DEF: Eagle Point Income Co. Proposes Trust Conversion

Sentiment:

Proxy Statement for Corporate Conversion 8 January 2026 4:52 PM

📋All filings for Eagle Point Income CO INC

Eagle Point Income Company Inc. seeks stockholder approval to convert from a Delaware corporation to a Delaware statutory trust, aiming for operational efficiencies and greater flexibility.

Capital raiseThe conversion would allow the company to authorize and issue an unlimited number of common and preferred shares of beneficial interest without requiring additional shareholder approval.This increased flexibility facilitates continued participation in current and any future at-the-market (ATM) offering programs.The ability to issue unlimited preferred shares would permit the company to efficiently leverage its portfolio and take advantage of investment opportunities.Any common share issuances would generally be accretive or neutral to the book value per share of existing common shareholders, consistent with Section 23(b) of the 1940 Act.The company intends to maintain its policy to operate with leverage within a range of 25% to 35% of total assets under normal market conditions.

Summary

A Special Meeting of Stockholders will be held on February 26, 2026, at 8:00 a.m. Eastern Time, in Greenwich, CT.
Stockholders are asked to approve a change in the company's legal form from a Delaware corporation to a Delaware statutory trust.
The Board of Directors unanimously recommends voting FOR the proposal.
If approved, the company will be known as the 'Eagle Point Income Company'.
The conversion is not anticipated to be a taxable event for the company or its stockholders and will preserve the company's legal existence and performance/accounting history.
The proposal requires the affirmative vote of the holders of a majority of the outstanding shares of capital stock as of the record date, December 30, 2025.
As of December 30, 2025, there were 23,464,222 shares of common stock, 1,521,649 shares of 5.00% Series A Term Preferred Stock due 2026, and 4,173,076 shares of 8.00% Series C Term Preferred Stock due 2029 issued and outstanding.

Sentiment

Score: 7

Explanation: The filing outlines a strategic corporate restructuring aimed at improving operational efficiency, reducing tax burden, and increasing financial flexibility for future growth and capital management. While it introduces potential risks like dilution and increased leverage, these are presented with mitigating factors and the board's unanimous recommendation suggests a well-considered move for long-term benefit. The non-taxable nature of the conversion is also a positive for shareholders.

Positives

The conversion offers greater flexibility and the potential for meaningful operating efficiencies.
The company would gain the ability to issue an unlimited number of common and preferred shares without the uncertainty and substantial costs associated with further shareholder approval.
The company would no longer be subject to the annual Delaware corporate franchise tax, which was $100,000 for the 2024 tax year.
The Delaware statutory trust form provides certainty regarding limiting liability for the obligations of the company and its Directors.
The new structure offers flexibility in structuring shareholder voting rights and shareholder meetings, for example, not requiring an annual meeting unless mandated by the 1940 Act or exchange listing rules.
The ability to issue an unlimited number of shares would permit the company to continue current and future at-the-market (ATM) offering programs without seeking shareholder approval.
The ability to issue an unlimited number of preferred shares would allow the company to efficiently leverage its portfolio and take advantage of investment opportunities with timely investments.
Any issuances of common shares would generally be accretive or neutral to the book value per share of existing common shareholders, consistent with Section 23(b) of the Investment Company Act of 1940.

Negatives

Future issuances of additional shares could dilute the voting rights of existing shareholders.
Common share issuances could dilute earnings per share if the company is unable to timely invest the proceeds in adequately yielding assets.
The prospect of uncapped share issuances, along with certain voting restrictions and anti-takeover provisions (such as the Delaware Statutory Trust Act control share statute), could discourage and make more difficult efforts by a prospective acquirer to obtain control of the company or pursue transformative transactions.
Any future issuance of preferred shares would increase the leverage incurred by the company, thereby increasing the volatility of investments and magnifying the potential for loss with respect to a shareholder's investment.

Risks

Dilution of voting rights and potential dilution in earnings of existing shareholders to the extent of any future share issuances in excess of the amounts currently authorized by the company as a corporation.
The prospect of uncapped share issuances, as well as certain voting restrictions and other anti-takeover provisions that would be applicable to the company as a Delaware statutory trust (such as the control share statute under the Delaware Statutory Trust Act and the provisions of the proposed Declaration of Trust), could discourage and make more difficult a prospective acquirer's efforts to obtain control of the company and pursue certain transformative transactions.
The potential for increased use of leverage through the issuance of preferred shares, thereby increasing the volatility of investments and magnifying the potential for loss with respect to a shareholder's investment in the company.

