Financial Performance - In Q4 2022, the company reported a loss of $4.1 million on revenue of $2.5 million, which was an improvement of $600,000 or 33% compared to Q3 [5][6] - Adjusted Q4 loss, excluding non-recurring items, was $3 million, down from $4 million in Q3 [6] Business Lines and Key Metrics - The company focuses on capital-light origination of private credit products, including residential transitional loans (RTL) and debt service coverage ratio (DSCR) loans [7] - Expected gross revenue per loan for RTLs is between 300 to 450 basis points, while for DSCR loans, it is between 200 to 350 basis points [10][11] Market Data and Key Metrics - The company has a pipeline of $35 million in direct borrower channel origination and is negotiating an additional $25 million [12] - Committed volume in the wholesale channel is $15 million, with plans to roll out a broker direct channel soon [12] Company Strategy and Industry Competition - The company aims to partner with institutions like insurance companies and pension funds, which have over a trillion dollars allocated for alternative fixed income assets [9] - The current market environment is seen as beneficial, as banks are pulling back on lending, allowing the company to capture more market share and pricing power [55] Management's Comments on Operating Environment and Future Outlook - Management believes the current environment is advantageous, as it allows the company to take advantage of reduced competition and increased demand for their products [55] - The company is focused on ramping up production across all three channels: direct borrower, wholesale, and broker [52] Other Important Information - The company has closed a $50 million warehouse line and a $55 million takeout with a major money manager [10] - The company is actively working on improving operational processes to handle increased loan origination efficiently [35][36] Q&A Session Summary Question: Impact of the U.S. regional banking sector crisis - Management stated that they have not experienced issues due to their capital partners being unaffected by market fluctuations [15] Question: Status of credit lines - Management confirmed that they have not lost access to any lines of credit and are in discussions to increase their credit line [17] Question: Stock repurchase plan - The company has repurchased approximately $1.2 million in stock, with details to be included in their upcoming 10-K filing [19] Question: Clarification on the $35 million pipeline - Management explained that the $35 million represents borrowers who have signed term sheets and are in the process of closing [21] Question: Profitability timeline - Management is focused on production and aims to achieve profitability on a monthly basis as soon as possible, though no specific timeline was provided [30] Question: Underwriting capacity for increased loan volume - Management expressed confidence in their staffing levels and ability to handle increased loan volume, with plans to hire additional processors if necessary [32] Question: Updates on lawsuits - Management indicated that updates on ongoing lawsuits would be available in the upcoming 10-K filing [61]

Financial Data and Key Metrics Changes - The company generated total revenue of over $1.9 million in Q3 2022, more than triple the net revenue earned in Q2 2022 [5] - The private credit commitments increased to over $123 million by the end of Q3 2022, representing a 175% increase from Q2 2022 [4] Business Line Data and Key Metrics Changes - The company has dynamically raised loan rates and is currently originating loans with a total yield of 12.5% or greater [5] - The advance rates on bridge originations have been lowered by 10 points to accommodate market headwinds [5][9] Market Data and Key Metrics Changes - Despite rising interest rates, strong demand for housing persists due to a housing shortage and modernization of existing housing stock in the U.S. [8] - The market conditions vary significantly across different U.S. metropolitan statistical areas (MSAs), with some experiencing declines while others show different trajectories [11] Company Strategy and Development Direction - The company is focused on creating alternative credit through direct-to-borrower and wholesale originations, primarily in the private credit space [12] - The strategy includes utilizing technology, data, and analytics to enhance market reach and customer experience [14] - The company aims to originate and sell loans on a forward flow basis to minimize interest rate and principal risk [18][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving over $600 million in loan production for 2023, despite current market volatility [25] - The company anticipates that a more normalized market environment will occur over the next six to nine months, which should expand margins [90] Other Important Information - The company