Company: RWT-PA
Filing Date: 2025-11-07
Form Type: 424B5
Source: 0001104659-25-108580
Chunk: 14

Company: REDWOOD TRUST INC
Filing Date: 2025-11-07
Form: 424B5
Chunk 14
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 of distributions we have made, the actual characterization (and, therefore, the rate at which holders of our common stock are taxed on the distributions they have received) could vary from our expectation, including due to errors, changes made in the course of preparing our corporate tax returns, or changes made in response to an Internal Revenue Service audit), with the result that holders of our common stock could incur greater income tax liabilities than expected.

For U.S. federal income tax purposes, distributions out of our current or accumulated earnings and profits will be treated as dividends and, with certain exceptions, will be taxable to our taxable U.S. stockholders as ordinary income. To the extent we make distributions in excess of our current and accumulated earnings and profits, such distributions will be treated first as a tax-free return of capital and then (to the extent in excess of a stockholder’s tax basis in its common stock) as capital gain.

Provisions of Maryland law, our charter and bylaws may impede or discourage a takeover, which could cause the market price of our common stock to decline.

Provisions of our charter and bylaws, as well as provisions of the Maryland General Corporation Law, or the MGCL, could make it more difficult for a third party to acquire us, even if doing so would benefit our stockholders. In order to maintain our qualifications as a REIT, not more than 50% in value of our outstanding capital stock may be owned, actually or constructively, by five or fewer individuals (defined in the Code to include certain entities). In order to protect us against the risk of losing our qualification as a REIT due to concentration of ownership of our outstanding stock, our charter generally prohibits any single stockholder, or any group of affiliated stockholders, from beneficially owning more than 9.8% of the outstanding shares of any class of our stock, unless our board of directors waives or modifies this ownership limit. This limitation may preclude an acquisition of control of us by a third party without the consent of our board of directors. Our board of directors has granted a limited number of such waivers to institutional investors to own shares in excess of this 9.8% limit, which waivers are subject to certain terms and conditions. Our board of directors may amend these existing waivers to permit additional share ownership or may grant waivers to additional stockholders at any time.

Certain other provisions contained in our charter and bylaws and in the MGCL may discourage a third-party from making an acquisition proposal for us and may therefore inhibit a change