Friday, 03 December 2021 04:43 GMT

Altisource Asset Management Corporation Reports Third Quarter 2021 Results


(MENAFN- GlobeNewsWire - Nasdaq) 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 .

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
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