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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 7, 2018 (November 7, 2018)

ALTISOURCE ASSET MANAGEMENT CORPORATION
(Exact name of Registrant as specified in its charter)

United States Virgin Islands
 
001-36063
 
66-0783125
(State or other jurisdiction of incorporation or organization)
 
(Commission File Number)
 
(I.R.S. Employer Identification No.)

5100 Tamarind Reef
Christiansted, United States Virgin Islands 00820
(Address of principal executive offices including zip code)

(340) 692-1055
(Registrant’s telephone number, including area code)

Not Applicable
(Former name or former address, if changed since last report)


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter):
 
Emerging growth company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 





Item 2.02 Results of Operations and Financial Condition
 
On November 7, 2018, Altisource Asset Management Corporation issued a press release announcing its financial results for the quarter ended September 30, 2018. A copy of the press release is attached hereto as Exhibit 99.1.

The information in this Item 2.02, including the information in Exhibit 99.1, is furnished solely pursuant to Item 2.02 of this Form 8-K. Consequently, it is not deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that Section. It may only be incorporated by reference in another filing under the Securities Exchange Act of 1934 or Securities Act of 1933 if such subsequent filing specifically references this Item 2.02 of this Form 8-K.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits.

Exhibit No.
 
Description
 
Press Release of Altisource Asset Management Corporation dated November 7, 2018





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
November 7, 2018
By:
/s/ Stephen H. Gray
 
 
Stephen H. Gray
General Counsel and Secretary



Exhibit


Exhibit 99.1

https://cdn.kscope.io/0e97ef25aad1bd6dc81a137e08a41c46-a991aamc2015earn_image1a09.jpg

FOR IMMEDIATE RELEASE
FOR FURTHER INFORMATION CONTACT:
 
Robin N. Lowe
 
Chief Financial Officer
 
T: +1-345-815-9919
 
E: Robin.Lowe@AltisourceAMC.com


Altisource Asset Management Corporation Reports Third Quarter 2018 Results

CHRISTIANSTED, U.S. Virgin Islands, November 7, 2018 (GLOBE NEWSWIRE) - Altisource Asset Management Corporation (“AAMC” or the “Company”) (NYSE MKT: AAMC) today announced financial and operating results for the third quarter of 2018.

Third Quarter 2018 Highlights and Recent Developments

•
Advised Front Yard Residential Corporation (“Front Yard”) on the acquisition of property manager HavenBrook Partners, LLC (“HavenBrook”) and the 3,236 affordable single-family rental (“SFR”) homes managed by HavenBrook, growing Front Yard's SFR portfolio to approximately 15,000 homes.
•
Transition of ASPS-managed homes to Front Yard's HavenBrook platform is ahead of schedule: 2,245 homes were transferred by October 31, 2018 and the remaining 1,815 homes will be moved by the end of November 2018.
•
Following this transition, approximately 7,300 homes will be internally managed by Front Yard.
•
Maintained strong operating metrics for Front Yard during integration of HavenBrook.
•
Reduced Front Yard's remaining legacy REOs to 133, down 30% from 190 at June 30, 2018 and 73% from 490 at December 31, 2017.
•
Obtained $508.7 million of 10-year, fixed rate financing for Front Yard as part of Freddie Mac's affordable SFR pilot program in connection with the HavenBrook acquisition.
•
Continued optimization of Front Yard's financing: capped an additional $172.4 million of financing on October 16, 2018, bringing its fixed-rate or capped financing of total debt to 88% with a weighted average maturity of five years.

“Front Yard’s internalization of property management under our guidance is ahead of schedule, and we continue to maintain strong operating metrics for Front Yard despite the costs associated with the integration of HavenBrook,” stated Chief Executive Officer George Ellison. “We believe Front Yard’s internal property management platform will enable it to drive operating efficiencies, improve service to its tenants and unlock Front Yard’s shareholder value. As Front Yard realizes the advantages of this structure, AAMC should benefit as well.”

Third Quarter 2018 Financial Results

AAMC’s net loss attributable to common stockholders for the third quarter of 2018 was $1.2 million, or $0.75 per diluted share, which included a $0.7 million change in the fair value of its shares of Front Yard common stock, compared to $2.2 million, or $1.38 per diluted share, for the third quarter of 2017. AAMC’s net loss attributable to common stockholders for the nine months ended September 30, 2018 was $6.7 million, or $4.19 per diluted share, which included a $(1.6) million change in the fair value of its shares of Front Yard common stock, compared to $5.3 million, or $3.42 per diluted share, for the nine months ended September 30, 2017.

About AAMC

AAMC is an asset management company that provides portfolio management and corporate governance services to investment vehicles. Additional information is available at www.altisourceamc.com.





