Press Release

Nov 15, 2021

Altisource Asset Management Corporation Reports Third Quarter 2021 Results

CHRISTIANSTED, U.S. Virgin Islands, Nov. 15, 2021 (GLOBE NEWSWIRE) -- Altisource Asset Management Corporation (“AAMC” or the “Company”) (NYSE American: AAMC) today announced financial and operating results for the second quarter of 2021.

Third Quarter 2021 Highlights and Recent Developments

  • Maintained liquidity to position the Company to have access to capital to consummate prospective business opportunities. Liquidity consists of $84.5 million in cash.
  • Negotiated a settlement agreement on 18,200 shares of our Series A Convertible Preferred Stock (“Series A Shares”) with certain investors which resulted in a $16.1 million increase to equity on the balance sheet, and reduced the overall Series A Shares balance to $150 million.
  • All remaining equity securities were divested during the quarter.
  • The Company is no longer an “investment company” as defined under the Investment Company Act of 1940, as amended, and expects to principally remain invested in cash and government securities until it commences new businesses.
  • Hired Kevin Sullivan to be the new General Counsel and Chief Compliance Officer of the Company.

Mr. Thomas K. McCarthy, Interim Chief Executive Officer, stated, “The Company’s attention and focus continues to be the evaluation and pursuit of certain business opportunities and acquisition targets in which to focus the Company’s resources and enhance shareholder value.   The Company has liquidated its equity holdings and is now in an all-cash position in preparation of an acquisition event.

During the third quarter, the Company also engaged the services of both an investment bank, Cowen and Company, LLC, and the law firm, Norton Rose Fulbright, LLP, to assist us in identifying and reviewing potential acquisition and merger opportunities. While no final decision has been made, the Company is in discussions with several potential acquisition or merger targets including cryptocurrency and brokerage related businesses”.

Third Quarter 2021 Financial Results

AAMC’s net loss to common shareholders for the third quarter of 2021 was $(5.7) million compared to net income of $11.8 million for the same period in 2020. Due to a $16.1 million gain on settlement of preferred shares, which was recorded directly to equity, but is included in the numerator of our earnings per share calculations, diluted earnings per share was $4.76 for the quarter, compared to $7.20 for the same period in 2020.

AAMC's net income to common shareholders for the nine months ended September 30, 2021 was $2.4 million compared to net income of $0.1 million for the same period in 2020. Due to a $88.0 million gain on settlement of preferred shares in 2021, which was recorded directly to equity, but is included in the numerator for our earnings per share calculations; diluted earnings per share was $41.94 for the nine months ended September 30, 2021, compared with $0.07 for the same period in 2020.

About AAMC

AAMC has historically been an asset management company that provides portfolio management and corporate governance services to investment vehicles but given the sale and discontinuance of certain operations the Company is in the process of repositioning itself. Additional information is available at www.altisourceamc.com.

Forward-looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, regarding management’s beliefs, estimates, projections, anticipations and assumptions with respect to, among other things, the Company’s financial results, future operations, business plans and investment strategies as well as industry and market conditions. These statements may be identified by words such as “anticipate,” “intend,” “expect,” “may,” “could,” “should,” “would,” “plan,” “estimate,” “target,” “seek,” “believe” and other expressions or words of similar meaning. We caution that forward-looking statements are qualified by the existence of certain risks and uncertainties that could cause actual results and events to differ materially from what is contemplated by the forward-looking statements. Factors that could cause our actual results to differ materially from these forward-looking statements may include, without limitation, our ability to implement new businesses or, to the extent such businesses are developed, our ability to make them successful or sustain the performance of any such businesses; developments in the litigation regarding our redemption obligations under the Certificate of Designations of our Series A Convertible Preferred Stock; and other risks and uncertainties detailed in the “Risk Factors” and other sections described from time to time in the Company’s current and future filings with the Securities and Exchange Commission. The foregoing list of factors should not be construed as exhaustive.

The statements made in this press release are current as of the date of this press release only. The Company undertakes no obligation to publicly update or revise any forward-looking statements or any other information contained herein, whether as a result of new information, future events or otherwise.

Altisource Asset Management Corporation 
Condensed Consolidated Statements of Operations
(In thousands, except share and per share amounts)
(Unaudited)

  Three months ended September 30,   Nine months ended September 30,
  2021   2020   2021   2020
Expenses:              
Salaries and employee benefits $ 878     $ 1,668     $ 4,078     $ 8,081  
Legal and professional fees 3,725     1,455     8,265     4,681  
General and administrative 585     559     1,949     1,709  
Total expenses 5,188     3,682     14,292     14,471  
               
Other income (loss):              
Change in fair value of Front Yard common stock     65     146     (5,848 )
Dividend income on Front Yard common stock             244  
Change in fair value of equity securities (3,310 )            
Dividend income 20         3,061      
Gain on sale of equity securities 6,360         8,347      
Interest expense         (60 )    
Other income 8     5     147     29  
Total other income (loss) (1,295 )   70     11,641     (5,575 )
               
