EST Enterprise Acquisition Corp.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

SCHEDULE 14A

(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

Filed by the Registrant   x

Filed by a Party Other Than the Registrant   o

Check the appropriate box:

o   Preliminary Proxy Statement

o    Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

x   Definitive Proxy Statement

o   Definitive Additional Materials

o   Soliciting Material Under Rule 14a-12

ENTERPRISE ACQUISITION CORP.

 (Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

Payment of Filing Fee (Check the appropriate box):
o	No fee required.
o	Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
	(1) Title of each class of securities to which transaction applies:
	(2) Aggregate number of securities to which transaction applies:
	(3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
	(4) Proposed maximum aggregate value of transaction:
	(5) Total fee paid:
x	Fee paid previously with preliminary materials:
o	Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
	(1) Amount previously paid:
	(2) Form, Schedule or Registration Statement No.:
	(3) Filing Party:
	(4) Date Filed:

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EXPLANATORY NOTE

Enterprise Acquisition Corp. is filing the attached revised Definitive Proxy Statement on Schedule 14A solely for the purpose of addressing an inadvertent error in the transmission of the original Definitive Proxy Statement on Schedule 14A earlier today, which excluded the Notice of Special Meeting of Stockholders and Notice of Special Meeting of Warrantholders. The revised filing includes the entire proxy statement text.

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ENTERPRISE ACQUISITION CORP.

6800 BROKEN SOUND PARKWAY

BOCA RATON, FLORIDA  33487

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

OF ENTERPRISE ACQUISITION CORP.

TO BE HELD ON OCTOBER 26, 2009

To the Stockholders of Enterprise Acquisition Corp.:

NOTICE IS HEREBY GIVEN that the special meeting of stockholders of Enterprise Acquisition Corp., a Delaware corporation (“Enterprise”), will be held at 9:00 a.m., eastern time, on October 26, 2009, at the offices of Akerman Senterfitt, Enterprise’s counsel, at One Southeast Third Avenue, Suite 2500, Miami, Florida  33131.  You are cordially invited to attend the meeting, which will be held for the following purposes:

(1) to consider and vote upon a proposal to amend Enterprise’s amended and restated certificate of incorporation to allow Enterprise to complete the merger with ARMOUR Merger Sub Corp., a Delaware corporation (“Merger Sub Corp.”) and a wholly-owned subsidiary of ARMOUR Residential REIT, Inc., a Maryland corporation (“ARMOUR”), even though (i) neither ARMOUR nor Merger Sub Corp. is an operating business and (ii) the fair market value of ARMOUR and Merger Sub Corp. on the date of the transaction is less than 80% of Enterprise’s net assets (all of Enterprise’s assets including the funds held in the trust account, less Enterprise’s liabilities) — this proposal is referred to as the “initial charter proposal;”

(2) to consider and vote upon a proposal to increase from 30% to 50% the threshold contained in Enterprise’s amended and restated certificate of incorporation regarding the amount of Enterprise’s shares of common stock issued in Enterprise’s initial public offering (the “Enterprise IPO”) that may seek conversion without preventing a business combination from being consummated — this proposal is referred to as the “secondary charter  proposal;”

(3) to consider and vote upon a proposal to (i) adopt the Agreement and Plan of Merger, dated as of July 29, 2009, among Enterprise, ARMOUR and Merger Sub Corp., which, among other things, provides for the merger of Merger Sub Corp. with and into Enterprise, with Enterprise being the surviving entity and becoming a wholly-owned subsidiary of ARMOUR and (ii) approve the business combination contemplated by such Agreement and Plan of Merger — this proposal is referred to as the “merger  proposal;” and

(4) to consider and vote upon a proposal to adjourn the special meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies if, based upon the tabulated vote at the time of the special meeting, Enterprise is not authorized to consummate the merger — this proposal is referred to as the “adjournment proposal.”

These items of business are described in the attached proxy statement/prospectus, which you are encouraged to read in its entirety before voting. Only holders of record of Enterprise common stock at the close of business October 5, 2009 are entitled to notice of the special meeting and to vote and have their votes counted at the special meeting and any adjournments or postponements of the special meeting.

Enterprise’s officers, directors and stockholders prior to the Enterprise IPO have agreed to vote any shares of Enterprise common stock they purchased after the consummation of the Enterprise IPO in favor of the proposals being presented at the special meeting.

After careful consideration, the Enterprise board of directors and the Audit Committee of the board of directors approved the proposals and have determined that the proposals are fair to and in the best interests of Enterprise and its stockholders and unanimously recommend that you vote or give instruction to vote “FOR” the approval of all of the proposals.

A fairness opinion from an unaffiliated, independent investment banking firm was not required pursuant to Enterprise's amended and restated certificate of incorporation. As a result, the Enterprise board did not obtain a fairness opinion in connection with the proposed transaction.

The approval of the initial charter proposal and the merger proposal is a condition to the consummation of the merger discussed above.  In addition, the approval of the warrant amendment proposal, as described in the attached proxy statement/prospectus, is a condition to the consummation of the merger.  The approval of the secondary charter proposal is not a condition to the consummation of the merger.

All Enterprise stockholders are cordially invited to attend the special meeting in person. To ensure your representation at the special meeting, however, you are urged to complete, sign, date and return the enclosed proxy card as soon as possible. If you are a stockholder of record of Enterprise common stock, you may also cast your vote in person at the special meeting. If your shares are held in an account at a brokerage firm or bank, you must instruct your broker or bank on how to vote your shares or, if you wish to attend the meeting and vote in person, obtain a proxy from your broker or bank.

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A complete list of Enterprise stockholders of record entitled to vote at the special meeting will be available for ten days before the special meeting at the principal executive offices of Enterprise for inspection by stockholders during ordinary business hours for any purpose germane to the special meeting.

Your vote is important regardless of the number of shares you own. Whether you plan to attend the special meeting or not, please sign, date and return the enclosed proxy card as soon as possible in the envelope provided. If your shares are held in “street name” or are in a margin or similar account, you should contact your broker to ensure that votes related to the shares you beneficially own are properly counted.

Thank you for your participation. We look forward to your continued support.

October 13, 2009		By Order of the Board of Directors
		/s/ Marc H. Bell
		Marc H. Bell Chairman of the Board

IF YOU RETURN YOUR PROXY CARD WITHOUT AN INDICATION OF HOW YOU WISH TO VOTE, YOUR SHARES WILL BE VOTED IN FAVOR OF EACH OF THE PROPOSALS AND YOU WILL NOT BE ELIGIBLE TO HAVE YOUR SHARES CONVERTED INTO A PRO RATA PORTION OF THE TRUST ACCOUNT IN WHICH A SUBSTANTIAL PORTION OF THE NET PROCEEDS OF THE ENTERPRISE IPO ARE HELD. YOU MUST AFFIRMATIVELY VOTE AGAINST THE MERGER PROPOSAL AND DEMAND THAT ENTERPRISE CONVERT YOUR SHARES INTO CASH NO LATER THAN THE CLOSE OF THE VOTE ON THE MERGER PROPOSAL TO EXERCISE YOUR CONVERSION RIGHTS. IN ORDER TO CONVERT YOUR SHARES, YOU MUST TENDER YOUR STOCK TO ENTERPRISE’S STOCK TRANSFER AGENT PRIOR TO THE SPECIAL MEETING OF ENTERPRISE STOCKHOLDERS. YOU MAY TENDER YOUR STOCK BY EITHER DELIVERING YOUR STOCK CERTIFICATE TO THE TRANSFER AGENT OR BY DELIVERING YOUR SHARES ELECTRONICALLY USING THE DEPOSITORY TRUST COMPANY’S DWAC (DEPOSIT WITHDRAWAL AT CUSTODIAN) SYSTEM. IF THE MERGER IS NOT COMPLETED, THEN THESE SHARES WILL NOT BE CONVERTED INTO CASH. IF YOU HOLD THE SHARES IN STREET NAME, YOU WILL NEED TO INSTRUCT THE ACCOUNT EXECUTIVE AT YOUR BANK OR BROKER TO WITHDRAW THE SHARES FROM YOUR ACCOUNT IN ORDER TO EXERCISE YOUR CONVERSION RIGHTS. SEE “THE MERGER PROPOSAL — CONVERSION RIGHTS” FOR MORE SPECIFIC INSTRUCTIONS.

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ENTERPRISE ACQUISITION CORP.

6800 BROKEN SOUND PARKWAY

BOCA RATON, FLORIDA  33487

NOTICE OF SPECIAL MEETING OF WARRANTHOLDERS

OF ENTERPRISE ACQUISITION CORP.

TO BE HELD ON OCTOBER 26, 2009

To the Warrantholders of Enterprise Acquisition Corp.:

NOTICE IS HEREBY GIVEN that the special meeting of warrantholders of Enterprise Acquisition Corp., a Delaware corporation (“Enterprise”), will be held at 9:00 a.m., eastern time, on October 26, 2009, at the offices of Akerman Senterfitt, Enterprise’s counsel, at One Southeast Third Avenue, Suite 2500, Miami, Florida  33131. You are cordially invited to attend the meeting, which will be held for the following purposes:

(1) to consider and vote upon a proposal to amend certain terms of the Warrant Agreement, dated as of November 7, 2007, between Enterprise and Continental Stock Transfer & Trust Company, which governs the terms of Enterprise’s outstanding warrants, in connection with the consummation of the transactions contemplated by the Agreement and Plan of Merger, dated as of July 29, 2009, among Enterprise, ARMOUR Residential REIT, Inc., a Maryland corporation (“ARMOUR”), and ARMOUR Merger Sub Corp., a Delaware corporation (“Merger Sub Corp.”) and a wholly-owned subsidiary of ARMOUR, which, among other things, provides for the merger of Merger Sub Corp. with and into Enterprise with Enterprise being the surviving entity and becoming a wholly-owned subsidiary of ARMOUR. The amendment to the Warrant Agreement will provide that (i) the exercise price of Enterprise’s warrants will be increased from $7.50 to $11.00 per share and (ii) the expiration date of the warrants will be extended from November 7, 2011 to November 7, 2013 — this proposal is referred to as the “warrant amendment  proposal;” and

(2) to consider and vote upon a proposal to adjourn the special meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies if, based upon the tabulated vote at the time of the special meeting, Enterprise is not authorized to consummate the warrant amendment proposal — this proposal is referred to as the “adjournment proposal.”

These items of business are described in the attached proxy statement/prospectus, which you are encouraged to read in its entirety before voting. Only holders of record of Enterprise warrants at the close of business on October 5, 2009 are entitled to notice of the special meeting and to vote and have their votes counted at the special meeting and any adjournments or postponements of the special meeting.

The approval of the warrant amendment proposal is a condition to the consummation of the merger discussed above.  Enterprise’s officers, directors and stockholders prior to Enterprise’s initial public offering have executed voting agreements whereby such parties have agreed to vote in favor of the warrant amendment proposal at the special meeting.

After careful consideration, Enterprise’s board of directors has determined that the proposals are fair to and in the best interests of Enterprise and its warrantholders and unanimously recommends that you vote or give instruction to vote “FOR” the approval of all of the proposals.

All Enterprise warrantholders are cordially invited to attend the special meeting in person. To ensure your representation at the special meeting, however, you are urged to complete, sign, date and return the enclosed proxy card as soon as possible. If you are a warrantholder of record of Enterprise, you may also cast your vote in person at the special meeting. If your warrants are held in an account at a brokerage firm or bank, you must instruct your broker or bank on how to vote your warrants or, if you wish to attend the meeting and vote in person, obtain a proxy from your broker or bank. If you do not vote or do not instruct your broker or bank how to vote, it will have the same effect as voting against the warrant amendment proposal.

A complete list of Enterprise warrantholders of record entitled to vote at the special meeting will be available for ten days before the special meeting at the principal executive offices of Enterprise for inspection by warrantholders during ordinary business hours for any purpose germane to the special meeting.

Your vote is important regardless of the number of warrants you own. Whether you plan to attend the special meeting or not, please sign, date and return the enclosed proxy card as soon as possible in the envelope provided. If your warrants are held in “street name” or are in a margin or similar account, you should contact your broker to ensure that votes related to the warrants you beneficially own are properly counted.

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Thank you for your participation. We look forward to your continued support.

October 13, 2009		By Order of the Board of Directors
		/s/ Marc H. Bell
		Marc H. Bell Chairman of the Board

IF YOU RETURN YOUR PROXY CARD WITHOUT AN  INDICATION OF HOW YOU WISH TO VOTE, YOUR WARRANTS WILL BE VOTED IN FAVOR OF EACH OF THE PROPOSALS. IF THE MERGER IS NOT COMPLETED AND ENTERPRISE DOES NOT COMPLETE AN INITIAL BUSINESS COMBINATION PRIOR TO NOVEMBER 7, 2009, THEN THE WARRANTS WILL EXPIRE WORTHLESS.

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PROXY STATEMENT FOR SPECIAL MEETING OF STOCKHOLDERS AND WARRANTHOLDERS OF

ENTERPRISE ACQUISITION CORP.

PROSPECTUS FOR UP TO

25,100,000 SHARES OF COMMON STOCK,

32,500,000 WARRANTS AND

32,500,000 SHARES OF COMMON STOCK UNDERLYING SUCH WARRANTS

OF

ARMOUR RESIDENTIAL REIT, INC.

Enterprise Acquisition Corp., a Delaware corporation (“Enterprise”), is pleased to report that its board of directors has unanimously approved an Agreement and Plan of Merger, dated July 29, 2009, among Enterprise, ARMOUR Residential REIT, Inc., a Maryland corporation (“ARMOUR”), and ARMOUR Merger Sub Corp., a Delaware corporation (“Merger Sub Corp.”) and a wholly-owned subsidiary of ARMOUR, pursuant to which (i) Merger Sub Corp. will merge with and into Enterprise with Enterprise surviving the merger and becoming a wholly-owned subsidiary of ARMOUR and (ii) holders of Enterprise securities (not exercising conversion rights as described below) at the time of merger will be security holders of ARMOUR.

ARMOUR is a Maryland corporation that will commence operations upon completion of the merger described in this proxy statement/prospectus. ARMOUR will be externally managed and advised by ARMOUR Residential Management LLC, a Delaware limited liability company (“ARRM”). ARMOUR intends to elect and qualify to be taxed as a real estate investment trust (“REIT”) for U.S. federal income tax purposes, commencing with ARMOUR’s taxable year ending December 31, 2009. ARMOUR generally will not be subject to U.S. federal income tax on its net taxable income to the extent that it annually distributes its net taxable income to stockholders and maintains its intended qualification as a REIT. ARMOUR also intends to operate its business in a manner that will permit it to maintain its exemption from registration under the Investment Company Act of 1940, as amended (“1940 Act”).

Proposals to approve the merger agreement and the other matters discussed in this proxy statement/prospectus will be presented at the special meetings of stockholders and warrantholders of Enterprise scheduled to be held on October 26, 2009.

Enterprise’s common stock, units and warrants are currently listed on the NYSE Amex under the symbols EST, EST.U and EST.WS, respectively. Enterprise’s units, common stock and warrants will no longer be traded following consummation of the merger. The parties intend to seek to have the common stock and warrants of ARMOUR listed on the NYSE Amex following consummation of the merger under the symbols ARR and ARR.WS, respectively. However, there is no assurance that the common stock and warrants will be listed on any exchange following consummation of the merger.

This proxy statement/prospectus provides you with detailed information about the merger and other matters to be considered by the Enterprise stockholders and warrantholders. You are encouraged to carefully read the entire document and the documents incorporated by reference. IN PARTICULAR, BEFORE YOU DECIDE WHETHER TO VOTE OR INSTRUCT YOUR VOTE TO BE CAST TO APPROVE THE PROPOSALS DESCRIBED IN THIS PROXY STATEMENT/PROSPECTUS, YOU SHOULD CAREFULLY READ “RISK FACTORS” BEGINNING ON PAGE 23 FOR A DISCUSSION OF THE FOLLOWING AND OTHER RISKS:

·

ARMOUR has no operating history and may not be able to successfully operate its business or generate sufficient revenue to make or sustain distributions to its stockholders.

·

ARMOUR depends on its manager, ARRM, and particularly key personnel including Mr. Ulm and Mr. Zimmer, and the loss of those key personnel could severely and detrimentally affect ARMOUR’s operations.

·

There are conflicts of interest in ARMOUR’s relationship with ARRM and its affiliates, which could result in decisions that are not in the best interests of ARMOUR’s stockholders or warrantholders.

·

If ARMOUR fails to qualify as a REIT, it will be subject to federal income tax as a regular corporation and may face substantial tax liability.

·

Enterprise’s board of directors did not obtain a fairness opinion in determining whether or not to proceed with the transaction with ARMOUR and as a result, the terms may not be fair from a financial point of view to Enterprise’s public stockholders.

·

The initial charter proposal significantly alters the obligations of Enterprise set forth in the Enterprise IPO prospectus and Enterprise’s amended and restated certificate of incorporation.

Your vote is very important. Whether or not you expect to attend the special meetings, the details of which are described on the following pages, please complete, date, sign and promptly return the accompanying proxy in the enclosed envelope.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this proxy statement/prospectus. Any representation to the contrary is a criminal offense.

The proxy statement/prospectus statement is dated October 13, 2009, and is first being mailed on or about October 14, 2009.

Enterprises’s initial public offering (the “Enterprise IPO”) was consummated on November 7, 2007. UBS Securities LLC (“UBS”) and Ladenburg Thalmann &Co. Inc. (“Ladenburg”) acted as joint bookrunning managers and representatives of the underwriters in the Enterprise IPO. Upon consummation of the merger, the underwriters in the Enterprise IPO will be entitled to receive up to an aggregate of approximately $8.375 million of deferred underwriting commissions, following consummation of the merger. If the merger is not consummated and Enterprise is required to be liquidated, the underwriters will not receive any of such funds and the funds will be returned upon Enterprise’s liquidation to the holders of shares of Enterprise common stock sold in the Enterprise IPO (the “Public Shares”). Pursuant to a Letter Agreement dated October 9, 2009 by and among Enterprise, and I-Bankers Securities, Inc. (“I-Bankers”), the aggregate deferred underwriting commissions to be paid to the underwriters upon consummation of the merger was decreased from 3.35% to 3.0% of (i) the value of the trust account on the closing date of the merger, less (ii) any amounts paid to Enterprise’s stockholders with whom Enterprise enters into forward contracts before the close of the merger to purchase stockholders’ shares, less (iii) any amounts paid to holders of the Public Shares of Enterprise who vote against the merger proposal and demand conversion of their Public Shares, in exchange for certain rights to participate in future securities offerings by ARMOUR following consummation of the merger.

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TABLE OF CONTENTS

SUMMARY OF THE MATERIAL TERMS OF THE MERGER	1
QUESTIONS AND ANSWERS FOR ENTERPRISE STOCKHOLDERS AND WARRANTHOLDERS ABOUT THE PROPOSALS	5
SELECTED HISTORICAL CONSOLIDATED FINANCIAL INFORMATION	10
SELECTED HISTORICAL CONSOLIDATED FINANCIAL INFORMATION — ARMOUR	11
SELECTED HISTORICAL FINANCIAL INFORMATION — ENTERPRISE	12
SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION	13
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION	14
RISK FACTORS	23
FORWARD-LOOKING STATEMENTS	43
SPECIAL MEETINGS OF ENTERPRISE STOCKHOLDERS AND WARRANTHOLDERS	45
PROPOSALS TO BE CONSIDERED BY THE ENTERPRISE STOCKHOLDERS	50
THE INITIAL CHARTER PROPOSAL	50
THE SECONDARY CHARTER PROPOSAL	52
THE MERGER PROPOSAL	54
THE MERGER AGREEMENT	68
U.S. FEDERAL INCOME TAX CONSIDERATIONS	75
THE ADJOURNMENT PROPOSAL	93
PROPOSALS TO BE CONSIDERED BY THE ENTERPRISE WARRANTHOLDERS	94
THE WARRANT AMENDMENT PROPOSAL	94
THE ADJOURNMENT PROPOSAL	95
OTHER INFORMATION RELATED TO ENTERPRISE	96
BUSINESS OF ARMOUR	105
MANAGEMENT OF ARMOUR FOLLOWING THE MERGER	117
ARMOUR’S MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	132
COMPARISON OF RIGHTS OF ENTERPRISE AND ARMOUR	136
CERTAIN PROVISIONS OF THE MARYLAND GENERAL CORPORATION LAW AND ARMOUR’S CHARTER AND BYLAWS	157
BENEFICIAL OWNERSHIP OF SECURITIES	161
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS	164
DESCRIPTION OF SECURITIES	168
PRICE RANGE OF SECURITIES AND DIVIDENDS	174
STOCKHOLDER PROPOSALS	174
LEGAL MATTERS	175
EXPERTS	175
DELIVERY OF DOCUMENTS TO STOCKHOLDERS	175
WHERE YOU CAN FIND MORE INFORMATION	175
INDEX TO FINANCIAL STATEMENTS	F-1

ANNEXES
Agreement and Plan of Merger	A-1
Form of ARMOUR Articles of Amendment and Restatement	B-1
Form of ARMOUR Bylaws	C-1
Form of Management Agreement	D-1
Tax Opinion of Akerman Senterfitt	E-1
Form of Enterprise Second Amended and Restated Certificate of Incorporation	F-1
Form of Supplement and Amendment to Warrant Agreement	G-1
Opinion of Richards, Layton & Finger, P.A.	H-1

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SUMMARY OF THE MATERIAL TERMS OF THE MERGER

The following summary highlights some of the information in this proxy statement/prospectus. It does not contain all of the information that you should consider before deciding how to vote on any of the proposals described herein. You should read carefully the more detailed information set forth under “Risk Factors” and the other information included in this proxy statement/prospectus.

