Ready Capital Transaction Overview

Details of the proposed transaction

Announced Dec. 2: Ready Capital (RC) to acquire UDF IV in stock-for-stock transaction

Election for board members of UDF IV

Ready Capital is NYSE-listed mortgage REIT with lending history to UDF IV and affiliates

UDF IV shareholders to receive 0.416 shares of RC stock for each share of UDF IV ($94M implied value)

Other benefits promoted in agreement outside of RC share issuance (potential distributions, CVRs)

Intent to execute sub-advisory agreement with UDF IV affiliate

Requires UDF IV shareholder approval (majority vote)

1H25 target closing date

Disconnect from Book Value Claimed by UDF IV

$9.47 / Share

$5.89 / Share

Book value per share according to 2023 Financial Statements (and touted by CEO as recently as July 2024)

Potential value per share for shareholders under transaction

Where Did The Money Go?

UDF listed the company’s total asset at $293 million as of 12/31/23. Why is Ready Capital only willing to offer $94 million (i.e., why wouldn’t RC agree to pay more in cash or stock and forego the pre-closing dividend and the contingent value rights)?

$293M

Total assets as of 12/31/2023

$94M

Implied value under stock consideration

Pros

Cons

Stock Consideration

“As part of the merger consideration, UDF IV shareholders will receive 0.416 shares (the “Exchange Ratio “) of RC for each UDF IV common share they own.”1

Stock consideration of $94M, or $3.07/share of UDF IV shares, based on RC’s share price as of 11/29/2024.

1. Ready Capital Investor Presentation

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