UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-K/A

(Amendment No. 1)

 

☒          ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2020

 

OR

 

☐          TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

COMMISSION FILE NUMBER: 001-36063

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Altisource Asset Management Corporation

(Exact name of registrant as specified in its charter)

 

5100 Tamarind Reef

Christiansted, United States Virgin Islands 00820

(Address of principal executive office)

 

(340) 692-0525

 

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Securities registered pursuant to Section 12(g) of the Act: None.

 

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Indicate by check if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

 

Indicate by check if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes  ☒ No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

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. ☐

 

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

 

The aggregate market value of common stock held by non-affiliates of the registrant was $9.2 million, based on the closing share price as reported on the New York Stock Exchange on June 30, 2020 and the assumption that all Directors and executive officers of the registrant and their families and beneficial holders of 10% of the registrant's common stock are affiliates. This determination of affiliate status is not necessarily a conclusive determination for any other purpose.

 

As of February 26, 2021, 2,048,319 shares of our common stock were outstanding (excluding 1,359,600 shares held as treasury stock).

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Altisource Asset Management Corporation

 

December 31, 2020

 

Table of Contents

 

Name (1)		Age		Position
Indroneel Chatterjee		40		Chief Executive Officer and Chairman
Ricardo C. Byrd		71		Director
John A. Engerman		51		Director
John P. de Jongh, Jr.		62		Director
Christopher Moltke-Hansen		34		Chief Financial Officer
P. Graham Singer		40		General Counsel and Secretary

(1)	Except as otherwise indicated, all information set forth herein is as of April 15, 2021, and all stock ownership and equity award information for Messrs. Chatterjee, Moltke-Hansen and Singer are based solely upon their Form 4 filings with the SEC.

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Indroneel Chatterjee, Chief Executive Officer

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George G. Ellison, Former Chief Executive Officer

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Robin N. Lowe, Chief Financial Officer

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Stephen H. Gray, General Counsel and Secretary

Name and Principal Position		Year		Salary				Bonus				Stock Awards (2)				Option Awards (2)				Non-Equity Incentive Compensation (3)				All Other Compensation (4)				Total
Indroneel Chatterjee (1) Chief Executive Officer		2020		$	649,038(6	)		$	800,000(7	)		$	786,600(7	)		$	636,733(7	)			—			$	165,625(8	)		$	3,037,996
		2019			—																—				—
George G. Ellison (5) Former Chief Executive Officer		2020		$	475,000(9	)							—							$	947,500(10	)		$	107,563(11	)		$	1,530,063
		2019		$	472,692							$	1,049,991								—			$	1,395,353			$	2,918,036
Robin N. Lowe Chief Financial Officer		2020		$	475,000(12	)							—							$	350,000(13	)		$	58,502(14	)		$	883,502
		2019		$	472,692							$	259,596								—			$	89,197			$	821,485
Stephen H. Gray General Counsel and Secretary		2020		$	385,000(15	)							—							$	315,000(16	)		$	124,569(17	)		$	824,569
		2019		$	384,077							$	149,995							$	150,000			$	448,286			$	1,132,358

(1)	Mr. Chatterjee joined the company on January 13, 2020 as Co-Chief Executive Officer, and upon resignation of Mr. Ellison on December 29, 2020, became the sole Chief Executive Officer of the Company.

(2)

Amounts represent the aggregate grant date fair value of restricted shares and option awards granted to our NEOs, calculated in accordance with FASB ASC 718. Such grant date fair value does not take into account any estimated forfeitures. The assumptions used in calculating the grant date fair value of restricted shares and option awards are set forth in Note 8 to our Consolidated Financial Statements for the year ended December 31, 2020 included in our Annual Report. The amount reported in this column reflects the accounting cost for these awards and does not correspond to the actual economic value that may be received by the directors upon the vesting of the restricted shares, the exercise of the stock options, or any sale of the underlying shares of common stock.

(3)

Consists of the cash annual incentive compensation related to performance in each year and generally awarded in the first quarter of the following year. For example, non-equity incentive compensation earned in 2020 was paid in January 2021. The non-equity incentive compensation for Messrs. Ellison, Lowe, and Gray were paid in the fourth quarter of 2020, and partially reimbursed by Front Yard Residential as detailed more fully in the respective footnotes below.

(4)	Consists of contributions from AAMC to each executive officer for relocation expenses, as applicable; supplemental living expenses; car allowances, as applicable; education allowances, as applicable; travel allowances and medical benefits, as detailed more fully in the respective footnotes below.

(5)	Mr. Ellison resigned as Chief Executive Officer on December 29, 2020.