entered into a warehouse line with Flagstar Bank, receiving approximately $53 million in funding by the end of Q3 2022 [6] - An arbitration case against the former CEO was dismissed, with the arbitrator sanctioning him for misconduct [7] Q&A Session Summary Question: What does the loan book look like and what institutions are being talked to for selling loans? - The company is in discussions with insurance companies, REITs, and money managers for selling DSCR and bridge loans, expecting to finalize takeouts in the next two to three weeks [17][20] Question: Do you still expect to achieve $600 million in originations? - Management remains confident in achieving or exceeding $600 million in total production for 2023, contingent on securing takeouts [25] Question: What are the borrower requirements? - The average borrower for the DSCR rental product typically has a credit score of 700 or higher, with LTVs at 80% or less [30] Question: How does the company monitor the health of its loan book? - The company conducts weekly reviews of its portfolio and has proactive measures in place to ensure timely payments from borrowers [80] Question: What is the expected timeline for margin normalization in the sector? - Management anticipates a stabilization in the market over the next six to nine months, which should lead to expanded margins [90]

Financial Performance - Loan interest income for the three and nine months ended September 30, 2022, was $1.7 million and $2.3 million, respectively, with no loan interest income recorded in 2021 [122]. - Loan fee income for the same periods was $0.2 million, with no income in 2021 [123]. - Salaries and employee benefits increased to $1.6 million and $4.0 million in 2022 from $0.9 million and $4.1 million in 2021, reflecting the addition of loan operations staff [124]. - Legal fees decreased to $0.8 million and $3.5 million in 2022 from $2.2 million and $5.7 million in 2021, primarily due to reduced litigation costs [125]. - General and administrative expenses were $0.8 million and $2.3 million in 2022, slightly up from $0.6 million and $1.9 million in 2021 [126]. Cash Flow and Investments - As of September 30, 2022, cash and cash equivalents were $10.2 million, down from $78.3 million at the end of 2021, mainly due to loan purchases [134]. - Net cash used in operating activities from continuing operations for the nine months ended September 30, 2022, was $(20,450) thousand, compared to $(16,943) thousand for the same period in 2021 [142]. - Net cash used in investing activities from continuing operations for the nine months ended September 30, 2022, was $(92,297) thousand, while it was $58,396 thousand in 2021 [142]. - Net cash provided by financing activities from continuing operations for the nine months ended September 30, 2022, was $47,626 thousand, compared to $(4,861) thousand in 2021 [142]. - Total cash flows relating to continuing operations for the nine months ended September 30, 2022, amounted to $(65,121) thousand, a decrease from $36,592 thousand in 2021 [142]. - Loans held for sale at fair value amounted to $7.2 million as of September 30, 2022 [137]. - Loans held for investment at fair value were $90.5 million, primarily related to business purpose bridge loans [138]. - A capital commitment of $50 million has been made to grow the Alternative Lending Group (ALG) operations [112]. Shareholder Actions - The company has repurchased $271.6 million in shares under its buyback program, with $28.4 million remaining available for repurchases [141]. Off-Balance Sheet Arrangements - There were no off-balance sheet arrangements as of September 30, 2022, or December 31, 2021 [146]. Market and Risk Factors - Market risk includes risks from changes in interest rates, foreign currency exchange rates, commodity prices, equity prices, and other market changes affecting market-sensitive instruments [148]. Accounting and Reporting - Critical accounting judgments are discussed in the Annual Report on Form 10-K for the year ended December 31, 2021 [147].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Title of each classTrading Symbol(s) Name of each exchange on which registered Common stock, par value $0.01 per share AAMC NYSE American FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR TRANSITION PERIOD FROM __________ TO __________ COMMISSION ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Title of each classTrading Symbol(s) Name of each exchange on which registered Common stock, par value $0.01 per share AAMC NYSE American FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR TRANSITION PERIOD FROM __________ TO __________ COMMISSIO ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 COMMISSION FILE NUMBER: 001-36063 | --- | --- | |-------------------------------------------------------------------------------------|------------------------------------------------| | | | | | | | | | | ...