Future Outlook

The Board believes that the Delaware statutory trust form offers a number of advantages over the current Delaware corporate form, including greater flexibility, potential for meaningful operating efficiencies, and the ability to issue an unlimited number of common and preferred shares without additional shareholder approval, which would support future growth and efficient leverage management. The conversion is expected to become effective in the first quarter of 2026.

Management Comments

The Board UNANIMOUSLY recommends voting FOR the proposal TO APPROVE A CHANGE IN THE COMPANYS LEGAL FORM FROM A DELAWARE CORPORATION TO A DELAWARE STATUTORY TRUST.
The Board unanimously determined that the Conversion is in the best interest of the Company and its stockholders because the Delaware statutory trust form offers a number of advantages over the current Delaware corporate form.
After considering the potential risks and benefits related to the Conversion, the Board determined that the Delaware statutory trust is the most favorable form of organization for the Company due to a variety of advantages associated with that form of organization.
The Board believes that it is in the best interests of the Company and its shareholders to grant the Company, as it continues to grow, the ability to issue an unlimited number of common and preferred shares of beneficial interest without incurring the additional costs associated with soliciting a shareholder vote at an annual or special meeting.
As of the date of this proxy statement, the Company and the Board are not aware of any attempt or plan to obtain control of the Company, and anti-takeover considerations are not part of the Boards rationale for recommending the Proposal.
The Company also currently intends to maintain its policy to operate, over the long term, with leverage within a range of 25% to 35% of total assets under normal market conditions.

Industry Context

The proposed conversion to a Delaware statutory trust aligns Eagle Point Income Company with a common organizational structure utilized by many registered closed-end funds, suggesting a move towards industry best practices for governance and operational flexibility. This shift leverages Delaware's established legal framework for such entities, potentially enhancing administrative efficiency and reducing certain tax burdens, which is a trend observed among investment companies seeking optimized operational models.

Comparison to Industry Standards

The Delaware statutory trust form is commonly utilized by registered closed-end funds, indicating the company is adopting a prevalent industry structure.
Delaware is recognized for its sophisticated business courts and a well-established body of legal precedent governing business entities and investment companies, providing a robust legal environment.
The Delaware Statutory Trust Act (DSTA) extends to shareholders the same limitation of personal liability as shareholders of Delaware for-profit corporations, aligning with standard corporate protections.
The company intends to maintain its policy to operate with leverage within a range of 25% to 35% of total assets under normal market conditions, which is consistent with industry practices for leveraged closed-end funds and adheres to the 1940 Act's minimum asset coverage limitations (currently 200% for preferred shares).

