ADAMAS TRUST, INC. (ADAM) Business

Item 1. BUSINESS

Certain Defined Terms

In this Annual Report on Form 10-K we refer to Adamas Trust, Inc., together with its consolidated subsidiaries, as “Adamas,” “we,” “us,” “Company,” or “our,” unless we specifically state otherwise or the context indicates otherwise, and we refer to our wholly-owned taxable real estate investment trust (“REIT”) subsidiaries as “TRSs” and our wholly-owned qualified REIT subsidiaries as “QRSs.” In addition, the following defines certain of the commonly used terms in this report:

•“ABS” refers to debt and/or equity tranches of securitizations backed by various asset classes including, but not limited to, automobiles, aircraft, credit cards, equipment, franchises, recreational vehicles and student loans;

•“Agency ARMs” refers to Agency RMBS comprised of adjustable-rate and hybrid adjustable-rate RMBS;

•“Agency fixed-rate RMBS” refers to Agency RMBS comprised of fixed-rate RMBS;

•“Agency investments” refers to Agency RMBS and TBAs;

•“Agency RMBS” refers to RMBS representing interests in or obligations backed by pools of residential loans guaranteed by a government sponsored enterprise (“GSE”), such as the Federal National Mortgage Association (“Fannie Mae”) or the Federal Home Loan Mortgage Corporation (“Freddie Mac”), or an agency of the U.S. government, such as the Government National Mortgage Association (“Ginnie Mae”);

•“ARMs” refers to adjustable-rate residential loans;

•“business purpose loans” refers to (i) short-term loans that are collateralized by residential properties and are made to investors who intend to rehabilitate and sell the residential property for a profit or (ii) loans that finance (or refinance) non-owner occupied residential properties that are rented to one or more tenants;

•“CDO” refers to collateralized debt obligation and includes debt that permanently finances the residential loans held in Consolidated SLST, the Company's residential loans held in securitization trusts and a non-Agency RMBS re-securitization that we consolidate, or consolidated, in our financial statements in accordance with GAAP;

•“CMBS” refers to commercial mortgage-backed securities comprised of commercial mortgage pass-through securities issued by a GSE, as well as PO, IO, or mezzanine securities that represent the right to a specific component of the cash flow from a pool of commercial mortgage loans;

•“Consolidated Real Estate VIEs” refers to Consolidated VIEs that own multi-family properties;

•“Consolidated SLST” refers to Freddie Mac-sponsored residential loan securitizations, comprised of seasoned re-performing and non-performing residential loans, of which we own the first loss subordinated securities and certain IOs, that we consolidate in our financial statements in accordance with GAAP;

•“Consolidated VIEs” refers to VIEs where the Company is the primary beneficiary, as it has both the power to direct the activities that most significantly impact the economic performance of the VIE and a right to receive benefits or absorb losses of the entity that could be potentially significant to the VIE and that we consolidate in our financial statements in accordance with GAAP;

•“Constructive” refers to Constructive Loans, LLC, a wholly-owned subsidiary through which the Company originates business purpose loans for residential real estate investors;

•“excess mortgage servicing spread” or “excess MSR” refers to the difference between the contractual servicing fee with Fannie Mae, Freddie Mac or Ginnie Mae and the base servicing fee that is retained as compensation for servicing or subservicing the related mortgage loans pursuant to the applicable servicing contract;

•“GAAP” refers to generally accepted accounting principles within the United States;

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•“IOs” refers collectively to interest only and inverse interest only mortgage-backed securities that represent the right to the interest component of the cash flow from a pool of mortgage loans;

•“MBS” refers to mortgage-backed securities;

•“Mezzanine Lending” refers, collectively, to preferred equity and mezzanine loan investments in multi-family properties;

•“MSRs” refers to mortgage servicing rights that represent the contractual right to service residential loans;

•“multi-family CMBS” refers to CMBS backed by commercial mortgage loans on multi-family properties;

•“non-Agency RMBS” refers to RMBS that are not guaranteed by any agency of the U.S. Government or GSE;

•“non-QM loans” refers to residential loans that are not deemed “qualified mortgage,” or “QM,” loans under the rules of the Consumer Financial Protection Bureau;

•“POs” refers to mortgage-backed securities that represent the right to the principal component of the cash flow from a pool of mortgage loans;

•“RMBS” refers to residential mortgage-backed securities backed by adjustable-rate, hybrid adjustable-rate or fixed-rate residential loans;

•“second mortgages” refers to liens on residential properties that are subordinate to more senior mortgages or loans;

•“TBAs” refers to to-be-announced securities that are forward contracts for the purchase or sale of Agency fixed-rate RMBS at a predetermined price, face amount, issuer, coupon, and stated maturity on an agreed-upon future date;

•“TBA dollar roll income” refers to the difference in price between two TBA contracts with the same terms but different settlement dates that are simultaneously bought and sold; and

•“Variable Interest Entity” or “VIE” refers to an entity in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties.