(6)	The amount reported for 2020 represents Mr. Chatterjee's base salary of $675,000 from his hire date of January 13, 2020, to December 31, 2020.

(7)

The amount reported for 2020 represents Mr. Chatterjee's $800,000 signing bonus, and equity inducement grants consisting of 60,000 shares of service-based restricted stock with a grant date fair value of $786,600, which was determined based on the average of the high and low sales price of our common stock on the date of the grant, and 60,000 performance-based stock options with a grant date fair value of $636,733 based on probable achievement. Mr. Chatterjee's signing bonus was paid pursuant to his employment agreement as described above under “Employment Agreements”. The grant date fair value of Mr. Chatterjee's 60,000 performance-based stock options assuming maximum achievement is $3,408,600.

(8)	The amount reported for 2020 includes: $147,315 for supplemental living expenses relating to Mr. Chatterjee's employment in the U.S. Virgin Islands, $17,488 in medical and life insurance benefits, and $822 for home travel leave expenses.

(9)	Front Yard Residential Corporation reimbursed AAMC for $42,019 of the $475,000 of Mr. Ellison's salary paid in 2020 pursuant to the transition plan associated with the termination of the amended AMA with Front Yard Residential Corporation.

(10)	The amount in 2020 represents a non-equity cash incentive award to Mr. Ellison of $947,500, of which $722,500 was reimbursed by Front Yard Residential Corporation pursuant to the transition plan associated with the termination of the amended AMA with Front Yard Residential Corporation.

(11)

The amount reported for 2020 includes $58,485 for supplemental living expenses relating to Mr. Ellison's employment in the U.S. Virgin Islands, $32,584 in medical insurance benefits, $8,550 of 401(k) employer matching contributions, and $7,943 in relocation costs. Of the $107,563 of other compensation awarded to Mr. Ellison in 2020, $2,965 was reimbursed by Front Yard Residential Corporation pursuant to the transition plan associated with the termination of the amended AMA with Front Yard Residential Corporation.

(12)	Front Yard Residential Corporation reimbursed AAMC for $42,060 of the $475,000 of Mr. Lowe's salary paid in 2020 pursuant to the transition plan associated with the termination of the amended AMA with Front Yard Residential Corporation.

(13)	The amount in 2020 represents a non-equity cash incentive award to Mr. Lowe of $350,000, of which $87,500 was reimbursed by Front Yard Residential Corporation pursuant to the transition plan associated with the termination of the amended AMA with Front Yard Residential Corporation.

(14)

The amount reported for 2020 includes $53,179 for supplemental living expenses under his relocation package for employment in the Cayman Islands, consisting of $48,000 for supplemental living expenses and $5,179 for Cayman Islands government-required pension benefits, and $5,323 in medical insurance benefits. Of the $58,502 in all other compensation expenses awarded to Mr. Lowe in 2020, $4,000 was reimbursed by Front Yard Residential Corporation pursuant to the transition plan associated with the termination of the amended AMA with Front Yard Residential Corporation.

(15)	Front Yard Residential Corporation reimbursed AAMC for $17,766 of the $385,000 of Mr. Gray's salary paid in 2020 pursuant to the transition plan associated with the termination of the amended AMA with Front Yard Residential Corporation.

(16)	The amount in 2020 represents a non-equity cash incentive award to Mr. Gray of $315,000, of which $202,500 was reimbursed by Front Yard Residential Corporation pursuant to the transition plan associated with the termination of the amended AMA with Front Yard Residential Corporation.

(17)

The amount reported for 2020 includes $63,849 for supplemental living expenses relating to Mr. Gray's employment in the U.S. Virgin Islands, $46,470 in medical insurance benefits, and, $14,250 in 401(k) employer matching contributions. Of the $124,569 in all other compensation expenses awarded to Mr. Gray in 2020, $4,998 was reimbursed by Front Yard Residential Corporation pursuant to the transition plan associated with the termination of the amended AMA with Front Yard Residential Corporation.

		OPTION AWARDS												STOCK AWARDS
(a)		(d)				(e)				(f)				(g)				(h)
Name		Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)				Option Exercise Price ($)				Option Expiration Date				Number of Shares or Units of Stock That Have Not Vested (#)				Market Value of Shares or Units of Stock That Have Not Vested (1) ($)
Indroneel Chatterjee			60,000(2	)		$	13.11			1/30/2030					60,000(3	)		$	1,414,800
George G. Ellison			—				—				—				33,571(4	)		$	791,604
Robin N. Lowe			—				—				—				7,787(4	)		$	183,617
Stephen H. Gray			—				—				—				4,528(4	)		$	106,770

(1)	Represents the fair market value of the restricted shares as of December 31, 2020, based on the closing price of AAMC’s common stock, as quoted on NYSE American, of $23.58 per share on December 31, 2020.

