Company: ADAMM
Filing Date: 2025-09-05
Form Type: S-3
Source: 0001104659-25-087812
Chunk: 62

Company: ADAMAS TRUST, INC.
Filing Date: 2025-09-05
Form: S-3
Chunk 62
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 parties. Any income earned by a TRS that is attributable to services provided to us, or on our behalf to any of our tenants, for which we were charged less than the amounts that would have been charged based upon arm’s length negotiations, will also be subject to a 100% penalty tax. We believe that all transactions between us and our TRSs have been and will be conducted on an arm’s-length basis.

Subsidiary REITs. We have formed, and may in the future form, or acquire equity in, entities which have elected or will elect to be taxed as REITs. Each of these entities must meet all of the REIT qualification tests discussed herein. Each of them also may be subject to tax on certain of its income as described therein. We currently have one subsidiary REIT, and we believe that our subsidiary REIT has been organized and operated in conformity with the requirements for qualification and taxation as a REIT under the Code. However, if our subsidiary REIT were to fail to qualify as a REIT, then (i) such subsidiary REIT would become subject to regular U.S. federal corporate income tax (as described in “— Failure to Qualify”) and (ii) our ownership of stock in such subsidiary REIT would cease to be a qualifying real estate asset for purposes of the 75% asset test and would become subject to the 5% asset test, the 10% vote test and the 10% value test generally applicable to ownership in corporations other than REITs, qualified REIT subsidiaries and TRSs. See “— Requirements for Qualification — Asset Tests.” If our subsidiary REIT were to fail to qualify as a REIT, it is possible that we may not meet the 10% vote test or the 10% value test with respect to our interest in such subsidiary REIT, in which event we would fail to qualify as a REIT unless we could avail ourselves of certain relief provisions. We have made a protective TRS election with respect to our subsidiary REIT. If the IRS respects our protective TRS election with respect to such subsidiary REIT, the failure of such subsidiary REIT to qualify as a REIT would only cause us to fail to qualify as a REIT to the extent that the total value of our interests in TRSs (including the subsidiary REIT) represent more than 20% (25% for taxable years beginning after December 31, 2025) of our assets. See “— Asset Tests