General

We are an internally-managed REIT for U.S. federal income tax purposes focused on strategically deploying capital across complementary businesses to generate durable earnings and long-term value for stockholders through disciplined portfolio management and an operating platform designed to capture opportunities across real estate and capital markets. Our current investment portfolio includes credit sensitive single-family and multi-family assets, as well as other types of fixed-income investments such as Agency RMBS. Through our wholly-owned subsidiary, Constructive, we also originate business purpose loans for residential real estate investors. On September 3, 2025, we changed our name from New York Mortgage Trust, Inc. to Adamas Trust, Inc.

Our targeted assets include (i) Agency RMBS, (ii) residential loans, including business purpose loans, (iii) non-Agency RMBS and (iv) certain other mortgage-, residential housing- and credit-related assets, as well as strategic investments in companies from which we purchase, or may in the future purchase, our targeted assets. Subject to maintaining our qualification as a REIT and the maintenance of our exclusion from registration as an investment company under the Investment Company Act of 1940, as amended (the “Investment Company Act”), we also may opportunistically acquire and manage various other types of mortgage-, residential housing- and other credit-related or alternative investments that we believe will compensate us appropriately for the risks associated with them, including, without limitation, CMBS, collateralized mortgage obligations, MSRs, excess mortgage servicing spreads, preferred equity and joint venture equity investments in multi-family properties, securities issued by newly originated securitizations, including credit sensitive securities from these securitizations, ABS and debt or equity investments in alternative assets or businesses.

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We have elected to be taxed as a REIT for U.S. federal income tax purposes and have complied, and intend to continue to comply, with the provisions of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), with respect thereto. Accordingly, we do not expect to be subject to U.S. federal income tax on our REIT taxable income that we currently distribute to our stockholders if certain asset, income, distribution and ownership tests and record keeping requirements are fulfilled. Even if we maintain our qualification as a REIT, we expect to be subject to some U.S. federal, state and local taxes on our income generated in our TRSs.

We operate in two segments: investment portfolio and Constructive. Our segments are based on our organizational structure and the nature of the business activities. Our investment portfolio, which includes primarily mortgage-related residential assets, generates revenues, including interest income, net income (loss) from real estate and other income, for us. We derive the substantial portion of our revenues and income from our investment portfolio. Our investment portfolio is described in greater detail under “Investment Portfolio” below. Constructive represents the mortgage origination business conducted by Constructive, a business purpose loan lender specializing in rental and transitional loans for real estate investors, which generates revenues from the origination and sale of loans.

Our Investment Strategy

Our strategy is to own and manage a diversified portfolio of primarily mortgage-related single-family residential assets that include elements of credit risk and/or interest rate risk. As part of this strategy, we own and manage a leveraged portfolio of Agency investments primarily comprised of Agency fixed-rate RMBS and Agency ARMs that provide coupon income. We also intend to continue, subject to market conditions, to focus on credit assets, many of which we have originated or sourced through proprietary channels, including through our wholly-owned subsidiary, Constructive, that we believe will deliver more attractive risk-adjusted returns over time. In particular, we seek investment opportunities in markets where we believe we have a competitive advantage due to operational barriers to entry.

We define credit assets as (i) residential loans, including business purpose loans, which may be originated by Constructive, (ii) non-Agency RMBS, (iii) structured multi-family property investments and (iv) other mortgage-, residential housing- and credit-related assets that contain credit risk. In pursuing credit assets, we target assets that we believe will provide an attractive total rate of return, as compared to assets that strictly provide net interest spread. We also own and manage investments in multi-family and single-family rentals. In 2022, we determined to strategically reposition our business through the opportunistic disposition of certain multi-family investments. We have allocated, and expect to continue to allocate, more capital to investments in single-family residential assets relative to multi-family assets in 2025 and subsequent years, with multi-family assets continuing to become a smaller part of our balance sheet. We may pursue opportunistic acquisitions of other types of assets and sectors that meet our investment criteria.

On July 15, 2025, we completed the acquisition of the remaining 50% interest in Constructive that was not previously owned by us. Constructive is a business purpose loan originator that operates in 48 states. Through Constructive, we originate business purpose loans to residential real estate investors, which supports our proprietary sourcing strategy and provides us access to credit assets consistent with our investment objectives. These loans may, from time to time, be retained on our balance sheet for investment or made available for sale to other real estate investors.

In light of current market and financing conditions, we are presently focused on acquiring assets with less price sensitivity to credit deterioration, such as Agency RMBS, and higher quality business purpose loans, including those sourced through Constructive, that will position our portfolio to better withstand economic stress. Selecting assets with lower credit exposure, either through agency guarantees, structure or collateral quality, can also reduce the overall risk profile of the portfolio and raise our interest income levels.

Since our inception in 2003, we have benefited from being able to flexibly move in and out of new niche investment opportunities as market conditions permit. As a result, we may pursue opportunistic acquisitions of other types of assets not described above that meet our investment criteria. We also may manage for third parties investments that fall within our area of expertise that are not a focus of our Company or are less suitable to being owned in a REIT. In these cases, we may agree to invest in these assets akin to a "general partner"-like capital contribution as part of the agreement to manage the assets.