Enterprise Background

Enterprise is a Delaware blank check company incorporated on July 9, 2007 in order to serve as a vehicle for the acquisition of one or more operating businesses.  On November 14, 2007, Enterprise consummated its initial public offering of 25,000,000 units, each unit consisting of one share of common stock, par value $0.0001 per share, and one warrant exercisable for an additional share of common stock, resulting in total gross proceeds of $250,000,000.  The managing underwriters for the initial public offering were UBS Securities LLC and Ladenburg Thalmann & Co. Inc.

Stockholder Proposals

In the Enterprise IPO prospectus, Enterprise undertook to effect an initial business combination with one or more operating businesses having a fair market value equal to at least 80% of Enterprise’s net assets (all of Enterprise’s assets, including the funds held in the trust account, less Enterprise’s liabilities). In the proposed merger, (i) neither ARMOUR nor Merger Sub Corp. is an operating business and (ii) the fair market value of ARMOUR and Merger Sub Corp. on the date of the transaction is less than 80% of Enterprise’s net assets.  Accordingly, the proposed merger does not satisfy the requirements set forth in the Enterprise IPO prospectus and Enterprise’s amended and restated certificate of incorporation. However, Enterprise considered and analyzed numerous companies and acquisition opportunities in its search for an attractive business combination candidate, none of which were believed to be as attractive to public stockholders as the proposed merger. As a result, the Enterprise board and the Audit Committee of the board of directors approved the merger with ARMOUR and Merger Sub Corp. Accordingly, Enterprise is proposing to amend the terms of its amended and restated certificate of incorporation to allow for the consummation of the proposed transaction. See the section entitled “ The Initial Charter Proposal .”

Stockholders will be asked to adopt the merger agreement and approve the business combination contemplated by such merger agreement. The parties to the merger agreement are Enterprise, ARMOUR and Merger Sub Corp.  Pursuant to the merger agreement, (i) Merger Sub Corp. will merge with and into Enterprise with Enterprise surviving the merger and becoming a wholly-owned subsidiary of ARMOUR and (ii) holders of Enterprise securities at the time of the merger (other than holders of Public Shares exercising conversion rights or holders of shares subject to cancellation under the merger agreement) will become security holders of ARMOUR as described below. See the section entitled “ The Merger Proposal .”

In addition to voting on the initial charter proposal and the merger proposal, the stockholders of Enterprise will vote upon a proposal to increase from 30% to 50% the threshold contained in Enterprise’s amended and restated certificate of incorporation regarding the amount of Enterprise’s Public Shares that may seek conversion without preventing a business combination from being consummated.  See the section entitled “The Secondary Charter Proposal.”

In addition to voting on the initial charter proposal, the merger proposal and the secondary charter proposal, the stockholders of Enterprise will vote on a proposal to adjourn the meeting, if necessary. It is possible for Enterprise to obtain sufficient votes to approve the adjournment proposal but not receive sufficient votes to approve the initial charter proposal and the merger proposal. In such a situation, Enterprise could adjourn the meeting and attempt to solicit additional votes in favor of such proposals. See the section entitled “The Adjournment Proposal.”

In evaluating the proposals described above, you should carefully read this proxy statement/prospectus and especially consider the factors discussed in the section entitled “ Risk Factors .”

Warrantholder Proposals

Enterprise is also seeking the approval from the holders of its warrants to (i) increase the exercise price of Enterprise’s warrants from $7.50 per share to $11.00 per share and (ii) extend the expiration date of the warrants from November 7, 2011 to November 7, 2013. The approval of the warrant amendment proposal is a condition to the merger being consummated. The amendments will be effective immediately upon consummation of the merger. Daniel C. Staton, Marc H. Bell and Staton Bell Blank Check LLC (“SBBC”), an entity affiliated with Mr. Staton and Mr. Bell (the “Enterprise Founders”), have executed voting agreements whereby such parties have agreed to vote in favor of the warrant amendment proposal at the special meeting. See the section entitled “ The Warrant Amendment Proposal .”

In addition to voting on the Warrant Amendment Proposal, the warrantholders of Enterprise will vote on a a proposal to adjourn the special meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies if, based upon the tabulated vote at the time of the special meeting, Enterprise is not authorized to consummate the warrant amendment proposal. See the section entitled “ The Adjournment Proposal .”

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In evaluating the proposals described above, you should carefully read this proxy statement/prospectus and especially consider the factors discussed in the section entitled “ Risk Factors .”

Actions That May Be Taken Before The Merger

 It is possible that the present holders of 30% or more of the Public Shares will vote against the merger and seek conversion of their Public Shares into cash in accordance with Enterprise’s amended and restated certificate of incorporation. If such event were to occur, the merger could not be completed (unless the secondary charter proposal, as described below, is approved, in which case the merger could be completed if fewer than 50% of the present holders of Public Shares vote against the merger and seek conversion of their Public Shares into cash). To preclude such possibility, Enterprise and ARMOUR and their respective affiliates may enter into arrangements to provide for the purchase of Public Shares from holders thereof who indicate their intention to vote against the merger and seek conversion or otherwise wish to sell their Public Shares or other arrangements that would induce holders of Public Shares not to vote against the merger proposal. Definitive arrangements have not yet been determined but some possible methods are described in the section titled “ The Merger Proposal — Actions That May Be Taken to Secure Approval of Enterprise’s Stockholders .”

Prior to consummation of the merger, Enterprise will declare a one-time cash distribution of $0.13 per share (the “Enterprise Distribution”) to stockholders as of the record date.  The Enterprise Distribution will reduce any claims that stockholders may have against the trust account, including without limitation, claims made by stockholders who wish to convert their shares into cash equal to their pro-rata share of the trust account plus any interest accrued thereon then held in the trust account.  The holders of 6,150,000 shares of common stock of Enterprise acquired immediately prior to the Enterprise IPO by SBBC (the “Founders’ Shares”) will not participate in the Enterprise Distribution. SBBC has agreed to have any shares it owns that were acquired prior to the Enterprise IPO cancelled on the day prior to the record date for the Enterprise Distribution.

The Enterprise Founders have agreed to have the Founders’ Shares cancelled prior to the record date for the Enterprise Distribution.  Also, in connection with the merger, Scott J. Ulm and Jeffrey J. Zimmer, the stockholders of ARMOUR, have agreed to have their ARMOUR shares cancelled upon consummation of the merger.

Pursuant to a letter agreement dated October 9, 2009 by and among Enterprise, Ladenburg, UBS and I-Bankers, the aggregate deferred underwriting commissions to be paid to the underwriters upon consummation of the merger was decreased from 3.35% to 3.0% of (i) the value of the trust account on the closing date of the merger, less (ii) any amounts paid to Enterprise’s stockholders with whom Enterprise enters into forward or other contracts before the close of the merger to purchase stockholders’ shares, less (iii) any amounts paid to holders of the Public Shares of Enterprise who vote against the merger proposal and demand conversion of their Public Shares, in exchange for certain rights to participate in future securities offerings by ARMOUR following consummation of the merger.

ARMOUR After the Merger

ARMOUR is a Maryland corporation that will commence operations upon completion of the merger described in this proxy statement/prospectus. ARMOUR will be externally managed and advised by ARRM. ARMOUR intends to elect and qualify to be taxed as a REIT for U.S. federal income tax purposes, commencing with ARMOUR’s taxable year ending December 31, 2009. ARMOUR generally will not be subject to U.S. federal income tax on its net taxable income to the extent that it annually distributes its net taxable income to stockholders and maintains its intended qualification as a REIT. ARMOUR also intends to operate its business in a manner that will permit it to maintain its exemption from registration under the 1940 Act.

Upon consummation of the merger, ARMOUR will seek to invest, on a leveraged basis, primarily in hybrid adjustable-rate, adjustable-rate and fixed-rate residential mortgage-backed securities issued or guaranteed by a U.S. Government-chartered entity, such as the Federal National Mortgage Association (more commonly known as Fannie Mae) and the Federal Home Loan Mortgage Corporation (more commonly known as Freddie Mac), or guaranteed by the Government National Mortgage Administration, a U.S. Government corporation (more commonly known as Ginnie Mae) (collectively, “Agency Securities”). A portion of ARMOUR’s portfolio may be invested in unsecured notes and bonds issued by U.S. Government-chartered entities (collectively, “Agency Debt”), U.S. Treasuries and money market instruments (including reverse repurchase agreements), or accounts at state or federal chartered financial institutions, subject to certain income tests ARMOUR must satisfy for its qualification as a REIT. ARMOUR has committed itself to this asset class by including in its charter a requirement to that effect. ARMOUR may also invest in hedging and other derivative instruments related to the foregoing investments. In the case of an ambiguity in the application of this restriction, ARMOUR’s manager, ARRM, or its future board of directors will determine its application. Amending the ARMOUR charter will require approval by the holders of a majority of ARMOUR’s outstanding common stock.  ARMOUR’s only assets following the business combination will be the funds released from Enterprise’s trust account upon consummation of the business combination and its Enterprise stock. The funds in the trust account are currently invested entirely in funds invested in U.S. Government Treasury securities. See the section entitled “Business of ARMOUR.”

As a result of the merger, the holders of common stock and warrants of Enterprise, subject to the exceptions set forth in the merger agreement, will receive like securities of ARMOUR, on a one-to-one basis, in exchange for their existing Enterprise

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securities. The holders of Enterprise’s common stock and warrants will become holders of securities of ARMOUR after the merger. ARRM will not be receiving any consideration, including any shares in ARMOUR, as a result of the transaction other than the management fees ARRM will be paid pursuant to the management agreement. The holders of Enterprise’s common stock and warrants will own the same proportion of ARMOUR’s securities as their current holdings in Enterprise, except as increased by (A) the cancellation of shares owned by Enterprise (other than shares held either in a fiduciary or agency capacity that are beneficially owned by third parties) and shares held by ARMOUR or Merger Sub Corp. (other than shares held in either a fiduciary or agency capacity that are beneficially owned by third parties) as well as the cancellation of any pre-IPO shares owned by SBBC and (B) the conversion of Public Shares by any holder thereof exercising its conversion rights described herein.

After the merger, the directors of ARMOUR will be Scott J. Ulm, Jeffrey J. Zimmer, Daniel C. Staton, Marc H. Bell, Thomas K. Guba, John P. Hollihan, III, Stewart J. Paperin, Jordan Zimmerman and Robert C. Hain. Messrs. Guba, Hollihan, Paperin, Zimmerman and Hain will be considered independent directors under applicable regulatory rules. The officers of ARMOUR will be Scott Ulm, Co-Chief Executive Officer, Chief Investment Officer and Head of Risk Management, and Jeffrey J. Zimmer, Co-Chief Executive Officer and President.

Management Agreement

ARMOUR will enter into a management agreement with ARRM prior to the consummation of the merger, which will become effective upon the consummation of the merger.  Pursuant to the management agreement, ARRM will provide the day-to-day management of ARMOUR’s operations and will perform services and activities relating to ARMOUR’s assets and operations in accordance with the terms of the management agreement.  The management agreement requires ARRM to manage ARMOUR’s business affairs in conformity with certain restrictions contained in the management agreement, including any material operating policies adopted by ARMOUR. The initial term of the management agreement will expire five years after its effective date, unless earlier terminated by either ARMOUR or ARRM pursuant to the terms of the management agreement. Following the initial term, the management agreement will automatically renew for successive 1-year renewal terms unless either ARMOUR or ARRM gives advance notice to the other of its intent not to renew the agreement prior to the expiration of the initial term or any renewal term, as applicable, subject to the terms and conditions for, and the restrictions on, the giving of such notice contained in the management agreement.  ARRM is entitled to receive from ARMOUR an annual management fee, payable monthly in arrears, equal to the sum of (a) 1.5% of the total of all “gross equity raised” (as defined in the management agreement) up to $1 billion and (b) 0.75% of the total of all gross equity raised in excess of $1 billion divided by twelve (12) (which monthly management fee shall never be less than 1/12 ^th of $900,000). ARMOUR is also obligated to reimburse certain expenses incurred by ARRM and its affiliates. ARRM is further entitled to receive a termination fee from ARMOUR under certain circumstances. For a more detailed description of the management agreement, see the section entitled “ Management of ARMOUR Following the Merger .”

Sub-Management Agreement

Staton Bell Blank Check LLC (the “Sub-Manager”), an entity affiliated with Daniel C. Staton and Marc H. Bell, the Enterprise Founders, has agreed to provide certain services to ARRM upon consummation of the merger pursuant to a sub-management agreement.  In exchange for such services, Sub-Manager will receive a sub-management fee of 25% of the net management fee earned by ARRM under its management agreement with ARMOUR.

The sub-management agreement will become effective upon the consummation of the merger and will continue in effect until it is terminated in accordance with its terms.  If the sub-management is terminated, upon expiration of the initial 5-year term of the management agreement at the election of Sub-Manager, Sub-Manager will be paid by ARMOUR a final payment equal to 6.16 times the annualized rate of the last three (3) monthly payments to Sub-Manager.  The sub-management agreement provides that, during its term, if ARRM or its affiliates manage certain other investment vehicles, including other REITs, ARRM will negotiate in good faith to provide Sub-Manager the right to enter into a sub-management agreement on substantially the same terms as the sub-management agreement or an alternative arrangement reasonably acceptable to ARRM and Sub-Manager. For a more detailed description of the interests of the Enterprise Founders and other persons having an interest in the transaction, see the section entitled “ The Merger Proposal — Interests of Enterprise’s Directors and Officers and Others in the Merger .”  

Potential Conflicts of Interest

Each of ARMOUR’s executive officers and certain of its non-independent directors is also an employee or partner of ARRM, and as a result, they will not be exclusively dedicated to ARMOUR’s business. Each of Scott J. Ulm and Jeffrey J. Zimmer is a partner and owner of equity interests in ARRM. In addition, Daniel C. Staton and Marc H. Bell own an interest in Staton Bell Blank Check LLC, which, in consideration for services to be provided to ARRM under a sub-management agreement, which becomes effective upon consummation of the merger, is entitled to receive a percentage of the net management fee earned by ARRM. As a result, the management agreement with ARRM, which becomes effective upon consummation of the merger, may create a conflict of interest, and its terms, including fees payable to ARRM, may not be as favorable to ARMOUR as if they had been negotiated

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with an unaffiliated third party. In addition, if ARRM manages other investment vehicles, conflicts of interest may arise in allocating investment opportunities between ARMOUR and such other investment vehicles. See “ Management of ARMOUR Following the Merger — Conflicts of Interest Relating to ARRM and ARRM. ”

Release of Trust Funds  

At the closing of the merger, the funds in Enterprise’s trust account will be released to fund the Enterprise Distribution, to pay Enterprise stockholders who properly exercise their conversion rights, and to pay transaction fees and expenses, deferred underwriting discounts and commissions, tax liabilities, and reimbursement of expenses of the Enterprise Founders and to make purchases of Public Shares, if any. The balance of the funds will be available to ARMOUR for working capital and general corporate purposes of ARMOUR, although Enterprise will retain a small portion of the trust account for its own corporate purposes.  The merger is conditioned on Enterprise’s trust account containing no less than $100.0 million after the closing and after taking into account all of the payments described above. The funds in the trust account are currently invested entirely in funds invested in U.S. Government Treasury securities.

Other Matters

The Enterprise board independently determined that the fair market value of ARMOUR and Merger Sub Corp. on the date of the transaction was less than 80% of Enterprise’s net assets. The Enterprise board also independently determined that the transaction with ARMOUR and Merger Sub Corp. was not affiliated with any of Enterprise’s officers, directors or stockholders. Based on these determinations, a fairness opinion from an unaffiliated, independent investment banking firm was not required pursuant to Enterprise’s amended and restated certificate of incorporation. As a result, the Enterprise board did not obtain a fairness opinion in connection with the transaction.

Enterprise has received an opinion from its counsel, Akerman Senterfitt, relating to the tax treatment of the proposed transaction on Enterprise’s stockholders, as well as an opinion regarding ARMOUR’s REIT qualification.  Akerman Senterfitt has consented to the use of its opinions in this proxy statement/prospectus. For a detailed description of the material U.S. federal income tax consequences of the merger and warrant amendment, see the section entitled “ U.S. Federal Income Tax Considerations.”

The merger and the transactions contemplated by the merger agreement are not subject to any additional federal or state regulatory requirement or approval, including the Hart-Scott-Rodino Antitrust Improvements Act of 1976, except for filings with the State of Delaware necessary to effectuate the merger.

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QUESTIONS AND ANSWERS

FOR ENTERPRISE STOCKHOLDERS AND WARRANTHOLDERS ABOUT THE PROPOSALS

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SELECTED HISTORICAL CONSOLIDATED FINANCIAL INFORMATION

Enterprise and ARMOUR are providing the following selected historical financial information to assist you in your analysis of the financial aspects of the merger.

ARMOUR’s balance sheet data as of June 30, 2009 is derived from ARMOUR’s audited balance sheet which is included elsewhere in this proxy statement/prospectus.

Enterprise’s balance sheet data as of December 31, 2008 and December 31, 2007 and statements of income data and cash flow data for the year ended December 31, 2008, and for the period from July 9, 2007 (inception) through December 31, 2007 are derived from Enterprise’s audited financial statements, which are included elsewhere in this proxy statement/prospectus. Enterprise’s balance sheet data as of June 30, 2009 and statements of income data and cash flow data for the six months ended June 30, 2009 and 2008 are derived from Enterprise’s unaudited financial statements, which are included elsewhere in this proxy statement/prospectus.

The information is only a summary and should be read in conjunction with each of Enterprise’s and ARMOUR’s historical financial statements and related notes and “Other Information Related to Enterprise — Enterprise’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “ARMOUR Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained elsewhere herein. The historical results included below and elsewhere in this proxy statement/prospectus are not indicative of the future performance of ARMOUR.

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SELECTED HISTORICAL CONSOLIDATED FINANCIAL INFORMATION — ARMOUR

Balance Sheet Data:		June 30, 2009
Total Assets	$	500
Total Stockholders’ Equity	$	500
Net Asset Value Per Share	$	25

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SELECTED HISTORICAL FINANCIAL INFORMATION — ENTERPRISE

		For the Six Months Ended, June 30,		For the Year Ended, Dec. 31, 2008		For the Period From Jul. 9, 2007 (inception) through Dec. 31, 2007
Income Statement Data:		2009				2008
		(Unaudited)
Operating costs	$	(962,655)	$	(322,720)	$	(2,309,375)	$	(163,275)
Interest income		241,761		3,650,390		5,425,560		1,652,252
Income (loss) before taxes		(720,894)		3,327,670		3,116,185		1,488,977
Provision for taxes		246,700		(1,373,750)		(2,041,750)		(621,662)
Net Income	$	(474,194)	$	1,953,920	$	1,074,435	$	867,315
Less: Interest attributable to common stock
subject to possible conversion	$	(45,228)	$	(197,248)	$	(587,577)	$	-
Net Income attributable to common stock
not subject to possible conversion	$	(519,422)	$	1,756,672	$	486,858	$	867,315
Weighted average number of common shares outstanding:
Basic		23,750,001		23,750,001		23,750,001		12,990,330
Diluted		23,750,001		29,697,713		29,697,713		16,129,865
Net income per share:
Basic	$	(0.02)	$	0.07	$	0.02	$	0.07
Diluted	$	(0.02)	$	0.06	$	0.02	$	0.05

		Jun. 30, 2009				Dec. 31, 2008		Dec. 31, 2007
Balance Sheet Data:		(Unaudited)
Cash	$	59,207			$	2,086	$	33,381
Cash held in trust available for operations		341,748				832,108		1,454,380
Prepaid expenses		54,184				35,927		137,656
Prepaid federal and state income tax		273,654				26,954		-
Cash held in trust		249,464,764				249,292,394		247,575,000
Total Assets	$	250,193,557			$	250,189,469	$	249,200,417
Total Liabilities	$	9,446,551			$	8,968,269	$	9,053,652
Common stock subject to possible redemption		74,249,990				74,249,990		74,249,990
Interest income attributable to common stock subject
to possible conversion (net of income taxes of
$383,933 at Jun. 30, 2009 and
$340,665 at Dec. 31, 2008)		632,805				587,577		-
Total Stockholders’ Equity		165,864,211				166,383,633		165,896,775
Total Liabilities and Stockholders’ Equity	$	250,193,557			$	250,189,469	$	249,200,417

		For the Six Months Ended, June 30,		For the Year Ended, Dec. 31, 2008		For the Period From Jul. 9, 2007 (inception) through Dec. 31, 2007
Cash Flow Data:		2009				2008
		(Unaudited)
Net cash (used in) provided by operating activities	$	(260,869)	$	801,866	$	1,063,827	$	1,373,311
Net cash (used in) provided by investing activities		317,990		(760,106)		(1,095,122)		(249,029,380)
Net cash (used in) provided by financing activities		-		(35,000)		-		247,689,450
Net (decrease) increase in cash	$	57,121	$	6,760	$	(31,295)	$	33,381

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SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

The selected unaudited pro forma condensed combined financial information has been derived from, and should be read in conjunction with, the unaudited pro forma condensed combined financial information included elsewhere in this proxy statement/prospectus.

The unaudited pro forma condensed combined balance sheet as of June 30, 2009 gives pro forma effect to the merger as if it had occurred on such date. The unaudited pro forma condensed combined balance sheet at June 30, 2009 was derived from Enterprise’s unaudited condensed financial statements and ARMOUR’s audited balance sheet as of June 30, 2009.

