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YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
, 2023
13,475
65,316
(1) Includes net realized loss on sale of loans.
The composition of the total loan commitment by state as of March 31, 2023 is summarized below ($ in thousands):
State
Commitment
Percent of Portfolio
Florida
32,122
34.9
New York
10,546
11.5
New Jersey
11,074
12.0
California
12,991
14.1
Washington
4,530
4.9
Connecticut
4,037
4.4
Illinois
4,357
4.7
Other
12,369
13.5
Total
92,026
100.0
11
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For financial reporting purposes of our alternative loans, we follow a fair value hierarchy established under GAAP that is used to determine the fair value of financial instruments. This hierarchy prioritizes relevant market inputs in order to determine an "exit price" at the measurement date, or at the price at which an asset could be sold or a liability could be transferred in an orderly process that is not a forced liquidation or distressed sale. Level 1 inputs are observable inputs that reflect quoted prices
cik:1555074
ticker:AAMC
name:Altisource Asset Management Corp
exchange:NYSE
filing_type:10-Q
|
YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
of contents)
For financial reporting purposes of our alternative loans, we follow a fair value hierarchy established under GAAP that is used to determine the fair value of financial instruments. This hierarchy prioritizes relevant market inputs in order to determine an "exit price" at the measurement date, or at the price at which an asset could be sold or a liability could be transferred in an orderly process that is not a forced liquidation or distressed sale. Level 1 inputs are observable inputs that reflect quoted prices for identical assets or liabilities in active markets.
Level 2 inputs are observable inputs other than quoted prices for an assets or liabilities that are obtained through corroboration with observable market data.
Level 3 inputs are unobservable inputs (e.g., our own data or assumptions) that are used when there is little, if any, relevant market activity for the asset or liability required to be measured at fair value.
In certain cases, inputs used to measure fair value fall into different levels of the fair value hierarchy. In such cases, the level at which the fair value measurement falls is determined based on the lowest level input that is significant to the fair value measurement. Our assessment of the significance of a particular input requires judgment and considers factors specific to the asset or liability being measured
cik:1555074
ticker:AAMC
name:Altisource Asset Management Corp
exchange:NYSE
filing_type:10-Q
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YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
are used when there is little, if any, relevant market activity for the asset or liability required to be measured at fair value.
In certain cases, inputs used to measure fair value fall into different levels of the fair value hierarchy. In such cases, the level at which the fair value measurement falls is determined based on the lowest level input that is significant to the fair value measurement. Our assessment of the significance of a particular input requires judgment and considers factors specific to the asset or liability being measured.
The following table presents the assets that are reported at fair value on a recurring basis as of March 31, 2023 and December 31, 2022, as well as the fair value of hierarchy of the valuation inputs used to measure fair value. We did not have any liabilities to report at fair value on a recurring basis as of March 31, 2023 and December 31, 2022.
Assets
Carrying
Fair Value Measurements Using
(In thousands)
Value
Level 1
Level 2
Level 3
March 31, 2023
Loans held for sale
13,475
13,475
Loans held for investment
65,316
65,316
Total measured
78,791
cik:1555074
ticker:AAMC
name:Altisource Asset Management Corp
exchange:NYSE
filing_type:10-Q
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YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
not have any liabilities to report at fair value on a recurring basis as of March 31, 2023 and December 31, 2022.
Assets
Carrying
Fair Value Measurements Using
(In thousands)
Value
Level 1
Level 2
Level 3
March 31, 2023
Loans held for sale
13,475
13,475
Loans held for investment
65,316
65,316
Total measured
78,791
78,791
December 31, 2022
Loans held for sale
11,593
11,593
Loans held for investment
83,143
83,143
Total measured
94,736
94,736
The estimated fair value for our business purpose loans is determined using discounted cash flow model (“DCF”) to estimate the net present value of the future cash flows expected from each loan. For performing loans, the DCF is based on the future expected cash flows of each loan in accordance with its contractual terms net of the strip component.
Cash flows for performing loans with construction holdbacks incorporate the draws to complete the required improvements to the underlying property securing the loan. For nonaccrual loans, the estimated cash flows are based
cik:1555074
ticker:AAMC
name:Altisource Asset Management Corp
exchange:NYSE
filing_type:10-Q
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YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
for our business purpose loans is determined using discounted cash flow model (“DCF”) to estimate the net present value of the future cash flows expected from each loan. For performing loans, the DCF is based on the future expected cash flows of each loan in accordance with its contractual terms net of the strip component.
Cash flows for performing loans with construction holdbacks incorporate the draws to complete the required improvements to the underlying property securing the loan. For nonaccrual loans, the estimated cash flows are based on the current fair value of the collateral of the loans, in which the Company will utilize a third-party appraisal to determine the fair value (Level 3).
On a loan by loan basis, the weighted average discount rate range utilized for the DCF applied to the net yield to be received by the Company was 10.6% which is greater than the overall yield on the portfolio of 8.6%, resulting in the decrease in value of the portfolio at March 31, 2023.
The determination of the discount rate was based on analysis of the current interest rates charged for business purpose loans in conjunction with the increase in rates for other underlying base rates such as the 10-year U.S. treasury bond and the 30 day Secured Overnight Financing Rate ("SO
cik:1555074
ticker:AAMC
name:Altisource Asset Management Corp
exchange:NYSE
filing_type:10-Q
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YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
be received by the Company was 10.6% which is greater than the overall yield on the portfolio of 8.6%, resulting in the decrease in value of the portfolio at March 31, 2023.
The determination of the discount rate was based on analysis of the current interest rates charged for business purpose loans in conjunction with the increase in rates for other underlying base rates such as the 10-year U.S. treasury bond and the 30 day Secured Overnight Financing Rate ("SOFR") (Level 3).
We did not transfer any assets from one level to another level during the three months ended March 31, 2023 and the year ended December 31, 2022.
3. Borrowings
In December 2022, the Company entered into a $50.0 million Master Repurchase Agreement (the "NexBank Line") with NexBank, as the buyer. Altisource Asset Management Corp uses the proceeds from the NexBank Line to fund the acquisition and origination of business purpose loans (the "Loans") secured by residential, multifamily and certain commercial properties. Each draw on the NexBank Line can be outstanding up to 180 days. NexBank has a security interest in the Loans subject to a transaction under
cik:1555074
ticker:AAMC
name:Altisource Asset Management Corp
exchange:NYSE
filing_type:10-Q
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YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
entered into a $50.0 million Master Repurchase Agreement (the "NexBank Line") with NexBank, as the buyer. Altisource Asset Management Corp uses the proceeds from the NexBank Line to fund the acquisition and origination of business purpose loans (the "Loans") secured by residential, multifamily and certain commercial properties. Each draw on the NexBank Line can be outstanding up to 180 days. NexBank has a security interest in the Loans subject to a transaction under the NexBank Line. The NexBank Line's maturity is 364 days from the execution date. The carrying value of the NexBank Line approximates its fair value as of March 31, 2023 due to its short-term nature and floating interest rate terms.