[Part I - Financial Information](index=6&type=section&id=Part%20I) [Financial Statements (Unaudited)](index=6&type=section&id=Item%201.%20Financial%20statements%20(unaudited)) This section presents Altisource Asset Management Corporation's unaudited condensed consolidated financial statements and accompanying notes for the nine months ended September 30, 2021 [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to $88.8 million, liabilities significantly reduced to $6.9 million, and stockholders' deficit improved to $(68.2) million by September 30, 2021 Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | September 30, 2021 (unaudited) | December 31, 2020 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $84,544 | $41,623 | | Front Yard common stock, at fair value | $0 | $47,355 | | Total current assets | $87,427 | $96,614 | | Total assets | $88,763 | $99,752 | | **Liabilities & Equity** | | | | Total current liabilities | $3,479 | $13,104 | | Total liabilities | $6,933 | $16,330 | | Redeemable preferred stock | $150,000 | $250,000 | | Total stockholders' deficit | $(68,170) | $(166,578) | [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The company reported a net income of $2.4 million for the nine months ended September 30, 2021, driven by gains from discontinued operations and preferred stock transactions Statement of Operations Highlights (Nine Months Ended Sept 30, in thousands) | Line Item | 2021 | 2020 | | :--- | :--- | :--- | | Total expenses | $14,292 | $14,471 | | Total other income (loss) | $11,641 | $(5,575) | | Net income (loss) from continuing operations | $(3,826) | $(18,955) | | Net gain on discontinued operations | $6,213 | $19,117 | | **Net income (loss)** | **$2,387** | **$162** | | **Earnings (loss) per basic common share** | **$45.54** | **$0.07** | [Condensed Consolidated Statements of Stockholders' Deficit](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Deficit) Stockholders' deficit improved from $(166.6) million to $(68.2) million, primarily due to a $95.0 million increase in additional paid-in capital from preferred stock transactions - The stockholders' deficit decreased from **$166.6 million** to **$68.2 million** during the first nine months of 2021[19](index=19&type=chunk) - Key drivers for the improvement include a **$78.9 million** gain from a preferred stock conversion in Q1 and a **$16.1 million** gain from another conversion in Q3, both credited to Additional Paid-in Capital[19](index=19&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from investing activities was $58.9 million, leading to a $42.6 million increase in cash and equivalents, ending at $84.5 million by September 30, 2021 Cash Flow Summary (Nine Months Ended Sept 30, in thousands) | Activity | 2021 | 2020 | | :--- | :--- | :--- | | Net cash (used in) operating activities | $(11,504) | $9,279 | | Net cash from investing activities | $58,907 | $3,615 | | Net cash (used in) financing activities | $(4,781) | $(182) | | **Net change in cash and cash equivalents** | **$42,622** | **$12,712** | | **Cash and cash equivalents, end of period** | **$84,544** | **$32,639** | [Notes to Condensed Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail the Front Yard agreement termination, significant litigation with Luxor Capital, preferred shareholder settlements, and other accounting policies - The termination of the asset management agreement with Front Yard on December 31, 2020, and the subsequent sale of the Disposal Group on January 1, 2021, resulted in a pre-tax gain of **$7.5 million** and are classified as discontinued operations[29](index=29&type=chunk)[30](index=30&type=chunk) - The company is in a legal dispute with Luxor Capital regarding the redemption of **$250.0 million** in Series A Preferred Stock, with AAMC believing it is not obligated to redeem the shares due to insufficient legally available funds[36](index=36&type=chunk)[70](index=70&type=chunk)[71](index=71&type=chunk) - In 2021, AAMC settled with preferred shareholders Putnam and Wellington, resulting in a **$71.9 million** gain from the Putnam exchange and a **$16.1 million** gain from the Wellington cash payment[40](index=40&type=chunk)[41](index=41&type=chunk) - The company is involved in arbitrations with its former CEO, Indroneel Chatterjee, and former General Counsel, Graham Singer, over claims of wrongful termination and discrimination, respectively[75](index=75&type=chunk)[76](index=76&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management's%20discussion%20and%20analysis%20of%20financial%20condition%20and%20results%20of%20operations) Management discusses the strategic shift post-Front Yard, exploring new business opportunities, analyzing