The unaudited condensed combined pro forma statement of operations for the six months ended June 30, 2009, and for the year ended December 31, 2008 gives pro forma effect to the merger as if it had occurred at the beginning of these respective periods.  The unaudited condensed combined pro forma statement of operations for the six months ended June 30, 2009 was derived from Enterprise’s unaudited condensed statement of operations for the six months ended June 30, 2009.  The unaudited condensed combined pro forma statement of operations for the year ended December 31, 2008 was derived from Enterprise’s audited Statement of Operations for the year ended December 31, 2008. ARMOUR did not have any operations for the year ended December 31, 2008 or the six months ended 2009.

The historical financial information has been adjusted to give effect to pro forma events that are related and/or directly attributable to the merger and are factually supportable. The adjustments presented on the unaudited pro forma condensed combined financial information have been identified and presented in “ Unaudited Pro Forma Condensed Combined Financial Data ” to provide relevant information necessary for an accurate understanding of the combined company upon consummation of the merger.

This information should be read together with the consolidated financial statements of Enterprise and the notes thereto, the financial statements of ARMOUR and the notes thereto, “ Unaudited Pro Forma Condensed Combined Financial Data ,” “ Enterprise’s Management’s Discussion and Analysis of Financial Condition and Results of Operations ,” and “ ARMOUR’s Management’s Discussion and Analysis of Financial Condition and Results of Operations ” included elsewhere in this proxy statement/prospectus.

The unaudited pro forma condensed combined financial statements have been prepared using the assumptions below with respect to cash and stockholders’ equity:

·

Assuming Minimum Conversion: This presentation assumes that no Enterprise stockholders exercise conversion rights with respect to their shares of Enterprise common stock into a pro rata portion of the trust account and that all of the funds held in the trust account are available after closing for the payment of transactional costs and for operating purposes; and

·

Assuming Current Maximum Conversion: This presentation assumes that (i) pursuant to the merger proposal, Enterprise stockholders holding less than 30% (or 50% if the secondary charter proposal is approved by stockholders) of the Public Shares object to the proposed merger and exercise their conversion rights, and/or Enterprise takes actions to secure approval of the merger proposal as described in the section titled “The Merger Proposal — Actions That May be Taken to Secure Approval of Enterprise’s Stockholders,” and (ii) Enterprise’s trust account contains $100 million at the closing.

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ARMOUR Residential REIT

Unaudited Condensed Combined Pro Forma Statement of Operations Data

For the Six Months Ended June 30, 2009

ARMOUR Residential REIT

Unaudited Condensed Combined Pro Forma Statement of Operations Data

For the Year Ended December 31, 2008

ARMOUR Residential REIT Unaudited Pro Forma Balance Sheet Data at June 30, 2009

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COMPARATIVE SHARE INFORMATION

The following table sets forth selected historical equity ownership information for Enterprise and ARMOUR and unaudited pro forma combined per share ownership information after giving effect to the merger, and presented to reflect the following:

·

Assuming Minimum Conversion : This presentation assumes that no Enterprise stockholders exercise conversion rights with respect to their shares of Enterprise common stock into a pro rata portion of the trust account and that all of the funds held in the trust account are available after closing for the payment of transactional costs and for operating purposes; and

·

Assuming Current Maximum Conversion : This presentation assumes that (i) pursuant to the merger proposal, Enterprise stockholders holding less than 30% (or 50% if the secondary charter proposal is approved by stockholders) of the Public Shares object to the proposed merger and exercise their conversion rights, and/or Enterprise takes actions to secure approval of the merger proposal as described in the section titled “The Merger Proposal — Actions That May be Taken to Secure Approval of Enterprise’s Stockholders,” and (ii)Enterprise’s trust account contains $100 million at the closing.

This information is being provided to aid you in your analysis of the financial aspects of the merger. This information should be read together with the consolidated financial statements of Enterprise and the notes thereto, the financial statements of ARMOUR and the notes thereto, “Unaudited Pro Forma Condensed Combined Financial Data,” “Enterprise’s Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and “ARMOUR’ Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this proxy statement/prospectus.

The unaudited pro forma consolidated per share information reflects that the merger will be accounted for as an acquisition by Enterprise under Financial Accounting Standards Board Statement No. 141R, “Business Combinations” (“SFAS 141R”) for accounting purposes. The determination was primarily based upon Enterprise having all of the ownership of the newly merged entity. The acquisition has not changed the control of Enterprise, therefore Enterprise’s balance sheet accounts will be reflected at their historical carryover basis. ARMOUR’s balance sheet accounts will be recorded at estimated fair value which is expected to approximate their carrying value. The unaudited pro forma consolidated per share information does not purport to represent what the actual results of operations of Enterprise and ARMOUR would have been had the merger been completed or to project Enterprise’s or ARMOUR’s results of operations that may be achieved after the merger. The unaudited pro forma book value per share information below does not purport to represent what the value of Enterprise and ARMOUR would have been had the merger been completed nor the book value per share for any future date or period.

Unaudited Pro Forma Consolidated Per Share Information

______________________

1)

Book value per share of Enterprise is computed by dividing the sum of total stockholders’ equity by the weighted average shares outstanding not subject to conversion of 23,750,001 at the balance sheet date.  Book value per share for the pro forma columns is computed by dividing the sum of total stockholders’ equity by the 25,100,000 shares outstanding assuming no conversion and 10,782,649 shares outstanding assuming maximum conversion.

2)

Book value per share of ARMOUR is computed by dividing stockholders’ equity at the balance sheet date by the 20 shares outstanding at the balance sheet date.

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UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

ARMOUR and Enterprise are providing the following unaudited pro forma condensed combined financial information to aid you in your analysis of the financial aspects of the merger.

The following unaudited pro forma condensed combined balance sheet at June 30, 2009 is based on the historical financial statements of Enterprise and ARMOUR after giving effect to the merger.

The unaudited pro forma condensed combined balance sheet at June 30, 2009 assumes that the merger was effective on June 30, 2009.  The unaudited pro forma condensed combined balance sheet at June 30, 2009 was derived from Enterprise’s unaudited condensed financial statements and ARMOUR’s audited financial statements as of June 30, 2009.

The following unaudited condensed combined pro forma statement of operations data for the six months ended June 30, 2009, and for the year ended December 31, 2008, is based on the historical financial statements of Enterprise, and gives pro forma effect to the merger as if it had occurred at the beginning of these respective periods.  The unaudited condensed combined pro forma statement of operations for the six months ended June 30, 2009 was derived from Enterprise’s unaudited condensed statement of operations.  The unaudited condensed combined pro forma statement of operations for the year ended December 31, 2008 was derived from Enterprise’s audited statement of operations for the year ended December 31, 2008. ARMOUR did not have any historical operations for the year ended December 31, 2008 or the six months ended June 30, 2009.

The merger will be accounted for as an acquisition by Enterprise for accounting purposes under Financial Accounting Standards Board Statement No. 141R, “Business Combinations” (“SFAS 141R”). The determination was primarily based on the continuing ownership by Enterprise stockholders of the post-merger entity. As a result, Enerprise’s balances are recorded using their historical cost basis, while ARMOUR’s assets and liabilities will be recorded at their fair value (which, being solely cash is equivalent to the historical cost basis).  

Enterprise’s obligation to consummate the merger is contingent on the following conditions, among others: (i) the holders of (a) a majority of the Public Shares present and entitled to vote at a meeting called for this and other related purposes, pproving the merger, and (b) a majority of the votes cast on the merger proposal approving the merger, (ii) the holders of fewer than 30% of the Public Shares (or 50% if the secondary charter proposal is approved by stockholders) voting against the merger and properly demanding that their Public Shares be converted into a pro-rata portion of the trust account, calculated as of two business days prior to the anticipated consummation of the merger, (iii) the holders of a majority of Enterprise’s common stock approving the initial charter proposal and the subsequent filing of Enterprise’s second amended and restated certificate of incorporation, (iv) the holders of a majority of Enterprise’s warrants approving the warrant amendment proposal and (v) Enterprise’s trust account containing no less than $100 million on the closing after taking into account payment of conversion of shares in (ii) above, certain expenses and actions taken to secure approval of the merger proposal described elsewhere in this proxy statement/prospectus.

·

Assuming Minimum Conversion:  This presentation assumes that no Enterprise stockholders exercise conversion rights with respect to their shares of Enterprise common stock into a pro rata portion of the trust account and that all of the funds held in the trust account are available after closing for the payment of transactional costs and for operating purposes; and

·

Assuming Maximum Conversion:  This presentation assumes that, pursuant to the merger proposal, Enterprise stockholders holding less than 30% (or 50% if the secondary charter proposal is approved by stockholders) of the Public Shares do not vote in favor of the proposed merger and exercise their conversion rights and/or Enterprise takes actions to secure approval of the merger proposal as described in the section titled “The Merger Proposal – Actions That May be Taken to Secure Approval of Enterprise’s Stockholders,” and Enterprise’s trust account contains no less than $100 million at the closing.

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Unaudited Condensed Combined Pro Forma Statement of Operations Data

For the Six Months Ended June 30, 2009

		Enterprise Acquisition Corp.		ARMOUR Residential REIT, Inc.		Pro Forma Adjustments (assuming no conversion)		Combined Pro Forma (assuming no conversion)		Additional Pro Forma Adjustments (assuming max conversion)		Combined Pro Forma (assuming max conversion)
Revenue	$	-	$	-	$	-	$	-	$	-	$	-
Operating expenses		962,655		-		1,777,857	I	3,978,012		(1,025,398)	I	2,952,614
						137,500	J
						1,100,000	K
Loss from operations		(962,655)		-		(3,015,357)		(3,978,012)		1,025,398		(2,952,614)
Interest and dividend income		241,761		-				241,761				241,761
(Loss) income before benefit from (provision for) income taxes		(720,894)		-		(3,015,357)		(3,736,251)		1,025,398		(2,710,853)
Benefit from (provision for) income taxes		246,700		-		(246,700)	L	-				-
Net loss		(474,194)		-		(3,262,057)		(3,736,251)		1,025,398		(2,710,853)
Less: Interest attributable to common stock subject to possible conversion (net of income taxes of $42,268 and $0)		(45,228)		-		45,228	N	-				-
Net loss attributable to common stock not subject to possible conversion	$	(519,422)	$	-	$	(3,216,829)	$	(3,736,251)	$	1,025,398	$	(2,710,853)
Weighted average shares outstanding—basic and diluted		23,750,001		20			M	25,100,000			M	10,782,649
Earnings per share—basic and diluted	$	(0.02)	$	-			$	(0.15)			$	(0.25)

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Unaudited Condensed Combined Pro Forma Statement of Operations Data

For the Year Ended December 31, 2008

		Enterprise Acquisition Corp.		ARMOUR Residential REIT, Inc.		Pro Forma Adjustments (assuming no conversion)		Combined Pro Forma (assuming no conversion)		Additional Pro Forma Adjustments (assuming max conversion)		Combined Pro Forma (assuming max conversion)
Revenue	$	-	$	-	$	-	$	-	$	-	$	-
Operating expenses		2,309,375		-		3,548,335	I	8,332,710		(2,046,831)	I	6,285,879
						275,000	J
						2,200,000	K
Loss from operations		(2,309,375)		-		(6,023,335)		(8,332,710)		2,046,831		(6,285,879)
Interest and dividend income		5,425,560		-				5,425,560				5,425,560
(Loss) income before benefit from (provision for) income taxes		3,116,185		-		(6,023,335)		(2,907,150)		2,046,831		(860,319)
Benefit from (provision for) income taxes		(2,041,750)		-		2,041,750	L	-				-
Net loss		1,074,435		-		(3,981,585)		(2,907,150)		2,046,831		(860,319)
Less: Interest attributable to common stock subject to possible conversion (net of income taxes of $340,665 and $0)		(587,577)		-		587,577	N	-				-
Net loss attributable to common stock not subject to possible conversion	$	486,858	$	-	$	(3,394,008)	$	(2,907,150)	$	2,046,831	$	(860,319)
Weighted average shares outstanding—basic and diluted		23,750,001		198,000			M	25,100,000			M	10,782,649
Earnings per share—basic and diluted	$	0.02	$	-			$	(0.12)			$	(0.08)

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ARMOR Residential REIT, Inc.

Unaudited Proforma Condensed Combined Balance Sheet

As of June 30, 2009

		Enterprise Acquisition Corp.		ARMOUR Residential REIT, Inc.		Pro Forma Adjustments (assuming no conversion)			Combined Pro Forma (assuming no conversion)		Additional Pro Forma Adjustments (assuming max conversion)			Combined Pro Forma (assuming max conversion)
ASSETS
Current Assets:
Cash	$	59,207	$	500	$	249,806,512	A	$	236,719,724	$	(142,866,989)	F	$	100,000,000
						(9,896,495)	B				4,286,010	B
						(3,250,000)	G				1,861,256	G
Cash held in trust available for operations		341,748				(341,748)	A		-					-
Prepaid Expenses		54,184							54,184					54,184
Refundable federal and state income tax		273,654							273,654					273,654
Total current assets		728,793		500		236,318,269			237,047,562		(136,719,724)			100,327,838
Cash held in trust (restricted)		249,464,764				(249,464,764)	A		-					-
TOTAL ASSETS	$	250,193,557	$	500	$	(13,146,495)		$	237,047,562	$	(136,719,724)		$	100,327,838
LIABILITIES & STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable	$	803,445	$	-	$	(803,445)	B	$	-				$	-
Accrued expenses		251,218				(251,218)	B		-					-
Franchise Tax payable		16,888				(16,888)	B		-					-
Deferred underwriters’ fee		8,375,000				(8,375,000)	B		-					-
Total current liabilities		9,446,551		-		(9,446,551)			-		-			-
Common Stock subject to possible redemption		74,249,990				(74,249,990)	C		-					-
Interest Income on CS subject to redemption		632,805				(632,805)	C		-					-
Stockholders’ Equity:
Preferred Stock		-							-					-
Common Stock – Enterprise		3,125				750	C		-					-
						(615)	E
						(3,260)	H
Common Stock - ARMOUR				0		(0)	D		25,100		(14,317)			10,783
						25,100	H					F
Additional paid-in capital		165,026,335		500		74,249,240	C		239,254,850		(142,852,672)	F		96,402,178
						615	E
						0	D
						(21,840)	H
Earnings accumulated during development stage		834,751				632,805	C		(2,232,388)		4,286,010	B		3,914,877
						(449,944)	B				1,861,256	G
						(3,250,000)	G
Total Stockholders’ Equity		165,864,211		500		71,182,851			237,047,562		(136,719,724)			100,327,838
TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY	$	250,193,557	$	500	$	(13,146,495)		$	237,047,562	$	(136,719,724)		$	100,327,838

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Notes to the Unaudited Condensed Combined Pro Forma Financial Statements

1. Description of the Acquisition and Basis of Presentation

The Merger

On July 29, 2009, Enterprise, ARMOUR and Merger Sub Corp. entered into the Agreement and Plan of Merger, pursuant to which (i) Merger Sub Corp. will merge with and into Enterprise with Enterprise surviving the merger and becoming a wholly-owned subsidiary of ARMOUR and (ii) ARMOUR will continue as the new publicly-traded corporation of which the present holders of Enterprise securities will be security holders. Enterprise’s units, common stock and warrants will no longer be traded following consummation of the merger. The parties have applied to have the common stock and warrants of ARMOUR listed on the NYSE Amex following consummation of the merger.

ARMOUR will commence operations upon completion of the merger described in this proxy statement/prospectus. ARMOUR intends to elect and qualify to be taxed as a REIT for U.S. federal income tax purposes, commencing with ARMOUR’s taxable year ending December 31, 2009. So long as it qualifies as a REIT, ARMOUR generally will not be subject to U.S. federal income taxes on its taxable income to the extent that it annually distributes all of its net taxable income to stockholders and maintains its intended qualification as a REIT. ARMOUR also intends to operate its business in a manner that will permit it to maintain its exemption from registration under the 1940 Act.

Upon consummation of the merger, ARMOUR will seek to invest, on a leveraged basis, primarily in hybrid adjustable-rate, adjustable-rate and fixed-rate residential mortgage-backed securities issued or guaranteed by a U.S. Government-chartered entity, such as the Federal National Mortgage Association (more commonly known as Fannie Mae) and the Federal Home Loan Mortgage Corporation (more commonly known as Freddie Mac), or guaranteed by the Government National Mortgage Administration, a U.S. Government corporation (more commonly known as Ginnie Mae) (collectively, “Agency Securities”).  A portion of ARMOUR’s portfolio may be invested in unsecured notes and bonds issued by U.S. Government-chartered entities (collectively, “Agency Debt”), U.S. Treasuries and money market instruments (including reverse repurchase agreements), or accounts at state or federal chartered financial institutions, subject to certain income tests ARMOUR must satisfy for its qualification as a REIT.  ARMOUR has committed itself to this asset class by including in its charter a requirement to that effect.  ARMOUR may also invest in hedging and other derivative instruments related to the foregoing investments.  In the case of an ambiguity in the application of this restriction, ARMOUR’s manager, ARRM, or its future board of directors will determine its application.  Amending the ARMOUR charter will require approval by the holders of a majority of ARMOUR’s outstanding common stock. ARMOUR’s only assets following the business combination will be the funds released from Enterprise’s trust account upon consummation of the business combination and its Enterprise stock. ARMOUR will be externally managed and advised by ARRM.

Upon consummation of the merger, Enterprise’s outstanding common stock and warrants will be converted into like securities of ARMOUR, on a one-to-one basis.  The holders of Enterprise’s common stock and warrants will be holders of the securities of ARMOUR after the merger in the same proportion as their current holdings in Enterprise, except as increased by (A) the cancellation of shares of Founders’ Shares prior to the record date for the Enterprise Distribution (as defined below) and (B) conversion of Public Shares by any holder thereof exercising its conversion rights.

In connection with the proposed merger, Enterprise is proposing an amendment to the warrant agreement governing its outstanding warrants to (i) increase the exercise price of the warrants from $7.50 per share to $11.00 per share and (ii) extend the expiration date of the warrants from November 7, 2011 to November 7, 2013. The warrant agreement will also be amended to make certain other immaterial changes to ensure that the warrants of ARMOUR that will be received by the holders of warrants of Enterprise after the merger will be governed by the warrant agreement and that ARMOUR will assume all of the rights and obligations of Enterprise under the warrant agreement after the merger. Pursuant to the Warrant Agreement, dated as of November 7, 2007, by and between Enterprise and Continental Stock Transfer & Trust Company, as warrant agent, the parties may amend any provision of the warrant agreement with the consent of the holders of warrants exercisable for a majority in interest of the shares issuable upon exercise of all outstanding warrants that would be affected by such amendment. Approval of the warrant amendment proposal is a condition to consummation of the merger.

Prior to consummation of the merger, Enterprise will declare a one-time cash distribution of $0.13 per share (the “Enterprise Distribution”) to stockholders as of the record date.  The Enterprise Distribution will reduce any claims that stockholders may have against the trust account, including without limitation, claims made by stockholders who wish to convert their shares into cash equal to their pro-rata share of the trust account plus any interest accrued thereon then held in the trust account.  The holders of the Founders’ Shares will not participate in the Enterprise Distribution.

Basis of Presentation

The unaudited pro forma condensed combined financial statements have been prepared based on Enterprise’s and ARMOUR’s historical financial information. Certain disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States have been condensed or omitted as permitted by SEC rules and regulations.

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These unaudited pro forma condensed combined financial statements are not necessarily indicative of the results of operations that would have been achieved had the Acquisition actually taken place at the dates indicated and do not purport to be indicative of future position or operating results.

2. Pro Forma Adjustments and Assumptions

A)

Reflects the release of $249,464,764 of cash and cash equivalent investments held in Enterprise’s trust account that will be available for transaction consideration, transaction costs, share repurchase, and the operating activities of ARMOUR following the merger.

B)

Reflects the use of cash to pay off all projected transaction expenses (includes adjustment of deferred underwriter fees). Transaction expenses include legal, accounting, consulting, marketing, proxy solicitation, printing, miscellaneous expenses, and make whole expenses of up to $292,000, of which $75,000 has already been paid to Scott Ulm and Jeff Zimmer. In the case of Maximum Conversion, transaction expenses do not include $680,276 which represents the maximum payment to third party purchasers because ARMOUR and Enterprise do not anticipate utilizing such third party purchasers at this time if this expense was incurred, the share count in the maximum conversion scenario would be 10,850,823.

C)

Reflects the reclassification of common stock subject to possible redemption to permanent equity, and the interest earned on that portion of the cash in trust.

D)

Reflects cancellation of common stock issued by ARMOUR upon consummation of the merger.

E)

Reflects the cancellation of the Founders’ Shares by the Enterprise Founders (with the exception of 100,000 shares they have distributed to officers and directors).

F)

Reflects the maximum redemption of common shares at trust value per share of $9.98, leaving $100,000,000 cash in the company post merger.

G)

Reflects the Enterprise Distribution.

H)

Reflects the exchange of Enterprise shares for ARMOUR shares. ARMOUR and Enterprise have assumed that no warrants will be exercised immediately following the consummation of the merger because the expected book value per share of ARMOUR’s common stock will be below the amended strike price of the warrants. Accordingly, the unaudited pro forma condensed combined financial statements do not reflect the modification of the warrants. The increase in the exercise price and the extended expiration date of the warrants would not result in any incremental fair value adjustment as a result of the modification of the warrants.  There is no incremental cost of compensation as a result of the modification of the warrants because the expected fair value per share of ARMOUR common stock will be below the amended strike price of the warrants.

I)

Reflects the management fees incurred for the period for the ARMOUR Manager for its investment management services based on 1.5% of the net equity of ARMOUR ($237,047,562 assuming no conversion and $100,327,838 assuming maximum conversion).

