 | |
| Total pro forma adjustment | |
$ | 949 | | |
$ | 2,360 | |
| (g) | To eliminate historical preferred stock dividends related to the Modiv Preferred Stock. GNL repaid the Modiv Preferred Stock upon
consummation of the Merger. |
NOTES TO THE UNAUDITED PRO FORMA CONDENSED
COMBINED FINANCIAL STATEMENTS
| (h) | To adjust the weighted-average GNL Common Stock outstanding for the periods presented reflecting the shares issued in the total consideration,
as follows: |
| | |
Six Months Ended | | |
Year Ended | |
| | |
June 30, 2026 | | |
December 31, 2025 | |
| Historical weighted-average shares of GNL Common Stock outstanding | |
| 212,681,722 | | |
| 223,255,282 | |
| Shares of GNL Common Stock issued to Modiv stockholders (see Note 3) | |
| 20,387,757 | | |
| 20,387,757 | |
| Pro forma weighted-average shares of GNL Common Stock outstanding | |
| 233,069,479 | | |
| 243,643,039 | |