(2)

Mr. Chatterjee's performance-based options will be earned based on the achievement of two stock price hurdles. The first tranche of 40,000 performance options is subject to a hurdle stock price of $52.44, which is four times the $13.11 exercise price (the "First Performance Goal"). Once the First Performance Goal has been attained, 13,333 options will vest and become exercisable immediately, while an additional 26,667 options will be subject to a time-based service requirement, vesting in equal installments on the first and second anniversary following attainment of the First Performance Goal. The second tranche of 20,000 performance options is subject to a hurdle stock price of $104.88, which is eight times the $13.11 exercise price (the "Second Performance Goal"). Once achieved, 6,666 options will vest and become exercisable immediately, while an additional 13,334 options will be subject to a time-based service requirement vesting in equal installments on the first and second anniversary following the attainment of the Second Performance Goal. All of the aforementioned vesting requirements of the inducement performance options are subject to a expiration period ending ten years following the January 30, 2020 grant date.

(3)	Mr. Chatterjee's inducement restricted stock awards are subject to service-based vesting requirements and have or will vest ratably on each of January 30, 2021, 2022, and 2023.

(4)	With respect to the unvested time-based restricted stock for Messrs. Ellison, Lowe, and Gray, 33,571, 7,787, and 4,528 shares vested on or before February 16, 2021, respectively.

Name		Fees Earned or Paid in Cash				Stock Awards (1)				Total
Ricardo C. Byrd (2)		$	90,000			$	59,994			$	149,994
John A. Engerman (2)			90,000				59,994				149,994
John P. de Jongh Jr. (2)			115,000				59,994				174,994

(1)

Each of Messrs. Byrd, Engerman, and Gov. de Jongh were granted 2,874 restricted shares of common stock of AAMC on October 13, 2020 for service on the Board. The number of shares granted was based on a share price of $20.87, which was the average of the high and low sales prices of our common stock on October 13, 2020, and represents the grant date fair value of such shares under FASB ASC 718. Such grant date fair value does not take into account estimated forfeitures. The amount reported in this column reflects the accounting cost for these restricted shares and does not correspond to the actual economic value that may be received by the directors upon the vesting of the restricted shares, or any sale of the underlying shares of common stock.

(2)	As of December 31, 2020, each of Messrs. Byrd, Engerman, and Gov. de Jongh held 2,874 unvested shares of time-based restricted stock.

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an annual retainer of $75,000;

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an additional $20,000 to the Lead Independent Director of the Board, only if the Chairman of the Board is a management Director (if the Chairman of the Board is a non-management director, the Chairman shall receive $50,000);

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an additional $20,000 to the Audit Committee chairperson;

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an additional $10,000 to all committee chairpersons (other than the Audit Committee chairperson); and

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an additional $5,000 to all Audit Committee members.

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each Director and NEO of the Company;

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all Directors and executive officers of the Company as a group; and

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all persons known by the Company to own beneficially 5% or more of the outstanding common stock.

Name of Beneficial Owner:		Amount				Percent
William C. Erbey (1)			805,749				39.3	%
Putnam Investments, LLC (2)			337,785				16.5	%

Directors and Officers:		Amount				Percent
Indroneel Chatterjee (3)			58,027				2.8	%
George G. Ellison (4)(5)			85,577				4.2	%
Robin N. Lowe (6)			33,300				1.6	%
Stephen H. Gray (7)			5,093				*
Chris Moltke-Hansen			4,774				*
P. Graham Singer			5,303				*
Ricardo C. Byrd (8)			10,127				*
John A. Engerman (8)			7,105				*
John P. de Jongh, Jr. (8)			7,967				*
All Directors and Executive Officers as a Group (6 persons) (9)			217,273				10.6	%

*	Less than 1%

(1)

