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): August 16, 2021
(Exact name of Registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||||||||||
(Address of principal executive offices including zip code)
(704 ) 275-9113
(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:
Securities registered or to be registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
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.
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Item 2.02 Results of Operations and Financial Condition
On August 16, 2021, Altisource Asset Management Corporation (“AAMC”) issued a press release announcing its financial results for the quarter ended June 30, 2021. 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 August 16, 2021. | ||||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). | |||||||
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 | |||||||||||
| August 16, 2021 | By: | /s/ | Thomas K. McCarthy | ||||||||
Thomas K. McCarthy | |||||||||||
| Interim Chief Executive Officer | |||||||||||
| August 16, 2021 | By: | /s/ | Stephen Ramiro Krallman | ||||||||
Stephen Ramiro Krallman | |||||||||||
| Chief Financial Officer | |||||||||||
Exhibit 99.1
FOR IMMEDIATE RELEASE | FOR FURTHER INFORMATION CONTACT: | ||||
| Investor Relations | |||||
| T: +1-704-275-9113 | |||||
| E: IR@AltisourceAMC.com | |||||
Altisource Asset Management Corporation Reports Second Quarter 2021 Results
CHRISTIANSTED, U.S. Virgin Islands, August 16, 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.
Second Quarter 2021 Highlights and Recent Developments
•Net income from continuing operations of $2.2 million for the second quarter was fueled in part by (i) the realized gains on sales of the equity securities and the associated dividend income, and (ii) reduced expenses on salaries and benefits due to forfeited bonuses from departed executives.
•Maintained liquidity to position the Company to have access to capital to consummate prospective business opportunities. Liquidity consists of $52.0 million in cash and $39.8 million in equity securities.
•Paid off the $28.4 million outstanding balance on the margin loan from proceeds of sales of equity securities.
•Hired Stephen Krallman as the new Chief Financial Officer of the Company.
•Hired Kevin Sullivan to be the new General Counsel and Chief Compliance Officer of the Company.
“The Company’s attention and focus” stated Thomas K. McCarthy, Interim Chief Executive Officer “continues to be to identify and evaluate business opportunities and acquisition targets in which to potentially focus the Company’s resources. In addition to the fund management and mortgage businesses more closely related to the Company's history, management has explored separate and distinct new business lines. While no final decision has been made on the new businesses that the Company will pursue, the Company is in different stages of discussion with several potential acquisition or merger targets including the fix and flip lending space, one in fee based real estate investment banking and one in a cryptocurrency related business.”
Second Quarter 2021 Financial Results
AAMC’s net income to common shareholders for the second quarter of 2021 was $2.2 million compared to a net loss of $(7.8) million for the same period in 2020. Diluted earnings per share was $1.01 for the quarter, compared with a diluted net loss per share of $(4.81) for the same period in 2020.
AAMC's net income to common shareholders for the six months ended June 30, 2021 was $8.1 million compared to a net loss of $(11.6) million for the same period in 2020. Due to a $71.9 million gain on settlement of preferred shares in the first quarter of 2021, which was recorded directly to equity, but is included in the numerator for our earnings per share calculations; diluted earnings per share was $37.41 for the six months ended June 30, 2021, compared with a diluted net loss per share of $(7.17) 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 June 30, | Six months ended June 30, | |||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||||||
| Expenses: | ||||||||||||||||||||
| Salaries and employee benefits | $ | (345) | $ | 3,319 | $ | 3,200 | $ | 6,413 | ||||||||||||
| Legal and professional fees | 2,655 | 1,746 | 4,540 | 3,226 | ||||||||||||||||
| General and administrative | 611 | 564 | 1,364 | 1,150 | ||||||||||||||||
| Total expenses | 2,921 | 5,629 | 9,104 | 10,789 | ||||||||||||||||
| Other income (loss): | ||||||||||||||||||||
| Change in fair value of Front Yard common stock | — | (5,279) | 146 | (5,913) | ||||||||||||||||
| Dividend income on Front Yard common stock | — | — | — | 244 | ||||||||||||||||
| Change in fair value of equity securities | (2,411) | — | 3,310 | — | ||||||||||||||||
| Dividend income | 887 | — | 3,041 | — | ||||||||||||||||
| Gain on sale of equity securities | 6,360 | — | 6,360 | — | ||||||||||||||||
| Interest expense | (24) | — | (60) | — | ||||||||||||||||
| Other income | 4 | 6 | 139 | 24 | ||||||||||||||||
| Total other income (loss) | 4,816 | (5,273) | 12,936 | (5,645) | ||||||||||||||||