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Prior to deploying capital to any of the assets we target or determining to dispose of any of our investments, our management team will consider, among other things, the availability of suitable investments, the amount and nature of anticipated cash flows from the asset, our ability to finance or borrow against the asset and the terms of such financing, the related capital requirements, the credit risk, prepayment risk, hedging risk, interest rate risk, fair value risk and/or liquidity risk related to the asset or the underlying collateral, the composition of our investment portfolio, the background experience and track record of our partners (if applicable), REIT qualification, the maintenance of our exclusion from registration as an investment company under the Investment Company Act and other regulatory requirements and future general market conditions. In periods where we have working capital in excess of our short-term liquidity needs, we may invest the excess in more liquid assets until such time as we are able to re-invest that capital in assets that meet our underwriting and return requirements. Consistent with our strategy to produce returns through a combination of net interest spread and capital gains, we will seek, from time to time, to sell certain assets within our portfolio when we believe the combination of realized gains on an asset and/or reinvestment potential for the related sale proceeds are consistent with our long-term return objectives.

Subject to our investment guidelines, continued compliance with applicable REIT tax requirements, and our exclusion from registration as an investment company under the Investment Company Act, our investment strategy does not limit the amount of capital we may invest in any particular investment, asset class or type, or geographic concentration. Thus, our future investments may include asset classes or types different from the targeted or other assets described in this Annual Report on Form 10-K. Our investment and capital allocation decisions depend on prevailing market conditions, among other factors, and may change over time in response to opportunities available in different economic and capital market environments. As a result, we cannot predict the percentage of our capital that will be invested in any particular investment at any given time.

For more information regarding our portfolio as of December 31, 2025, see Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” below.

Investment Portfolio

Our portfolio is substantially comprised of investments in two asset categories: single-family and multi-family residential investments.

Single-Family Investments

We have deep experience managing a diversified portfolio of mortgage-related single-family residential assets across the credit spectrum, including whole loan investments and investments in Agency and non-Agency RMBS. Consistent with our investment strategy and prevailing market conditions, in recent years, we have increasingly emphasized investment in Agency RMBS, reflecting their liquidity, government-sponsored credit support and ability to generate attractive risk-adjusted returns.

We also acquire single-family residential loans through a combination of proprietary sourcing channels, including relationships with select mortgage loan originators and secondary market institutions through bulk purchases and/or flow arrangements, as well as through Constructive, our wholly-owned business purpose loan originator. We do not directly service the mortgage loans we acquire, and instead contract with licensed third-party subservicers to handle substantially all servicing functions.

Set forth below is a description of the investments that substantially comprise our single-family investment portfolio.

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Agency RMBS. Our leveraged Agency RMBS portfolio is a core component of our single-family investment strategy and is primarily comprised of Agency fixed-rate RMBS and Agency ARMs, the principal and interest of which are guaranteed by Fannie Mae or Freddie Mac. The Agency fixed-rate RMBS have been primarily backed by 15-year and 30-year residential fixed-rate mortgage loans, while the Agency ARMs have primarily included interest reset periods up to 120 months. We also own Agency IOs that represent the right to receive the interest portion of the cash flow from a pool of mortgage loans issued or guaranteed by Freddie Mac or Ginnie Mae. In addition, we may invest in Agency TBAs. In managing our portfolio of Agency RMBS, we expect to employ leverage through the use of repurchase agreements to generate risk-adjusted returns, while maintaining liquidity and flexibility, subject to general and capital market conditions, among other factors.

Residential Loans. Our portfolio of residential loans consists of (i) short-term business purpose loans with terms generally of 12 to 24 months that are collateralized by residential properties and made to investors who intend to rehabilitate and sell the property for a profit, or "business purpose bridge loans," (ii) business purpose loans that finance (or refinance) non-owner occupied residential properties that are or will be rented to one or more tenants, or "business purpose rental loans," (iii) performing residential mortgage loans that consist of GSE-eligible mortgage loans, non-QM loans that predominantly meet our underwriting guidelines, loans originally underwritten to GSE or another program's guidelines but are either undeliverable to the GSE or ineligible for a program due to certain underwriting or compliance errors, and investor loans generally underwritten to our program guidelines, (iv) seasoned performing, re-performing, non-performing and other delinquent mortgage loans secured by first liens on residential properties and (v) second mortgages. In connection with our acquisitions of residential loans, we or a third-party due diligence firm perform an independent review of the mortgage loan files to assess, where applicable, the value and condition of the underlying property, the completeness of the loan file package, the historical servicing of the mortgage loan, the compliance of the loan with existing guidelines and our ability to enforce the contractual rights associated with the mortgage. We also obtain certain representations and warranties from each seller with respect to the mortgage loans, often including the enforceability of the lien on the mortgaged property. In the case of any loans originated by Constructive and sold to real estate investors, Constructive will provide the buyer of those loans with certain representations and warranties or an obligation to repurchase such loans upon certain events. In addition, as part of our process, we focus on selecting a servicer with the appropriate expertise to mitigate losses and maximize our overall return on these residential loans. This involves, among other things, performing due diligence on the servicer prior to their engagement, assigning the appropriate servicer on each loan based on certain characteristics and monitoring each servicer's performance on an ongoing basis.