Based on information contained in a Schedule 13D/A filed by Mr. Erbey on May 20, 2019, a Form 4 filed by Mr. Erbey on May 31, 2019 and a Form 4 filed by Mr. Erbey on June 3, 2019. Includes: (a) 26,293 shares of common stock held by the Carisma Trust, a Nevada trust, the trustee of which is Venia, LLC, a Nevada limited liability company (“Venia”) and (b) 696,029 shares of common stock held by Salt Pond Holdings, LLC, a U.S. Virgin Islands limited liability company (“Salt Pond”) of which the Christiansted Trust, a U.S. Virgin Islands trust (the “C-Trust”), the Frederiksted Trust, a U.S. Virgin Islands trust (the “F-Trust”), and Erbey Holding Corporation, Inc., a Delaware corporation (“Erbey Holding”) are members. Erbey Holding is wholly owned by the Carisma Trust, the trustee of which is Venia (together with Mr. Erbey, E. Elaine Erbey (“Mrs. Erbey”), Erbey Holding, Salt Pond, the C-Trust, the F-Trust and the Carisma Trust, the “Reporting Persons”). The members of Venia are Mrs. Erbey, John Erbey (Mr. Erbey’s brother) and Andrew Burnett, although Mr. Erbey is given sole investment and voting control over any securities owned by Venia or the Carisma Trust. Mr. Erbey, John Erbey, Mrs. Erbey and Salt Pond are co-trustees of the C-Trust. Mr. Erbey, John Erbey, and Salt Pond are co-trustees of the F-Trust. Mr. Erbey, Erbey Holding, the C-Trust, the F-Trust, the Carisma Trust and Venia each may be deemed to beneficially own the 696,029 shares of common stock held by Salt Pond.

(2)

Based on information contained in a Schedule 13G/A jointly filed with the SEC on March 10, 2021 by Putnam Investments, LLC, Putnam Investment Management, LLC, the Putnam Advisory Company, LLC and Putnam Focused Equity Fund (collectively, “Putnam”). Includes zero shares as to which sole voting power is claimed, 337,785 shares as to which sole dispositive power is claimed and zero shares as to which shared voting power and shared dispositive power is claimed. Putnam’s address is 100 Federal Street, Boston, Massachusetts 02110.

(3)	Mr. Chatterjee also owns 100 shares of Series L Preferred Stock, which are excluded from the table above because such shares are not transferable and have no voting power.

(4)	Mr. Ellison resigned as Chief Executive Officer on December 29, 2020.

(5)	Based on information contained in a Form 4 filed by Mr. Ellison on October 14, 2020.

(6)	Based on information contained in a Form 4 filed by Mr. Lowe on February 21, 2020.

(7)	Based on information contained in a Form 4 filed by Mr. Gray on October 14, 2020.

(8)	Includes 2,874 shares issuable to each of Messrs. Byrd and Engerman and Governor de Jongh for service on our Board for the 2020 to 2021 service year that vest within 60 days after March 25, 2021.

(9)

Includes Messrs. Chatterjee, Moltke-Hansen, Singer, Byrd, Engerman, and Governor de Jongh. Does not include an aggregate of 60,000 stock options granted to Mr. Chatterjee or 50,000  restricted shares of common stock granted to Messrs. Chatterjee, Moltke-Hansen and Singer because such stock options or restricted shares do not become exercisable or vest, respectively, within 60 days after March 25, 2021.

Plan Category		Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants and Rights (a)				Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights (b)				Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) (c)
Equity Compensation Plans Approved by Security Holders:
2012 Equity Incentive Plan			118,982			$	4.01				2,442
2012 Special Equity Incentive Plan			—			$	—				—
2020 Equity Incentive Plan			—			$	—				166,378
Equity Compensation Plans Not Approved by Security Holders:
Indroneel Chatterjee (1)			60,000			$	13.11				60,000
Total			187,013			$	7.06				228,820

(1)

As approved in connection with his appointment as our Co-Chief Executive Officer on January 13, 2020, Mr. Chatterjee was granted inducement equity awards that were made outside of our 2012 Equity Incentive Plan but are otherwise subject to the terms and conditions of the 2012 Equity Incentive Plan. Such initial equity award qualified as “inducement awards” for purposes of the NYSE American's exemption from stockholder approval requirements for inducement awards. The equity awards consisted of options to purchase 60,000 shares of common stock and 60,000 restricted shares. The options are subject to vesting following the achievement of certain trading price targets and further time-based vesting criteria thereafter. The restricted shares will vest annually over a three-year period following the grant date of January 30, 2020.

Category		2020				2019
Audit Fees		$	468,950			$	450,666
Audit-Related Fees			—				—
Tax Fees			17,546				46,957
All Other Fees			—				—
Total		$	486,496			$	497,623

Exhibit Number		Description
31.1*		Certification of Interim Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act

		Altisource Asset Management Corporation
Date:	April 30, 2021	By:	/s/ Thomas K. McCarthy
			Thomas K. McCarthy
			Interim Chief Executive Officer

Exhibit 31.1

Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Thomas K McCarthy, certify that:

1. I have reviewed this Amendment No. 1 on Form 10-K/A of Altisource Asset Management Corporation; and

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.

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