J)

Reflects the annual director fees ($50,000 for each director plus an additional $25,000 to the audit committee chair) incurred during the period to 5 external members of the board of directors.

K)

Reflects estimated recurring annual direct operating expenses ARMOUR will incur as a public company, including audit, tax, insurance, legal, consulting, printer and exchange fees and certain reimbursable operating expenses of the ARMOUR Manager.

L)

Reflects the elimination of income tax as the result of the merger as ARMOUR will make an election to be treated as a REIT, and therefore will not be subject to income taxes.

M)

Pro forma earnings per share (EPS), basic and diluted, are based on the weighted average number of shares of common stock outstanding assuming no conversion (25,100,000 common shares) and maximum conversion (10,784,010 common shares). ARMOUR and Enterprise have assumed that no warrants will be exercised immediately following the consummation of the merger because the expected fair value per share of ARMOUR common stock will be below the amended strike price of the warrants and the warrants would also be anti dilutive.

N)

Reflects the reversal of Accretion of trust account income relating to common stock subject to possible conversion as a result of the merger.

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The below charts show the calculation of the adjustment to the fees payable to each underwriter to the Enterprise IPO as well as fees payable to Enterprise’s financial advisors and the dividend distribution calculations.

Deferred Underwriters Fees Adjustment

                

(1)

Does not include $680,276 which represents the maximum amount payable to third party purchasers. See footnote B above.

(2)

If the $680,276 maximum amount payable to third party purchasers was incurred, the final pro forma share count on the maximum conversion scenario would be 10,850,823.

(3)

Assumes no expense for third party purchasers.

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RISK FACTORS

You should carefully consider the following risk factors, together with all of the other information included in this proxy statement/prospectus, before you decide whether to vote or instruct your vote to be cast to approve the proposals described in this proxy statement/prospectus.

Risks Related to ARMOUR’s Business and Operations Following the Merger

The value of your investment in ARMOUR following consummation of the merger will be subject to the significant risks affecting REITs, and mortgage REITs in particular, described below. If any of the events described below occur, ARMOUR’s post-merger business, financial condition, liquidity and/or results of operations could be adversely affected in a material way. This could cause the price of its common stock or warrants to decline, perhaps significantly, and you therefore may lose all or part of your investment.

Risks Related To ARMOUR’s Business

ARMOUR has no operating history and may not be able to successfully operate its business or generate sufficient revenue to make or sustain distributions to its stockholders.

ARMOUR was organized in 2008, has no assets or operating history and will commence operations upon consummation of the business combination.  ARMOUR cannot assure you that it will be able to operate its business successfully or implement its policies and strategies as described in this proxy statement/prospectus.  Additionally, the past performance of ARRM, ARMOUR’s manager, and ARRM’s key personnel should not be viewed as an indication of the future performance of ARMOUR.  

ARMOUR may not be able to operate its business or implement its operating policies and strategies successfully.

The results of ARMOUR’s operations will depend on many factors, including, without limitation, the availability of opportunities for the acquisition of attractively priced mortgage-backed assets, the level and volatility of interest rates, readily accessible short-, and long-term funding alternatives in the financial markets and ARMOUR’s ability to cost-effectively hedge risks and economic conditions.  Moreover, delays in investing funds may reduce ARMOUR’s income.  ARMOUR’s stockholders will not have the opportunity to evaluate the manner in which funds are to be invested or the economic merits of particular assets to be acquired.  ARMOUR may not be able to finalize any agreements with prospective lenders on favorable terms or at all.  Furthermore, ARMOUR may not be able to operate its business successfully or implement its operating policies and strategies as described in this proxy statement/prospectus, which could result in your loss of some or all of your investment.

ARMOUR depends on its manager, ARRM, and particularly key personnel including Mr. Ulm and Mr. Zimmer.  The loss of those key personnel could severely and detrimentally affect ARMOUR’s operations.

As an externally-managed company, ARMOUR will depend on the diligence, experience and skill of its manager for the selection, acquisition, structuring, hedging and monitoring of its mortgage-backed assets and associated borrowings.  ARMOUR depends on the efforts and expertise of its operating officers to manage its day-to-day operations and strategic business direction.  If any of ARMOUR’s key personnel were to leave the company, locating individuals with specialized industry knowledge and skills similar to that of its key personnel may not be possible or could take months and require the retention of an executive search firm, which may be expensive.  Because ARMOUR is a new company with no employees, the loss of Mr. Ulm and Mr. Zimmer could harm its business, financial condition, cash flow and results of operations.

An increase in interest rates may adversely affect ARMOUR’s financial position.

Increases in interest rates may negatively affect the fair market value of ARMOUR’s assets, which it intends to be primarily Agency Securities and Agency Debt.  When interest rates rise, the value of fixed-rate mortgage-backed securities generally declines.  Typically, as interest rates rise, prepayments on the underlying mortgages tend to slow.  The combination of rising interest rates and declining prepayments may negatively affect the price of mortgage-backed securities, and the effect can be particularly pronounced with fixed-rate mortgage-backed securities.  In accordance with GAAP, ARMOUR will be required to reduce the carrying value of its mortgage-backed assets by the amount of any decrease in the fair value of its mortgage-backed assets compared to amortized cost.  If unrealized losses in fair value occur, ARMOUR will have to either reduce current earnings or reduce stockholders’ equity without immediately affecting current earnings, depending on how it classifies its assets under GAAP.  In either case, ARMOUR’s net book value will decrease to the extent of any realized or unrealized losses in fair value.

Increased levels of prepayments from mortgage-backed securities may decrease ARMOUR’s net interest income or result in a net loss.

Pools of mortgage loans underlie the mortgage-backed securities that ARMOUR intends to acquire.  ARMOUR generally receives payments from the payments that are made on these underlying mortgage loans.  When ARMOUR

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acquires mortgage-backed securities, it anticipates that the underlying mortgages will prepay at a projected rate generating an expected yield.  When borrowers prepay their mortgage loans faster than expected, the related prepayments on the corresponding mortgage-backed securities will be faster than expected.  Faster-than-expected prepayments could potentially harm ARMOUR’s financial position and results of operations. While ARMOUR will seek to manage prepayment risk, in selecting investments it must balance prepayment risk against other risks, the potential returns of each investment and the cost of hedging its risks.  No strategy can completely insulate ARMOUR from prepayment or other such risks, and it may deliberately retain exposure to prepayment or other risks.

Continued adverse developments in the residential mortgage market may adversely affect the value of the Agency Securities in which ARMOUR intends to invest and its ability to finance or sell any Agency Securities that it acquires.

Recently, the residential mortgage market in the United States has experienced a variety of difficulties and changed economic conditions that may adversely affect the performance and market value of the mortgage securities in which ARMOUR intends to invest.  This includes the recent United States Government conservatorship of Fannie Mae and Freddie Mac.  The manager, ARRM, believes that this conservatorship will enhance the value of Fannie Mae and Freddie Mac securities in the future.  There is no certainty this will occur.  Securities backed by residential mortgage loans originated in 2006 and 2007 have had a higher and earlier than expected rate of delinquencies.  Many non-agency residential mortgage-backed securities have been downgraded by the rating agencies during the past few months and the rating agencies may in the future further downgrade these residential mortgage-backed securities.  As a result, the market for these securities may be adversely affected for a significant period of time.

ARMOUR intends to invest in Agency Securities.  Fannie Mae, Freddie Mac or Ginnie Mae guarantee the payments on the securities ARMOUR intends to purchase even if the borrowers of the underlying mortgages default on their payments.  However, rising delinquencies could negatively affect the value of ARMOUR’s Agency Securities or create market uncertainty about their true value.  ARMOUR will need to rely on its Agency Securities as collateral for its financings.  Any decline in their value, or perceived market uncertainty about their value, would likely make it more difficult for ARMOUR to obtain financing on favorable terms or at all, or maintain its compliance with terms of any financing arrangements already in place.  At the same time, market uncertainty about residential mortgages in general could depress the market for Agency Securities, despite the U.S. Government conservatorship, making it more difficult for ARMOUR to sell any Agency Securities assets it intends to own on favorable terms or at all.  If market conditions result in a decline in available purchasers of Agency Securities or the value of ARMOUR’s Agency Securities, its financial position and results of operations could be adversely affected.

Recent market conditions may upset the historical relationship between interest rate changes and prepayment trends, which would make it more difficult for ARMOUR to analyze its portfolio.

ARMOUR’s success depends on its ability to analyze the relationship of changing interest rates on prepayments of the mortgages that underlie its Agency Securities.  Changes in interest rates and prepayments affect the market price of the Agency Securities that ARMOUR intends to purchase and any Agency Securities that it holds at a given time.  As part of ARMOUR’s overall portfolio risk management, it will analyze interest rate changes and prepayment trends separately and collectively to assess their effects on its portfolio.  In conducting its analysis, ARMOUR will depend on industry-accepted assumptions with respect to the relationship between interest rates and prepayments under normal market conditions.  If the recent dislocation in the residential mortgage market or other developments change the way that prepayment trends have historically responded to interest rate changes, ARMOUR’s ability to assess the market value of its portfolio would be significantly affected and could materially adversely affect its financial position and results of operations.

If the entities that guarantee the payments on ARMOUR’s Agency Securities cannot honor those guarantees, its results of operations would be adversely affected.

The payments ARMOUR expects to receive on the Agency Securities in which it intends to primarily invest will be guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae.  Ginnie Mae is part of a U.S. Government agency and its guarantees are backed by the full faith and credit of the United States.  Fannie Mae and Freddie Mac are now both under conservatorship of the U.S. Government and have the explicit capital support of the U.S. Treasury. The conservatorship of Fannie Mae and Freddie Mac and related efforts, along with any changes in laws and regulations affecting the relationship between Fannie Mae and Freddie Mac and the federal government, may adversely affect ARMOUR’s business.

New laws may be passed affecting the relationship between Fannie Mae and Freddie Mac, on the one hand, and the federal government, on the other, which could adversely affect the price of Agency Securities.

Legislation may be proposed to change the relationship between Fannie Mae and Freddie Mac, on the one hand, and the federal government, on the other hand, or may require Fannie Mae and Freddie Mac to reduce the amount of mortgages they own or for which they provide guarantees on Agency Securities.  Any type of legislation enacted into law affecting these

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U.S. Government-chartered entities may create market uncertainty and have the effect of reducing the actual or perceived credit quality of mortgage- backed securities issued by Fannie Mae or Freddie Mac.  As a result, such legislation could increase the risk of loss on investments in Fannie Mae and/or Freddie Mac mortgage-backed securities.  ARMOUR currently intends to invest primarily in Agency Securities, even if such U.S. Government-chartered entities’ relationships with the federal government change or limits are imposed on the amount of mortgages they can own or for which they can guarantee payments on Agency Securities.

Interest rate mismatches between ARMOUR’s future assets, primarily Agency Securities and Agency Debt, and its borrowings used to fund its purchases of those assets may reduce its net income or result in a loss during periods of changing interest rates.

ARMOUR’s investments will generally be fixed rate, either for the life of the asset, or for a significant period.  ARMOUR’s liabilities will typically reset either monthly or in a period less than a year.  While ARMOUR intends to have swap agreements in place to effectively fix the cost of certain of its liabilities over a period of time, these agreements will generally not be sufficient to fix the cost of all its liabilities matched against fixed-rate assets, especially because the duration of fixed-rate assets extends during periods of high interest rates, as prepayments decrease.  Conversely, during periods of low interest rates, prepayments may be high, and ARMOUR’s high interest rate assets may be prepaid while it still has outstanding relatively high cost (after the effect of swaps and other derivatives) liabilities.  These factors may cause a reduction in net income or a loss during periods of changing interest rates.  Any other derivatives that ARMOUR puts in place to mitigate such effects may not fully offset such effects and in certain circumstances could even make them worse.  In addition, investments that pay floating rates of interest may reset more slowly in periods of rising rates than the interest ARMOUR pays on its liabilities.  Similarly, the reset period for ARMOUR’s hedges when rates rise may be slower than the increase in the cost of its liabilities.

Interest rate fluctuations will also cause variances in the yield curve, which may reduce ARMOUR’s net income.  The relationship between short-term and longer-term interest rates is often referred to as the “yield curve.”  If short-term interest rates rise disproportionately relative to longer-term interest rates (a flattening of the yield curve), ARMOUR’s borrowing costs may increase more rapidly than the interest income earned on its assets.  Because ARMOUR’s assets may bear interest based on longer-term rates than its borrowings, a flattening of the yield curve would tend to decrease ARMOUR’s net income and the market value of its mortgage loan assets.  Additionally, to the extent cash flows from investments that return scheduled and unscheduled principal are reinvested in mortgage loans, the spread between the yields of the new investments and available borrowing rates may decline, which would likely decrease ARMOUR’s net income.  It is also possible that short-term interest rates may exceed longer-term interest rates (a yield curve inversion), in which event ARMOUR’s borrowing costs may exceed its interest income and it could incur significant operating losses.

Interest rate caps on ARMOUR’s hybrid adjustable-rate and adjustable-rate mortgage-backed securities may reduce its income or cause ARMOUR to suffer a loss during periods of rising interest rates.

Adjustable-rate mortgage-backed securities will typically be subject to periodic and lifetime interest rate caps.  Periodic interest rate caps limit the amount an interest rate can increase during any given period.  Lifetime interest rate caps limit the amount an interest rate can increase through the maturity of a mortgage-backed security.  ARMOUR’s borrowings typically will not be subject to similar restrictions.  Accordingly, in a period of rapidly increasing interest rates, the interest rates paid on ARMOUR’s borrowings could increase without limitation while caps could limit the interest rates on its adjustable-rate mortgage-backed securities.  This problem is magnified for hybrid adjustable-rate and adjustable-rate mortgage-backed securities that are not fully indexed.  Further, some hybrid adjustable-rate and adjustable-rate mortgage-backed securities may be subject to periodic payment caps that result in a portion of the interest being deferred and added to the principal outstanding.  As a result, ARMOUR may receive less cash income on hybrid adjustable-rate and adjustable-rate mortgage-backed securities than it needs to pay interest on its related borrowings.  These factors could reduce ARMOUR’s net interest income and cause ARMOUR to suffer a loss.

ARMOUR may not be able to execute its desired swap and other derivatives at favorable prices.

ARMOUR intends to execute interest rate swaps and other derivative instruments to manage the risks inherent in its portfolio.  This strategy will potentially help ARMOUR reduce its exposure to significant changes in interest rates but entails significant costs and other risks.  These derivative instruments may not be attractively priced in the marketplace and may not be available to ARMOUR given its financial condition in the future or as a result of other factors.  Additionally, the use of these derivative instruments could have a negative impact on ARMOUR’s earnings and its qualification as a REIT.  If ARMOUR is unable to execute interest rate swaps and other derivative instruments at favorable prices, it may not successfully implement its business strategy, it may expose itself to additional risks and it could suffer significant losses.

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Hedging against interest rate exposure may adversely affect ARMOUR’s earnings, and its hedges may fail to protect it from the losses that the hedges were designed to offset.

Subject to complying with REIT tax requirements, ARMOUR intends to employ techniques that limit, or “hedge,” the adverse effects of rising interest rates on its short-term repurchase agreements and on the value of its assets.  In general, ARMOUR’s hedging strategy depends on its view of its entire portfolio, consisting of assets, liabilities and derivative instruments, in light of prevailing market conditions.  ARMOUR could misjudge the condition of its portfolio or the market.  ARMOUR’s hedging activity will vary in scope based on the level and volatility of interest rates and principal repayments, the type of securities held and other changing market conditions.  ARMOUR’s actual hedging decisions will be determined in light of the facts and circumstances existing at the time and may differ from its currently anticipated hedging strategy.  These techniques may include entering into interest rate swap agreements or interest rate cap or floor agreements, swaptions, purchasing or selling futures contracts, purchasing put and call options on securities or securities underlying futures contracts, or entering into forward rate agreements.

There are no perfect hedging strategies, and interest rate hedging may fail to protect ARMOUR from loss.  Alternatively, ARMOUR may fail to properly assess a risk to its portfolio or may fail to recognize a risk entirely leaving it exposed to losses without the benefit of any offsetting hedging activities.  The derivative financial instruments ARMOUR selects may not have the effect of reducing its interest rate risk.  The nature and timing of hedging transactions may influence the effectiveness of these strategies.  Poorly designed strategies or improperly executed transactions could actually increase ARMOUR’s risk and losses.  In addition, hedging activities could result in losses if the event against which ARMOUR hedges does not occur.  

Whether the derivatives ARMOUR acquires achieve hedge accounting treatment under Statement of Financial Accounting Standards No. 133, Accounting for Derivative Instruments and Hedging Activities , or SFAS 133, or not, hedging generally involves costs and risks.  ARMOUR’s hedging strategies may adversely affect it because hedging activities involve costs that it will incur regardless of the effectiveness of the hedging activity.  Those costs may be higher in periods of market volatility, both because the counterparties to ARMOUR’s derivative agreements may demand a higher payment for taking risks, and because repeated adjustments of its hedges during periods of interest rate changes also may increase costs.  Especially if ARMOUR’s hedging strategies are not effective, it could incur significant hedging-related costs without any corresponding economic benefits.

ARMOUR’s use of derivatives may expose it to counterparty risk.

ARMOUR intends to enter into transactions to hedge risks associated with its business with counterparties that have a high-quality credit rating.  If counterparties cannot perform under the terms of an interest rate swap, for example, ARMOUR would not receive payments due under that agreement, it may lose any unrealized gain associated with the interest rate swap, and the hedged liability would cease to be hedged by the interest rate swap.  ARMOUR may also be at risk for any collateral it has pledged to secure its obligations under the interest rate swap if the counterparty became insolvent or filed for bankruptcy.  Similarly, if a cap counterparty fails to perform under the terms of the cap agreement, in addition to not receiving payments due under that agreement that would offset ARMOUR’s interest expense, it would also incur a loss for all remaining unamortized premium paid for that agreement.  ARMOUR intends that its hedging agreements require its counterparties to post collateral in certain events, generally related to their credit condition, to provide ARMOUR some protection against their potential failure to perform.  ARMOUR, in turn, will likely be subject to similar requirements.

ARMOUR may fail to qualify for hedge accounting treatment.

ARMOUR intends to record its investment in and exposure to derivatives in accordance with GAAP.  Under the accounting standards set forth in SFAS 133, the derivatives ARMOUR uses may fail to qualify for hedge accounting treatment for a number of reasons, including if it uses instruments that do not meet the SFAS 133 definition of a derivative (such as short sales) or if it fails to satisfy SFAS 133 hedge documentation and hedge effectiveness assessment requirements or its instruments are not highly effective.  Additionally, ARMOUR may choose to designate some derivatives as hedges based on their strategic purpose and relationship to other derivatives not designated as hedges.  If ARMOUR fails to qualify for hedge accounting treatment, its reported operating results may suffer because losses on the derivatives it enters into may not be offset by a change in the fair value of the related asset, liability, commitment or hedged transaction.

REIT income tests may affect ARMOUR’s hedging strategy and may cause it to incur tax liabilities.

Income on ARMOUR’s derivatives which are not designated and qualified as qualified REIT hedges (which are generally swaps and caps on notional amounts not exceeding its borrowings incurred to acquire or hold real estate assets or other transactions entered into to manage the risk of currency fluctuations with respect to qualified REIT income (or property generating such income)) will not qualify for the annual 75% and 95% gross income tests applicable to REITs.  

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Because the assets that ARMOUR expects to acquire may experience periods of illiquidity, it may be prevented from selling its mortgage-backed assets or Agency Securities at opportune times and prices.

ARMOUR will bear the risk of being unable to dispose of its mortgage-backed assets and Agency Securities at advantageous times and prices or in a timely manner because mortgage-backed assets generally experience periods of illiquidity.  The lack of liquidity may result from the absence of a willing buyer or an established market for these assets, as well as legal or contractual restrictions on resale.  As a result, the illiquidity of mortgage-backed assets may harm ARMOUR’s results of operations and could cause it to suffer a loss and reduce its distributions.

Competition may prevent ARMOUR from acquiring mortgage-backed assets at favorable yields, and that would harm its results of operations.

ARMOUR’s net income largely depends on its ability to acquire mortgage-backed assets (primarily Agency Securities) at favorable spreads over its borrowing costs.  In acquiring mortgage-backed assets, ARMOUR competes with other REITs, investment banking firms, savings and loan associations, banks, insurance companies, mutual funds, other lenders and other entities that purchase mortgage-backed assets, many of which have greater financial resources than it does.  Additionally, many of ARMOUR’s competitors are not subject to REIT tax compliance or required to maintain an exemption from the Investment Company Act.  As a result, ARMOUR may not be able to acquire sufficient mortgage-backed assets at favorable spreads over its borrowing costs, which would harm its results of operations.

If ARMOUR fails to maintain a relationship with AVM, L.P., as its clearing agent and repurchase agreement agent, it may have to reduce or delay its operations and/or increase its expenditures.

The manager, ARRM, has a long term successful relationship with AVM, L.P., a securities broker-dealer, and ARMOUR intends to have a contract with AVM, L.P. to provide trading and settlement services for ARMOUR’s securities and derivative transactions.  ARMOUR also intends to enter into a second contract with AVM, L.P. to assist ARMOUR with financing transaction services such as repurchase financings and managing the margin arrangement between ARMOUR and its lenders for each of its expected repurchase agreements.  As a newly-organized company with few employees, ARMOUR will be relying on AVM, L.P. for these aspects of its business so its executive officers can focus on its daily operations and strategic direction.  Further, ARMOUR anticipates that as its business operations expand, it will be increasingly dependent on AVM, L.P. to provide ARMOUR with timely, effective services.  In the future, as ARMOUR expands its staff, it may absorb internally some or all of the services provided by AVM, L.P.  Until ARMOUR elects to move those services in-house, it will remain dependent on AVM, L.P. or other third parties that provide similar services.  If ARMOUR is unable to maintain a relationship with AVM, L.P. or is unable to establish a successful relationship with other third parties providing similar services at comparable pricing, it may have to reduce or delay its operations and/or increase its expenditures and undertake the repurchase agreement and trading and administrative activities on its own, which could have a material adverse effect on its business operations and financial condition.  However, ARMOUR believes that the breadth and scope of its manager’s experience will enable them to fill any needs created by discontinuing a relationship with AVM, L.P.