Non-Agency RMBS. Our non-Agency RMBS are collateralized by residential credit assets. The non-Agency RMBS in our investment portfolio may consist of the senior, mezzanine or subordinated tranches in the securitizations. The underlying collateral of these securitizations are predominantly residential credit assets, which may be exposed to various macroeconomic and asset-specific credit risks. These securities have varying levels of credit enhancement which provide some structural protection from losses within the securitization from which the securities are issued. We undertake an in-depth assessment of the underlying collateral and securitization structure when investing in these assets, which may include modeling defaults, prepayments and loss across different scenarios.

Single-Family Rental. We also participate in the U.S. Department of Housing and Urban Development Housing Choice Vouchers program administered by local public housing agencies (“PHAs”) in which we acquire and then rent single-family rental homes to families that are eligible. We target PHAs with programs that help families with children move into high-opportunity neighborhoods with low poverty, high-performing schools, low crime and strong community resources in various markets, including Chicago, IL, Baltimore, MD and Houston, TX. The goal of the program is to promote better health and life satisfaction for these families. As of December 31, 2025, we owned 471 single-family rental properties, the majority of which are located in Illinois and Maryland.

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Multi-Family Investments

As of December 31, 2025, our multi-family investment portfolio consists of credit-oriented investments such as preferred equity investments and a cross-collateralized preferred equity and joint venture equity investment (or a "cross-collateralized mezzanine lending investment") in multi-family properties. These investments are generally focused on middle-market multi-family apartment communities located in secondary and tertiary markets. Currently, we do not operate or manage multi-family properties on a day-to-day basis and generally participate as a capital provider alongside experienced property-level operators.

Mezzanine Lending. As of December 31, 2025, our multi-family credit exposure is principally reflected through preferred equity investments and, historically, mezzanine loan investments (together, “Mezzanine Lending”) in entities that directly or indirectly own multi-family properties. Preferred equity investments are not secured by mortgages on the underlying real estate; however, they generally have priority over common equity with respect to cash flow distributions and proceeds from capital events. Mezzanine loans, when held, are typically senior to the borrower’s equity interests and subordinate to a senior mortgage loan and are generally secured by pledges of ownership interests in the property-owning entities.

Our Mezzanine Lending investments typically include contractual return features and protective provisions, which may include covenants limiting certain actions of the property owner and, in some cases, remedies that provide enhanced control rights upon the occurrence of specified default events. These investments are generally structured alongside a senior mortgage loan and, when combined with such loan, typically result in total loan-to-value ratios ranging from approximately 70% to 90%.

Preferred equity investments generally include mandatory redemption provisions aligned with the maturity of the related senior mortgage financing, and we generally intend to hold such investments until their contractual redemption dates. As of December 31, 2025, 100% of our Mezzanine Lending assets were structured as preferred equity investments.

Cross-Collateralized Mezzanine Lending

In December 2021, we entered into a cross-collateralized mezzanine lending investment in an entity that presently owns nine multi-family properties in six states. We are a co-manager of the entity and, as of December 31, 2025, owned an approximate 27% common equity interest and approximately $144.1 million of preferred equity interests in the entity, respectively. Pursuant to the terms of the operating agreement for the entity, subject to certain conditions, the other investors in the entity have the ability to sell their ownership interests to us, at their election, on an annual basis at the current fair value of their interests.

Joint Venture Equity. We have historically also owned joint venture equity investments in entities that own multi-family properties. Joint venture equity is a direct common equity ownership interest in an entity that owns a property. In this type of investment, the return of capital to us was variable and was made on a pro rata basis between us and our operating partners. Due to certain control provisions, we consolidated certain joint ventures into our consolidated financial statements in accordance with GAAP. As a result, the real estate assets held by these entities, and the corresponding mortgages payable that financed the real estate assets, were included in our consolidated balance sheets.

We completed our disposition of the majority of our ownership interests in our joint venture equity investments in multi-family properties during the year ended December 31, 2025. We do not anticipate making additional joint venture equity investments in multi-family properties that make us a majority or significant minority common equity owner in the future. However, we may agree to make common equity investments in multi-family properties akin to a "general partner"-like capital contribution in connection with one or more agreements to manage third party investments in multi-family properties.

Other Investments

We have made, and may in the future make, investments in the debt and/or equity of other entities engaged in single-family loan-related businesses, such as loan originators. In the future, we may also acquire investments that are structured with terms that reflect a combination of the investment structures described above. We also may invest, from time to time, based on market conditions, in other multi-family investments, structured investments in other property categories, equity and debt securities issued by entities that invest in residential and commercial real estate or in other mortgage-, real estate- and credit-related assets, and certain alternative investments not described here, subject to maintaining our qualification as a REIT and the maintenance of our exclusion from regulation as an investment company under the Investment Company Act or otherwise.

