The Company expects to continue to increase the amount of non-RMBS investments to a range of 15% to 40% of its portfolio in an effort to create a more diversified, less correlated portfolio of investments, which may include investments in non-U.S. dollar denominated securities, within 12 months of the completion of this offering, subject to the availability of appropriate investment opportunities. However, the Company’s portfolio in its current form does not fully balance the interest rate or mark-to-market risks inherent in RMBS investments, and the Company will not be able to eliminate all of its portfolio risk through asset allocation. Future dividends and capital appreciation are not guaranteed.

The Company’s investments will depend on prevailing market conditions and trends. The Company has not adopted any policy that establishes specific asset allocations among its targeted asset classes, and its targeted allocations will vary from time to time. As a result, the Company cannot predict the percentage of its assets that will be invested in each asset class or whether it will invest in other classes or investments.

The Company generally expects to incur total leverage of up to five times the amount of its equity for most investments other than Agency Adjustable Rate RMBS, which the Company anticipates it generally will lever up to 15 times the amount of its equity allocated to this asset class. The Company currently expects its overall long-term average portfolio leverage to be three to five times the amount of its equity. The Company may change its investment strategy and policies and the percentage of assets that may be invested in each asset class, or in the case of securities, in a single issuer, without a vote of its stockholders. The Company’s charter and bylaws do not limit the amount of indebtedness it can incur, and its board of directors has the discretion to deviate from or change its leverage policy at any time.

Because the Company will elect and intends to qualify to be taxed as a REIT and to operate its business so as to be exempt from regulation under the Investment Company Act, it is required to invest a substantial majority of its assets in qualifying real estate assets, such as agency RMBS, mortgage loans and other liens on and interests in real estate. Therefore, the percentage of its assets the Company may invest in other MBS, ABS, alternative assets and other types of instruments is limited, unless those investments comply with various federal income tax requirements for REIT qualification and the requirements for exclusion from Investment Company Act regulation.

Net interest income for the three months ended September 30, 2005 was $10.9 million.

Expenses for the the three months ended September 30, 2005 totaled $2.5 million.

Other revenues (expenses) for the three months ended September 30, 2005 totaled approximately $3.9 million.