Subsequent Events

6 Months Ended

Jun. 30, 2022

Subsequent Events [Abstract]

Subsequent Events

16 — Subsequent Events

Reverse Stock Split

On June 30, 2022, the Company announced that its board of directors approved a one-for-ten reverse stock split of the Company's outstanding shares of common stock. The ten-for-one reverse stock split was effected on July 11, 2022, which reduced the total number of authorized shares of common stock from 500,000,000 to 50,000,000 shares, resulting in the number of common shares outstanding reducing from 60,380,105 to 6,038,010. The par value per share of our common stock remained unchanged at $0.01. All per share amounts and common shares outstanding have been adjusted on a retroactive basis to reflect the Company's one-for-ten reverse stock split.

Securitization of Arroyo 2022-2 Trust

In July 2022, the Company completed its fourth securitization of $402.2 million of Residential Whole Loans, issuing and priced an aggregate $351.9 million of Mortgage-Backed Notes, Series 2022-2 (the “Notes”) in a residential mortgage-backed securitization comprised of a portfolio of residential whole loans. The Notes, which initially will be issued by Arroyo Mortgage Trust 2022-2 in four classes, were priced with a weighted average fixed interest rate of approximately 5.9% per annum. All of the Notes are anticipated to have a final payment date in July 2057. The Notes will be issued in a private placement to qualified institutional investors and non-US persons under Regulation S of the Securities Act. It is expected that S&P and DBRS will rate the Notes at closing. The anticipated S&P and DBRS ratings for the Class A-1 Notes are AAA(sf) and AAA(sf), respectively.

Announcement of Review of Strategic Alternatives

On August, 4, 2022, the Company announced that its Board of Directors has authorized a review of strategic alternatives for the Company aimed at enhancing shareholder value, which may include a sale or merger of the Company. JMP Securities, A Citizens Company, has been retained as exclusive financial advisor to the Company. No assurance can be given that the review being undertaken will result in a sale, merger, or other transaction sale or other business combination involving the Company, and the Company has not set a timetable for completion of the review process. The Company does not intend to

make any further statements regarding this process unless and until a definitive agreement for a transaction has been reached, or until the process of exploring strategic alternatives has ended.