Net income (loss) from continuing operations before income taxes (6,483 )   (3,612 )   (2,651 )   (20,046 )
Income tax (benefit) expense (786 )   (523 )   1,175     (1,091 )
Net income (loss) from continuing operations (5,697 )   (3,089 )   (3,826 )   (18,955 )
               
Discontinued operations:              
Income from operations related to Front Yard, net of tax     14,843         19,117  
Gain on disposal of operations related to Front Yard         7,485      
Income tax expense related to disposal         1,272      
Net gain on discontinued operations     14,843     6,213     19,117  
               
Net income (loss) (5,697 )   11,754     2,387     162  
Amortization of preferred stock issuance costs             (42 )
Net income (loss) attributable to common stockholders $ (5,697 )   $ 11,754     $ 2,387     $ 120  
               
Continuing operations earnings per share              
Net income (loss) from continuing operations $ (5,697 )   (3,089 )   (3,826 )   (18,955 )
Reverse amortization of preferred stock issuance costs             42  
Gain on preferred stock transaction 16,101         87,984      
Numerator for earnings per share from continuing operations $ 10,404     $ (3,089 )   $ 84,158     $ (18,913 )
               
Discontinued operations earnings per share              
Net income from discontinued operations $     $ 14,843     $ 6,213     $ 19,117  
               
Earnings (loss) per share of common stock – basic:              
Continuing operations – basic $ 5.06     $ (1.89 )   $ 42.41     $ (11.69 )
Discontinued operations – basic     9.09     3.13     11.76  
Earnings (loss) per basic common share $ 5.06     $ 7.20     $ 45.54     $ 0.07  
Weighted average common stock outstanding – basic 2,055,561     1,632,117     1,984,294     1,625,727  
               
Earnings (loss) per share of common stock – diluted:              
Continuing operations – diluted $ 4.76     $ (1.89 )   $ 39.06     $ (11.69 )
Discontinued operations – diluted     9.09     2.88     11.76  
Earnings (loss) per diluted common share $ 4.76     $ 7.20     $ 41.94     $ 0.07  
Weighted average common stock outstanding – diluted 2,187,585     1,632,117     2,154,597     1,625,727  

Altisource Asset Management Corporation 
Condensed Consolidated Balance Sheets
(In thousands, except share and per share amounts)

  September 30, 2021   December 31, 2020
  (unaudited)    
Current assets:      
Cash and cash equivalents $ 84,544     $ 41,623  
Equity securities, at fair value      
Front Yard common stock, at fair value     47,355  
Receivable from Front Yard     3,414  
Prepaid expenses and other assets 2,883     3,328  
Current assets held for sale     894  
Total current assets 87,427     96,614  
       
Non-current assets:      
Right-of-use lease assets 860     656  
Other non-current assets 476     503  
Non-current assets held for sale     1,979  
Total non-current assets 1,336     3,138  
Total assets $ 88,763     $ 99,752  
       
Current liabilities:      
Accrued salaries and employee benefits $ 467     $ 2,539  
Accounts payable and accrued liabilities 2,879     9,152  
Short-term lease liabilities 133     75  
Current liabilities held for sale     1,338  
Total current liabilities 3,479     13,104  
       
Non-current liabilities:      
Long-term lease liabilities 757     600  
Other non-current liabilities 2,697     1,027  
Non-current liabilities held for sale     1,599  
Total non-current liabilities 3,454     3,226  
Total liabilities 6,933     16,330  
       
Commitments and contingencies:      
       
Redeemable preferred stock:      
Preferred stock, $0.01 par value, 250,000 and 250,000 shares issued as September 30, 2021 and December 31, 2020, respectively. 150,000 shares outstanding and $150,000 redemption value as of September 30, 2021 and 250,000 shares outstanding and $250,000 redemption value as of December 31, 2020. 150,000     250,000  
       
Stockholders' deficit:      
Common stock, $0.01 par value, 5,000,000 authorized shares; 3,416,541 and 2,055,561 shares issued and outstanding, respectively, as of September 30, 2021 and 2,966,207 and 1,650,212 shares issued and outstanding, respectively, as of December 31, 2020 34     30  
Additional paid-in capital 143,490     46,574  
Retained earnings 65,841     63,426  
Accumulated other comprehensive loss 54     (65 )
Treasury stock, at cost, 1,360,980 shares as of September 30, 2021 and 1,315,995 shares as of December 31, 2020 (277,589 )   (276,543 )
Total stockholders' deficit (68,170 )   (166,578 )
Total liabilities and equity $ 88,763     $ 99,752  
               


FOR FURTHER INFORMATION CONTACT:
Investor Relations
T: +1-704-275-9113
E: IR@AltisourceAMC.com 

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Source: Altisource Asset Management Corporation

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