expense changes, and assessing liquidity challenges from ongoing litigation - Following the termination of the Front Yard agreement, AAMC is actively exploring new business lines, including potential acquisitions or mergers in cryptocurrency and brokerage-related businesses[99](index=99&type=chunk) - Upon the closing of the Front Yard merger, AAMC received approximately **$47.5 million** in cash for its stock holdings[98](index=98&type=chunk) Key Expense Changes (Nine Months Ended Sept 30, 2021 vs 2020) | Expense Category | 2021 (in millions) | 2020 (in millions) | Change Driver | | :--- | :--- | :--- | :--- | | Salaries and Employee Benefits | $4.1 | $8.1 | Decrease due to sale of Front Yard operations and executive departures | | Legal and Professional Fees | $8.3 | $4.7 | Increase due to litigation, employment issues, and new business assessment costs | - As of September 30, 2021, cash and cash equivalents stood at **$84.5 million**, indicating strong liquidity, though potential adverse effects exist if the Luxor litigation is unsuccessful[117](index=117&type=chunk)[122](index=122&type=chunk) - During Q3 2021, the company liquidated its equity securities portfolio, selling **$38.5 million** in securities and fully repaying its margin loan[123](index=123&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=32&type=section&id=Item%203.%20Quantitative%20and%20qualitative%20disclosures%20about%20market%20risk) The company's primary market risk from mortgage REIT equity investments was mitigated by the liquidation of its entire portfolio in Q3 2021 - The primary market risk was investment risk related to a concentration in mortgage REIT equity securities, which were sensitive to interest rates and economic policy changes[131](index=131&type=chunk)[132](index=132&type=chunk) - This investment risk was significantly reduced as the company liquidated its entire equity securities portfolio during the third quarter of 2021[123](index=123&type=chunk) [Controls and Procedures](index=32&type=section&id=Item%204.%20Controls%20and%20procedures) Management concluded that disclosure controls and procedures were effective as of September 30, 2021, with no material changes to internal controls over financial reporting - Based on an evaluation as of the end of the reporting period, the Interim CEO and CFO concluded that the company's disclosure controls and procedures were effective[134](index=134&type=chunk) - There were no changes in internal control over financial reporting during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[135](index=135&type=chunk) [Part II - Other Information](index=34&type=section&id=Part%20II) [Legal Proceedings](index=34&type=section&id=Item%201.%20Legal%20proceedings) This section refers to Note 6, "Commitments and Contingencies," for a detailed description of the company's legal proceedings - For a description of the Company's legal proceedings, refer to Note 6, "Commitments and Contingencies" of the interim condensed consolidated financial statements[138](index=138&type=chunk) [Risk Factors](index=34&type=section&id=Item%201A.%20Risk%20factors) New risks include expenses exceeding minimal income while holding cash, and the challenge of successfully launching or profitably operating a new business - A key risk is that until a new business is engaged, the company's assets will consist almost entirely of cash and government securities, resulting in minimal income that will be significantly exceeded by expenses[138](index=138&type=chunk) - The company faces the risk of being unable to establish new businesses, and even if it does, they may not be profitable due to challenges in hiring, competition, and marketing[139](index=139&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=34&type=section&id=Item%202.%20Unregistered%20sales%20of%20equity%20securities%20and%20use%20of%20proceeds) The company reported no unregistered sales of equity securities or use of proceeds during the period - None[139](index=139&type=chunk) [Other Information](index=35&type=section&id=Item%205.%20Other%20Information) Kevin Sullivan was appointed as the company's General Counsel and Chief Compliance Officer on September 20, 2021 - On September 20, 2021, Kevin Sullivan commenced employment with the Company as General Counsel and Chief Compliance Officer[142](index=142&type=chunk) [Exhibits](index=36&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Quarterly Report on Form 10-Q, including corporate governance documents and required CEO/CFO certifications - The report includes standard exhibits such as Articles of Incorporation, Bylaws, and CEO/CFO certifications pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act[144](index=144&type=chunk)