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Our Financing Strategy

We employ leverage as part of our financing strategy and strive to maintain and achieve a balanced and diverse funding mix to finance our assets and operations. To achieve this, we rely primarily on a combination of short-term and long-term repurchase agreements and structured financings, including securitizations and long-term senior and subordinated debt. Our approach to leverage is based on the type of asset, underlying collateral and overall market conditions with the intent of obtaining more permanent, longer-term financing for our more illiquid assets. Currently, our maximum leverage ratios for each eligible asset portfolio are (i) 15:1 in the case of more liquid Agency securities, (ii) between 1:1 and 4:1 in the case of our more illiquid assets, such as our non-Agency RMBS and multi-family investments and (iii) 8:1 in the case of our residential loans. Our target total debt leverage ratio should not be greater than 6:1. This target may be adjusted from time to time by our Board of Directors depending on the composition of our overall portfolio, market conditions and such other factors deemed relevant by our Board of Directors.

As of December 31, 2025, our Company recourse leverage ratio, which represents our total recourse debt divided by our total stockholders' equity, was approximately 5.0 to 1. Our Company recourse leverage ratio does not include debt associated with securitizations or other non-recourse debt, such as mortgages payable on real estate and non-recourse repurchase agreement financing. Our portfolio recourse leverage ratio, which represents our outstanding recourse repurchase agreements divided by our total stockholders' equity, was approximately 4.7 to 1 as of December 31, 2025. We monitor all at-risk or short-term borrowings to ensure that we have adequate liquidity to satisfy margin calls and liquidity covenant requirements.

We rely on repurchase agreements to fund the purchase of investment securities, a portion of our residential loans and single-family rental properties. In addition, Constructive utilizes warehouse facilities to fund the origination of business purpose loans prior to their sale or retention on our balance sheet. The repurchase agreements and warehouse facilities have terms ranging from 30 days to 24 months and bear interest rates that are linked to the Secured Overnight Funding Rate (“SOFR”), a short-term market interest rate used to determine short-term loan rates. In most cases under these agreements and facilities, the financial institution that serves as a counterparty will generally agree to provide us with financing based on the market value of the assets that we pledge as collateral, less a “haircut.” The market value of the collateral represents the price of such collateral that is determined by the financing counterparty. These valuations may be internally derived, obtained from generally recognized sources or observed from recent trading activity. Most of our repurchase agreements and warehouse facilities include margin-type provisions that require the posting of additional collateral or repayment of a portion of outstanding borrowings if the market value of our pledged collateral declines as a result of market conditions or due to principal repayments. Applicable interest rates and haircuts vary based on the underlying collateral pledged.

Our financings for residential loans and investment securities may also include longer-term structured debt financing, such as securitizations where the assets we intend to finance are contributed to a special purpose entity (“SPE”) and serve as collateral for the financing. We issue debt through securitizations for the primary purpose of obtaining longer-term non-recourse financing on these assets. Securitizations provide little to no exposure to collateral repricing determinations of financing counterparties or rapid liquidity reductions in repurchase agreement financing markets.

Pursuant to the terms of any longer-term debt financings we utilize, our ability to access the cash flows generated by the assets serving as collateral for these borrowings may be significantly limited and we may be unable to sell or otherwise transfer or dispose of or modify such assets until the financing has matured. As part of our longer-term master repurchase agreements that finance certain of our credit assets, such as residential loans, we have provided a guarantee with respect to certain terms incurred by certain of our subsidiaries and we may provide similar guarantees in connection with future financings.

We have consolidated our cross-collateralized mezzanine lending investment and have consolidated or may consolidate certain Mezzanine Lending investments on which a default has occurred into our consolidated financial statements in accordance with GAAP. As a result, the real estate assets held by these entities, and the corresponding mortgages payable that finance the real estate assets, are included in our consolidated balance sheets. We have no obligation for repayment of the mortgages payable but, with respect to certain of the mortgages payable, we may execute a guaranty related to commitment of bad acts, and our equity investment may be lost or reduced to the extent a lender forecloses on the property.

For more information regarding our outstanding financing instruments at December 31, 2025, see Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” below.

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Our Hedging Strategy

We use derivative instruments as part of our risk management activities to manage exposure to changes in interest rates, market values, credit performance and broader geopolitical and market conditions affecting our assets and liabilities. We do not apply hedge accounting to our derivative instruments, and changes in fair value are recognized in current period earnings.

Our derivative instruments may include interest rate swaps, interest rate caps, TBAs, credit default swaps, U.S. Treasury and commodity futures and options contracts such as options on credit default swap indices, equity index options, swaptions and options on futures. We may also enter into other mortgage-related derivative instruments. In addition, Constructive may enter into interest rate lock commitments (“IRLCs”) in connection with the origination of business purpose loans.