ARMOUR may be harmed by changes in various laws and regulations.

ARMOUR’s business may be harmed by changes to the laws and regulations affecting it, including changes to securities laws and changes to the Code applicable to the taxation of REITs.  In addition, proposed changes to laws and regulations that could hinder a loan servicer’s ability to adjust loan interest rates upward or to foreclose promptly on defaulted mortgage loans could adversely affect the performance of the loans and the yield on and value of the mortgage securities.  Any legislation requiring U.S. Government-chartered entities to reduce the amount of mortgages they own or for which they guarantee payments on Agency Securities could adversely affect the availability and pricing of Agency Securities and harm ARMOUR’s business.  New legislation may be enacted into law or new interpretations, rulings or regulations could be adopted, any of which could harm ARMOUR and its stockholders, potentially with retroactive effect.

Risks Related To Debt Financing

ARMOUR does not have any definitive financing arrangements in place.

During the credit crises which began in of 2007 and which continue to this day, repurchase funding become increasingly more difficult to acquire.  ARMOUR’s proposed relationship with AVM, L.P. is intended to address potential scarcity of repurchase funding.  Yet, ARMOUR will depend on borrowings to fund its acquisitions of Agency Securities and reach its target leverage ratio.  Accordingly, ARMOUR’s ability to achieve its investment and leverage objectives depends on its ability to borrow money in sufficient amounts and on favorable terms.  Currently, ARMOUR has agreed to enter into several master agreements establishing the terms and conditions of future commitments, if any, made by such third parties.  However, ARMOUR has no definitive commitments in place.  If ARMOUR fails to secure definitive commitments, the operation of its business would be significantly impaired.

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ARMOUR may incur increased borrowing costs related to repurchase agreements which could harm its results of operations.

ARMOUR’s borrowing costs under repurchase agreements that it expects to arrange generally will be adjustable and will correspond to short-term interest rates, such as LIBOR or a short-term U.S. Treasury index, plus or minus a margin.  The margins on these borrowings over or under short-term interest rates may vary depending upon a number of factors, including, without limitation:

·

the movement of interest rates;

·

the availability of financing in the market, including the financial stability of lenders; and

·

the value and liquidity of ARMOUR’s mortgage-backed securities.

ARMOUR expects that most of its borrowings will be collateralized borrowings in the form of repurchase agreements.  If the interest rates on these repurchase agreements increase, ARMOUR’s results of operations will be harmed and it may have losses.

Continued adverse developments in the residential mortgage market could make it more difficult for ARMOUR to borrow money to finance its acquisition of Agency Securities.

Recently, a number of originators of mortgage loans have experienced serious financial difficulties and, in some cases, have entered bankruptcy proceedings.  These difficulties have resulted in part from declining markets for their mortgage loans as well as from claims for repurchases of mortgage loans previously sold under provisions that require repurchase in the event of early payment defaults or for breaches of representations regarding loan quality.  In addition, a rising interest rate environment and declining real estate values may decrease the number of borrowers seeking or able to refinance their mortgage loans, which would result in a decrease in overall originations.

Institutions from which ARMOUR will seek to obtain financing may also originate mortgage loans and may have suffered financial difficulties as a result of the market conditions described above.  Further, even lenders that do not originate mortgage loans may have suffered losses related to their lending and other financial relationships with the institutions that maintain loan origination as part of their businesses.  As a result, institutions that originate loans, and other lenders that have been indirectly affected by losses incurred by loan originators, may become insolvent or tighten their lending standards which could make it more difficult for ARMOUR to obtain financing on favorable terms or at all.  ARMOUR intends to rely on the availability of cost-effective financing to acquire Agency Securities and operate its business.  ARMOUR’s financial condition and results of operations would be adversely affected if it was unable to obtain cost-effective financing.

ARMOUR’s lenders may not be able to obtain financing to fund its borrowings.

ARMOUR will depend indirectly on the ability of its lenders to obtain financing to fund borrowing arrangements it makes with them.  ARMOUR will pledge its assets, primarily Agency Securities, as collateral for the loans it obtains.  Some of the institutions from which ARMOUR will borrow funds may obtain financing from the U.S. Federal Reserve through its open market operations, which provide liquidity to the banking industry.  U.S. Federal Reserve lending policies permit financial institutions to secure their financings from the U.S. Federal Reserve with collateral that was pledged to them.  If the U.S. Federal Reserve changes its policies to no longer permit institutions to pledge such collateral, including Agency Securities, ARMOUR’s ability to obtain financing on favorable terms, or at all, may be significantly impaired because the institutions from which it expects to obtain its financing may not have sufficient funds available for ARMOUR to borrow.

ARMOUR’s leverage strategy increases the risks of its operations, which could reduce its net income and the amount available for distributions or cause it to suffer a loss.

ARMOUR will seek to borrow so that its debt-to-equity ratio is between 6:1 and 10:1, but it is not explicitly bound by those ranges.  ARMOUR expects to incur this leverage by borrowing against a substantial portion of the market value of its mortgage-backed securities.  The amount of leverage, however, is not expressly limited and will depend on ARMOUR’s and its prospective lenders’ estimate of the stability of its portfolio’s cash flow and its ability to service and repay additional debt.  ARMOUR may not be able to meet its debt service obligations and, to the extent it cannot, it may be forced to liquidate its assets at disadvantageous prices and you could lose some or all of your investment.

This leverage, which is fundamental to ARMOUR’s investment strategy, also creates significant risks.  For example:

·

ARMOUR expects that a majority of its borrowings will be secured by its mortgage-backed securities, generally under repurchase agreements.  A decline in the market value of the mortgage-backed securities used to secure these debt obligations could limit ARMOUR’s ability to borrow or result in lenders requiring it to pledge additional collateral to secure its borrowings.  In that situation, ARMOUR could be required to sell mortgage-backed securities under adverse market conditions.  If these sales are made at prices lower than the carrying value of the mortgage-backed securities, it would experience losses.

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·

Certain lenders may require ARMOUR to remain in compliance with all provisions of other material contracts, including other financing agreements.  If any of ARMOUR’s financing agreements contain such a provision, its default under one financing agreement could cause ARMOUR to be in default under other financing agreements.  If that occurs, ARMOUR’s access to capital would be significantly impeded, which could materially and adversely affect its ability to operate its business.

·

To the extent ARMOUR is compelled to liquidate qualified REIT assets to repay debts, its compliance with the REIT rules regarding its assets and its sources of income could be negatively affected, which would jeopardize its qualification as a REIT.  Losing ARMOUR’s REIT status would cause ARMOUR to lose tax advantages applicable to REITs and would decrease its overall profitability and distributions to its stockholders.

·

If ARMOUR experiences losses as a result of its leverage policy, such losses would reduce the amounts available for distribution to its stockholders.

ARMOUR may exceed its target leverage ratio.

ARMOUR will seek to borrow so that its debt-to-equity ratio is between 6:1 and 10:1.  However, ARMOUR is not required to stay within this leverage ratio.  ARMOUR may exceed this target ratio at any time and without stockholder approval.  If ARMOUR exceeds this ratio, the adverse impact on its financial condition and results of operations from the types of risks described in this section would likely be more severe.

ARMOUR will depend on borrowings to purchase mortgage-backed assets and reach its target leverage ratio.  If ARMOUR fails to obtain or renew sufficient funding on favorable terms or at all, it will be limited in its ability to acquire Agency Securities, Agency Debt and U.S. Treasuries, which will harm its results of operations.

ARMOUR will depend on borrowings to fund acquisitions of Agency Securities, Agency Debt and U.S. Treasuries and reach its target leverage ratio.  Accordingly, ARMOUR’s ability to achieve its investment and leverage objectives depends on its ability to borrow money in sufficient amounts and on favorable terms.  In addition, ARMOUR must be able to renew or replace its maturing borrowings on a continuous basis.  ARMOUR expects that it will depend on several lenders to provide the primary credit facilities for its purchases of mortgage-backed assets; however, that may not be the case and ARMOUR may be dependent on one or a few lenders for all of its financing.

If ARMOUR cannot renew or replace maturing borrowings on favorable terms or at all, it may be unable to achieve its leverage target and have to sell its Agency Securities, Agency Debt or U.S. Treasuries under adverse market conditions, which would materially harm its results of operations and may result in permanent losses.

ARMOUR may, however, have the ability to issue securitized debt if such a securitization is favorable to repurchase borrowings.

ARMOUR’s lenders may require ARMOUR to enter into restrictive covenants relating to its operations.

When ARMOUR obtains financing, its lenders could impose restrictions on ARMOUR that would affect its ability to incur additional debt, its capability to make distributions to stockholders and its flexibility to determine its operating policies.  Loan documents ARMOUR executes may contain negative covenants that limit, among other things, its ability to repurchase stock, distribute more than a certain amount of its funds from operations, and employ leverage beyond certain amounts.

ARMOUR’s anticipated use of repurchase agreements to borrow funds may give its lenders greater rights in the event that it files for bankruptcy.

ARMOUR’s anticipated borrowings under repurchase agreements may qualify for special treatment under the bankruptcy code, giving its lenders the ability to avoid the automatic stay provisions of the bankruptcy code and to take possession of and liquidate its collateral under the repurchase agreements without delay if ARMOUR files for bankruptcy.  Thus, the use of repurchase agreements exposes ARMOUR’s pledged assets to risk in the event it files for bankruptcy.

Changes in accounting treatment may adversely affect ARMOUR’s profitability.

ARMOUR is awaiting further clarification by the Financial Accounting Standards Board, or FASB, regarding the current financial statement presentation for transactions which involve the acquisition of mortgage securities from a counterparty and the subsequent financing of these mortgage securities through repurchase agreements with the same counterparty.  Although ARMOUR believes that its proposed accounting treatment for these transactions is appropriate, it will reevaluate its position upon the issuance of further guidance from FASB.  If ARMOUR determines that it is required to apply the position taken by certain members of the accounting community, based on a technical interpretation of Statement of Financial Accounting Standards No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities , or SFAS 140, (substantially included in Accounting Standards Codification Topic 860, Transfers and Servicing (ASC (860)) the potential change in its accounting treatment would not affect the economics of these transactions, but would affect how these transactions were reported on its consolidated financial statements.  ARMOUR believes that under this

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technical interpretation for same party transactions it would be precluded from presenting mortgage securities and the related financings, as well as the related interest income and interest expense, on a gross basis on its consolidated financial statements.  Instead, ARMOUR would present the net investment in these transactions as derivatives and report the corresponding change in fair value of such derivatives on its consolidated statements of income.  If FASB determines that the technical interpretation should be applied to previously issued financial statements, ARMOUR’s historical annual and quarterly net income could be materially and adversely impacted by changes in the fair value of such derivatives and other factors.

Risks Related To Armour’s Corporate Structure

Maintenance of ARMOUR’s exemption from the Investment Company Act will impose limits on ARMOUR’s business

ARMOUR intends to conduct its business so as not to become regulated as an investment company under the Investment Company Act.  If ARMOUR were to fall within the definition of investment company, it would be unable to conduct its business as described in this proxy statement/prospectus.

Section 3(a)(1)(A) of the 1940 Act defines an investment company as any issuer that is or holds itself out as being engaged primarily in the business of investing, reinvesting or trading in securities. Section 3(a)(1)(C) of the 1940 Act also defines an investment company as any issuer that is engaged or proposes to engage in the business of investing, reinvesting, owning, holding or trading in securities and owns or  proposes to acquire investment securities having a value exceeding 40% of the value of the issuer’s total assets (exclusive of U.S. Government securities and cash items) on an unconsolidated basis. Excluded from the term “investment securities,” among other things, in Section 3(a)(1)(C) of the 1940 Act, as defined above, are U.S. Government securities and securities issued by majority-owned subsidiaries that are not themselves investment companies and are not relying on the exception from the definition of investment company set forth in Section 3(c)(1) or Section 3(c)(7) of the 1940 Act.

To avoid registration as an investment company, ARMOUR intends to rely on the exclusion provided by Section 3(c)(5)(C) of the Investment Company Act.  To qualify for the exclusion, ARMOUR intends to make investments so that at least 55% of the assets it owns consist of “qualifying assets” and so that at least 80% of the assets it owns consist of qualifying assets and real estate-related assets. ARMOUR generally expects that its investments in Agency Securities will be treated as either qualifying assets or real estate-related assets under Section 3(c)(5)(C) of the Investment Company Act in a manner consistent with SEC staff no-action letters .   Qualifying assets for this purpose include mortgage loans and other assets, such as whole pool Agency RMBS, that are considered the functional equivalent of mortgage loans for the purposes of the 1940 Act.  ARMOUR expects to invest at least 55% of its assets in whole pool Agency RMBS and other interests in real estate that constitute qualifying assets in accordance with SEC staff guidance and approximately an additional 25% of its assets in either qualifying assets or non-Agency RMBS and other types of real estate-related assets that do not constitute qualifying assets.  As a result of the foregoing restrictions, ARMOUR will be limited in its ability to make or dispose of certain investments.  To the extent that the SEC staff publishes new or different guidance with respect to these matters, ARMOUR may be required to adjust its strategy accordingly.  These restrictions could also result in ARMOUR holding assets ARMOUR might wish to sell or selling assets ARMOUR might wish to hold.  Although ARMOUR intends to monitor its portfolio relying on the Section 3(c)(5)(C) exclusion periodically and prior to each acquisition and disposition, there can be no assurance that it will be able to maintain this exclusion.

To the extent that ARMOUR elects in the future to conduct its operations through wholly-owned subsidiaries, such business will be conducted in such a manner as to ensure that ARMOUR does not meet the definition of investment company under either Section 3(a)(1)(A) or Section 3(a)(1)(C) of the Investment Company Act of 1940. All wholly-owned subsidiaries that ARMOUR elects to conduct its business through would qualify for the Section 3(c)(5)(C) exclusion discussed above and ARMOUR would, accordingly, qualify for the Section 3(a)(1)(C) exemption because less than 40% of the value of its total assets on an unconsolidated basis would consist of investment securities. ARMOUR intends to monitor its portfolio periodically to insure compliance with the 40% test.  In such case, ARMOUR would be a holding company which conducts business exclusively through wholly-owned subsidiaries and ARMOUR would be engaged in the non-investment company business of its subsidiaries.

Loss of ARMOUR’ s 1940 Act exemption would adversely affect ARMOUR, the market price of shares of its common stock or warrants and its ability to distribute dividends.

As described above, ARMOUR intends to conduct its operations so as not to become required to register as an investment company under the 1940 Act based on current laws, regulations and guidance.  There can be no assurance that the laws and regulations governing REITs, including the Division of Investment Management of the SEC providing more specific or different guidance regarding the treatment of assets as qualifying real estate assets or real estate-related assets, will not change in a manner that adversely affects ARMOUR’s operations.  Further, although ARMOUR intends to monitor its portfolio, there can be no assurance that ARMOUR will be able to maintain its 1940 Act exemption.  If ARMOUR were to fail to qualify for this exemption in the future, ARMOUR could be required to restructure its activities or the activities of its subsidiaries, if any, including effecting sales of assets in a manner that, or at a time when, ARMOUR would not otherwise

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choose, which could negatively affect the value of its common stock or warrants, the sustainability of its business model, and its ability to make distributions.  The sale could occur during adverse market conditions, and ARMOUR could be forced to accept a price below that which it believes is appropriate.  

Rapid changes in the values of ARMOUR’s target assets may make it more difficult for ARMOUR to maintain its qualification as a REIT or its exemption from the 1940 Act.

If the market value or income potential of ARMOUR’s target assets declines as a result of increased interest rates, prepayment rates, general market conditions, government actions or other factors, ARMOUR may need to increase certain types of its assets and income or liquidate its non-qualifying assets to maintain its REIT qualifications or its exemption from the 1940 Act.  If the decline in real estate asset values or income occurs quickly, this may be especially difficult to accomplish.  This difficulty may be exacerbated by the illiquid nature of any non-real estate assets ARMOUR may own.  ARMOUR may have to make decisions that it otherwise would not make absent the REIT and 1940 Act considerations.

ARMOUR may not be able to acquire investments at favorable prices.

ARMOUR may not be able to acquire mortgage-backed securities at favorable prices.  As a result, ARMOUR may not be able to acquire enough mortgage-backed securities in order to become fully invested after the business combination, or it may have to pay more for mortgage-backed securities than it would expect.  In either case, the return that ARMOUR earns on its stockholders’ equity may be reduced.

Restrictions on ownership of ARMOUR’s capital stock may limit your opportunity to receive a premium on its stock.

ARMOUR’s charter prohibits beneficial or constructive ownership by any person of more than 9.8% in value or in number of shares, whichever is more restrictive, of the outstanding shares of its common stock or of its capital stock.  Additionally, ARMOUR’s charter prohibits beneficial or constructive ownership of its stock that would otherwise result in its failure to qualify as a REIT.  The ownership rules in ARMOUR’s charter are complex and may cause the outstanding stock owned by a group of related individuals or entities to be deemed to be owned by one individual or entity.  As a result, these ownership rules could cause an individual or entity to unintentionally own shares beneficially or constructively in excess of ARMOUR’s ownership limits.  Any attempt to own or transfer shares of ARMOUR’s common or preferred stock in excess of its ownership limits without the consent of its manager (ARRM) or its future Board of directors shall be void, and will result in the shares being transferred to a charitable trust.  These provisions may inhibit market activity and the resulting opportunity for ARMOUR’s stockholders to receive a premium for their shares that might otherwise exist if any person were to attempt to assemble a block of shares of its stock in excess of the number of shares permitted under its charter and which may be in the best interests of its stockholders.

Provisions of Maryland law and other provisions of ARMOUR’s organizational documents may limit the ability of a third party to acquire control of ARMOUR.

Certain provisions of the Maryland General Corporation Law, or MGCL, may have the effect of delaying, deferring or preventing a transaction or a change in control of ARMOUR that might involve a premium price for holders of its common stock or otherwise be in their best interests. Additionally, ARMOUR’s charter and bylaws contain other provisions that may delay or prevent a change of control of the company.  

If ARMOUR has a class of equity securities registered under the Securities Exchange Act and meet certain other requirements, Title 3, Subtitle 8 of the MGCL permits its manager (ARRM) without stockholder approval and regardless of what is currently provided in its charter or bylaws, to elect on behalf of ARMOUR to be subject to statutory provisions that may have the effect of delaying, deferring or preventing a transaction or a change in control of ARMOUR that might involve a premium price for holders of its common stock or otherwise be in their best interest.  Pursuant to Title 3, Subtitle 8 of the MGCL, once ARMOUR meets the applicable requirements, its charter provides that its board of directors will have the exclusive power to fill vacancies on its Board.  As a result, unless all of the directorships are vacant, ARMOUR’s stockholders will not be able to fill vacancies with nominees of their own choosing.  ARMOUR’s manager (ARRM) may elect to opt in to additional provisions of Title 3, Subtitle 8 of the MGCL without stockholder approval at any time that ARMOUR has a class of equity securities registered under the Securities Exchange Act and satisfy certain other requirements.

ARMOUR’s rights and the rights of its stockholders to take action against its manager, ARRM, any future directors and officers are limited, which could limit your recourse in the event of actions not in stockholders’ best interests.

ARMOUR’s charter limits the liability of its manager, ARRM, any future directors and officers for money damages, except for liability resulting from actual receipt of an improper benefit or profit in money, property or services, or a final judgment based upon a finding of active and deliberate dishonesty by the director or officer that was material to the cause of action adjudicated.

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ARMOUR’s charter also authorizes ARMOUR to indemnify its manager, ARRM, any future directors and officers for actions taken by them in those capacities to the extent permitted by Maryland law, and its bylaws obligate ARMOUR, to the maximum extent permitted by Maryland law, to indemnify any present or former director or officer of ARMOUR from and against any claim or liability to which he or she may become subject by reason of his or her service in that capacity.  In addition, ARMOUR may be obligated to fund the defense costs incurred by its directors and officers.  Finally, ARMOUR also intends to enter into agreements with its manager, ARRM, any future directors and executive officers pursuant to which it will agree to indemnify them to the maximum extent permitted by Maryland law.  See “Certain Provisions of Maryland Law and of ARMOUR’s Charter and Bylaws—Limitation of Liability and Indemnification.”

Risks Related to ARMOUR’s Management and ARMOUR’s Relationship with ARRM

There are conflicts of interest in ARMOUR’s relationship with ARRM and its affiliates, which could result in decisions that are not in the best interests of ARMOUR’s stockholders or warrantholders.