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The NexBank Line provides for certain affirmative and negative covenants applicable to the Company and its subsidiaries. Altisource Asset Management Corp is required to maintain financial covenants including specified levels of: 1) maximum debt to net worth ratio; 2) minimum current ratio; and 3) minimum liquidity. The NexBank Line also contains events of default (subject to certain materiality thresholds and grace periods), including payment defaults, breaches of covenants and representations and
cik:1555074
ticker:AAMC
name:Altisource Asset Management Corp
exchange:NYSE
filing_type:10-Q
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YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
12
(table of contents)
The NexBank Line provides for certain affirmative and negative covenants applicable to the Company and its subsidiaries. Altisource Asset Management Corp is required to maintain financial covenants including specified levels of: 1) maximum debt to net worth ratio; 2) minimum current ratio; and 3) minimum liquidity. The NexBank Line also contains events of default (subject to certain materiality thresholds and grace periods), including payment defaults, breaches of covenants and representations and warranties, cross defaults, bankruptcy or insolvency proceedings and other events of default which are customary for this type of transaction. The remedies for such events of default include the acceleration of the principal amount outstanding under the NexBank Line and the liquidation of Loans subject to a transaction. For the three months ended March 31, 2023, the Company did not meet the twelve-trailing months profitability requirements of the NexBank Line. As a result, the Company has requested a compliance waiver from NexBank and is currently working with NexBank to receive the waiver. We are not aware of any reasons or circumstances that would prevent NexBank from electing to issue the waiver at this time. Altisource Asset Management Corp was otherwise in compliance with all covenants and there were no
cik:1555074
ticker:AAMC
name:Altisource Asset Management Corp
exchange:NYSE
filing_type:10-Q
|
YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
For the three months ended March 31, 2023, the Company did not meet the twelve-trailing months profitability requirements of the NexBank Line. As a result, the Company has requested a compliance waiver from NexBank and is currently working with NexBank to receive the waiver. We are not aware of any reasons or circumstances that would prevent NexBank from electing to issue the waiver at this time. Altisource Asset Management Corp was otherwise in compliance with all covenants and there were no defaults as of March 31, 2023.
In August 2022, the Company entered into a $50.0 million Master Repurchase Agreement (the “Flagstar Line”) with Flagstar Bank FSB (“Flagstar”), a federal savings bank, as a buyer and administrative agent. Altisource Asset Management Corp uses the proceeds from the Flagstar Line to fund the acquisition and origination of Loans secured by residential, multifamily and certain commercial properties. Each draw on the Flagstar Line can be outstanding up to 180 days. Flagstar has a security interest in the Loans subject to a transaction under the Flagstar Line and requires the Company to maintain restricted cash of $2 million in a Flagstar deposit account. The Line's maturity is 364 days from the execution
cik:1555074
ticker:AAMC
name:Altisource Asset Management Corp
exchange:NYSE
filing_type:10-Q
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YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
buyer and administrative agent. Altisource Asset Management Corp uses the proceeds from the Flagstar Line to fund the acquisition and origination of Loans secured by residential, multifamily and certain commercial properties. Each draw on the Flagstar Line can be outstanding up to 180 days. Flagstar has a security interest in the Loans subject to a transaction under the Flagstar Line and requires the Company to maintain restricted cash of $2 million in a Flagstar deposit account. The Line's maturity is 364 days from the execution date. The carrying value of the Line approximates its fair value as of March 31, 2023 due to its short-term nature and floating interest rate terms.
The Flagstar Line provides for certain affirmative and negative covenants applicable to the Company and its subsidiaries. Altisource Asset Management Corp is required to maintain financial covenants including specified levels of: 1) quarter-end tangible net worth; 2) quarter-end liquidity; 3) a quarter-end ratio of total liabilities to tangible net worth; and 4) minimum profitability requirements in 2023. The Line also contains events of default (subject to certain materiality thresholds and grace periods), including payment defaults, breaches of covenants and representations and warranties, cross defaults, bankruptcy or insolvency proceedings and other
cik:1555074
ticker:AAMC
name:Altisource Asset Management Corp
exchange:NYSE
filing_type:10-Q
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YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Altisource Asset Management Corp is required to maintain financial covenants including specified levels of: 1) quarter-end tangible net worth; 2) quarter-end liquidity; 3) a quarter-end ratio of total liabilities to tangible net worth; and 4) minimum profitability requirements in 2023. The Line also contains events of default (subject to certain materiality thresholds and grace periods), including payment defaults, breaches of covenants and representations and warranties, cross defaults, bankruptcy or insolvency proceedings and other events of default which are customary for this type of transaction. The remedies for such events of default include the acceleration of the principal amount outstanding under the Line and the liquidation of Loans subject to a transaction. Altisource Asset Management Corp was in compliance with all covenants and there were no defaults as of March 31, 2023.
4. Leases
We lease office space under operating leases in Christiansted, St. Croix, U.S. Virgin Islands, Tampa, Florida, and Bengaluru, India.
As of March 31, 2023 and December 31, 2022, our weighted average remaining lease term, including applicable extensions, was 3.6 years and 3.8 years, respectively. We determine the discount rate for
cik:1555074
ticker:AAMC
name:Altisource Asset Management Corp
exchange:NYSE
filing_type:10-Q
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YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
defaults as of March 31, 2023.
4. Leases
We lease office space under operating leases in Christiansted, St. Croix, U.S. Virgin Islands, Tampa, Florida, and Bengaluru, India.
As of March 31, 2023 and December 31, 2022, our weighted average remaining lease term, including applicable extensions, was 3.6 years and 3.8 years, respectively. We determine the discount rate for each lease to be either the discount rate stated in the lease agreement or our estimated rate that we would be charged to finance real estate assets.
During the three months ended March 31, 2023 and 2022, we recognized rent expense of approximately $124,000 and $49,000, related to long-term operating leases, respectively. We had no short-term rent expense during the three months ended March 31, 2023 and 2022. We include rent expense as a component of general and administrative expenses in the Condensed Consolidated Statements of Operations. We had no finance leases during the three months ended March 31, 2023 and 2022.
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The following table presents our future lease obligations under our operating
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ticker:AAMC
name:Altisource Asset Management Corp
exchange:NYSE
filing_type:10-Q
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YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
$49,000, related to long-term operating leases, respectively. We had no short-term rent expense during the three months ended March 31, 2023 and 2022. We include rent expense as a component of general and administrative expenses in the Condensed Consolidated Statements of Operations. We had no finance leases during the three months ended March 31, 2023 and 2022.
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(table of contents)
The following table presents our future lease obligations under our operating leases as of March 31, 2023 ($ in thousands):
Operating Lease Liabilities
2023 (1)
458
2024
304
2025
314
2026
275
2027
43
Total lease payments
1,394
Less: interest
162
Lease liabilities
1,232
_____________
(1)
Excludes the three months ended March 31, 2023.