We primarily use interest rate swaps to hedge the variable cash flows associated with our variable-rate borrowings. Interest rate swaps generally involve the receipt of variable-rate amounts from a counterparty, based on SOFR, in exchange for us making fixed-rate payments over the life of the interest rate swap without exchange of the underlying notional amount. Notwithstanding the foregoing, in order to manage our position with regard to our liabilities, we may also enter into interest rate swaps which involve the receipt of fixed-rate amounts from a counterparty in exchange for us making variable-rate payments, based on SOFR, over the life of the interest rate swap without exchange of the underlying notional amount. The variable rate we pay or receive under our swap agreements has the effect of offsetting the repricing characteristics and cash flows of our financing arrangements.

We may use TBAs as part of our Agency RMBS strategy to enhance the overall yield of the portfolio. In a TBA transaction, we would agree to purchase or sell, for future delivery, Agency RMBS with certain principal and interest terms and certain types of underlying collateral, but the particular Agency RMBS to be delivered is not identified until shortly before the TBA settlement date. We typically do not take delivery of TBAs, but rather settle with our trading counterparties on a net basis prior to the forward settlement date. Although TBAs are liquid and have quoted market prices and represent the most actively traded class of RMBS, the use of TBAs exposes us to increased market value risk. We may also utilize U.S. Treasury futures to manage exposure to changes in interest rate risk.

In addition, we may, from time to time, utilize commodity futures, credit default swap index contracts, equity index options and credit default swap index options to manage broader market, geopolitical, interest rate or credit-related risks.

As it relates to the variable-rate mortgages payable in our Consolidated Real Estate VIEs, the entities may be required by the lender to enter into interest rate cap contracts. In addition, with respect to one of our financings under repurchase agreements, the lender has, in the past, required us to enter into an interest rate cap contract. These interest rate cap contracts are with a counterparty that involve the receipt of variable-rate amounts from the counterparty if interest rates rise above the strike rate on the contract in exchange for an up-front premium.

In managing our hedging activities, we utilize model-based risk analysis to evaluate the sensitivity of our assets, liabilities and cash flows to changes in interest rates, prepayment speeds, credit performance and other market factors. While these instruments are intended to reduce certain risks, they may not fully offset the impact of adverse market movements.

Competition

We believe that our principal competitors in the business of acquiring and holding mortgage-related single-family and multi-family residential assets of the types in which we invest are financial institutions, such as banks, specialty finance companies, insurance companies, institutional investors, including mutual funds and pension funds, hedge funds and other mortgage REITs. Some of these entities may not be subject to the same regulatory constraints (i.e., REIT compliance or maintaining an exclusion from registration under the Investment Company Act) as we are. In addition, many of these entities have greater financial resources and access to capital than we have. The existence of these entities, as well as the possibility of additional entities forming in the future, may increase the competition for the acquisition of residential mortgage assets, resulting in higher prices and lower yields on such assets.

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Human Capital

As of December 31, 2025, we had 221 full-time employees, including our executive management team, 160 (or 72%) of which are directly engaged in the operations of Constructive. Our employees are generally located in offices in New York, NY, Charlotte, NC, Woodland Hills, CA and Oakbrook Terrace, IL, while certain of our employees work on a fully remote basis. We believe that our employees are our greatest asset and recognize that our achievements and growth as a business are made possible by the recruitment, hiring, training, development and retention of our dedicated employees. As part of our ongoing business, we evaluate and modify our internal processes to improve employee engagement, productivity and efficiency, which benefit our operations. We are committed to maintaining workplaces that are inclusive and free from discrimination or harassment based on age, disability, race, ethnicity, gender identification or expression, national origin, sexual orientation, religion, pregnancy, marital and familial status and other statuses protected by law.

Governmental Regulation

Our operations are subject, in certain instances, to supervision and regulation by U.S. and other governmental authorities, and may be subject to various laws, rules and regulations and judicial and administrative decisions imposing various requirements and restrictions, which, among other things: (i) regulate lending activities; (ii) establish maximum interest rates, finance charges and other charges; (iii) require disclosures to customers; (iv) govern secured transactions; and (v) set refinancing, loan modification, servicing, collection, foreclosure, repossession, eviction and claims-handling procedures and other trade practices. Some of the laws, rules and regulations to which we are or may be subject are intended primarily to safeguard and protect consumers, rather than stockholders or creditors. We originate loans through Constructive and, although we do not directly service residential loans, we must comply with various federal and state laws, rules and regulations as a result of owning RMBS, residential loans and MSRs, including, among others, rules promulgated under The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”), and the Gramm-Leach-Bliley Financial Modernization Act of 1999.

In our judgment, existing statutes, rules and regulations have not had a material adverse effect on our business, although we do incur significant ongoing costs to comply with them. Additionally, because issues related to residential housing and real estate finance can be areas of political focus, federal, state and local governments may be more likely to take actions that affect residential housing, the markets for financing residential housing, landlord and tenant rights, lender rights, institutional ownership of residential housing, and the participants in residential housing-related industries than they would with respect to other industries. While additional new legislative and regulatory reforms in these areas may be adopted and existing legislation and regulations may change in the future, it is not possible at this time to forecast the exact nature of any future legislation, regulations, judicial decisions, orders or interpretations, nor their impact upon our future business, financial condition, or results of operations or prospects.

