Company: ADAMM
Filing Date: 2025-02-21
Form Type: 10-K
Source: 0001273685-25-000028
Chunk: 95

Company: ADAMAS TRUST, INC.
Filing Date: 2025-02-21
Form: 10-K
Item: Item 16
Chunk 95
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10,393 5,787 Other income52,764 34,870 21,769 Operating expenses(49,330)(33,883)(38,921)Income before debt service and depreciation and amortization56,361 32,679 133,915 Interest expense(33,235)(23,315)(11,892)Depreciation and amortization(15,328)(14,904)(14,779)Net income (loss)$7,798 $(5,540)$107,244 (1)The Company records income (loss) from equity investments under either the hypothetical liquidation of book value method of accounting or the equity method using the fair value option.  Accordingly, the combined net income (loss) shown above is not indicative of the income (loss) recognized by the Company from equity investments.

F-34

7.      Use of Special Purpose Entities (SPE) and Variable Interest Entities (VIE)Financing VIEsThe Company uses SPEs to facilitate transactions that involve securitizing financial assets or re-securitizing previously securitized financial assets. The objective of such transactions may include obtaining non-recourse financing, obtaining liquidity or refinancing the underlying securitized financial assets on improved terms. Securitization involves transferring assets to an SPE to convert all or a portion of those assets into cash before they would have been realized in the normal course of business through the SPE’s issuance of debt or equity instruments. Investors in an SPE usually have recourse only to the assets in the SPE and depending on the overall structure of the transaction, may benefit from various forms of credit enhancement, such as over-collateralization in the form of excess assets in the SPE, priority with respect to receipt of cash flows relative to holders of other debt or equity instruments issued by the SPE, or a line of credit or other form of liquidity agreement that is designed with the objective of ensuring that investors receive principal and/or interest cash flow on the investment in accordance with the terms of their investment agreement.    The Company has entered into financing transactions, including residential loan securitizations and re-securitizations,  which required the Company to analyze and determine whether the SPEs that were created to facilitate the transactions are VIEs in accordance with ASC 810 and if so, whether the Company is the primary beneficiary requiring consolidation. During the year ended December 31, 2024, the Company completed a re-securitization of its investment in certain