Forward-looking Statements

This press release contains forward-looking statements that involve a number of risks and uncertainties. Those forward-looking statements include all statements that are not historical fact, including statements about management’s beliefs and expectations. Forward-looking statements are based on management’s beliefs as well as assumptions made by and information currently available to management. Because such statements are based on expectations as to future economic performance and are not statements of historical fact, actual results may differ materially from those projected. The risks and uncertainties to which forward-looking statements are subject include, but are not limited to: AAMC’s ability to implement its business plan; AAMC's ability to leverage strategic relationships on an efficient and cost-effective basis; AAMC's and Front Yard's ability to compete; Front Yard’s ability to implement its business plan; general economic and market conditions; governmental regulations, taxes and policies; AAMC's ability to generate adequate and timely sources of liquidity and financing for itself or Front Yard; Front Yard’s ability to sell non-rental real estate assets on favorable terms or at all; AAMC's ability to identify and acquire assets for Front Yard’s portfolio; Front Yard’s ability to complete potential transactions in accordance with anticipated terms and on a timely basis or at all; AAMC’s ability to integrate newly acquired rental assets into Front Yard’s portfolio; the ability to successfully and efficiently integrate and manage Front Yard’s newly acquired property manager or effectively manage the performance of Front Yard’s internal property manager at the level and/or the cost that it anticipates; the failure of external property managers to effectively perform their obligations under their agreements with Front Yard; our failure to maintain Front Yard’s qualification as a REIT; 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,
 
2018
 
2017
 
2018
 
2017
Revenues:
 
 
 
 
 
 
 
Management fees from Front Yard
$
3,613

 
$
3,966

 
$
10,984

 
$
12,176

Conversion fees from Front Yard
35

 
163

 
151

 
1,201

Expense reimbursements from Front Yard
286

 
300

 
767

 
706

Total revenues
3,934

 
4,429

 
11,902

 
14,083

Expenses:
 
 
 
 
 
 
 
Salaries and employee benefits
4,605

 
5,035

 
13,343

 
15,003

Legal and professional fees
474

 
899

 
1,293

 
1,919

General and administrative
993

 
778

 
2,783

 
2,661

Total expenses
6,072

 
6,712

 
17,419

 
19,583

Other income (loss):
 
 
 
 
 
 
 
Change in fair value of Front Yard common stock
698

 
—

 
(1,641
)
 
—

Dividend income on Front Yard common stock
244

 
244

 
731

 
731

Other income
58

 
41

 
150

 
68

Total other income (loss)
1,000

 
285

 
(760
)
 
799

Loss before income taxes
(1,138
)
 
(1,998
)
 
(6,277
)
 
(4,701
)
Income tax expense
17

 
127

 
309

 
484

Net loss
(1,155
)
 
(2,125
)
 
(6,586
)
 
(5,185
)
Amortization of preferred stock issuance costs
(52
)
 
(52
)
 
(155
)
 
(155
)
Net loss attributable to common stockholders
$
(1,207
)
 
$
(2,177
)
 
$
(6,741
)
 
$
(5,340
)
 
 
 
 
 
 
 
 
Loss per share of common stock – basic:
 
 
 
 
 
 
 
Loss per basic share
$
(0.75
)
 
$
(1.38
)
 
$
(4.19
)
 
$
(3.42
)
Weighted average common stock outstanding – basic
1,613,413

 
1,574,822

 
1,609,932

 
1,562,056

 
 
 
 
 
 
 
 
Loss per share of common stock – diluted:
 
 
 
 
 
 
 
Loss per diluted share
$
(0.75
)
 
$
(1.38
)
 
$
(4.19
)
 
$
(3.42
)
Weighted average common stock outstanding – diluted
1,613,413

 
1,574,822

 
1,609,932

 
1,562,056






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

 
September 30, 2018
 
December 31, 2017
 
(unaudited)
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
30,194

 
$
33,349

Short-term investments
279

 
625

Front Yard common stock, at fair value
17,625

 
19,266

Receivable from Front Yard
4,006

 
4,151

Prepaid expenses and other assets
1,172

 
1,022

Total current assets
53,276

 
58,413

Other non-current assets
1,638

 
1,974

Total assets
$
54,914

 
$
60,387

 
 
 
 
Current liabilities:
 
 
 
Accrued salaries and employee benefits
$
4,603

 
$
5,651

Accounts payable and other accrued liabilities
888

 
2,085

Total liabilities
5,491

 
7,736

 
 
 
 
Commitments and contingencies
—

 
—

 
 
 
 
Redeemable preferred stock:
 
 
 
Preferred stock, $0.01 par value, 250,000 shares issued and outstanding as of September 30, 2018 and December 31, 2017; redemption value $250,000
249,701

 
249,546

 
 
 
 
Stockholders' deficit:
 
 
 
Common stock, $0.01 par value, 5,000,000 authorized shares; 2,835,046 and 1,613,852 shares issued and outstanding, respectively, as of September 30, 2018 and 2,815,122 and 1,599,210 shares issued and outstanding, respectively, as of December 31, 2017
28

 
28

Additional paid-in capital
41,475

 
37,765

Retained earnings
30,899

 
38,970

Accumulated other comprehensive loss
—

 
(1,330
)
Treasury stock, at cost, 1,221,194 shares as of September 30, 2018 and 1,215,912 shares as of December 31, 2017
(272,680
)
 
(272,328
)
Total stockholders' deficit
(200,278
)
 
(196,895
)
Total liabilities and equity
$
54,914

 
$
60,387