Risk Factors Update Summary

• Increase in federal funds rate target from 4% to 5% and reduction in quantitative tightening from 50% to 25%.
• Addition of potential cyber incidents impact on business, including delays in payments due to cyber-attacks.
• Prepayment rates can change, affecting asset performance. This change might result in lower yields.
• Increased regulatory scrutiny on ESG disclosures, potential reputational damage, litigation, and increased expenses.
• Detailed risks associated with corporate CLO investments, including potential losses and impact on financial condition.
• Addition of risks related to war, terrorism, inflation, and social unrest. These factors could impact financial performance.
• Introduction of risks related to preferred stock, unsecured debt, and convertible debt securities impacting cash flow.
• Interest rate increases may reduce issuance volumes, impacting asset performance. This could reduce profitability.
• Increase in outstanding common shares ownership from 4.0% to 4.6% by Manager Group.
• Change from "may" to "could" in the ability to change investment strategy without stockholder consent.
• Inclusion of risks related to acquisitions and mergers, highlighting potential cost overruns and benefits not realized.
• Change in the expiration of the management agreement from 2023 to 2024, impacting business continuity.
• Potential adverse tax consequences if Arlington fails to qualify as a REIT, affecting financial condition.
• Introduction of risks associated with concentrated investments in certain sectors and geographic locations.
• Materially adverse effect added to competitive pressures risk statement.
• Financing sources may be limited or shut off, requiring additional collateral. This could impact financial stability.
• Potential reduction in monthly dividends from $0.15 to $0.13 per share recommended by management.