5. Commitments and Contingencies
Litigation, claims and assessments
Information regarding reportable legal proceedings is contained in the “Commitments and Contingencies” note in the financial statements provided in our Annual Report on Form 10-K for the year ended December 31, 2022. We establish reserves for specific legal
cik:1555074
ticker:AAMC
name:Altisource Asset Management Corp
exchange:NYSE
filing_type:10-Q
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YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
: interest
162
Lease liabilities
1,232
_____________
(1)
Excludes the three months ended March 31, 2023.
5. Commitments and Contingencies
Litigation, claims and assessments
Information regarding reportable legal proceedings is contained in the “Commitments and Contingencies” note in the financial statements provided in our Annual Report on Form 10-K for the year ended December 31, 2022. We establish reserves for specific legal proceedings when we determine that the likelihood of an outcome is probable and the amount of loss can be reasonably estimated. We do not currently have any reserves for our legal proceedings. The following updates and restates the description of the previously reported matters:
Litigation regarding Luxor Capital Group, LP and certain of its managed funds and accounts ("Luxor")
Please refer to
Note 1
– Section
Series A Convertible Preferred Stock in 2014 Private Placement.
Erbey Holding Corporation et al. v. Blackrock Management Inc., et al.
On April 12, 2018, a partial stockholder derivative action was filed in the Superior Court of the Virgin Islands, Division of St. Croix under the caption Erbey Holding Corporation
cik:1555074
ticker:AAMC
name:Altisource Asset Management Corp
exchange:NYSE
filing_type:10-Q
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YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
or Capital Group, LP and certain of its managed funds and accounts ("Luxor")
Please refer to
Note 1
– Section
Series A Convertible Preferred Stock in 2014 Private Placement.
Erbey Holding Corporation et al. v. Blackrock Management Inc., et al.
On April 12, 2018, a partial stockholder derivative action was filed in the Superior Court of the Virgin Islands, Division of St. Croix under the caption Erbey Holding Corporation, et al. v. Blackrock Financial Management Inc., et al. The action was filed by Erbey Holding Corporation (“Erbey Holding”), John R. Erbey Family Limited Partnership (“JREFLP”), by its general partner Jupiter Capital, Inc., Salt Pond Holdings, LLC (“Salt Pond”), Munus, L.P. (“Munus”), Carisma Trust (“Carisma”), by its trustee, Venia, LLC, and Tribue Limited Partnership (collectively, the “Plaintiffs”) each on its own behalf and Salt Pond and Carisma derivatively on behalf of AAMC. The action was filed against Blackrock Financial Management, Inc., Blackrock Investment Management, LLC, Blackrock Investments, LLC, Blackrock Capital Management, Inc
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name:Altisource Asset Management Corp
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YOU are a financial analyst. You are reading a report of a company.
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Holdings, LLC (“Salt Pond”), Munus, L.P. (“Munus”), Carisma Trust (“Carisma”), by its trustee, Venia, LLC, and Tribue Limited Partnership (collectively, the “Plaintiffs”) each on its own behalf and Salt Pond and Carisma derivatively on behalf of AAMC. The action was filed against Blackrock Financial Management, Inc., Blackrock Investment Management, LLC, Blackrock Investments, LLC, Blackrock Capital Management, Inc., Blackrock, Inc. (collectively, “Blackrock”), Pacific Investment Management Company LLC, PIMCO Investments LLC (collectively, “PIMCO”) and John and Jane Does 1-10 (collectively with Blackrock and PIMCO, the “Defendants”). The action alleges a conspiracy by Blackrock and PIMCO to harm Ocwen Financial Corporation (“Ocwen”) and AAMC and certain of their subsidiaries, affiliates and related companies and to extract enormous profits at the expense of Ocwen and AAMC by attempting to damage their operations, business relationships and reputations. The complaint alleges that Defendants’ conspiratorial activities, which included short-selling activities, were designed to destroy Ocwen and AAMC, and that the Plaintiffs
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ticker:AAMC
name:Altisource Asset Management Corp
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YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Defendants”). The action alleges a conspiracy by Blackrock and PIMCO to harm Ocwen Financial Corporation (“Ocwen”) and AAMC and certain of their subsidiaries, affiliates and related companies and to extract enormous profits at the expense of Ocwen and AAMC by attempting to damage their operations, business relationships and reputations. The complaint alleges that Defendants’ conspiratorial activities, which included short-selling activities, were designed to destroy Ocwen and AAMC, and that the Plaintiffs (including AAMC) suffered significant injury, including but not limited to lost value of their stock and/or stock holdings. The action seeks, among other things, an award of monetary damages to AAMC, including treble damages under Section 605, Title IV of the Virgin Islands Code related to the Criminally Influenced and Corrupt Organizations Act, punitive damages and an award of attorney’s and other fees and expenses.
Defendants have moved to dismiss the first amended verified complaint on various alleged grounds, including that the Court allegedly lacks personal jurisdiction over Defendants. Plaintiffs and AAMC have opposed Defendant’s motions and have also moved for leave to file a second amended verified complaint to include AAMC as a direct plaintiff, rather than as a derivative party
cik:1555074
ticker:AAMC
name:Altisource Asset Management Corp
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YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Virgin Islands Code related to the Criminally Influenced and Corrupt Organizations Act, punitive damages and an award of attorney’s and other fees and expenses.
Defendants have moved to dismiss the first amended verified complaint on various alleged grounds, including that the Court allegedly lacks personal jurisdiction over Defendants. Plaintiffs and AAMC have opposed Defendant’s motions and have also moved for leave to file a second amended verified complaint to include AAMC as a direct plaintiff, rather than as a derivative party. On March 27, 2019, the Court held oral argument on Defendants' motions to dismiss the first amended verified complaint and Plaintiffs' motion for leave to file the second amended verified complaint. The Court held additional oral argument on the pending motions on October 25, 2021. Plaintiffs have repeatedly required the Court to decide the pending motions and issue a scheduling order permitting discovery to proceed.
14
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On October 11, 2022, the Court appointed a Staff Master to decide, or issue a recommended decision on, the pending motions, including the motion to dismiss for lack of personal jurisdiction.
On February 1, 2023, Plaintiffs and AAMC filed a petition for mandamus with the United States Virgin
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name:Altisource Asset Management Corp
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YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
25, 2021. Plaintiffs have repeatedly required the Court to decide the pending motions and issue a scheduling order permitting discovery to proceed.
14
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On October 11, 2022, the Court appointed a Staff Master to decide, or issue a recommended decision on, the pending motions, including the motion to dismiss for lack of personal jurisdiction.
On February 1, 2023, Plaintiffs and AAMC filed a petition for mandamus with the United States Virgin Islands Supreme Court seeking an order directing the Superior Court to issue a decision on the personal jurisdiction issue and to permit discovery to proceed. On April 18, 2023, the Supreme Court issued an order dismissing the petition for mandamus, without prejudice, as moot.