Operating and Regulatory Structure

REIT Qualification

We have elected to be treated as a REIT under Sections 856 through 860 of the Internal Revenue Code. Our qualification as a REIT depends upon our ability to meet on a continuing basis, through actual investment and operating results, various complex requirements under the Internal Revenue Code relating to, among other things, the sources of our gross income, the composition and values of our assets, our distribution levels and the diversity of ownership of our shares. We believe that we are organized to comply with the requirements for qualification and taxation as a REIT under the Internal Revenue Code, and that our manner of operation enables us to meet the requirements for qualification and taxation as a REIT.

We generally need to distribute at least 90% of our ordinary taxable income each year (subject to certain adjustments) to our stockholders in order to qualify as a REIT under the Internal Revenue Code. Our ability to make distributions to our stockholders depends, in part, upon the performance of our investment portfolio.

As a REIT, we generally are not subject to U.S. federal income tax on our REIT taxable income that we distribute currently to our stockholders. If we fail to qualify as a REIT in any taxable year and do not qualify for certain statutory relief provisions, we will be subject to U.S. federal income tax at regular corporate rates and may be precluded from qualifying as a REIT for the subsequent four taxable years following the year during which we lost our REIT qualification. Accordingly, our failure to qualify as a REIT could have a material adverse impact on our results of operations and our ability to pay distributions, if any, to our stockholders.

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Investment Company Act Exclusion

We conduct our operations so that neither we nor any of our subsidiaries are required to register as an “investment company” under the Investment Company Act because we and our subsidiaries either do not come within the definition of “investment company” under the Investment Company Act or qualify for an exemption or exclusion from registration under the Investment Company Act. We and certain of our subsidiaries rely upon the exemption from registration as an investment company under the Investment Company Act pursuant to Section 3(c)(5)(C) of the Investment Company Act. We and certain of our subsidiaries have in the past and may in the future conduct our operations so that we are not considered an investment company under Section 3(a)(1) of the Investment Company Act.

We and our subsidiaries that invest in residential mortgage loans (whether through a consolidated trust or otherwise) rely upon the exemption from registration as an investment company under the Investment Company Act pursuant to Section 3(c)(5)(C) of the Investment Company Act, which is available for entities “primarily engaged in the business of purchasing or otherwise acquiring mortgages and other liens on and interests in real estate.” This exemption generally requires that at least 55% of our and each of these subsidiaries’ assets be comprised of qualifying real estate assets and at least 80% of our and each of their portfolios be comprised of qualifying real estate assets and real estate-related assets under the Investment Company Act. We classify our assets and those of our subsidiaries relying on the Section 3(c)(5)(C) exemption from the Investment Company Act based upon no-action positions taken by the Securities and Exchange Commission (“SEC”) staff and interpretive guidance provided by the SEC and its staff. Mortgage loans that are fully and exclusively secured by real property are generally qualifying real estate assets for purposes of the exemption. Substantially all of our residential mortgage loans are fully and exclusively secured by real property with a loan-to-value ratio of less than 100%. As a result, we believe our residential mortgage loans that are fully and exclusively secured by real property meet the definition of qualifying real estate assets.

Certain of our subsidiaries that hold mortgage loans through majority-owned subsidiaries may rely on the exemption provided by Section 3(c)(6) of the Investment Company Act, which excludes from the definition of “investment company” any company primarily engaged, directly or through majority-owned subsidiaries, in a business, among others, described in Section 3(c)(5)(C) of the Investment Company Act (from which not less than 25% of such company’s gross income during its last fiscal year was derived) together with an additional business or additional businesses other than investing, reinvesting, owning, holding or trading in securities. The SEC staff has issued little interpretive guidance with respect to Section 3(c)(6) and any guidance published by the SEC staff could require us to adjust our strategy accordingly.

Section 3(a)(1)(A) of the Investment Company Act defines an investment company as any issuer that is or holds itself out as being engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting or trading in securities. Under Section 3(a)(1)(C) of the Investment Company Act, a company is deemed to be an investment company if it is engaged, or proposes to engage, in the business of investing, reinvesting, owning, holding or trading in securities and owns or proposes to acquire “investment securities” having a value exceeding 40% of the value of its total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis. “Investment securities” does not include, among other things, U.S. government securities and securities issued by majority-owned subsidiaries that (i) are not investment companies and (ii) are not relying on the exceptions from the definition of investment company provided by Section 3(c)(1) or 3(c)(7) of the Investment Company Act.