While ARRM and its affiliates are not currently involved with any other programs where it maintains an investment portfolio, ARMOUR will be subject to conflicts of interest arising out of its relationship with ARRM and its affiliates.  Each of ARMOUR’s executive officers and certain of its non-independent directors is also an employee or partner of ARRM; they will not be exclusively dedicated to ARMOUR’s business.  Each of Scott J. Ulm and Jeffrey J. Zimmer is a partner and owner of equity interests in ARRM. In addition, Daniel C. Staton and Marc H. Bell own an interest in Sub-Manager, which, in consideration for services to be provided to ARRM under a sub-management agreement, which becomes effective upon consummation of the merger, is entitled to receive a percentage of the net management fee earned by ARRM. As a result, the management agreement with ARRM, which becomes effective upon consummation of the merger, may create a conflict of interest, and its terms, including fees payable to ARRM, may not be as favorable to ARMOUR as if they had been negotiated with an unaffiliated third party. In addition, ARMOUR may choose not to enforce, or to enforce less vigorously, its rights under the management agreement because of its desire to maintain its ongoing relationship with ARRM. ARRM maintains a contractual as opposed to a fiduciary relationship with ARMOUR. The management agreement with ARRM does not prevent ARRM and its affiliates from engaging in additional management or investment opportunities some of which will compete with ARMOUR. ARRM and its affiliates may engage in additional management or investment opportunities that have overlapping objectives with ARMOUR, and may thus face conflicts in the allocation of investment opportunities to these other investments. Such allocation is at the discretion of ARRM and there is no guarantee that this allocation would be made in the best interest of ARMOUR’s stockholders or warrantholders. ARMOUR is not entitled to receive preferential treatment as compared with the treatment given by ARRM or its affiliates to any investment company, fund or advisory account other than any fund or advisory account which contains only funds invested by ARRM (and not of any of its clients or customers) or its officers and directors. Additionally, the ability of ARRM and its respective officers and employees to engage in other business activities may reduce the time spends managing ARMOUR.

In the future, ARMOUR may enter, or ARRM may cause ARMOUR to enter, into additional transactions with ARRM or its affiliates. In particular, ARMOUR may purchase, or ARRM may cause ARMOUR to purchase, assets from ARRM or its affiliates or make co-purchases alongside ARRM or its affiliates. These transactions may not be the result of arm’s length negotiations and may involve conflicts between ARMOUR’s interests and the interests of ARRM and/or its affiliates in obtaining favorable terms and conditions. There can be no assurance that any procedural protections will be sufficient to assure that these transactions will be made on terms that will be at least as favorable to ARMOUR as those that would have been obtained in an arm’s length transaction.

Members of ARMOUR’s management team have competing duties to other entities, which could result in decisions that are not in the best interests of ARMOUR’s stockholders or warrantholders.

ARMOUR’s executive officers and the employees of ARRM will not spend all of their time managing ARMOUR’s activities and ARMOUR’s investment portfolio. ARMOUR’s executive officers and the employees of ARRM will allocate some, or a material portion, of their time to other businesses and activities. For example, each of ARMOUR’s executive officers is also an employee or partner of ARRM. None of these individuals is required to devote a specific amount of time to ARMOUR’s affairs. Accordingly, ARMOUR will compete with ARRM, its existing funds, investment vehicles, other ventures and possibly other entities in the future for the time and attention of these officers.

If ARRM ceases to be the investment manager of ARMOUR, financial institutions providing any financing arrangements to ARMOUR may not provide future financing to ARMOUR.

Financial institutions that ARMOUR seeks to finance its investments may require that ARRM continue to act in such capacity. If ARRM ceases to be ARMOUR’s manager, it may constitute an event of default and the financial institution providing the arrangement may have acceleration rights with respect to outstanding borrowings and termination rights with respect to ARMOUR’s ability to finance its future investments with that institution. If ARMOUR is unable to obtain financing for its accelerated borrowings and for its future investments under such circumstances, it is likely that ARMOUR would be materially and adversely affected.

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ARRM’s failure to make investments on favorable terms that satisfy ARMOUR’s investment strategy and otherwise generate attractive risk-adjusted returns initially and consistently from time to time in the future would materially and adversely affect ARMOUR.

ARMOUR’s ability to achieve its investment objective depends on ARRM’s personnel and their ability to make investments on favorable terms that satisfy ARMOUR’s investment strategy and otherwise generate attractive risk-adjusted returns initially and consistently from time to time in the future. Accomplishing this result is also a function of ARRM’s ability to execute ARMOUR’s financing strategy on favorable terms.

The manner of determining the management fee may not provide sufficient incentive to ARRM to maximize risk-adjusted returns on ARMOUR’s investment portfolio since it is based on ARMOUR’s gross equity raised and not on ARMOUR’s performance.

ARRM is entitled to receive a monthly management fee that is based on the total of all “gross equity raised” (as defined in the management agreement), as measured as of the date of determination (i.e., each month) (which monthly management fee will never be less than 1/12 ^th of $900,0000), regardless of ARMOUR’s performance. Accordingly, the possibility exists that significant management fees could be payable to ARRM for a given month despite the fact that ARMOUR could experience a net loss during that month. ARRM’s entitlement to such significant nonperformance-based compensation may not provide sufficient incentive to ARRM to devote its time and effort to source and maximize risk-adjusted returns on ARMOUR’s investment portfolio, which could, in turn, adversely affect ARMOUR’s ability to pay dividends to its stockholders and the market price of its common stock or warrants. Further, the management fee structure gives ARRM the incentive to maximize gross equity raised by the issuance of new ARMOUR equity securities or the retention of existing  equity, regardless of the effect of these actions on existing stockholders. In other words, the management fee structure will reward ARRM primarily based on the size of ARMOUR, and not on its financial returns to stockholders.

The termination of the management agreement may be difficult and costly, which may adversely affect ARMOUR’s inclination to end its relationship with ARRM.

Termination of the management agreement with ARRM without cause is difficult and costly. The term “cause” is limited to those circumstances described under “ Management of ARMOUR Following the Merger — Management Agreement with ARRM. ” The management agreement provides that, in the absence of cause, it may be terminated by ARMOUR only without cause and only during any renewal term following the initial 5-year term of the management agreement.  ARRM will be provided 180 days prior notice of any such termination by ARMOUR without cause. Additionally, upon a termination by ARMOUR without cause, the management agreement provides that ARMOUR will pay ARRM a termination payment equal to three times the sum of the base management fee received by ARRM during the 12-month period before such termination, calculated as of the effective date of termination. This provision increases the effective cost to ARMOUR of electing to terminate the management agreement, thereby adversely affecting ARMOUR’s inclination to end ARMOUR’s relationship with ARRM prior to the expiration of any renewal term, even if ARMOUR believes ARRM’s performance is not satisfactory.

ARRM may terminate the management agreement at any time and for any reason upon 180 days prior notice. If the management agreement is terminated and no suitable replacement is found to manage ARMOUR, ARMOUR may not be able to execute its business plan.

Additionally, following the initial 5-year term, the management agreement will automatically renew for successive 1-year renewal terms unless either ARMOUR or ARRM gives advance notice to the other of its intent not to renew the agreement prior to the expiration of the initial term or any renewal term.  However, ARMOUR’s right to give such a notice of non-renewal are limited and requires ARMOUR’s independent directors to agree that certain conditions are met, as further described in the section entitled “ Management of ARMOUR Following the Merger .”

ARRM’s liability is limited under the management agreement, and ARMOUR has agreed to indemnify ARRM and its affiliates against certain liabilities. As a result, ARMOUR could experience poor performance or losses for which ARRM would not be liable.

Pursuant to the management agreement, ARRM will not assume any responsibility other than to render the services called for thereunder and will not be responsible for any action of ARMOUR’s board of directors in following or declining to follow its advice or recommendations. ARRM and its affiliates, directors, officers, stockholders, equity holders, employees, representatives and agents, and any affiliates thereof, will not be liable to ARMOUR, ARMOUR’s shareholders, any subsidiary of ARMOUR, the shareholders of any subsidiary of ARMOUR, ARMOUR’s board of directors, any issuer of mortgage securities, any credit-party, any counter-party under any agreement, or any other person for any acts or omissions, errors of judgment or mistakes of law by ARRM or its affiliates, directors, officers, stockholders, equity holders, employees, representatives or agents, or any affiliates thereof, under or in connection with the management agreement, except if ARRM

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was grossly negligent, acted with reckless disregard or engaged in willful misconduct or fraud while discharging its duties under the management agreement.  ARMOUR has agreed to indemnify ARRM and its affiliates, directors, officers, stockholders, equity holders, employees, representatives and agents, and any affiliates thereof, with respect to all expenses, losses, costs, damages, liabilities, demands, charges and claims of any nature, actual or threatened (including reasonable attorneys’ fees), arising from or in respect of any acts or omissions, errors of judgment or mistakes of law (or any alleged acts or omissions, errors of judgment or mistakes of law) performed or made while acting in any capacity contemplated under the management agreement or pursuant to any underwriting or similar agreement to which ARRM is a party that is related to ARMOUR’s activities, unless ARRM was grossly negligent, acted with reckless disregard or engaged in willful misconduct or fraud while discharging its duties under the management agreement. As a result, ARMOUR could experience poor performance or losses for which ARRM would not be liable.

In addition, the articles of incorporation of ARMOUR provide that no director or officer of ARMOUR shall be personally liable to ARMOUR or its stockholders for money damages. Furthermore, its articles of incorporation permit, and its by-laws require, ARMOUR to indemnify, pay or reimburse any present or former director or officer of ARMOUR who is made or threatened to be made a party to a proceeding by reason of his or her service to ARMOUR in such capacity. Officers and directors of ARMOUR who are also officers and board members of ARRM will therefore benefit from the exculpation and indemnification provisions of the articles of incorporation and by-laws of ARMOUR, and accordingly may not be liable to ARMOUR in such circumstances.

Federal Income Tax Risks

If ARMOUR fails to qualify as a REIT, it will be subject to federal income tax as a regular corporation and may face substantial tax liability.

Qualification as a REIT involves the satisfaction of numerous requirements (some on an annual or quarterly basis) established under highly technical and complex provisions of the Code for which only a limited number of judicial or administrative interpretations exist.  The determination that ARMOUR is a REIT requires an analysis of various factual matters and circumstances that may not be totally within its control.  ARMOUR has not requested, and does not intend to request, a ruling from the Internal Revenue Service, or IRS, that it qualifies as a REIT.  Accordingly, it is not certain ARMOUR will be able to qualify and remain qualified as a REIT for federal income tax purposes.  Even a technical or inadvertent mistake could jeopardize ARMOUR’s REIT status.  Furthermore, Congress or IRS might change tax laws or regulations and the courts might issue new rulings, in each case potentially having retroactive effect, which could make it more difficult or impossible for ARMOUR to qualify as a REIT.  If ARMOUR fails to qualify as a REIT in any tax year, then:

·

ARMOUR would be taxed as a regular domestic corporation, which, among other things, means that it would be unable to deduct distributions to stockholders in computing taxable income and would be subject to federal income tax on its taxable income at regular corporate rates;

·

any resulting tax liability could be substantial and would reduce the amount of cash available for distribution to stockholders, and could force ARMOUR to liquidate assets at inopportune times, causing lower income or higher losses than would result if these assets were not liquidated; and

·

unless ARMOUR was entitled to relief under applicable statutory provisions, it would be disqualified from treatment as a REIT for the subsequent four taxable years following the year during which it lost its qualification, and thus, its cash available for distribution to its stockholders would be reduced for each of the years during which it does not qualify as a REIT.

Even if ARMOUR remains qualified as a REIT, it may face other tax liabilities that reduce its cash flow.  Further, ARMOUR may be subject to certain federal, state and local taxes on its income and property.  Any of these taxes would decrease cash available for distribution to its stockholders.

Complying with REIT requirements may cause ARMOUR to forego otherwise attractive opportunities.

To qualify as a REIT for federal income tax purposes, ARMOUR must continually satisfy tests concerning, among other things, its sources of income, the nature and diversification of its assets, the amounts it distributes to its stockholders and the ownership of its stock.  ARMOUR may also be required to make distributions to its stockholders at disadvantageous times or when it does not have funds readily available for distribution.  Thus, compliance with REIT requirements may hinder ARMOUR’s ability to operate solely with the goal of maximizing profits.

In addition, the REIT provisions of the Code impose a 100% tax on income from “prohibited transactions.  “Prohibited transactions generally include sales of assets that constitute inventory or other dealer property held for sale in the ordinary course of a business, other than foreclosure property.  This 100% tax could impact ARMOUR’s desire to sell mortgage-backed securities at otherwise opportune times if it believes such sales could result in ARMOUR being treated as engaging in prohibited transactions.

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Complying with REIT requirements may limit ARMOUR’s ability to hedge effectively or may require ARMOUR to execute its hedge and derivative activities through a TRS.

The existing REIT provisions of the Code may substantially limit ARMOUR’s ability to hedge mortgage-backed securities and related borrowings by requiring ARMOUR to limit its income in each year from hedging transactions, other than qualified REIT hedges, together with any other income not generated from qualified REIT real estate assets, to less than 25% of its gross income.  In addition, ARMOUR must generally limit its aggregate income from hedging and services from all sources, other than from qualified REIT hedges, to less than 5% of its annual gross income.  As a result, ARMOUR expects in the future to conduct certain hedging and derivative activity through a TRS, the income from which will be fully subject to federal, state and local corporate income tax, and it may have to limit its use of hedging techniques.  This could result in greater risks associated with changes in interest rates than ARMOUR would otherwise want to incur.  If ARMOUR fails to satisfy the 25% or 5% limitations, unless its failure was due to reasonable cause and not due to willful neglect and it meets certain other technical requirements, it could lose its REIT status for federal income tax purposes.  Even if ARMOUR’s failure was due to reasonable cause, it may have to pay a penalty tax equal to the amount of income in excess of certain thresholds, multiplied by a fraction intended to reflect its profitability.

ARMOUR’s ability to invest in Agency Debt and U.S. Treasuries may be limited by the REIT 75% gross income test.

In order to qualify and maintain ARMOUR’s qualification as a REIT, it must derive at least 75% of its gross income each year from certain real estate related sources.  ARMOUR’s interest income from Agency Debt and U.S. Treasuries will not be qualifying income for purposes of the 75% gross income test.  Accordingly, ARMOUR’s strategy to invest in such Agency Debt and U.S. Treasuries may be limited by its intention to comply with that test.

Complying with REIT requirements may force ARMOUR to liquidate otherwise attractive investments.

In order to qualify as a REIT, ARMOUR must ensure that at the end of each calendar quarter at least 75% of the value of its assets consists of cash, cash items, government securities and qualified REIT real estate assets.  The remainder of ARMOUR’s investment in securities generally cannot include more than 10% of the outstanding voting securities of any one issuer or more than 10% of the total value of the outstanding securities of any one issuer.  In addition, other than securities issued by Fannie Mae and Freddie Mac and certain other securities, generally no more than 5% of the value of ARMOUR’s assets can consist of the securities of any one issuer.  If ARMOUR fails to comply with these requirements, it must dispose of a portion of its assets within 30 days after the end of the calendar quarter in order to avoid losing its REIT status and suffering adverse tax consequences.

Dividends paid by REITs do not qualify for the reduced tax rates on dividend income.

The maximum U.S. federal income tax rate for certain qualified dividends paid to individual U.S. stockholders (and some trusts and estates) currently is 15% (through 2010).  Dividends paid by REITs, however, are generally not eligible for the reduced rates and, therefore, may be subject to tax at the rates applicable to ordinary income.   Although this rate difference does not adversely affect the taxation of REITs or dividends paid by REITs, the more favorable rates applicable to regular corporate dividends could cause stockholders who are individuals to perceive investments in REITs to be relatively less attractive than investments in the stock of non-REIT corporations that pay dividends, which could adversely affect the value of the stock of REITs, including its common stock.

Complying with REIT requirements may force ARMOUR to borrow to make distributions to its stockholders.

As a REIT, ARMOUR must distribute at least 90% of its annual REIT taxable income (excluding net capital gains) to its stockholders.  From time to time, ARMOUR may generate taxable income greater than its net income for financial reporting purposes from, among other things, amortization of capitalized purchase premiums, or its taxable income may be greater than its cash flow available for distribution to its stockholders.  If ARMOUR does not have other funds available in these situations, it may be unable to distribute 90% of its taxable income as required by the REIT rules.  Thus, ARMOUR could be required to borrow funds, sell a portion of its assets at disadvantageous prices or find another alternative source of funds.  These alternatives could increase ARMOUR’s costs or reduce its equity and reduce amounts available to invest in mortgage-backed securities.

Misplaced reliance on legal opinions or statements by issuers of mortgage-backed securities could result in a failure to comply with REIT gross income or asset tests.

When purchasing mortgage-backed securities, ARMOUR may rely on opinions of counsel for the issuer or sponsor of such securities, or statements made in related offering documents, for purposes of determining whether and to what extent those securities constitute REIT real estate assets for purposes of the REIT asset tests and produce income which qualifies under the REIT gross income tests.  The inaccuracy of any such opinions or statements may adversely affect ARMOUR’s qualification as a REIT and result in significant corporate-level tax.

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Tax exempt investors may have to include unrelated business taxable income..

In general, dividend income that a tax-exempt entity receives from ARMOUR should not constitute unrelated business taxable income as defined in Section 512 of the Code.  If ARMOUR realizes excess inclusion income and allocates it to stockholders, this income would be fully taxable as unrelated business taxable income under Section 512 of the Code.  If the stockholder is foreign, it would be subject to federal income tax withholding at the full 30% rate on the portion of the dividends that are characterized as excess inclusion income without reduction pursuant to any otherwise applicable income tax treaty.  Additionally, such income cannot be offset by any net operating losses.

Excess inclusion income could result if ARMOUR held a residual interest in a real estate mortgage investment conduit, or REMIC.  However, ARMOUR does not plan to buy residuals.  Excess inclusion income also would be generated if ARMOUR was to issue debt obligations with two or more maturities and the terms of the payments on these obligations bore a relationship to the payments that it received on its mortgage-backed securities securing those debt obligations.  ARMOUR does not plan to buy residuals.  It does, however, expect to enter into various repurchase agreements that have differing maturity dates and afford the lender the right to sell any pledged mortgage securities if it defaults on its obligations.  The IRS may determine that these borrowings give rise to excess inclusion income that should be allocated among stockholders.  Furthermore, some types of tax-exempt entities, including, without limitation, voluntary employee benefit associations and entities that have borrowed funds to acquire their shares of ARMOUR’s common stock, may be required to treat a portion of or all of the dividends they may receive from ARMOUR as unrelated business taxable income.

ERISA Risks

Plans should consider ERISA risks of investing in ARMOUR’s common stock.

Investment in ARMOUR’s common stock may not be appropriate for a pension, profit-sharing, employee benefit, or retirement plan, considering the plan’s particular circumstances, under the fiduciary standards of ERISA or other applicable similar laws including standards with respect to prudence, diversification and delegation of control and the prohibited transaction provisions of ERISA, the Code and any applicable similar laws.

ERISA and Section 4975 of the Code prohibit certain transactions that involve (i) certain pension, profit-sharing, employee benefit, or retirement plans or individual retirement accounts and (ii) any person who is a “party in interest” or “disqualified person” with respect to such plan.  Consequently, the fiduciary of a plan contemplating an investment in ARMOUR’s common stock should consider whether its company, any other person associated with the issuance of its common stock or any affiliate of the foregoing is or may become a “party in interest” or “disqualified person” with respect to the plan and, if so, whether an exemption from such prohibited transaction rules is applicable.  See “ERISA Considerations.”

ERISA may limit ARMOUR’s ability to attract capital from Benefit Plan Investors.

It is unlikely that ARMOUR will qualify as an operating company for purposes of ERISA.  Consequently, in order to avoid ARMOUR’s assets being deemed to include so-called “plan assets” under ERISA, it intends initially to limit equity ownership in ARMOUR by Benefit Plan Investors to less than 25% of the value of each class or series of capital stock issued by ARMOUR and to prohibit transfers of its common stock to Benefit Plan Investors.  Until such time as any class or series of ARMOUR’s capital stock is publicly traded, its charter limits Benefit Plan Investors to holding less than 25% in the aggregate of any class of its capital stock, disregarding any stock held by controlling persons.  After any class or series of shares of ARMOUR’s capital stock is publicly traded, its charter prohibits Benefit Plan Investors from holding any interest in any shares of its capital stock that are not publicly traded.  These restrictions on investments in ARMOUR by Benefit Plan Investors (and certain similar investors) may adversely affect the ability of ARMOUR’s stockholders to transfer their shares of its common stock and its ability to attract private equity capital in the future.

Risks Related to Enterprise and the Merger and the Securities of ARMOUR Following the Merger

If Enterprise is unable to effect a business combination and is forced to liquidate, its warrants will expire worthless.

If Enterprise does not complete the merger or another business combination by November 7, 2009, its amended and restated certificate of incorporation provides that its corporate existence will automatically terminate and it will distribute to all holders of Public Shares, in proportion to the number of Public Shares held by them, an aggregate sum equal to the amount in the trust fund, inclusive of any interest, plus any remaining net assets. In such event, there will be no distribution with respect to Enterprise’s outstanding warrants. Accordingly, the warrants will expire worthless.

Enterprise’s stockholders may be held liable for claims by third parties against Enterprise to the extent of distributions received by them.

Enterprise’s amended and restated certificate of incorporation provides that Enterprise will continue in existence only until November 7, 2009. If Enterprise has not completed a business combination by such date and amended this

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provision in connection thereto, pursuant to the Delaware General Corporation Law (“DGCL”), its corporate existence will cease except for the purposes of winding up its affairs and liquidating. Under Sections 280 through 282 of the DGCL, stockholders may be held liable for claims by third parties against a corporation to the extent of distributions received by them in a dissolution. If the corporation complies with certain procedures set forth in Section 280 of the DGCL intended to ensure that it makes reasonable provision for all claims against it, including a 60-day notice period during which any third-party claims can be brought against the corporation, a 90-day period during which the corporation may reject any claims brought, and an additional 150-day waiting period before any liquidating distributions are made to stockholders, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would be barred after the third anniversary of the dissolution. However, it is Enterprise’s intention to make liquidating distributions to its stockholders as soon as reasonably possible after November 7, 2009 and, therefore, it does not intend to comply with those procedures.

