Company: ADAMM
Filing Date: 2025-08-22
Form Type: 424B5
Source: 0001104659-25-081920
Chunk: 39

Company: ADAMAS TRUST, INC.
Filing Date: 2025-08-22
Form: 424B5
Chunk 39
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 underlying mortgage loans produce qualifying income for purposes of those tests, as described above. However, we do not intend to seek our own private letter ruling. Thus, the IRS could take the position that our Excess MSRs do not produce qualifying income, presumably by treating a portion of the income we receive from an Excess MSR as reasonable compensation for servicing the underlying mortgage loans. A successful challenge of our treatment of our Excess MSRs could result in our being treated as failing the 75% asset test, the 75% gross income test, and/or the 95% gross income test. If we failed any of those tests but qualified for a “savings” provision described in the accompanying prospectus under “— Asset Tests” or “— Failure to Satisfy Gross Income Tests,” we would be required to pay a penalty tax, which could be material, in order to maintain our REIT qualification. If we did not qualify for that “savings” provision, we would fail to qualify as a REIT. See “— Failure to Qualify” in the accompanying prospectus.

#### TBAs
**. We have purchased, and may purchase in the future, Agency RMBS through “to be announced” forward contracts (“TBAs”), and we may recognize income or gains on the disposition of those TBAs, through “dollar roll” transactions or otherwise. The law is unclear with respect to the qualification of TBAs as real estate assets or government securities for purposes of the 75% asset test, and with respect to gains from dispositions of TBAs as gains from the sale of real property (including interests in real property and interests in mortgages on real property) or other qualifying income for purposes of the 75% gross income test. However, we treat our TBAs as qualifying assets for purposes of the 75% asset test, and we treat income and gains from our TBAs as qualifying income for purposes of the 75% gross income test, based on a legal opinion of Vinson & Elkins L.L.P. (“V&E”) substantially to the effect that (i) our TBAs should be qualifying assets for purposes of the 75% asset test to the extent of the net positive value, if any, of a TBA and (ii) any gain recognized by us in connection with the settlement of our TBAs, whether physically settled or settled by an offsetting TBA, should be treated as qualifying income for purposes of the 75% gross income test. Opinions of counsel are not