Company: ADAMM
Filing Date: 2025-06-13
Form Type: 424B5
Source: 0001104659-25-059349
Chunk: 121

Company: ADAMAS TRUST, INC.
Filing Date: 2025-06-13
Form: 424B5
Chunk 121
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 it derives from an equity interest in a TMP equal to the percentage of its stock that is held in record name by “disqualified organizations.” Our subsidiary REIT currently owns an interest in a TMP. The ownership of our subsidiary REIT is structured such that no excess inclusion income should be allocated to the Company or its shareholders; rather the tax liability on the related excess inclusion income is to be borne by a TRS of the Company. We will indirectly bear such tax economically as the shareholder of such TRS.

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. Until we receive a favorable private letter ruling from the IRS or we receive an opinion of counsel to the effect that (i) our TBAs should be treated as qualifying assets for purposes of the 75% asset test and (ii) income and gain from the disposition of TBAs should be treated as qualifying income for purposes of the 75% gross income test, we will limit our TBAs and nonqualifying assets to no more than 25% of our total assets at the end of any calendar quarter, our TBAs of any one issuer to less than 5% of our total assets at the end of any calendar quarter, and our gains from dispositions of TBAs and any nonqualifying income to no more than 25% of our gross income for each calendar year. Accordingly, our ability to acquire TBAs and to dispose of those TBAs, through “dollar roll” transactions or otherwise could be limited. Moreover, even if we are

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advised by counsel that TBAs should be treated as qualifying assets, and income and gains from dispositions of TBAs should be treated as qualifying income, it is possible that the IRS could successfully take the position that such TBAs are not qualifying assets and/or such income is not qualifying income. In the event that our TBAs were determined