| Net income (loss) from continuing operations before income taxes | 1,895 | (10,902) | 3,832 | (16,434) | ||||||||||||||||
| Income tax (benefit) expense | (333) | (690) | 1,961 | (568) | ||||||||||||||||
| Net income (loss) from continuing operations | 2,228 | (10,212) | 1,871 | (15,866) | ||||||||||||||||
| Discontinued operations: | ||||||||||||||||||||
| Income from operations related to Front Yard, net of tax | — | 2,377 | — | 4,274 | ||||||||||||||||
| Gain on disposal of operations related to Front Yard | — | — | 7,485 | — | ||||||||||||||||
| Income tax expense related to disposal | — | — | 1,272 | — | ||||||||||||||||
| Net gain on discontinued operations | — | 2,377 | 6,213 | 4,274 | ||||||||||||||||
| Net income (loss) | 2,228 | (7,835) | 8,084 | (11,592) | ||||||||||||||||
| Amortization of preferred stock issuance costs | — | — | — | (42) | ||||||||||||||||
| Net income (loss) attributable to common stockholders | $ | 2,228 | $ | (7,835) | $ | 8,084 | $ | (11,634) | ||||||||||||
| Continuing operations earnings per share | ||||||||||||||||||||
| Net income (loss) from continuing operations | $ | 2,228 | (10,212) | 1,871 | (15,866) | |||||||||||||||
| Reverse amortization of preferred stock issuance costs | — | — | — | 42 | ||||||||||||||||
| Gain on preferred stock transaction | — | — | 71,883 | — | ||||||||||||||||
| Numerator for earnings per share from continuing operations | $ | 2,228 | $ | (10,212) | $ | 73,754 | $ | (15,824) | ||||||||||||
| Discontinued operations earnings per share | ||||||||||||||||||||
| Net income from discontinued operations | $ | — | $ | 2,377 | $ | 6,213 | $ | 4,274 | ||||||||||||
| Earnings (loss) per share of common stock – basic: | ||||||||||||||||||||
| Continuing operations – basic | $ | 1.09 | $ | (6.27) | $ | 37.86 | $ | (9.80) | ||||||||||||
| Discontinued operations – basic | — | 1.46 | 3.19 | 2.63 | ||||||||||||||||
| Earnings (loss) per basic common share | $ | 1.09 | $ | (4.81) | $ | 41.05 | $ | (7.17) | ||||||||||||
| Weighted average common stock outstanding – basic | 2,050,786 | 1,629,285 | 1,948,070 | 1,622,497 | ||||||||||||||||
| Earnings (loss) per share of common stock – diluted: | ||||||||||||||||||||
| Continuing operations – diluted | $ | 1.01 | $ | (6.27) | $ | 34.50 | $ | (9.80) | ||||||||||||
| Discontinued operations – diluted | — | 1.46 | 2.91 | 2.63 | ||||||||||||||||
| Earnings (loss) per diluted common share | $ | 1.01 | $ | (4.81) | $ | 37.41 | $ | (7.17) | ||||||||||||
| Weighted average common stock outstanding – diluted | 2,195,806 | 1,629,285 | 2,137,513 | 1,622,497 | ||||||||||||||||
Altisource Asset Management Corporation
Condensed Consolidated Balance Sheets
(In thousands, except share and per share amounts)
| June 30, 2021 | December 31, 2020 | ||||||||||
| (unaudited) | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 52,027 | $ | 41,623 | |||||||
| Equity securities, at fair value | 39,804 | — | |||||||||
| Front Yard common stock, at fair value | — | 47,355 | |||||||||
| Receivable from Front Yard | — | 3,414 | |||||||||
| Dividends receivable | 681 | — | |||||||||
| Prepaid expenses and other assets | 2,875 | 3,328 | |||||||||
| Current assets held for sale | — | 894 | |||||||||
| Total current assets | 95,387 | 96,614 | |||||||||
| Non-current assets: | |||||||||||
| Right-of-use lease assets | 894 | 656 | |||||||||
| Other non-current assets | 419 | 503 | |||||||||
| Non-current assets held for sale | — | 1,979 | |||||||||
| Total non-current assets | 1,313 | 3,138 | |||||||||
| Total assets | $ | 96,700 | $ | 99,752 | |||||||
| Current liabilities: | |||||||||||
| Accrued salaries and employee benefits | $ | 299 | $ | 2,539 | |||||||
| Accounts payable and accrued liabilities | 2,374 | 9,152 | |||||||||
| Short-term lease liabilities | 128 | 75 | |||||||||
| Current liabilities held for sale | — | 1,338 | |||||||||
| Total current liabilities | 2,801 | 13,104 | |||||||||
| Non-current liabilities: | |||||||||||
| Long-term lease liabilities | 793 | 600 | |||||||||
| Other non-current liabilities | 3,497 | 1,027 | |||||||||
| Non-current liabilities held for sale | — | 1,599 | |||||||||
| Total non-current liabilities | 4,290 | 3,226 | |||||||||
| Total liabilities | 7,091 | 16,330 | |||||||||
| Commitments and contingencies: | — | — | |||||||||
| Redeemable preferred stock: | |||||||||||
| Preferred stock, $0.01 par value, 250,000 and 250,000 shares issued as June 30, 2021 and December 31, 2020, respectively. 168,200 shares outstanding and $168,200 redemption value as of June 30, 2021 and 250,000 shares outstanding and $250,000 redemption value as of December 31, 2020. | 168,200 | 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 June 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 | 127,372 | 46,574 | |||||||||
| Retained earnings | 71,538 | 63,426 | |||||||||
| Accumulated other comprehensive loss | 54 | (65) | |||||||||
| Treasury stock, at cost, 1,360,980 shares as of June 30, 2021 and 1,315,995 shares as of December 31, 2020 | (277,589) | (276,543) | |||||||||
| Total stockholders' deficit | (78,591) | (166,578) | |||||||||
| Total liabilities and equity | $ | 96,700 | $ | 99,752 | |||||||