Corporate Governance

Change Type	Description	Effective Date	Impact Assessment
Legal Form Conversion	Conversion from a Delaware corporation governed by the Delaware General Corporation Law (DGCL) and existing Charter/Bylaws to a Delaware statutory trust governed by the Delaware Statutory Trust Act (DSTA) and new Declaration of Trust/Bylaws.	Expected First Quarter 2026 (if approved)	Streamlines governance, potentially reduces costs, provides greater flexibility in administration, and eliminates the Delaware corporate franchise tax.
Share Authorization	Current authorized stock is 150,000,000 common shares and 20,000,000 preferred shares, requiring stockholder approval for increases. Post-conversion, the Declaration of Trust authorizes an unlimited number of shares of beneficial interest for each class without shareholder vote.	Expected First Quarter 2026 (if approved)	Increases flexibility for future capital raises (e.g., ATM programs, preferred share issuances) but introduces potential for voting rights dilution and anti-takeover implications.
Annual Meetings	Currently required to hold annual meetings. Post-conversion, DSTA and Organizational Documents do not require annual meetings, but exchange listing requirements would still mandate them.	Expected First Quarter 2026 (if approved)	Minimal practical change due to exchange listing requirements, but statutory flexibility is gained.
Special Meetings	Currently called by the Secretary at the request of the Chairman, CEO, or Board majority. Post-conversion, may be called by a majority of trustees or the CEO. Shareholders generally not entitled to call meetings, except as required by federal law (e.g., 1940 Act).	Expected First Quarter 2026 (if approved)	Slightly restricts shareholder ability to call special meetings compared to a corporation, except where federal law mandates.
Shareholder Action by Written Consent	Currently, unanimous written consent of stockholders can take action without a meeting. Post-conversion, shareholders may not take action by written consent.	Expected First Quarter 2026 (if approved)	Reduces shareholder flexibility to act outside of meetings.
Notice of Meetings	Currently, notice of each meeting of stockholders is required not less than ten (10) nor more than sixty (60) days before the meeting. Post-conversion, notice is required not less than ten (10) days nor more than 120 days before the meeting.	Expected First Quarter 2026 (if approved)	Provides a wider window for notice, potentially more flexibility for the company.
Liability of Officers and Directors/Trustees	Currently, directors/officers have limited liability under DGCL, with exceptions for breach of loyalty, bad faith, intentional misconduct, knowing violation of law, or improper personal benefit. Post-conversion, trustees/officers will not have personal liability unless arising from bad faith, willful misfeasance, gross negligence, or reckless disregard for duty.	Expected First Quarter 2026 (if approved)	Slightly different phrasing of liability standards, but generally aims for similar protections.
Amendments to Organizational Documents	Currently, the Charter may generally be amended by a majority stockholder vote, and Bylaws by the Board without stockholder approval. Post-conversion, trustees may amend the Declaration of Trust and Bylaws without shareholder vote, with specific exceptions requiring shareholder vote (e.g., eliminating voting rights, adversely affecting preferences, declassifying the Board, or amendments submitted by trustees). Trustees have exclusive power to amend or repeal the Bylaws.	Expected First Quarter 2026 (if approved)	Significantly increases the Board's power to amend governing documents without shareholder approval, reducing shareholder oversight on many governance matters.
Inspection Rights	Currently, stockholders have rights to inspect corporate records for a proper purpose. Post-conversion, no shareholder shall have any right to inspect any account, book, or document of the trust except as conferred by the Trustees or otherwise required by law.	Expected First Quarter 2026 (if approved)	Reduces shareholder transparency and access to company records.
Merger, Consolidation, Dissolution Approval	Currently, DGCL generally requires approval by a majority of the outstanding capital stock for mergers, consolidations, and dissolutions. Post-conversion, requires the affirmative vote or consent of at least seventy-five percent (75%) of the trustees AND at least seventy-five percent (75%) of the shares of beneficial interest outstanding and entitled to vote thereon. However, such actions may be approved by a majority of the entire board of trustees and seventy-five percent (75%) of the continuing trustees without shareholder approval, unless otherwise required by law.	Expected First Quarter 2026 (if approved)	Significantly increases the threshold for shareholder approval of extraordinary transactions, and in some cases, allows the Board (with continuing trustees) to bypass shareholder approval entirely, reducing shareholder control over major corporate events.
Declassification of the Board	Currently, an amendment to a corporation's charter to declassify the board is effective upon approval of a majority of the board of directors and a majority of outstanding capital stock. Post-conversion, any amendment to declassify the Board may be approved by a majority of the entire board of trustees and seventy-five percent (75%) of the continuing trustees without shareholder approval, unless otherwise required by law.	Expected First Quarter 2026 (if approved)	Reduces shareholder control over board structure.
Derivative Actions	Currently, DGCL provides for derivative suits by stockholders. Post-conversion, no person, other than a trustee, who is not a shareholder shall be entitled to bring any derivative action on behalf of the trust, unless holders of at least fifty percent (50%) of the outstanding shares of beneficial interest join in the action. Additional conditions apply (pre-suit demand, reasonable time for trustees to consider).	Expected First Quarter 2026 (if approved)	Significantly restricts individual shareholder ability to bring derivative actions, requiring a very high threshold of shareholder support.
Assent to Agreement	Currently, the Charter and Bylaws are silent with respect to shareholders' express assent to, and agreement to be bound by, their terms. Post-conversion, every shareholder, by virtue of having acquired a share, shall be held to have expressly assented to, and agreed to be bound by, the terms of the Declaration of Trust.	Expected First Quarter 2026 (if approved)	Clarifies and strengthens the binding nature of the governing documents on shareholders.
Exclusive Jurisdiction	Currently, the Court of Chancery or U.S. District Court for the District of Delaware is the sole and exclusive forum for certain internal affairs claims. Post-conversion, similar, but federal securities law claims shall be exclusively brought in the federal district courts of the United States of America.	Expected First Quarter 2026 (if approved)	Clarifies and potentially streamlines legal venue for certain types of claims.
Control Share Provision	Currently not applicable. Following the Conversion, the company will become automatically subject to the control share statute contained in the DSTA, which limits voting rights of acquirers above certain thresholds unless approved by a two-thirds vote of the company's other shares or exempted by the Board.	Expected First Quarter 2026 (if approved)	Introduces a significant anti-takeover provision, potentially making hostile takeovers more difficult.

