professional relationship with our former sponsor, former advisor or any of their affiliates. For purposes of determining whether or not the business or professional relationship is material, the gross revenue derived by the director from our former sponsor and former advisor and their affiliates shall be deemed material per se if it exceeded 5.0% of the director’s (i) annual gross revenue (derived from all sources) during either of the last two years or (ii) net worth (on a fair market value basis). A director is also deemed to be associated with our former sponsor or former advisor if the director’s spouse, parents, children, siblings, mothers- or fathers-in-law, sons- or daughters-in-law, or brothers- or sisters-in-law is or has been associated with our former sponsor, former advisor, any of their affiliates or the Company.
In addition, although our shares are not listed for trading on any national securities exchange, a majority of the directors and members of the audit committee are “independent” as defined by the New York Stock Exchange. The New York Stock Exchange standards provide that to qualify as an independent director, in addition to satisfying certain bright-line criteria, the Board of Directors must affirmatively determine thatundertook a director has no material relationship with us (either directly or as a partner, stockholder or officerreview of an organization that has a relationship with us).
Thethe independence of all non-management directors. Our Board of Directors has affirmatively determined that the following six of our seven directors are independent under the NYSE listing standards and our Corporate Governance Guidelines and do not have a relationship with us that would interfere with such person’s ability to exercise independent judgment as a member of the Board: Asma Ishaq, Adam Markman, Curtis McWilliams, Thomas Nolan, Jr., Kimberly Smith and Jeffrey Randolph each qualify as an “Independent Director” as defined in our charter and satisfy the New York Stock Exchange independence standards.Connie Tirondola.
The Audit Committee
General
Our audit committee’s function is to assist the Board of Directors in fulfilling its responsibilities by overseeing (i) our accounting and financial reporting processes, (ii) the integrity of our financial statements, (iii) our compliance with legal and regulatory requirements, (iv) the selection, appointment and compensation of our independent registered public accounting firm and (v) our independent registered public accounting firm’s qualifications, performance and independence. The audit committee fulfills these responsibilities primarily by carrying out the activities enumerated in the audit committee charter. The audit committee charter is available in the Investor Relations – Governance – Governance Documents - Corporate Governance section of our website at www.modiv.com. The information contained on this website is not part of, or incorporated by reference in, this Proxy Statement.
The members of the audit committee are Jeffrey RandolphMr. Markman (Chairman), Joe HanauerMr. McWilliams and Adam Markman. A majorityMs. Tirondola. All of the members of the audit committee are “Independent Directors” as defined by our charter and are “independent” as defined by the New York Stock ExchangeNYSE and applicable rules of the SEC. All members of the audit committee are financially literate, and the Board of Directors has determined that Mr. RandolphMarkman satisfies the SEC’s requirements for an “audit committee financial expert.”
The audit committee was formed in May 2017. During 2020,2022, the audit committee held five meetings and acted by unanimous written consent on one occasion.meetings.
Independent Registered Public Accounting Firm
On November 1, 2020, we were notified thatThe Company recently conducted a competitive selection process to determine the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2023. The audit committee considered several public accounting firms in connection with this process and, as a result of this process, on March 30, 2023, the audit practicecommittee approved the engagement of Squar MilnerGrant Thornton as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2023, replacing Baker Tilly US, LLP (“Squar Milner”Baker Tilly”), the Company’s former independent registered public accounting firm.
In deciding to engage Grant Thornton, the audit committee reviewed auditor independence and any existing commercial relationships with Grant Thornton and concluded that Grant Thornton has no commercial relationships with the Company that would impair its independence. During the fiscal years ended December 31, 2022 and 2021, and during the interim period from January 1, 2023 through March 30, 2023, neither the Company nor anyone acting on its behalf consulted with Grant Thornton regarding either (i) the application of accounting principles to a specific completed or contemplated transaction or regarding the type of audit opinions that might be rendered by Grant Thornton on the Company’s financial statements, and Grant Thornton did not provide any written or oral advice that was an important factor considered by the Company in reaching a decision as to any accounting, auditing or financial reporting issue; or (ii) any matter that was the subject of a “disagreement” (as defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions) or a “reportable event” (as defined in Item 304(a)(1)(v) of Regulation S-K).
The report of Baker Tilly regarding the Company’s financial statements as of and for the years ended December 31, 2022 and 2021 contained in the 2022 Annual Report did not contain any adverse opinion or disclaimer of opinion and was not qualified or modified as to uncertainty, audit scope or accounting principles.
Grant Thornton has served as our independent registered public accounting firm since May 21, 2018, was combined with Baker Tilly in a transaction pursuant to which Squar Milner combined its operations with Baker Tilly and certain of the professional staff and partners of Squar Milner joined Baker Tilly either as employees or partners of Baker Tilly. On November 1, 2020, Squar Milner resigned as the auditors of the Company, and with the approval of the audit committee, Baker Tilly was engaged as the Company's independent registered public accounting firm.March 30, 2023. The audit committee may, however, select new auditors at any time in the future in its discretion if it deems such decision to be in our best interests. Any such decision would be disclosed to our stockholders in accordance with applicable securities laws.
Prior to engaging Baker Tilly, the Company did not consult with Baker Tilly regarding the application of accounting principles to a specific completed or contemplated transaction or regarding the type of audit opinions that might be rendered by Baker Tilly on the Company’s financial statements, and Baker Tilly did not provide any written or oral advice that was an important factor considered by the Company in reaching a decision as to any such accounting, auditing or financial reporting issue.