On March 3, 2023, the Staff Master held a hearing to discuss the pending motions to dismiss. On April 6, 2023, the Staff Master ordered the parties to submit supplemental briefs on the personal jurisdiction issue which the parties filed on April 28, 2023.
At this time, we are not able to predict the ultimate outcome of this matter, nor can we estimate the range of possible damages to be awarded to AAMC, if any. As
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name:Altisource Asset Management Corp
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YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
March 3, 2023, the Staff Master held a hearing to discuss the pending motions to dismiss. On April 6, 2023, the Staff Master ordered the parties to submit supplemental briefs on the personal jurisdiction issue which the parties filed on April 28, 2023.
At this time, we are not able to predict the ultimate outcome of this matter, nor can we estimate the range of possible damages to be awarded to AAMC, if any. As such, we have not recorded a gain contingency for this matter at March 31, 2023 or December 31, 2022.
6. Share-Based Payments
On May 12, 2022, we granted 22,500 shares of restricted stock to management with a weighted average grant date fair value per share of $9.89. The restricted stock units will vest in three equal annual installments in May 2023, 2024, and 2025 subject to forfeiture or acceleration.
On September 20, 2021, we granted 3,000 shares of restricted stock to management with a weighted average grant date fair value per share of $24.83. 1,000 shares of this grant vested on September 20,
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ticker:AAMC
name:Altisource Asset Management Corp
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with a weighted average grant date fair value per share of $9.89. The restricted stock units will vest in three equal annual installments in May 2023, 2024, and 2025 subject to forfeiture or acceleration.
On September 20, 2021, we granted 3,000 shares of restricted stock to management with a weighted average grant date fair value per share of $24.83. 1,000 shares of this grant vested on September 20, 2022. The vesting of the additional 2,000 shares were accelerated to March 9, 2023 due to a separation agreement with the member of management.
On June 28, 2021, we granted 5,000 shares of restricted stock to management with a weighted average grant date fair value per share of $19.64. 1,667 shares of this grant vested on June 28, 2022. The remaining restricted stock units will vest in two equal annual installments on June 28, 2023 and 2024 subject to forfeiture or acceleration.
Our independent Directors each receive annual grants of restricted stock equal to $60,000 based on the market value of our common stock at the time of the annual stock
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YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
to management with a weighted average grant date fair value per share of $19.64. 1,667 shares of this grant vested on June 28, 2022. The remaining restricted stock units will vest in two equal annual installments on June 28, 2023 and 2024 subject to forfeiture or acceleration.
Our independent Directors each receive annual grants of restricted stock equal to $60,000 based on the market value of our common stock at the time of the annual stockholders' meeting. These shares of restricted stock vest and are issued after the next annual shareholders meeting, subject to each independent Director attending at least 75% of the Board and committee meetings. During 2022, we granted 8,571 shares of stock pursuant to our Equity Incentive Plans with a weighted average grant date fair value per share of $21.00.
7. Income Taxes
We are domiciled in the USVI and are obligated to pay taxes to the USVI on our income. We applied for tax benefits from the USVI Economic Development Commission (“EDC”) and received our certificate of benefits (the “Certificate”), effective as of February 1, 2013. Pursuant to the Certificate, as long as we comply with its provisions,
cik:1555074
ticker:AAMC
name:Altisource Asset Management Corp
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YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Incentive Plans with a weighted average grant date fair value per share of $21.00.
7. Income Taxes
We are domiciled in the USVI and are obligated to pay taxes to the USVI on our income. We applied for tax benefits from the USVI Economic Development Commission (“EDC”) and received our certificate of benefits (the “Certificate”), effective as of February 1, 2013. Pursuant to the Certificate, as long as we comply with its provisions, we will receive a 90% tax credit on our USVI-sourced income taxes until 2043. By letter dated April 13, 2023, the EDC approved an extension of the temporary full-time employment waiver (the “Waiver”) of the Company’s minimum employment requirements to five full-time USVI employees for the period from January 1, 2023 through June 30, 2023.
At March 31, 2023, the Company met the minimum employment requirements required under the provisions of the Waiver. Altisource Asset Management Corp hired Jason Kopcak as President and Chief Operating Officer, now Chief Executive Officer, in May 2022, and he has relocated to the USVI.
As of March 31, 2023
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name:Altisource Asset Management Corp
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’s minimum employment requirements to five full-time USVI employees for the period from January 1, 2023 through June 30, 2023.
At March 31, 2023, the Company met the minimum employment requirements required under the provisions of the Waiver. Altisource Asset Management Corp hired Jason Kopcak as President and Chief Operating Officer, now Chief Executive Officer, in May 2022, and he has relocated to the USVI.
As of March 31, 2023 and December 31, 2022, we accrued no interest or penalties associated with any unrecognized tax benefits, nor did we recognize any interest expense or penalties during the three months ended March 31, 2023 and 2022.
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Altisource Asset Management Corp recorded tax expense of $35 thousand on a book loss of $3.0 million in the first quarter
of 2023. The material differences between the effective tax rate and the statutory tax rate are the EDC benefit discussed above and the fact that the USVI EDC is in a full valuation allowance position and incurred a current quarter loss.
8. Earnings Per Share
The following table sets forth the components of basic and diluted earnings (loss) per share (in thousands, except
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ticker:AAMC
name:Altisource Asset Management Corp
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The report is about the company's financial status.
recorded tax expense of $35 thousand on a book loss of $3.0 million in the first quarter
of 2023. The material differences between the effective tax rate and the statutory tax rate are the EDC benefit discussed above and the fact that the USVI EDC is in a full valuation allowance position and incurred a current quarter loss.
8. Earnings Per Share
The following table sets forth the components of basic and diluted earnings (loss) per share (in thousands, except share and per share amounts):
Three months ended March 31,
2023
2022
Numerator
Net loss
(2,988)
(3,697)
Gain on preferred stock transaction
5,122
Numerator for earnings per share - net loss attributable to common stockholders
(2,988)
1,425
Denominator
Weighted average common stock outstanding – basic
1,777,135
2,056,666
Weighted average common stock outstanding – diluted
1,777,135
2,174,002
(Loss) income per basic common share
(1.68)
0.69
(Loss) income per diluted common share
(1.68)
0.66
We excluded the items presented below
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name:Altisource Asset Management Corp
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common stockholders
(2,988)
1,425
Denominator
Weighted average common stock outstanding – basic
1,777,135
2,056,666
Weighted average common stock outstanding – diluted
1,777,135
2,174,002
(Loss) income per basic common share
(1.68)
0.69
(Loss) income per diluted common share
(1.68)
0.66
We excluded the items presented below from the calculation of diluted earnings per share as they were antidilutive to loss per share for the period indicated ($ in thousands):
Three months ended March 31,
2023
2022
Denominator
Restricted stock
29,216
Preferred stock, if converted
115,370
9. Segment Information
ALG is our primary segment which we continue to grow in 2023.
10. Subsequent Events
Management has evaluated the impact of all subsequent events through the issuance of these interim condensed consolidated financial statements and determined that there were no subsequent events requiring adjustment or disclosure in the financial statements.
