Armour (ARR) Co-CIO Sergey Losyev Exercises Phantom Stock

What Happened
Sergey Losyev, Co-Chief Investment Officer of Armour Residential REIT (ARR), converted 4,000 vested phantom stock units on August 21, 2026. He elected to convert 2,882 of those units into 2,882 shares of Armour common stock (no cash exercise price) and converted the remaining 1,118 units into cash solely to cover income taxes, yielding $18,246 (1,118 × $16.32). These phantom units are economic equivalents of common shares and were part of a multi-year phantom stock grant reported previously.

Key Details

• Transaction date: August 21, 2026. Form filed August 25, 2026 (covers the Aug 21 transaction).
• Conversions/exercises (code M): 4,000 phantom units converted; 2,882 shares acquired (¥$0 per share reported for conversion).
• Tax withholding/payment (code F): 1,118 units converted to cash at $16.32 per unit = $18,246 disposed to cover taxes.
• Shares owned after transaction: The Form 4 does not state a single total holding; it notes 60.539 shares held in Losyev’s self-directed rollover IRA (7.695 of those from dividend reinvestment). In addition, 2,882 shares were acquired via the conversion.
• Footnotes: F1 explains the split conversion (shares vs. cash for taxes) and that the 4,000 units are part of a five‑year phantom stock vesting schedule previously reported. F3 confirms each phantom unit equals one share of common stock. F2 details the IRA-held shares.
• Transaction codes: M = exercise/conversion of derivative (phantom stock); F = shares used/converted to satisfy tax withholding.

Context
This was a routine vesting/conversion of phantom stock, not an open‑market purchase or sale. Converting phantom units into shares (with a portion cashed out to pay taxes) is common practice and does not necessarily signal a buy/sell judgment about the stock. For retail investors, note that converting phantom stock increases the insider’s direct share count but involves no cash purchase; the cash conversion here was solely for tax withholding.