Business Context and Reporting Period
This Form 8-K is a current report filed by Five Oaks Investment Corp. on January 23, 2014. The filing provides preliminary, unaudited financial estimates regarding the Company's book value per common share as of December 31, 2013, in connection with a Registration Statement on Form S-11. The Company's audited financial statements for the period are expected to be available in March 2014.
Key Financial Metrics
- Estimated Book Value per Common Share (Dec 31, 2013): $12.92 to $13.02.
- Book Value per Common Share (Sep 30, 2013): $12.38.
- Revenue, Profit, and Cash Flow: The filing text does not provide specific values for revenue, net income, or cash flow for the period.
- Debt and Liquidity: The filing text does not provide specific values for debt levels or liquidity metrics.
Material Changes
The estimated book value per share increased from $12.38 as of September 30, 2013, to the range of $12.92 to $13.02 as of December 31, 2013. Management attributes this increase primarily to the rise in the fair value of the Company's Non-Agency Residential Mortgage-Backed Securities (RMBS) portfolio during the fourth quarter of 2013.
Outlook, Risks, and Unusual Items
The financial data presented is preliminary, unaudited, and subject to revision. The Company explicitly states that final year-end results may differ materially from these estimates. Factors that could cause variances include:
- Additional adjustments in financial result calculations or portfolio valuations.
- Discovery of new information altering expectations or valuation methodologies.
- Errors in the assessment of portfolio value.
- Accounting changes required by GAAP.
The filing contains forward-looking statements subject to substantial risks and uncertainties, including market conditions and the Company's ability to execute its business strategy. The auditors have not expressed an opinion on this preliminary data.
Investor Verification Checklist
- Verify the final audited book value per share when the March 2014 financial statements are released.
- Confirm the specific valuation adjustments made to the Non-Agency RMBS portfolio in the final audit.
- Review the full Form S-11 prospectus for detailed risk factors and use of proceeds.
- Monitor for any material revisions to the estimated range of $12.92 to $13.02 prior to the final filing.