Because Enterprise will not be complying with those procedures, it is required, pursuant to Section 281 of the DGCL, to adopt a plan that will provide for its payment, based on facts known to it at such time, of (i) all existing claims, (ii) all pending claims and (iii) all claims that may be potentially brought against it within the subsequent 10 years. Accordingly, Enterprise would be required to provide for any creditors known to it at that time or those that it believes could be potentially brought against it within the subsequent 10 years prior to distributing the funds held in the trust to stockholders. Enterprise cannot assure you that it will properly assess all claims that may be potentially brought against it. As such, Enterprise’s stockholders could potentially be liable for any claims to the extent of distributions received by them (but no more) and any liability of Enterprise’s stockholders may extend well beyond the third anniversary of such date. Accordingly, there can be no assurance that third parties will not seek to recover from Enterprise’s stockholders amounts owed to them by Enterprise. Currently, Enterprise estimates the total amount of such claims to be approximately $2.1 million.

If Enterprise is forced to file a bankruptcy case or an involuntary bankruptcy case is filed against it which is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover all amounts received by Enterprise’s stockholders. Furthermore, because Enterprise intends to distribute the proceeds held in the trust fund to its public stockholders promptly after November 7, 2009 if it has not completed a business combination by such date, this may be viewed or interpreted as giving preference to Enterprise’s public stockholders over any potential creditors with respect to access to or distributions from Enterprise’s assets. Furthermore, Enterprise’s board may be viewed as having breached their fiduciary duties to Enterprise’s creditors and/or may have acted in bad faith; thereby exposing itself and Enterprise to claims of punitive damages, by paying public stockholders from the trust fund prior to addressing the claims of creditors. There can be no assurance that claims will not be brought against Enterprise for these reasons.

The initial charter proposal significantly alters the obligations of Enterprise set forth in the Enterprise IPO prospectus and the amended and restated certificate of incorporation.

In the Enterprise IPO prospectus, Enterprise undertook to effect an initial business combination with one or more operating businesses having a fair market value equal to at least 80% of Enterprise’s net assets (all of Enterprise’s assets, including the funds held in the trust account, less Enterprise’s liabilities). The initial charter proposal seeks to amend the terms of Enterprise’s amended and restated certificate of incorporation to remove the requirements that (i) Enterprise acquire an operating business and (ii) the fair market value of the business acquired on the date of the transaction be equal to at least 80% of Enterprise’s net assets (all of Enterprise’s assets, including the funds held in the trust account, less Enterprise’s liabilities).  These amendments eliminate the ability of Enterprise’s stockholders to review audited historical financial statements of an operating company, which may impact their ability to make an informed decision on whether to vote for or against the proposed merger.

Future issuances and sales of shares of ARMOUR’s common stock may depress the market price of ARMOUR’s common stock or warrants or have adverse consequences for ARMOUR’s stockholders or warrantholders.

ARMOUR will issue up to 25,100,000 shares of common stock and warrants to purchase 32,500,000 shares of common stock in connection with the consummation of the merger. ARMOUR may, from time to time, issue additional shares of common stock or shares of preferred stock that are convertible into common stock, as well as warrants to purchase shares of common stock or convertible preferred stock.  ARMOUR may also issue stock options and similar instruments.  ARMOUR’s 2009 stock incentive plan provides for grants of stock options, restricted common stock and other equity- and cash-based awards, subject to a ceiling on the number shares available for issuance under the plan to be determined by the board of directors . If ARMOUR issues a significant number of shares of common stock or convertible preferred stock, or if warrant or option holders exercise their warrants or options in a short period of time, dilution of ARMOUR’s outstanding common stock and an accompanying decrease in the market price of ARMOUR common stock could occur.

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ARMOUR cannot predict the effect, if any, of future sales of its common stock, or the availability of shares for future sales, on the market price of its common stock or warrants. Sales of substantial amounts of common stock or the perception that such sales could occur may adversely affect the prevailing market price for ARMOUR’s common stock or warrants.

Also, ARMOUR may issue additional shares in subsequent public offerings or private placements to acquire new assets or for other purposes. ARMOUR is not required to offer any such shares to existing stockholders on a preemptive basis. Therefore, it may not be possible for existing stockholders to participate in such future share issuances, which may dilute the existing stockholders’ interests in ARMOUR.

ARMOUR has not established a minimum distribution payment level and ARMOUR cannot assure you of its ability to pay distributions in the future.

ARMOUR intends to pay quarterly distributions and to make distributions to its stockholders in an amount such that ARMOUR distributes all or substantially all of its REIT taxable income in each year, subject to certain adjustments. ARMOUR has not established a minimum distribution payment level and its ability to pay distributions may be adversely affected by a number of factors, including the risk factors described in this proxy statement/prospectus. All distributions will be made, subject to Maryland law, at the discretion of ARMOUR’s board of directors and will depend on ARMOUR’s earnings, its financial condition, any debt covenants, maintenance of its REIT qualification and other factors as its board of directors may deem relevant from time to time. ARMOUR believes that a change in any one of the following factors could adversely affect its results of operations and impair its ability to pay distributions to its stockholders:

	•	the profitability of the assets acquired with of the funds to be released from the trust account upon consummation of the merger;
	•	ARMOUR’s ability to make profitable acquisitions;
	•	margin calls or other expenses that reduce ARMOUR’s cash flow;
	•	defaults in ARMOUR’s asset portfolio or decreases in the value of its portfolio; and
	•	the fact that anticipated operating expense levels may not prove accurate, as actual results may vary from estimates.

ARMOUR cannot assure you that ARMOUR will achieve results that will allow ARMOUR to make a specified level of cash distributions or year-to-year increases in cash distributions in the future. In addition, some of ARMOUR’s distributions may include a return in capital.

Your ability to exercise your warrants may be limited by the ownership limits contained in ARMOUR’s charter.

Your ability to exercise your warrants may be limited by the ownership limits contained in ARMOUR’s charter. In particular, to assist ARMOUR in qualifying as a REIT, ownership of shares of ARMOUR’s common stock by any person is limited, with certain exceptions, to 9.8% by value or by number of shares, whichever is more restrictive, of ARMOUR’s outstanding shares of common stock and no more than 9.8% by value or by number of shares, whichever is more restrictive, of ARMOUR’s outstanding capital stock. In addition, ARMOUR’s charter contains various other restrictions limiting the ownership and transfer of ARMOUR’s common stock. As a result, you may not be able to exercise your warrants if such exercise would cause you to own shares of ARMOUR common stock in excess of these ownership limits.

You will not be able to exercise your warrants if an effective registration statement is not in place when you desire to do so.

No public warrant will be exercisable and ARMOUR will not be obligated to issue shares of common stock unless, at the time a holder seeks to exercise such public warrant, a prospectus relating to the common stock issuable upon exercise  of the warrant is current. Under the terms of the warrant agreement, ARMOUR will be required to use its best efforts to meet these conditions and to maintain a current prospectus relating to the shares of common stock issuable upon exercise of the warrants until the expiration of the warrants. However, there can be no assurance that ARMOUR will be able to do so, and if it does not maintain a current prospectus related to the shares of common stock issuable upon exercise of the warrants, holders will be unable to exercise their warrants. Additionally, ARMOUR will have no obligation to settle the warrants for cash or “net cash settle” any warrant exercise. Accordingly, if the prospectus relating to the common stock issuable upon the exercise of the warrants is not current, the warrants may have no value, the market for the warrants may be limited and the warrants may expire worthless. If the warrants expire worthless, this would mean that a person who paid $10.00 for a unit in the Enterprise IPO and who did not sell the warrant included in the unit would have effectively paid $10.00 for one share of ARMOUR common stock.

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An investor will only be able to exercise a warrant if the issuance of ARMOUR shares of common stock upon such exercise has been registered or qualified or is deemed exempt under the securities laws of the state of residence of the holder of the warrants.

No warrants will be exercisable by a warrant holder and ARMOUR will not be obligated to issue shares of common stock unless the shares of common stock issuable upon such exercise have been registered or qualified or deemed to be exempt under the securities laws of the state of residence of the holder of the warrants. At the time that the warrants become exercisable (following completion of the merger), ARMOUR expects to become listed on the NYSE Amex LLC which would provide an exemption from registration in every state. Accordingly, ARMOUR believes holders in every state will be able to exercise their warrants as long as its prospectus relating to the shares of common stock issuable upon exercise of the warrants is current. However, there can be no assurance of this fact. If a warrant holder is unable to exercise his warrants in a particular state, he may be forced to sell his warrant and therefore lose the benefit of purchasing ARMOUR stock. Furthermore, the price he receives for his warrant may not equal the difference between the exercise price and the stock price.

ARMOUR’s warrants may be exercised in the future, which would increase the number of shares eligible for future resale in the public market.

Outstanding redeemable warrants to purchase an aggregate of 25,000,000 shares of ARMOUR common stock (issued in connection with the conversion, pursuant to the merger, of the Enterprise warrants issued in the IPO) and warrants to purchase an aggregate of 7,500,000 shares of common stock (issued in connection with the conversion, pursuant to the merger, of the warrants sold to the Enterprise Founders and other affiliates of Enterprise simultaneously with the consummation of the IPO (“Sponsors’ Warrants”)) will become exercisable after the consummation of the merger. These warrants likely will be exercised if the market price of the shares of ARMOUR common stock equals or exceeds $11.00 per share (assuming the warrant amendment proposal is approved). Therefore, as long as warrants remain outstanding, there will be a drag on any increase in the price of ARMOUR’s common stock in excess of $11.00 per share. To the extent such warrants are exercised, additional shares of ARMOUR common stock will be issued, which would dilute the ownership of existing stockholders.

If Enterprise stockholders fail to vote against the merger proposal and fail to deliver their shares in accordance with the conversion requirements specified in this proxy statement/prospectus, they will not be entitled to convert their shares of common stock of Enterprise into a pro rata portion of the trust account.

Enterprise stockholders holding Public Shares who affirmatively vote against the merger proposal may demand that Enterprise convert their shares into a pro rata portion of the trust account, calculated as of two business days prior to the anticipated consummation of the merger. Enterprise stockholders who seek to exercise this conversion right must affirmatively vote against the merger and deliver their stock (either physically or electronically) to Enterprise’s transfer agent prior to the vote at the meeting. Any Enterprise stockholder who fails to vote against the merger proposal and who fails to deliver his or her stock will not be entitled to convert his or her shares into a pro rata portion of the trust account for conversion of his or her shares. See the section entitled  “The Merger Proposal — Conversion Rights”  for the procedures to be followed if you wish to convert your shares to cash.

NYSE Amex LLC may not list ARMOUR’s securities on its exchange, which could limit investors’ ability to make transactions in ARMOUR’s securities and subject ARMOUR to additional trading restrictions.

ARMOUR will seek listing of its common stock and warrants on the NYSE Amex as soon as practicable in connection with the merger. ARMOUR will be required to meet the initial listing requirements to be listed. ARMOUR may not be able to meet those initial listing requirements. Even if such application is accepted and ARMOUR’s securities are so listed, ARMOUR may be unable to maintain the listing of its securities in the future.

If the NYSE Amex does not list ARMOUR’s securities for trading on its exchange, ARMOUR could face significant material adverse consequences, including:

	•	a limited availability of market quotations for its securities;
	•	reduced liquidity with respect to its securities;
	•	a determination that its shares of common stock are “penny stock,” which will require brokers trading in its shares of common stock to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for the shares of common stock;
	•	a limited amount of news and analyst coverage for ARMOUR; and
	•	a decreased ability to issue additional securities or obtain additional financing in the future.

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ARMOUR’s stock or warrant price could fluctuate and could cause you to lose a significant part of your investment.

Following consummation of the merger, the market price of ARMOUR’s securities may be influenced by many factors, some of which are beyond its control, including those described above and the following:

	•		changes in financial estimates by analysts;
	•		fluctuations in its quarterly financial results or the quarterly financial results of companies perceived to be similar to it;
	•		general economic conditions;
	•		changes in market valuations of similar companies;
	•		terrorist acts;
	•		changes in its capital structure, such as future issuances of securities or the incurrence of additional debt;
	•		future sales of its common stock;
	•		regulatory developments in the United States, foreign countries or both;
	•		litigation involving ARMOUR, its subsidiaries or its general industry; and
	•		additions or departures of key personnel at ARRM.

Enterprise’s current directors and executive officers own shares of Enterprise common stock and warrants that will be worthless if the merger is not approved. In addition, they will receive consideration under the sub-management agreement that is different than, and potentially more valuable than, the consideration that holders of Public Shares will receive for their shares if the merger is approved. Such interests may have influenced their decision to approve the business combination with ARMOUR.

Enterprise’s current directors and executive officers beneficially own 6,250,000 shares of common stock, which they purchased prior to the Enterprise IPO and 7,500,000 Sponsors’ Warrants they purchased in a private placement that occurred simultaneously with the Enterprise IPO. Such persons are not entitled to receive any of the cash proceeds that may be distributed upon Enterprise’s liquidation with respect to shares they acquired prior to its IPO. Therefore, if the merger is not approved and Enterprise does not consummate another business combination by November 7, 2009 and is forced to liquidate, such Founders’ Shares and Sponsors’ Warrants held by such persons will be worthless. As of  October 5, 2009, the record date for the special meeting, Enterprise’s Founders held $60,639,000 in common stock (based on a market price of $9.86) and $2,400,000 in warrants (based on a market price of $0.32). The Enterprise Founders have agreed to have their Founders’ Shares cancelled. Furthermore, Sub-Manager, an affiliate of the Enterprise Founders, will be providing services to ARRM upon consummation of the merger pursuant to a sub-management agreement pursuant to which it will earn certain fees. See the section entitled “The Merger Proposal — Interests of Enterprise’s Directors and Officers and Others in the Merger.”

These financial interests of Enterprise’s Founders may have influenced their decision to approve Enterprise’s merger with ARMOUR and to continue to pursue the merger. In considering the recommendations of Enterprise’s board of directors to vote for the merger proposal and other proposals, you should consider these interests.

Certain executive officers of Enterprise are liable to ensure that proceeds of the trust are not reduced by vendor claims in the event the merger is not consummated. Such liability may have influenced their decision to approve the merger with ARMOUR.

If Enterprise liquidates prior to the consummation of a business combination, Daniel C. Staton, Enterprise’s Chief Executive Officer, Marc H. Bell, Enterprise’s Treasurer, and Maria Balodimas Staton, Enterprise’s Secretary, will be  personally liable to ensure that the proceeds in the trust account are not reduced by the claims of target businesses or claims of vendors or other entities that are owed money by Enterprise for services rendered or contracted for or products sold to Enterprise. However, this agreement entered into by Mr. Staton, Mr. Bell and Ms. Staton specifically provides for two exceptions to the personal indemnity he has given:  Mr. Staton, Mr. Bell and Ms. Staton will have no personal liability (1) as to any claimed amounts owed to a target business or vendor or other entity who has executed a valid and enforceable agreement with Enterprise waiving any right, title, interest or claim of any kind they may have in or to any monies held in the trust account, or (2) as to any claims under Enterprise’s indemnity with the underwriters of the IPO against certain liabilities, including liabilities under the Securities Act. Neither Enterprise nor Mr. Staton, Mr. Bell and Ms. Staton have any reason to believe that Mr. Staton, Mr. Bell and Ms. Staton will not be able to fulfill his/her indemnity obligations to Enterprise if required to do so.

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Additionally, if Enterprise is required to be liquidated and there are no funds remaining to pay the costs associated with the implementation and completion of such liquidation, Mr. Staton, Mr. Bell and Ms. Staton have agreed to advance Enterprise the funds necessary to pay such costs and complete such liquidation (currently anticipated to be no more than approximately $15,000) and not to seek repayment for such expenses. If Enterprise consummates the merger, Mr. Staton, Mr. Bell and Ms. Staton will no longer be responsible for such expenses. See the section entitled  “Other Information Related to Enterprise — Enterprise’s Management’s Discussion and Analysis of Financial Condition and Results of Operations”  for further information.

These personal obligations may have influenced Mr. Staton’s, and Mr. Bell’s decision to approve Enterprise’s merger with ARMOUR and to continue to pursue the merger. In considering the recommendations of Enterprise’s board of directors to vote for the merger proposal and other proposals, you should consider these interests.

The exercise of Enterprise’s directors’ and officers’ discretion in agreeing to changes or waivers in the terms of the merger may result in a conflict of interest when determining whether such changes to the terms of the merger or waivers of conditions are appropriate and in Enterprise’s stockholders’ best interest.

In the period leading up to the closing of the merger, events may occur that, pursuant to the merger agreement, would cause Enterprise to agree to amend the merger agreement, to consent to certain actions taken by ARMOUR or to waive rights that Enterprise is entitled to under the merger agreement. Such events could arise because of a request by ARMOUR to undertake actions that would otherwise be prohibited by the terms of the merger agreement or the occurrence of other events that would have a material adverse effect on ARMOUR’s business and would entitle Enterprise to terminate the merger agreement. In any of such circumstances, it would be discretionary on Enterprise, acting through its board of directors, to grant its consent or waive its rights. The existence of the financial and personal interests of the directors described in the preceding risk factors may result in a conflict of interest on the part of one or more of the directors between what he may believe is best for Enterprise and what he may believe is best for himself in determining whether or not to take the requested action. As of the date of this proxy statement/prospectus, Enterprise does not believe there will be any changes or waivers that its directors and officers would be likely to make after stockholder approval of the merger proposal has been obtained. Although certain changes could be made without further stockholder approval, Enterprise will circulate a new or amended proxy statement/prospectus and resolicit its stockholders if changes to the terms of the transaction that would have a material impact on its stockholders are required prior to the stockholder vote on the merger proposal.

If the merger is completed, a large portion of the funds in the trust account established by Enterprise in connection with its IPO for the benefit of the holders of the Public Shares may be used to pay converting stockholders or for the purchase, directly or indirectly, of Public Shares. As a consequence, if the merger is completed, such funds will not be available to ARMOUR for working capital and general corporate purposes and the number of beneficial holders of Enterprise’s and ARMOUR’s securities may be reduced to a number that may preclude the quotation, trading or listing of ARMOUR’s securities other than on the Over-the-Counter Bulletin Board.

Pursuant to Enterprise’s amended and restated certificate of incorporation, holders of Public Shares may vote against the merger proposal and demand that Enterprise convert their shares, calculated as of two business days prior to the anticipated consummation of the merger, into a pro rata share of the trust account where a substantial portion of the net proceeds of the IPO are held. Enterprise will not consummate the merger if holders of 7,500,000 or more Public Shares exercise these conversion rights unless the secondary charter proposal is approved, in which case Enterprise will not consummate the merger if holders of 12,500,000 or more Public Shares exercise their conversion rights.  Furthermore, a large portion of the funds in the trust account may be used by ARMOUR, Enterprise or their affiliates to acquire Public Shares from holders thereof who have indicated their intention to vote against the merger proposal and elect to convert their shares into cash so that such shares will be voted in favor of the merger proposal. As a consequence of such purchases,

	•	the funds in Enterprise’s trust account that are so used will not be available to ARMOUR after the merger and the actual amount of such funds that ARMOUR may retain for its own use will be diminished; and
	•	the public “float” of ARMOUR’s common stock may be reduced and the number of beneficial holders of Enterprise’s and ARMOUR’s securities may be reduced, which may make it difficult to obtain the quotation, listing or trading of ARMOUR’s securities on the NYSE AMEX or any other national securities exchange.

In addition, because Enterprise is only obligated to have at least $100 million in funds contained in its trust account at the closing of the merger (after payment of transactions fees and expenses, deferred underwriting discounts and commissions, tax liabilities, reimbursement of expenses of the Founder Founders and purchases of Public Shares by Enterprise or its affiliates), this allows for approximately 57% of the holders of Public Shares to convert such shares for cash or sell such shares to Enterprise or its affiliates.

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Holders of Public Shares at the time of the merger who purchased their units in the IPO and have not converted their shares into cash may have rights to rescind their purchases and assert a claim for damages therefor against Enterprise and the former directors and officers of Enterprise.

The prospectus issued in the Enterprise IPO (i) disclosed that Enterprise was required to complete a business combination in which it acquired a target business having a fair market value equal to at least 80% of Enterprise’s net assets (all of Enterprise’s assets including the funds held in the trust account, less Enterprise’s liabilities) and obtain disinterested independent director approval and a fairness opinion if such business combination involved a related party target and (ii) did not disclose that funds in the trust account might be used to purchase Public Shares from holders thereof who have indicated their intention to vote against the merger and convert their shares into cash. Consequently, a holder of Public Shares who purchased them in the Enterprise IPO could assert securities law claims against Enterprise for rescission of the purchase of the units he acquired in the Enterprise IPO. A successful claimant for damages under federal or state law could be awarded an amount to compensate for the decrease in value of his or her shares caused by the alleged violation (including, possibly, punitive damages), together with interest, while retaining the shares.

If Enterprise is unable to complete the merger with ARMOUR or another business combination by November 7, 2009, its amended and restated certificate of incorporation provides that its corporate existence will automatically terminate and will liquidate. In such event, third parties may bring claims against Enterprise and, as a result, the proceeds held in trust could be reduced and the per-share liquidation price received by stockholders could be less than $9.98 per share.