If we or one or more of our subsidiaries fail to maintain an exclusion or exception from the Investment Company Act, we could, among other things, be required either (a) to substantially change the manner in which we conduct our operations to avoid being required to register as an investment company, (b) to effect sales of our assets in a manner that, or at a time when, we would not otherwise choose to do so, or (c) to register as an investment company, any of which could negatively affect the value of our common stock, the sustainability of our business model, and our ability to make distributions, among other things. Further, if we were required to register as an investment company under the Investment Company Act, we would become subject to substantial regulation with respect to our capital structure (including our ability to use leverage), management, operations, transactions with affiliated persons (as defined in the Investment Company Act), portfolio composition, including restrictions with respect to diversification and industry concentration, and other matters. For further discussion, please see the risk factor titled “Maintenance of our exemption from registration as an investment company under the Investment Company Act imposes significant limits on our operations” in Part I, Item “1A. Risk Factors” in this Annual Report on Form 10-K.

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Corporate Offices

We were formed as a Maryland corporation in 2003. Our corporate headquarters are located at 90 Park Avenue, New York, NY, 10016 and our telephone number is (212) 792-0107. We also maintain offices in Charlotte, NC, Woodland Hills, CA and Oakbrook Terrace, IL.

Access to Our Periodic SEC Reports and Other Corporate Information

Our internet website address is www.adamasreit.com. We make available free of charge, through our internet website, our Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q, our Current Reports on Form 8-K and any amendments thereto that we file or furnish pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.

We have adopted a Code of Business Conduct and Ethics that applies to our executive officers, including our principal executive officer, principal financial officer, principal accounting officer and to our other employees. We have also adopted a Code of Ethics for senior financial officers, including the principal financial officer. We intend to satisfy the disclosure requirement under Item 5.05 of Form 8-K relating to amendments to or waivers from any provision of either of these Code of Ethics applicable to our principal executive officer, principal financial officer, principal accounting officer and other persons performing similar functions by posting such information on our website at www.adamasreit.com, under “Governance Documents”. Our Corporate Governance Guidelines and Code of Business Conduct and Ethics and the charters of our Audit, Compensation and Nominating and Corporate Governance Committees are available on our website and are available in print to any stockholder upon request in writing to Adamas Trust, Inc., c/o Secretary, 90 Park Avenue, Floor 23, New York, New York, 10016. Information on our website is neither part of, nor incorporated into, this Annual Report on Form 10-K.

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

When used in this Annual Report on Form 10-K, in future filings with the SEC or in press releases or other written or oral communications issued or made by us, statements which are not historical in nature, including those containing words such as “will,” “believe,” “expect,” “anticipate,” “estimate,” “plan,” “continue,” “intend,” “could,” “would,” “should,” “may,” or similar expressions, are intended to identify “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Exchange Act, and, as such, may involve known and unknown risks, uncertainties and assumptions.

Forward-looking statements are based on estimates, projections, beliefs and assumptions of management of the Company at the time of such statements and are not guarantees of future performance. Forward-looking statements involve risks and uncertainties in predicting future results and conditions. Actual results and outcomes could differ materially from those projected in these forward-looking statements due to a variety of factors, including, without limitation:

• changes in our business and investment strategy;

•inflation and changes in interest rates and the fair market value of our assets, including negative changes resulting in margin calls relating to the financing of our assets;

• changes in credit spreads;

• changes in the long-term credit ratings of the U.S., Fannie Mae, Freddie Mac, and Ginnie Mae;

• general volatility of the markets in which we invest;

• changes in prepayment rates on the loans we own or that underlie our investment securities;

• increased rates of default, delinquency or vacancy and/or decreased recovery rates on or at our assets;

• our ability to identify and acquire our targeted assets, including assets in our investment pipeline;

• our ability to dispose of assets from time to time on terms favorable to us;

• changes in our relationships with our financing counterparties and our ability to borrow to finance our assets and the terms thereof;

• changes in our relationships with and/or the performance of our operating partners;

• our ability to predict and control costs;

• changes in laws, regulations or policies affecting our business;

• our ability to make distributions to our stockholders in the future;

• our ability to maintain our qualification as a REIT for U.S. federal income tax purposes;

• our ability to maintain our exemption from registration under the Investment Company Act;

• impairments and declines in the value of the collateral underlying our investments;

•changes in the benefits we anticipate from the acquisition of Constructive;

•our ability to effectively integrate Constructive into our Company and the risks associated with the ongoing operation thereof;

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• our ability to manage or hedge credit risk, interest rate risk, and other financial and operational risks;

• our exposure to liquidity risk, risks associated with the use of leverage, and market risks; and

• risks associated with investing in real estate assets and/or operating companies, including changes in business conditions and the general economy, the availability of investment opportunities and conditions in markets for residential loans, mortgage-backed securities, structured multi-family investments and other assets that we own or in which we invest.

These and other risks, uncertainties and factors, including the risk factors and other information described herein, as updated by those risks described in our subsequent filings with the SEC under the Exchange Act, could cause our actual results to differ materially from those projected in any forward-looking statements we make. All forward-looking statements speak only as of the date on which they are made. New risks and uncertainties arise over time and it is not possible to predict those events or how they may affect us. Except as required by law, we are not obligated to, and do not intend to, update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.