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Item 2. Management's discussion and analysis of financial condition and results of operations
Our Business
Altisource Asset Management Corporation (“we
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name:Altisource Asset Management Corp
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,370
9. Segment Information
ALG is our primary segment which we continue to grow in 2023.
10. Subsequent Events
Management has evaluated the impact of all subsequent events through the issuance of these interim condensed consolidated financial statements and determined that there were no subsequent events requiring adjustment or disclosure in the financial statements.
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Item 2. Management's discussion and analysis of financial condition and results of operations
Our Business
Altisource Asset Management Corporation (“we,” “our,” “us,” “AAMC,” or the “Company”) was incorporated in the United States Virgin Islands (“USVI”) on March 15, 2012 (our "inception"), and we commenced operations as an asset manager on December 21, 2012.
During the first quarter of 2022, the Company created Alternative Lending Group (“ALG”) to generate alternative private credit loans through Direct to Borrower Lending, Wholesale Originations, and Correspondent Loan Acquisitions. The initial operations of ALG entail the following:
Build out a niche origination platform as well as a loan acquisition team;
Fund the originated or acquired alternative loans from a combination of Company equity and future lines of credit;
Sell the originated and acquired alternative
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2012.
During the first quarter of 2022, the Company created Alternative Lending Group (“ALG”) to generate alternative private credit loans through Direct to Borrower Lending, Wholesale Originations, and Correspondent Loan Acquisitions. The initial operations of ALG entail the following:
Build out a niche origination platform as well as a loan acquisition team;
Fund the originated or acquired alternative loans from a combination of Company equity and future lines of credit;
Sell the originated and acquired alternative loans through forward commitment and repurchase contracts;
Leverage senior management’s expertise in this space; and
Utilize AAMC’s existing operations in India to drive controls and cost efficiencies.
The type of product we expect to originate or acquire are alternative loans that offer opportunities for rapid growth and allow us to tap into under-served markets. We intend to stay agile on the loan product mix, but we are currently focused on markets not addressed by banks, agency aggregators and most traditional lenders, including but not limited to:
Transitional Loans: bridge loans on single family and commercial real estate;
Ground-up Construction Loans: assisting developers in projects with the primary focus on workforce housing;
Investor Loans: Non-agency loans on investment rental properties that are debt service coverage ratio
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rapid growth and allow us to tap into under-served markets. We intend to stay agile on the loan product mix, but we are currently focused on markets not addressed by banks, agency aggregators and most traditional lenders, including but not limited to:
Transitional Loans: bridge loans on single family and commercial real estate;
Ground-up Construction Loans: assisting developers in projects with the primary focus on workforce housing;
Investor Loans: Non-agency loans on investment rental properties that are debt service coverage ratio type loans;
Special Purpose Credit Programs: loans to extend special purpose credit to applicants who meet certain eligibility requirements such as credit assistance programs; and
“Gig Economy” Loans: Loans to professionals, self-employed borrowers, start-up business owners lacking income documentation to qualify for Agency purchase.
ALG’s primary sources of income are derived from mortgage banking activities generated through the origination and acquisition of loans, and their subsequent sale or securitization as well as net interest income from loans while held on the balance sheet.
For a discussion of the risks associated with the Company's new business, see
Item 1A - “Risk Factors”
in Part II of this Quarterly Report on Form 10-Q.
Metrics Affecting our Consolidated Results
Our operating results are affected
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.
ALG’s primary sources of income are derived from mortgage banking activities generated through the origination and acquisition of loans, and their subsequent sale or securitization as well as net interest income from loans while held on the balance sheet.
For a discussion of the risks associated with the Company's new business, see
Item 1A - “Risk Factors”
in Part II of this Quarterly Report on Form 10-Q.
Metrics Affecting our Consolidated Results
Our operating results are affected by various factors and market conditions, including the following:
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Revenues
Our revenues primarily consist of loan interest income and origination fees earned and origination fees earned on our loans held for sale and investment, net realized gains or losses on loans held for sale, along with other ancillary fees earned from the loan portfolio.
Expenses
Our expenses consist primarily of salaries and employee benefits, legal and professional fees, general and administrative expenses, servicing and asset management expense, acquisition charges, operational interest expense, direct loan expense, and loan sales and marketing expense and other loan related expenses. Salaries and employee benefits include the base salaries, incentive bonuses, medical coverage, retirement benefits, non-cash share-based compensation and other benefits provided to our employees for their
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name:Altisource Asset Management Corp
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YOU are a financial analyst. You are reading a report of a company.
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sale, along with other ancillary fees earned from the loan portfolio.
Expenses
Our expenses consist primarily of salaries and employee benefits, legal and professional fees, general and administrative expenses, servicing and asset management expense, acquisition charges, operational interest expense, direct loan expense, and loan sales and marketing expense and other loan related expenses. Salaries and employee benefits include the base salaries, incentive bonuses, medical coverage, retirement benefits, non-cash share-based compensation and other benefits provided to our employees for their services. Legal and professional fees include services provided by third-party attorneys, accountants and other service providers of a professional nature. General and administrative expenses include costs related to the general operation and overall administration of our business as well as non-cash share-based compensation expense related to restricted stock awards to our Directors.
Servicing and asset management expenses include loan commissions.
Acquisition charges reflect professional fees incurred solely for the purpose of assisting the Company in the identification of target companies and the subsequent due diligence, valuation, and deal structuring services required to properly assess the viability of the target companies.
Operational interest expense, direct loan expense, and loan sales and marketing expense are fees related to loans or the line of credit.
Other Income (Expense)
Other income (expense) primarily relates to income
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awards to our Directors.
Servicing and asset management expenses include loan commissions.
Acquisition charges reflect professional fees incurred solely for the purpose of assisting the Company in the identification of target companies and the subsequent due diligence, valuation, and deal structuring services required to properly assess the viability of the target companies.
Operational interest expense, direct loan expense, and loan sales and marketing expense are fees related to loans or the line of credit.
Other Income (Expense)
Other income (expense) primarily relates to income or expense recognized in the change of fair value of loans and net realized gains or losses on loans held for investment.
Results of Operations
The following sets forth discussion of our results of operations for the three months ended March 31, 2023 and 2022. Our results of operations for the periods presented are not indicative of our expected results in future periods.
Loan Interest Income
Loan interest income was $2.0 million for three months ended March 31, 2023. No loan interest income was earned in 2022, as we had not developed said lines of business at that time.
Loan Fee Income
Loan fee income was $0.1 million for the three months ended March 31, 2023. No loan fee income was
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results of operations for the periods presented are not indicative of our expected results in future periods.
Loan Interest Income
Loan interest income was $2.0 million for three months ended March 31, 2023. No loan interest income was earned in 2022, as we had not developed said lines of business at that time.
Loan Fee Income
Loan fee income was $0.1 million for the three months ended March 31, 2023. No loan fee income was earned in three months ended March 31, 2022, as we had not developed said line of business at that time.