Enterprise must complete a business combination with ARMOUR or another target business by November 7, 2009, when, pursuant to its amended and restated certificate of incorporation, its corporate existence will terminate and it will be required to liquidate. In such event, third parties may bring claims against Enterprise. Although Enterprise has obtained waiver agreements from certain vendors and service providers it has engaged and owe money to, and the prospective target businesses it has negotiated with, whereby such parties have waived any right, title, interest or claim of any kind they may have in or to any monies held in the trust account, there is no guarantee that they or other vendors who did not execute such waivers will not seek recourse against the trust account notwithstanding such agreements. Furthermore, there is no guarantee that a court will uphold the validity of such agreements. Accordingly, the proceeds held in trust could be subject to claims which could take priority over those of Enterprise’s public stockholders. Currently, Enterprise estimates the total amount of claims that can be asserted against the trust account to be approximately $2.1 million. Additionally, if Enterprise is forced to file a bankruptcy case or an involuntary bankruptcy case is filed against it which is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy law, and may be included in Enterprise’s bankruptcy estate and subject to the claims of third parties with priority over the claims of Enterprise’s stockholders. To the extent any bankruptcy or other claims deplete the trust account, there can be no assurance that Enterprise will be able to return to its public stockholders at least $9.98 per share (or $9.97 per share, if the Enterprise Founders are not able to cover the outstanding liabilities representing expenses above the cap of $2.45 million available to Enterprise for payment of expenses as disclosed in Enterprise’s IPO prospectus) .

Enterprise’s board of directors did not obtain a fairness opinion in determining whether or not to proceed with the transaction with ARMOUR and as a result, the terms may not be fair from a financial point of view to Enterprise’s public stockholders.

A fairness opinion from an unaffiliated, independent investment banking firm was not required in connection with the proposed trasaction with ARMOUR pursuant to Enterprise’s amended and restated certificate of incorporation. As a result, the Enterprise board did not obtain a fairness opinion in connection with the proposed transaction with ARMOUR. The Enterprise board of directors believes that because of the financial skills and background of its directors, it was qualified to conclude that the business combination was fair from a financial perspective to its stockholders. Additionally, because ARMOUR does not have an existing operating business, this precluded the use of customary analyses on which fairness opinions are based. Therefore, it was determined that a fairness opinion was not necessary and Enterprise did not seek to obtain such an opinion to assist in its determination.  Accordingly, Enterprise’s board of directors may be incorrect in its assessment of the transaction. See the section entitled  “The Merger Proposal — Interests of Enterprise’s Directors and Officers and Others in the Merger.”

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FORWARD-LOOKING STATEMENTS

Enterprise and ARMOUR believe that some of the information in this proxy statement/prospectus constitutes forward-looking statements within the definition of the Private Securities Litigation Reform Act of 1995. You can identify these statements by forward-looking words such as “may,” “expect,” “anticipate,” “contemplate,” “believe,” “estimate,” “intends,” and “continue” or similar words. You should read statements that contain these words carefully because they:

	•	discuss future expectations;
	•	contain projections of future results of operations or financial condition; or
	•	state other “forward-looking” information.

Enterprise and ARMOUR believe it is important to communicate their expectations to their respective securityholders. However, there may be events in the future that they are not able to predict accurately or over which they have no control. The risk factors and cautionary language discussed in this proxy statement/prospectus provide examples of risks, uncertainties and events that may cause actual results to differ materially from the expectations described by Enterprise or ARMOUR in such forward-looking statements, including among other things:

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You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this proxy statement/prospectus.

All forward-looking statements included herein attributable to any of Enterprise, ARMOUR or any person acting on either party’s behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Except to the extent required by applicable laws and regulations, Enterprise and ARMOUR undertake no obligations to update these forward-looking statements to reflect events or circumstances after the date of this proxy statement/prospectus or to reflect the occurrence of unanticipated events.

Before you grant your proxy or instruct how your vote should be cast or vote on the merger proposal or any of the other proposals, you should be aware that the occurrence of the events described in the “Risk Factors” section and elsewhere in this proxy statement/prospectus may adversely affect Enterprise and/or ARMOUR.

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SPECIAL MEETINGS OF ENTERPRISE STOCKHOLDERS AND WARRANTHOLDERS

General

Enterprise is furnishing this proxy statement/prospectus to its stockholders and warrantholders as part of the solicitation of proxies by its board of directors for use at the special meetings of Enterprise stockholders and warrantholders to be held on October 26, 2009, and at any adjournment or postponement thereof. This proxy statement/prospectus is first being furnished to Enterprise stockholders and warrantholders on or about October 14, 2009 in connection with the vote on the proposals described herein. This proxy statement/prospectus provides you with information you need to know to be able to vote or instruct your vote to be cast at the special meetings.

Date, Time and Place

The special meetings of stockholders and warrantholders will be held on October 26, 2009, at 9:00 a.m., eastern time, at the offices of Akerman Senterfitt, Enterprise’s counsel, at One Southeast Third Avenue, Suite 2500, Miami, Florida  33131.

Purpose of the Enterprise Special Meetings

At the special meeting of stockholders, Enterprise will ask holders of its common stock to:

	•	consider and vote upon a proposal to amend Enterprise’s amended and restated certificate of incorporation to allow Enterprise to complete the merger with Merger Sub Corp. even though (i) neither ARMOUR nor Merger Sub Corp. is an operating business and (ii) the fair market value of ARMOUR and Merger Sub Corp. on the date of the transaction is less than 80% Enterprise’s net assets (all of Enterprise’s assets including the funds held in the trust account, less Enterprise’s liabilities) (the initial charter proposal);
	•	consider and vote upon a proposal to increase from 30% to 50% the threshold contained in Enterprise’s amended and restated certificate of incorporation regarding the amount of Enterprise’s Public Shares that may seek conversion without preventing a business combination from being consummated (the secondary charter proposal);
	•	consider and vote upon a proposal to (i) adopt the merger agreement, dated as of July 29, 2009, among Enterprise, Merger Sub Corp. and ARMOUR which, among other things, provides for the merger of Merger Sub Corp. with and into Enterprise, with Enterprise being the surviving entity and becoming a wholly-owned subsidiary of ARMOUR, and (ii) approve the business combination contemplated by such merger agreement (the merger proposal); and
	•	consider and vote upon a proposal to adjourn the special meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies if, based upon the tabulated vote at the time of the special meeting, Enterprise is not authorized to consummate the merger (the adjournment proposal).

The approval of the initial charter proposal and the merger proposal, as well as the warrant amendment proposal described below, is a condition to the consummation of the merger discussed above. The approval of the secondary charter proposal is not a condition to the consummationof the merger.

At the special meeting of warrantholders, Enterprise will ask holders of its warrants to:

	•	in connection with the transactions contemplated by the merger agreement, consider and vote upon a proposal to amend the Warrant Agreement, dated as of November 7, 2007, between Enterprise and Continental Stock Transfer & Trust Company which governs the terms of Enterprise’s outstanding warrants to (i) increase the exercise price of Enterprise’s warrants from $7.50 per share to $11.00 per share and (ii) extend the expiration date of the warrants from November 7, 2011 to November 7, 2013 (the warrant amendment proposal); and
	•	consider and vote upon a proposal to adjourn the special meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies if, based upon the tabulated vote at the time of the special meeting, Enterprise is not authorized to consummate the warrant amendment proposal (the adjournment proposal).

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Recommendation of Enterprise Board of Directors

Enterprise’s board of directors:

	•	has unanimously determined that each of the proposals is fair to and in the best interests of Enterprise and its stockholders and warrantholders;
	•	has unanimously approved each of the proposals;
	•	unanimously recommends that Enterprise’s common stockholders vote “FOR” the initial charter proposal;
		unanimously recommends that Enterprise’s common stockholders vote “FOR” the secondary charter proposal;
	•	unanimously recommends that Enterprise’s common stockholders vote “FOR” the merger proposal;
	•	unanimously recommends that Enterprise’s common stockholders vote “FOR” the adjournment proposal;
	•	unanimously recommends that Enterprise’s warrantholders vote “FOR” the warrant amendment proposal; and
	•	unanimously recommends that Enterprise’s warrantholders vote “FOR” the adjournment proposal.

Record Date; Who is Entitled to Vote

Enterprise has fixed the close of business October 5, 2009, as the “record date” for determining Enterprise stockholders and warrantholders entitled to notice of and to attend and vote at its special meetings. As of the close of business October 5, 2009, there were 31,250,000 shares of Enterprise’s common stock outstanding and entitled to vote and 32,500,000 warrants outstanding and entitled to vote. Each share of Enterprise’s common stock is entitled to one vote per share at the special meeting of stockholders and each warrant is entitled to one vote per warrant at the special meeting of warrantholders.

Pursuant to agreements with Enterprise, the 6,250,000 shares of common stock issued prior to the Enterprise IPO will be voted on the merger proposal in accordance with the majority of the votes cast at the special meeting of stockholders on such proposal by the holders of the Public Shares. Accordingly, the vote of such shares will not affect the outcome of the vote on the merger proposal. The officers, directors and stockholders of Enterprise prior to the Enterprise IPO have agreed to vote any shares they purchase after consummation of the Enterprise IPO agreement in favor of the merger proposal.  In connection with the merger, the Enterprise Founders have agreed to have the 6,150,000 Founders’ Shares cancelled prior to the record date for the Enterprise Distribution.

The Enterprise Founders have executed voting agreements whereby they have agreed to vote the 7,500,000 warrants held by them in favor of the warrant amendment proposal.

The Enterprise Founders have indicated that they intend to vote their Founders’ Shares and Sponsors’ Warrants in favor of all other proposals being presented at the meeting.

Quorum

The presence, in person or by proxy, of a majority of all the outstanding shares of common stock entitled to vote constitutes a quorum at the special meeting of stockholders. The presence, in person or by proxy, of a majority of all the outstanding warrants entitled to vote constitutes a quorum at the special meeting of warrantholders.

Abstentions and Broker Non-Votes

Proxies that are marked “abstain” will be treated as shares or warrants present for purposes of determining the presence of a quorum on all matters.  Proxies related to “street name” shares or warrants that are returned to Enterprise but marked by brokers as “not voted” will not be treated as shares or warrants present for purposes of determining the presence of a quorum on all matters.  The latter will not be treated as shares or warrants entitled to vote on the matter as to which authority to vote is withheld from the broker. If you do not give the broker voting instructions, under applicable self-regulatory organization rules, your broker may not vote your shares or warrants on “non-routine” proposals, such as the merger proposal, the initial charter proposal, and the warrant amendment proposal. Since a stockholder must affirmatively vote against the merger proposal to have conversion rights, individuals who fail to vote or who abstain from voting may not exercise their conversion rights. See the information set forth in  “The Merger Proposal — Conversion Rights.”

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Vote of Enterprise’s Stockholders Required

The approval of the merger proposal will require (i) the holders of (a) a majority of the Public Shares present and entitled to vote at a meeting called for this and other related purposes approving the merger proposal, and (b) a majority of the votes cast on the merger proposal approving the proposal and (ii) the holders of fewer than 30% of the Public Shares (or 50% if the secondary charter proposal is approved by stockholders) voting against the merger and properly demanding that their Public Shares be converted into a pro-rata portion of the trust account, calculated as of two business days prior to the anticipated consummation of the merger. For purposes of the vote of the holders of a majority of Enterprise stock outstanding, abstentions and broker non-votes will have the same effect as a vote “AGAINST” the merger proposal. For purposes of the vote of the holders of a majority of the Public Shares present and entitled to vote on the proposal, broker non-votes will have no effect on the vote on the merger proposal and abstentions will have the same effect as a vote “AGAINST” the merger proposal. You cannot seek conversion unless you affirmatively vote against the merger proposal.

The initial charter proposal and secondary charter proposal will require the affirmative vote of the holders of a majority of Enterprise common stock outstanding on the record date. Because these proposals require the affirmative vote of a majority of the shares of common stock outstanding for approval, abstentions and shares not entitled to vote because of a broker non-vote will have the same effect as a vote against these proposals.

The approval of the adjournment proposal will require the affirmative vote of the holders of a majority of Enterprise’s outstanding common stock present (in person or represented by proxy) at the meeting. Abstentions are deemed entitled to vote on such proposal. Therefore, they have the same effect as a vote against the proposal. Broker non-votes are not deemed entitled to vote on such proposals and, therefore, they will have no effect on the vote on such proposal.

The approval of the initial charter proposal, the merger proposal and the warrant amendment proposal is a condition to the consummation of the merger.

Vote of Enterprise’s Warrantholders Required

The approval of the warrant amendment proposal will require the affirmative vote of the holders of a majority of Enterprise warrants outstanding on the record date. Because this proposal requires the affirmative vote of a majority of the warrants outstanding for approval, abstentions and warrants not entitled to vote because of a broker non-vote will have the same effect as a vote against this proposal.

The approval of the adjournment proposal will require the affirmative vote of the holders of a majority of Enterprise’s warrants represented and entitled to vote thereon at the meeting. Abstentions are deemed entitled to vote on such proposal. Therefore, they have the same effect as a vote against this proposal. Broker non-votes are not deemed entitled to vote on such proposal and, therefore, they will have no effect on the vote on such proposal.

The approval of the initial charter proposal, the merger proposal and the warrant amendment proposal are conditions to the consummation of the merger.

Voting Your Shares or Warrants

Each share of Enterprise common stock or warrant of Enterprise that you own in your name entitles you to one vote at the special meetings of stockholders and warrantholders, respectively. Your proxy card shows the number of shares of Enterprise’s common stock or warrants that you own. If your shares or warrants are held in “street name” or are in a margin or similar account, you should contact your broker to ensure that votes related to the shares or warrants you beneficially own are properly counted.

There are two ways to vote your shares of Enterprise common stock or warrants at the special meetings:

	•	You Can Have Your Shares Voted at the Special Meeting By Proxy By Signing and Returning the Enclosed Proxy Card. If you submit a proxy card, your “proxy,” whose name is listed on the proxy card, will vote your shares or warrants as you instruct on the proxy card. If you sign and return the proxy card but do not give instructions on how to vote your shares or warrants, your shares or warrants will be voted as recommended by Enterprise’s board “FOR” all of the proposals. Proxy cards received after a matter has been voted upon at the special meetings will not be counted.
	•	You Can Attend the Special Meetings and Vote in Person. Enterprise will give you a ballot when you arrive. However, if your shares or warrants are held in the name of your broker, bank or another nominee, you must get a proxy from the broker, bank or other nominee. That is the only way Enterprise can be sure that the broker, bank or nominee has not already voted your shares or warrants.

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Revoking Your Proxy

If you give a proxy, you may revoke it or change your voting instructions at any time before it is exercised by:

	•	if you have already sent in a proxy, sending another proxy card with a later date;
	•	notifying Enterprise in writing before the special meeting that you have revoked your proxy; or
	•	attending the special meeting, revoking your proxy and voting in person.

If your shares are held in “street name,” consult your broker for instructions on how to revoke your proxy or change your vote.

Who Can Answer Your Questions About Voting Your Shares or Warrants

If you have any questions about how to vote or direct a vote in respect of your shares of Enterprise’s common stock or warrants, you may call  Morrow & Co., Enterprise’s proxy solicitor, at (800) 662-5200.

Proxy Solicitation Costs

Enterprise is soliciting proxies on behalf of its board of directors. All solicitation costs will be paid by Enterprise. This solicitation is being made by mail but also may be made by telephone or in person. Enterprise and its directors, officers and employees may also solicit proxies in person, by telephone or by other electronic means, including email and facsimile.

Enterprise has hired Morrow & Co. to assist in the proxy solicitation process. It has paid that firm a fee of $12,500 plus disbursements. Such payments were made from non-trust account funds. If the merger is successfully closed, Enterprise will pay Morrow & Co. an additional contingent fee of $15,000.

Enterprise will ask banks, brokers and other institutions, nominees and fiduciaries to forward its proxy materials to their principals and to obtain their authority to execute proxies and voting instructions. Enterprise will reimburse them for their reasonable expenses.

Enterprise Founders; Staton Bell Blank Check LLC

As of October 5, 2009, the record date for the Enterprise special meetings, Staton Bell Blank Check LLC  (“SBBC”), which is affiliated with the Enterprise Founders, beneficially owned and was entitled to vote 6,150,000 Founders’ Shares. The Founders’ Shares constituted approximately 20% of the outstanding shares of Enterprise’s common stock immediately after the Enterprise IPO. In connection with the Enterprise IPO, Enterprise, UBS and Ladenburg entered into agreements with each of the Enterprise Founders pursuant to which each Enterprise Founder agreed to vote his, her or its Founders’ Shares on the merger proposal in accordance with the majority of the votes cast by the holders of Public Shares. SBBC has agreed to vote any shares of Enterprise common stock they purchase after the execution of the merger agreement in favor of the proposals being presented at the special meeting. SBBC has executed voting agreements whereby such parties have agreed to vote the 7,500,000 Sponsors’ Warrants in favor of the warrant amendment proposal. SBBC has also indicated that it intends to vote its Founders’ Shares and Sponsors’ Warrants in favor of all other proposals being presented at the meetings. The Founders’ Shares have no liquidation rights and will be worthless if no business combination is effected by Enterprise. In connection with the IPO, the Enterprise Founders placed their Founders’ Shares in escrow with Continental Stock Transfer & Trust Company and agreed that they would not sell the Founders’ Shares until the earlier of twelve months after a business combination or Enterprise’s liquidation, subject to earlier release within such twelve month period if (i) Enterprise’s common stock has a last sales price equal to or exceeding $14.25 per share for any 20 trading days within any 30-trading day period commencing 90 days after the successful consummation of a business combination or (ii) Enterprise consummates a subsequent liquidation, merger, stock exchange or other similar transaction that results in all of Enterprise’s stockholders having the right to exchange their shares for cash, securities or other property. If the merger is consummated, SBBC has agreed to cancel all of its Founders’ Shares. Additionally, SBBC has agreed to provide certain services to ARRM upon consummation of the transaction pursuant to a sub-management agreement. In exchange for such services, SBBC will receive a percentage of the net management fees to be paid by ARMOUR to ARRM pursuant to the management agreement. For a more detailed description of the interests of the Enterprise Founders, see the section entitled “ The Merger Proposal — Interests of Enterprise’s Directors and Officers and Others in the Merger .”

SBBC agreed, pursuant to an agreement with UBS and Ladenburg in accordance with guidelines specified by Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, to purchase up to $10.0 million of Enterprise’s common stock in the open market, at market prices not to exceed the per share amount held in the trust account, commencing on the later of (a) ten business days after Enterprise files a Current Report on Form 8-K announcing Enterprise’s execution of a definitive agreement for Enterprise’s initial business combination or (b) 60 calendar days after the end of the “restricted period” under Regulation M and ending on the business day immediately preceding the record date for the meeting of the

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stockholders at which such business combination is to be voted upon by Enterprise stockholders. Daniel C. Staton, Marc H. Bell and Maria Balodimas Staton have agreed to purchase such securities in the event that SBBC is unable to satisfy its  obligations under this agreement.  SBBC will not have any discretion or influence with respect to such purchase and will not be able to sell or transfer any common stock purchased in the open market pursuant to such agreement until six months following the consummation of a business combination.  SBBC has agreed to vote all such shares of common stock purchased in the open market in favor of Enterprise’s initial business combination.  If a business combination is not approved by Enterprise’s stockholders, SBBC has agreed not to sell such shares, provided that it will be entitled to participate in any liquidating distributions with respect to such shares purchased in the open market.  Any additional shares or warrants purchased by SBBC will be voted by them in favor of the merger and the other proposals. As of October 5, 2009, SBBC has acquired 128,100 shares of the Enterprise common stock pursuant to this 10b-5 plan.

At any time prior to the special meetings, during a period when the Enterprise Founders are not aware of any material nonpublic information regarding Enterprise or its securities or pursuant to agreements between the buyer and seller of such securities in a form that would not violate insider trading rules, the Enterprise Founders may purchase additional shares or warrants from institutional and other investors, or execute agreements to purchase such shares or warrants from them in the future, or they or Enterprise may enter into transactions with such persons and others to provide them with incentives to acquire Enterprise’s securities or vote their securities in favor of the merger proposal and the other proposals. The purpose of such purchases and other transactions would be to increase the likelihood of satisfaction of the requirements that (i) the holders of a majority of the Public Shares present (in person or represented by proxy) and entitled to vote on the merger proposal vote in its favor, (ii) a majority of the votes cast on the merger proposal approve the merger, (iii) holders of fewer than 30% (50% if the secondary charter proposal is approved) of the Public Shares vote against the merger proposal and demand conversion of their Public Shares into cash where it appears that such requirements would otherwise not be met and (iv) the other proposals are approved.

If such transactions are effected, the consequence could be to cause the merger and the other proposals to be approved in circumstances where such approvals could not otherwise be obtained. Purchases of shares or warrants by the persons described above would allow them to exert more influence over the approval of the merger proposal and other proposals and would likely increase the chances that such proposals would be approved. Moreover, any such purchases may make it less likely that the holders of 30% (50% if the secondary charter proposed is approved) or more of the Public Shares will vote against the merger proposal and exercise their conversion rights.

As of the date of this proxy statement/prospectus, no such discussions have been held and no agreements to such effect have been entered into with any such investor or holder. Enterprise will file a Current Report on Form 8-K to disclose arrangements entered into or significant purchases made by any of the aforementioned persons that would affect the vote on the merger proposal or the other proposals or the conversion threshold. Any such report will include descriptions of any arrangements entered into or significant purchases by any of the aforementioned persons.

It is possible that the special meetings could be adjourned to provide time to seek out and negotiate such transactions if, at the time of the meetings, it appears that the requisite vote will not be obtained or that the limitation on conversion will be exceeded, assuming that an adjournment proposal is presented and approved. Also, under Delaware law, the board of directors may postpone the meetings at any time prior to it being called to order in order to provide time to seek out and negotiate such transactions.

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