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Issuer Free Writing Prospectus
Filed by: Orchid Island Capital, Inc.
Pursuant to Rule 433 under the Securities Act of 1933
Relating to Preliminary Prospectus, Dated July 21, 2011
Registration No.: 333-173890
Dated July 21, 2011
ORCHID ISLAND CAPITAL, INC.
This free writing prospectus is being filed to advise you of the availability of a revised
preliminary prospectus, dated July 21, 2011 (the “Revised Preliminary Prospectus”), included in
Amendment No. 3 to the Registration Statement on Form S-11 (File No. 333-173890) of Orchid Island
Capital, Inc. (the “Company”), as filed with the Securities and Exchange Commission on July 21,
2011 (as so amended, the “Registration Statement”), relating to the Company’s proposed offer and
sale of shares of its common stock, and to provide you with a hyperlink to the current version of
the Registration Statement. This free writing prospectus relates only to the securities described
in the Registration Statement, is only a summary of the changes included in the Revised Preliminary
Prospectus and should be read together with the Revised Preliminary Prospectus included in the
Registration Statement, including the section entitled “Risk Factors” beginning on page 25 of the
Revised Preliminary Prospectus. References to “we,” “us,” “our” and “our company” are used in the
manner described in the Revised Preliminary Prospectus.
Our Central Index Key, or CIK, on the SEC Web site is 0001518621.
Neither the Securities and Exchange Commission (the “SEC”) nor any other regulatory body has
approved or disapproved of these securities or determined if this issuer free writing prospectus or
the Revised Preliminary Prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
Revised Proposed Terms of Initial Public Offering
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Stock Exchange Listing
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We intend to list our common stock on the NYSE Amex under the
symbol “ORC.” |
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Number of Shares of Common Stock to be Offered in
the Initial Public Offering
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5,200,000 shares |
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Option to Purchase Additional Shares
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780,000 shares |
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Estimated Price per Share to Public
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$8.00 |
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Estimated Net Proceeds (after deduction of the
portion of the estimated offering expenses payable
by us and the portion of the underwriting discount
and commissions payable by us)
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$41,184,000 |
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Shares Outstanding After the Initial Public Offering
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6,263,830 shares |
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Bimini’s Beneficial Ownership After the Initial
Public Offering
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1,063,830 shares
(16.98% of the
outstanding shares
of our common stock
upon completion of
this offering, or
15.10% if the
underwriters
exercise their
option to purchase
additional shares in
full). |
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Number of Shares to be Issued in the Stock Dividend
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6.0922 shares for
each outstanding
share of common
stock. |
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Warrants to be purchased by Bimini
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Concurrently with
this offering, we
intend to sell in a
separate private
placement to Bimini
warrants to purchase
an aggregate of
2,655,000 shares of
our common stock.
The aggregate
purchase price of
such warrants will
be $1,248,000. |
Revised As Adjusted Capitalization
The following table sets forth our capitalization as of March 31, 2011:
• On an actual basis;
• On an as adjusted basis to give effect to (i) the sale of 5,200,000 shares of our common
stock in this offering, at an assumed public offering price of $8.00 per share, and after deducting the
portion of the underwriters’ discounts and commissions payable by us and estimated offering expenses payable by us,
(ii) the issuance of 1,063,830 shares of our common stock sold to Bimini for $15.0 million in cash
(after giving effect to the stock dividend of 6.0922 shares for each share of common stock that we will effect prior to the
completion of this offering, or the Stock Dividend), (iii) the sale of warrants to purchase
2,655,000 shares of our common stock in the concurrent private placement for an aggregate purchase
price of $1,248,000 and (iv) the Stock Dividend.
You should read this table together with “Management’s Discussion and Analysis of Financial
Conditions and Results of Operations” and our financial statements and related notes included
elsewhere in this prospectus.
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March 31, 2011 |
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As |
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Actual |
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Adjusted(1)(2) |
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STOCKHOLDERS’ EQUITY: |
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Common stock, $0.01 par value;
1,000,000 shares authorized; 75,000
shares subscribed, actual; 500,000,000
shares authorized, as adjusted;
6,263,830 shares issued and
outstanding, as adjusted |
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$ |
750 |
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$ |
62,638 |
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Preferred stock, $0.01 par value; no
shares authorized; no shares
outstanding, actual; 100,000,000 shares
authorized and no shares issued and
outstanding, as adjusted |
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— |
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Additional paid in capital |
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7,499,250 |
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56,121,362 |
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(Accumulated deficit) Retained earnings |
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(14,082 |
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(14,082 |
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TOTAL STOCKHOLDERS’ EQUITY(3) |
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7,485,918 |
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56,169,918 |
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The number of shares of common stock to be outstanding immediately after the closing of
this offering and the concurrent private placement includes (i) 1,063,830 shares of our common
stock that will be held by Bimini upon completion of this offering, and (ii) 5,200,000 shares
of common stock to be sold in this offering. Does not include a maximum 4,000,000 shares of
common stock reserved for issuance under our 2011 Equity Incentive
Plan, with grants under such plan subject to a
cap of an aggregate of 10% of the issued and outstanding shares of our common stock (on a
fully-diluted basis) at the time of each award. |
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Does not include the underwriters’ option to purchase up to an additional 780,000 shares
of common stock. Also does not include 2,655,000 shares of common stock issuable upon exercise
of the warrants issued to Bimini in the concurrent private placement, however, as adjusted
additional paid-in capital does include the $1,248,000 aggregate purchase price of such
warrants. Each warrant will have an exercise price of 110% of the price per share of the
common stock sold in this offering, will be immediately exercisable and will expire seven
years from the completion of the offering. |
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A $1.00 increase (decrease) in the assumed initial public offering price of $8.00 per