Realized Gains on Loans Held for Sale, net
Realized gains on loans held for sale, net, were $10,000 for the three months ended March 31, 2023. No realized gains on loans held for sale was earned in three months ended March 31, 2022, as we had not developed said line of business at that time.
Salaries and Employee Benefits
Salaries and employee benefits were $1.9 million during the three months ended March 31, 2023, compared to $0.9 million during the three months ended March 31, 2022. The 202
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three months ended March 31, 2023. No realized gains on loans held for sale was earned in three months ended March 31, 2022, as we had not developed said line of business at that time.
Salaries and Employee Benefits
Salaries and employee benefits were $1.9 million during the three months ended March 31, 2023, compared to $0.9 million during the three months ended March 31, 2022. The 2023 quarterly increase was primarily due addition of loan operations and ALG staff.
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Legal, Acquisition and Professional Fee
Legal fees were $0.4 million during the three months ended March 31, 2023 compared to $1.4 million during the three months ended March 31, 2022. The 2023 decrease was primarily due to higher legal and consulting fees related to the Luxor litigation and employment issues incurred in 2022. We incurred no acquisition costs in the three months ended March 31, 2023 and $0.4 million in acquisition costs in the three months ended March 31, 2022. Professional fees were $0.5 million during the three months ended March 31, 202
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name:Altisource Asset Management Corp
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the three months ended March 31, 2022. The 2023 decrease was primarily due to higher legal and consulting fees related to the Luxor litigation and employment issues incurred in 2022. We incurred no acquisition costs in the three months ended March 31, 2023 and $0.4 million in acquisition costs in the three months ended March 31, 2022. Professional fees were $0.5 million during the three months ended March 31, 2023 compared to $0.3 million for the three months ended March 31, 2022.
General and Administrative Expenses
General and administrative expenses were $0.9 million during the three months ended March 31, 2023 compared to $0.7 million during the three months ended March 31, 2022.
Servicing and Asset Management Expense
Servicing and asset management expenses were $0.2 million during the three months ended March 31, 2023. No servicing and asset management expense was recorded in three months ended March 31, 2022, as we had not developed the ALG line of business at that time.
Interest Expense
Interest expenses were $1.1 million during the three months ended March 31,
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the three months ended March 31, 2022.
Servicing and Asset Management Expense
Servicing and asset management expenses were $0.2 million during the three months ended March 31, 2023. No servicing and asset management expense was recorded in three months ended March 31, 2022, as we had not developed the ALG line of business at that time.
Interest Expense
Interest expenses were $1.1 million during the three months ended March 31, 2023. Interest expense includes interest incurred on our margin account, line of credit and amortized commitment fees. No interest expense was recorded in three months ended March 31, 2022, as we had not developed the ALG line of business at that time.
Direct Loan Expense
Direct loan expenses were $0.3 million during the three months ended March 31, 2023. Direct loan expenses include loan broker fees, inspection fees, title search and other fees. No direct loan expense was recorded in three months ended March 31, 2022, as we had not developed the ALG line of business at that time.
Loan Sales and Marketing Expense
Loan sales and marketing expenses were $0.4 million during the three months ended March
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Loan Expense
Direct loan expenses were $0.3 million during the three months ended March 31, 2023. Direct loan expenses include loan broker fees, inspection fees, title search and other fees. No direct loan expense was recorded in three months ended March 31, 2022, as we had not developed the ALG line of business at that time.
Loan Sales and Marketing Expense
Loan sales and marketing expenses were $0.4 million during the three months ended March 31, 2023. Loan sales and marketing expense include expenses related to the promotion and exposure to new business leads which may result in originations of loans. No loan sales and marketing expense was recorded in the three months ended March 31, 2022, as we had not developed the ALG line of business at that time.
Change in Fair Value of Loans
We recognized $0.8 million income for the change in fair value of loans three months ended March 31, 2023 No income or expense was recognized in the three months ended March 31, 2022, as we had not developed the ALG line of business at that time.
Realized Losses on Sale of Held for Investment Loans, net
We recognized $
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YOU are a financial analyst. You are reading a report of a company.
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as we had not developed the ALG line of business at that time.
Change in Fair Value of Loans
We recognized $0.8 million income for the change in fair value of loans three months ended March 31, 2023 No income or expense was recognized in the three months ended March 31, 2022, as we had not developed the ALG line of business at that time.
Realized Losses on Sale of Held for Investment Loans, net
We recognized $0.3 million expense for realized losses on sale of held for investment loans, net, for the three months ended March 31, 2023. No income or expense was recognized in the three months ended March 31, 2022, as we had not developed the ALG line of business at that time.
Liquidity and Capital Resources
As of March 31, 2023, we had cash and cash equivalents of $11.8 million compared to $10.7 million as of December 31, 2022. The increase in cash and cash equivalents was primarily due to principal payments on loans. As of March 31, 2023, we also had $2.0 million in restricted cash. We are developing new
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ticker:AAMC
name:Altisource Asset Management Corp
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YOU are a financial analyst. You are reading a report of a company.
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the ALG line of business at that time.
Liquidity and Capital Resources
As of March 31, 2023, we had cash and cash equivalents of $11.8 million compared to $10.7 million as of December 31, 2022. The increase in cash and cash equivalents was primarily due to principal payments on loans. As of March 31, 2023, we also had $2.0 million in restricted cash. We are developing new sources of income and capital through our strategic business plan. We believe these sources of liquidity are sufficient to enable us to meet anticipated short-term (one-year) liquidity requirements. Our ongoing cash expenditures consist of: salaries and employee benefits, legal and professional fees, lease obligations and other general and administrative expenses. Certain account balances exceed FDIC insurance coverage and, as a
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result, there is a concentration of credit risk related to amounts on deposit in excess of FDIC insurance coverage. To mitigate this risk, we maintain our cash and cash equivalents at large national or international banking institutions.
As referred to in
Note 1
in our condensed consolidated financial statements, the Company has settled with certain owners of its Series A Shares which has reduced the
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general and administrative expenses. Certain account balances exceed FDIC insurance coverage and, as a
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result, there is a concentration of credit risk related to amounts on deposit in excess of FDIC insurance coverage. To mitigate this risk, we maintain our cash and cash equivalents at large national or international banking institutions.
As referred to in
Note 1
in our condensed consolidated financial statements, the Company has settled with certain owners of its Series A Shares which has reduced the outstanding balance from $250 million to approximately $144 million. The remaining outstanding Series A Shares are owned by Luxor in which we are currently in litigation over various claims.
AAMC intends to continue to pursue its strategic business initiatives despite this litigation. See “
Our Business.
” If Luxor were to prevail in its lawsuit, we may need to cease or curtail our business initiatives and our liquidity could be materially and adversely affected. For more information on the legal proceedings with Luxor, see “Item 1A. Risk Factors” and “Item 3. Legal Proceedings” in the Annual Report on Form 10-K for the year ended December 31, 2022.