Related Party Transactions

Eagle Point Income Management LLC (the Adviser) manages the company's investments under an Advisory Agreement. Management fees for the fiscal year ended December 31, 2024, totaled approximately $4.45 million.
Eagle Point Administration LLC (the Administrator) provides administrative services under an Administration Agreement. Administration fees for the fiscal year ended December 31, 2024, totaled approximately $0.65 million.
The Adviser is primarily owned indirectly by certain Trident Funds. Members of the Adviser's Senior Investment Team, other employees of Eagle Point Credit Management, and an affiliate of Enstar Group Limited hold indirect economic interests in the Adviser.
The Adviser's board of managers includes Thomas P. Majewski (Chief Executive Officer of Eagle Point Income Company Inc.) and certain principals of Stone Point Capital LLC.

Stakeholder Impact

Shareholders: Potential for dilution of voting rights and earnings per share from future share issuances. Reduced ability to call special meetings, take action by written consent, inspect records, and initiate derivative actions. Increased difficulty for acquirers to gain control. The conversion is not anticipated to be a taxable event for shareholders. Elimination of Delaware corporate franchise tax could indirectly benefit overall company performance.
Management/Board: Increased flexibility in administration, share issuance, and amending governing documents. Enhanced anti-takeover protections.
Company Operations: Potential for greater operating efficiencies and lower expenses. Conforms to common industry structure for closed-end funds.

Next Steps

Stockholders are invited to attend and vote at the Special Meeting on February 26, 2026.
If approved by stockholders, the conversion is expected to become effective in the first quarter of 2026.
Upon conversion, the company will be known as 'Eagle Point Income Company'.
The company's shares will continue to be listed and traded on the NYSE under the same ticker symbols.
The company will remain subject to the rules of the NYSE and the standards set forth in the NYSE's Listed Company Manual, as well as the 1940 Act.

Key Dates

Date	Description
2018-09-28	EP Income Company LLC, a Delaware limited liability company, was organized.
2018-10-16	EP Income Company LLC converted to Eagle Point Income Company Inc., a Delaware corporation.
2021-10-22	Date of Original Issue for Series A Term Preferred Shares.
2021-11-10	Record date for the first dividend payment for Series A Term Preferred Shares.
2021-11-30	First Dividend Payment Date for Series A Term Preferred Shares.
2023-10-31	End of the 'No-Call Period' for Series A Term Preferred Shares.
2024-03-29	Date for credit rating reference for Series C Term Preferred Shares Deposit Securities.
2024-04-03	Date of Original Issue for Series C Term Preferred Shares.
2024-04-10	Record date for the first dividend payment for Series C Term Preferred Shares.
2024-04-30	First Dividend Payment Date for Series C Term Preferred Shares.
2025-11-05	Board of Directors unanimously approved a Plan of Conversion and proposed organizational documents under Delaware law.
2025-12-08	Deadline for stockholder proposals for inclusion in the company's proxy statement for the 2026 annual meeting.
2025-12-30	Record date for the determination of stockholders entitled to receive notice of, and to vote at, the Special Meeting.
2026-01-07	Latest date for stockholder proposals (not for proxy inclusion) for the 2026 fiscal year annual meeting, assuming it's within 30 days of May 23, 2026.
2026-01-08	Date of the Dear Stockholder letter and first mailing of the Notice of Special Meeting of Stockholders, Proxy Statement, and proxy card.
2026-02-26	Special Meeting of Stockholders to be held at 8:00 a.m. Eastern Time.
2026-04-03	End of the 'No-Call Period' for Series C Term Preferred Shares.
2026-05-01	Anticipated next annual meeting of Stockholders (May 2026).
2026-10-30	Term Redemption Date for Series A Term Preferred Shares.
2029-04-30	Term Redemption Date for Series C Term Preferred Shares.

Recommendation

hold

The proposed conversion to a Delaware statutory trust is a strategic move aimed at enhancing operational flexibility, reducing administrative costs, and aligning the company's structure with industry norms for closed-end funds. While the board's unanimous recommendation and the non-taxable nature of the conversion are positive, the significant changes to corporate governance, particularly the reduction in shareholder rights regarding amendments, special meetings, inspection, and derivative actions, introduce concerns about shareholder influence. The anti-takeover provisions, while potentially stabilizing, could also limit opportunities for premium-priced transactions. The increased flexibility for capital raises is a double-edged sword, offering growth potential but also dilution risk. Given these balanced factors, a 'hold' recommendation is appropriate as the long-term benefits of efficiency and flexibility are weighed against the reduced shareholder protections and potential for dilution.

Keywords

Delaware statutory trust, corporate conversion, closed-end fund, corporate governance, shareholder vote, SEC filing, investment company, preferred stock, common stock, proxy statement, Eagle Point Income Company

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