share would increase (decrease) total stockholders’ equity by approximately $5.0 million, assuming the
number of shares offered by us, as set forth on the cover page of this prospectus, remains the
same and the underwriters do not exercise their option to purchase 780,000 additional shares
of our common stock, and after deducting the portion of the underwriters’ discount payable by us and estimated offering expenses payable by us. |
Revised Dilution
Our net tangible book value as of March 31, 2011 was approximately $7.5 million, or $99.81 per
share of our common stock subscribed. Net tangible book value per share represents the amount of
our total tangible assets minus our total liabilities, divided by the aggregate shares of our
common stock outstanding (or subscribed for). After giving effect to (i) the sale of 5,200,000
shares of our common stock in this offering at an assumed initial public offering price of $8.00 per share,
and after deducting the portion of the underwriting discounts and commissions payable by us and
estimated offering expenses payable by us and (ii) the sale of warrants to purchase 2,655,000
shares of our common stock in the concurrent private placement for an aggregate purchase price of
$1,248,000, our as adjusted net tangible book value on March 31, 2011 would have been approximately
$56.2 million, or $8.97 per share. This amount represents an immediate increase in net tangible
book value of $0.97 per share to new investors who purchase our common stock in this offering at an
initial public offering price of $8.00. The following table shows this immediate per share
dilution:
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Public offering price per share |
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$ |
8.00 |
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Net tangible book value per share subscribed for on March 31, 2011, before
giving effect to this offering and the concurrent private placement |
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$ |
99.81 |
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As adjusted net tangible book value per share of common stock on March 31,
2011, after giving effect to the additional investment of $7.5 million in
cash and the Stock Dividend (1,063,830 shares outstanding, as adjusted) |
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$ |
14.09 |
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Decrease in net tangible book value per share attributable to this
offering and the concurrent private placement |
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$ |
5.12 |
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As adjusted net tangible book value per share on March 31, 2011, after
giving effect to this offering and the concurrent private placement |
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$ |
8.97 |
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Accretion in as adjusted net tangible book value per share to new investors |
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$ |
0.97 |
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A $1.00 increase (decrease) in the assumed initial public offering price of $8.00 per share
would increase (decrease) our adjusted net tangible book value by approximately $5.0 million, would increase (decrease) our adjusted net
tangible book value per share by $0.80 and would (decrease) increase the accretion per share to new investors by $(0.20),
assuming the number of shares of common stock offered by us, as set forth on the cover page of this
prospectus, remains the same and the underwriters do not exercise their over-allotment option to
purchase an additional 780,000 shares of our common stock, and after deducting the portion of the
underwriting discounts and commissions payable by us and estimated offering expenses payable by us.
The following table summarizes, on the as adjusted basis described above as of March 31, 2011,
the differences between the average price per share paid by our existing stockholder and by new
investors purchasing shares of common stock in this offering at an initial public offering price of
$8.00 per share, before deducting the portion of the underwriting discounts and commissions payable
by us and estimated offering expenses payable by us in this offering:
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Average Price Per |
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Shares Purchased(1) |
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Total Consideration |
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Share(2) |
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Number |
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Amount |
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Shares purchased by
existing stockholder |
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1,063,830 |
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16.98 |
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15,000,000 |
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26.50 |
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$ |
14.10 |
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New Investors(3) |
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5,200,000 |
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83.02 |
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41,600,000 |
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73.50 |
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8.00 |
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Total(3) |
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6,263,830 |
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100.00 |
% |
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56,600,000 |
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100.00 |
% |
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| (1) |
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Assumes no exercise of the underwriters’ option to purchase an additional 780,000 shares
of our common stock. |
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The average price per share for shares purchased by the existing stockholder gives effect to
the issuance of 913,830 shares of our common stock to Bimini pursuant to the Stock Dividend
that will occur immediately prior to the completion of this offering. The actual average price per
share for shares purchased by Bimini was $100.00. |
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A $1.00 increase (decrease) in the assumed initial public offering price of $8.00 per share,
would increase (decrease) total consideration paid by new investors and total consideration paid by
all investors by $5.2 million, assuming the number of shares of common stock offered by us, as set
forth on the cover page of this prospectus, remains the same and the underwriters do not exercise
their over-allotment option to purchase an additional 780,000 shares of our common stock, and before
deducting the portion of the underwriting discounts and commissions payable by us and estimated offering expenses payable by us. |
If the underwriters fully exercise their option to purchase an additional 780,000 shares
of our common stock, the number of shares of common stock held by the existing stockholder will be
reduced to 15.10% of the aggregate number of shares of common stock outstanding after this
offering, and the number of shares of common stock held by new investors will be increased to
5,980,000, or 84.90% of the aggregate number of shares of common stock outstanding after this
offering.
The issuer has filed a registration statement (including a prospectus) with the SEC for
the offering to which this communication relates. Before you invest, you should read the prospectus
in that registration statement and other documents the issuer has filed with the SEC for more
complete information about the issuer and this offering. You may get these documents for free by
visiting EDGAR on the SEC website at www.sec.gov or by clicking on the link above. Alternatively,
the issuer, any underwriter or any dealer participating in the offering will arrange to send you
the prospectus if you request it by calling 1-888-603-5847.