Loans Held for Sale, at fair value
On March 31,
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” If Luxor were to prevail in its lawsuit, we may need to cease or curtail our business initiatives and our liquidity could be materially and adversely affected. For more information on the legal proceedings with Luxor, see “Item 1A. Risk Factors” and “Item 3. Legal Proceedings” in the Annual Report on Form 10-K for the year ended December 31, 2022.
Loans Held for Sale, at fair value
On March 31, 2023, our loans held for sale, at fair value, was $13.5 million. These loans primarily relate to loans originated by ALG and are included net of loan holdbacks, deferred fees, accrued interest, payments and advances in process, interest reserve in process and market valuation amounts.
Loans Held for Investment, at fair value
On March 31, 2023, our loans held for investment, at fair value, was $65.3 million. These loans primarily relate to business purpose bridge loans for the transitioning of real estate properties and are included net of loan holdbacks, accrued interest, in process and market valuation amounts.
Credit Facilities
As of March 31, 2023, our repurchase agreements totaled $43.2
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process and market valuation amounts.
Loans Held for Investment, at fair value
On March 31, 2023, our loans held for investment, at fair value, was $65.3 million. These loans primarily relate to business purpose bridge loans for the transitioning of real estate properties and are included net of loan holdbacks, accrued interest, in process and market valuation amounts.
Credit Facilities
As of March 31, 2023, our repurchase agreements totaled $43.2 million. See
Note 3
for more detail.
Treasury Shares
At March 31, 2023, a total of $273.1 million in shares of our common stock had been repurchased under the authorization by our Board of Directors to repurchase up to $300.0 million in shares of our common stock. Repurchased shares are held as treasury stock and are available for general corporate purposes. As of March 31, 2023, we had an aggregate of $26.9 million remaining available for repurchases under our Board-approved repurchase plan.
Cash Flows
We report and analyze our cash flows based on operating activities, investing activities and financing activities. The following table sets forth our cash flows for the periods indicated ($ in
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$300.0 million in shares of our common stock. Repurchased shares are held as treasury stock and are available for general corporate purposes. As of March 31, 2023, we had an aggregate of $26.9 million remaining available for repurchases under our Board-approved repurchase plan.
Cash Flows
We report and analyze our cash flows based on operating activities, investing activities and financing activities. The following table sets forth our cash flows for the periods indicated ($ in thousands):
Three months ended March 31,
2023
2022
Net cash used in operating activities
(6,944)
(4,379)
Net cash provided by (used in) investing activities
17,974
(17,723)
Net cash used in financing activities
(9,923)
(1,868)
Total cash flows
1,107
(23,970)
Net cash used in operating activities for the three months ended March 31, 2023, respectively, consisted primarily of origination and additional fundings of loans held for sale, interest receivable, payment of ongoing salaries and benefits, annual incentive compensation, and general corporate expenses in excess of revenues offset by proceeds from sales and principal payments on held for sale loans.
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financing activities
(9,923)
(1,868)
Total cash flows
1,107
(23,970)
Net cash used in operating activities for the three months ended March 31, 2023, respectively, consisted primarily of origination and additional fundings of loans held for sale, interest receivable, payment of ongoing salaries and benefits, annual incentive compensation, and general corporate expenses in excess of revenues offset by proceeds from sales and principal payments on held for sale loans. Net cash used in operating activities for the three months ended March 31, 2022, consisted primarily of payment of ongoing salaries and benefits, annual incentive to select staff and operating leases.
Net cash provided by investing activities for the three months ended March 31, 2023, consisted primarily of the proceeds from sales and principal payments on loans held for investment, offset by additional fundings of loans held for investment. Net cash used in investing activities for the three months ended March 31, 2022, consisted primarily of the purchase of ALG loans.
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Net cash used in financing activities for the three months ended March 31, 2023, primarily relates to funds borrowed and repaid under the Company's line of credit, cash
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, consisted primarily of the proceeds from sales and principal payments on loans held for investment, offset by additional fundings of loans held for investment. Net cash used in investing activities for the three months ended March 31, 2022, consisted primarily of the purchase of ALG loans.
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Net cash used in financing activities for the three months ended March 31, 2023, primarily relates to funds borrowed and repaid under the Company's line of credit, cash used in the repurchase of common stock. Net cash used in financing activities for the three months ended March 31, 2022, primarily relates to the conversion of preferred stock.
Off-balance Sheet Arrangements
We had no off-balance sheet arrangements as of March 31, 2023 or December 31, 2022.
Recent Accounting Pronouncements
See
Item 1 - Financial statements (unaudited) - “Note 1. Organization and basis of presentation - Recently issued accounting standards.”
Critical Accounting Judgments
For a discussion of our critical accounting judgments, please see “Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Judgments” in our Annual Report on Form 10-K for the
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31, 2023 or December 31, 2022.
Recent Accounting Pronouncements
See
Item 1 - Financial statements (unaudited) - “Note 1. Organization and basis of presentation - Recently issued accounting standards.”
Critical Accounting Judgments
For a discussion of our critical accounting judgments, please see “Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Judgments” in our Annual Report on Form 10-K for the year ended December 31, 2022; and Footnotes
and
of the condensed consolidated interim financial statements.
Item 3. Quantitative and qualitative disclosures about market risk
Market risk includes risks that arise from changes in interest rates, foreign currency exchange rates, commodity prices, equity prices and other market changes that affect market sensitive instruments.
Item 4. Controls and procedures
Altisource Asset Management Corp maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company's filings under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms and to ensure that such information is accumulated and communicated to the Company’s management, including its
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, equity prices and other market changes that affect market sensitive instruments.
Item 4. Controls and procedures
Altisource Asset Management Corp maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company's filings under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms and to ensure that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
Our Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act) as of the end of the period covered by this quarterly report. Based upon that evaluation, management has determined that the Company's disclosure controls and procedures were effective as of March 31, 2023.
As the Company is a Smaller Reporting Company (“SRC”) under the SEC guidelines, management has determined that it will no longer receive an attestation opinion of its internal controls over financial reporting from its external auditor until the Company no longer qualifies as a SRC,
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(e) of the Exchange Act) as of the end of the period covered by this quarterly report. Based upon that evaluation, management has determined that the Company's disclosure controls and procedures were effective as of March 31, 2023.
As the Company is a Smaller Reporting Company (“SRC”) under the SEC guidelines, management has determined that it will no longer receive an attestation opinion of its internal controls over financial reporting from its external auditor until the Company no longer qualifies as a SRC, upon reaching certain revenue thresholds. This decision was in conjunction with the creation of Company’s new business line and the extension of the 2012 Jumpstart Our Business Startups (“JOBS:) Act in March 2020.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the quarter ended March 31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Limitations on Controls
Our disclosure controls and procedures and internal control over financial reporting are designed to provide reasonable assurance of achieving their objectives as specified above. Management
cik:1555074
ticker:AAMC
name:Altisource Asset Management Corp
exchange:NYSE
filing_type:10-Q
|
YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
changes in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the quarter ended March 31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Limitations on Controls
Our disclosure controls and procedures and internal control over financial reporting are designed to provide reasonable assurance of achieving their objectives as specified above. Management does not expect, however, that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all error and fraud. Any control system, no matter how well designed and operated, is based upon certain assumptions and can provide only reasonable, not absolute, assurance that its objectives will be met. Further, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company have been detected.
21
(table of contents)
Part II
Item 1. Legal proceedings
For a description of the Company’s legal proceedings, refer to
Item 1 - Financial Statements (Unaudited) - Note 5, “Commitments and Contingencies”
cik:1555074
ticker:AAMC
name:Altisource Asset Management Corp
exchange:NYSE
filing_type:10-Q
|
YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
its objectives will be met. Further, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company have been detected.
21
(table of contents)
Part II
Item 1. Legal proceedings
For a description of the Company’s legal proceedings, refer to
Item 1 - Financial Statements (Unaudited) - Note 5, “Commitments and Contingencies”
of the condensed consolidated interim financial statements included in this Quarterly Report on Form 10-Q.
Item 1A. Risk factors
Our risk factors reflected in our December 31, 2022 Form 10-K (filed on March 27, 2023) have not materially changed as our alternative lending business line risks were incorporated. For additional information regarding our risk factors, you should carefully consider the risk factors disclosed in “Item 1A. Risk factors” in our Annual Report on Form 10-K for the year ended December 31, 2022.
Item 2. Unregistered sales of equity securities and use of proceeds
None.
Item 3. Defaults upon senior securities
None.
Item 4. Mine safety disclosures
Not applicable.
cik:1555074
ticker:AAMC
name:Altisource Asset Management Corp
exchange:NYSE
filing_type:10-Q
|
YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
not materially changed as our alternative lending business line risks were incorporated. For additional information regarding our risk factors, you should carefully consider the risk factors disclosed in “Item 1A. Risk factors” in our Annual Report on Form 10-K for the year ended December 31, 2022.
Item 2. Unregistered sales of equity securities and use of proceeds
None.
Item 3. Defaults upon senior securities
None.
Item 4. Mine safety disclosures
Not applicable.
Item 5. Other Information
None.
22
(table of contents)
Item 6. Exhibits
Exhibit Number
Description
2.1
Separation Agreement, dated as of December 21, 2012, between Altisource Asset Management Corporation and Altisource Portfolio Solutions S.A. (incorporated by reference to Exhibit 2.1 of the Registrant's Current Report on Form 8-K filed with the SEC on December 28, 2012).
3.1
Amended and Restated Articles of Incorporation of Altisource Asset Management Corporation (incorporated by reference to Exhibit 3.1 of the Registrant's Current Report on Form 8-K filed with the SEC on January 5, 2017
cik:1555074
ticker:AAMC
name:Altisource Asset Management Corp
exchange:NYSE
filing_type:10-Q
|
YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
isource Portfolio Solutions S.A. (incorporated by reference to Exhibit 2.1 of the Registrant's Current Report on Form 8-K filed with the SEC on December 28, 2012).
3.1
Amended and Restated Articles of Incorporation of Altisource Asset Management Corporation (incorporated by reference to Exhibit 3.1 of the Registrant's Current Report on Form 8-K filed with the SEC on January 5, 2017).
3.2
Fifth Amended and Restated Bylaws of Altisource Asset Management Corporation.
3.3
Certificate of Designations establishing the Company’s Series A Convertible Preferred Stock (incorporated by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K filed with the SEC on March 19, 2014).
3.4
Master Repurchase Agreement between Altisource Asset Management Corporation and Grapetree Lending LLC and NexBank, dated December 2, 2022 (portions redacted).
4.1
Description of Securities (incorporated by reference to Exhibit 4.1 of the Registrant's Annual Report on Form 10-K filed with the SEC on March
cik:1555074
ticker:AAMC
name:Altisource Asset Management Corp
exchange:NYSE
filing_type:10-Q
|
YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
’s Current Report on Form 8-K filed with the SEC on March 19, 2014).
3.4
Master Repurchase Agreement between Altisource Asset Management Corporation and Grapetree Lending LLC and NexBank, dated December 2, 2022 (portions redacted).
4.1
Description of Securities (incorporated by reference to Exhibit 4.1 of the Registrant's Annual Report on Form 10-K filed with the SEC on March 3, 2021).
10.1*
Flagstar Master Repurchase Agreement among Grapetree Lending LLC, as Seller, Altisource Asset Management Corporation, as Guarantor, Flagstar Bank FSB, as a Buyer and as Administrative Agent, dated August 1, 2022
10.2*
Flagstar Bank FSB Guaranty Agreement, Altisource Asset Management Corporation, Guarantor, Flagstar Bank FSB, Administrative Agent, dated August 1, 2022.
31.1*
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act.
31.2*
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act.
32.
cik:1555074
ticker:AAMC
name:Altisource Asset Management Corp
exchange:NYSE
filing_type:10-Q
|
YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
1, 2022
10.2*
Flagstar Bank FSB Guaranty Agreement, Altisource Asset Management Corporation, Guarantor, Flagstar Bank FSB, Administrative Agent, dated August 1, 2022.
31.1*
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act.
31.2*
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act.
32.1*†
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act.
32.2*†
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act.
101.INS*
Inline XBRL Instance Document.
101.SCH*
Inline XBRL Taxonomy Extension Schema Document.
101.CAL*
Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF*
Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*
Inline XBRL Extension Label Linkbase Document.
101.PRE*
Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104
Cover page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
__________
Filed
cik:1555074
ticker:AAMC
name:Altisource Asset Management Corp
exchange:NYSE
filing_type:10-Q
|
YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
Inline XBRL Instance Document.
101.SCH*
Inline XBRL Taxonomy Extension Schema Document.
101.CAL*
Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF*
Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*
Inline XBRL Extension Label Linkbase Document.
101.PRE*
Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104
Cover page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
__________
Filed herewith.
† This Certification is furnished and not filed for purposes of Sections 11 and 12 of the Securities Act of 1933 and Section 18 of the Securities Exchange Act of 1934.
23
(table of contents)
Signatures
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Altisource Asset Management Corporation
Date:
May 15, 2023
By:
/s/
Jason Kopcak
Jason Kopcak
Chief Executive Officer
Date:
May 15, 2023
By:
/s/
Stephen Ramiro Kr
cik:1555074
ticker:AAMC
name:Altisource Asset Management Corp
exchange:NYSE
filing_type:10-Q
|
YOU are a financial analyst. You are reading a report of a company.
The report is about the company's financial status.
requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Altisource Asset Management Corporation
Date:
May 15, 2023
By:
/s/
Jason Kopcak
Jason Kopcak
Chief Executive Officer
Date:
May 15, 2023
By:
/s/
Stephen Ramiro Krallman
Stephen Ramiro Krallman
Chief Financial Officer
24
cik:1555074
ticker:AAMC
name:Altisource Asset Management Corp
exchange:NYSE
filing_type:10-Q
|
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