[PART I Financial Information](index=3&type=section&id=PART%20I%20Financial%20Information) This section presents Great Ajax Corp.'s unaudited consolidated financial statements and management's discussion and analysis of financial performance [Consolidated Interim Financial Statements](index=3&type=section&id=Item%201.%20Consolidated%20Interim%20Financial%20Statements) This section presents Great Ajax Corp.'s unaudited consolidated financial statements and comprehensive notes for the period ended March 31, 2019 [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) Great Ajax Corp. reported total assets of $1.616 billion and total liabilities of $1.280 billion as of March 31, 2019, reflecting slight increases from year-end 2018 Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2019 | December 31, 2018 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $41,542 | $55,146 | | Mortgage loans, net | $1,313,677 | $1,310,873 | | Investments at fair value | $152,083 | $146,811 | | **Total assets** | **$1,616,182** | **$1,602,871** | | **Liabilities & Equity** | | | | Secured borrowings, net | $593,121 | $610,199 | | Borrowings under repurchase transactions | $560,404 | $534,089 | | Convertible senior notes, net | $117,838 | $117,525 | | **Total liabilities** | **$1,279,507** | **$1,268,592** | | **Total equity** | **$336,675** | **$334,279** | [Consolidated Statements of Income](index=4&type=section&id=Consolidated%20Statements%20of%20Income) For Q1 2019, consolidated net income attributable to common stockholders was $7.3 million, with diluted EPS of $0.36, a slight decrease from the prior year Consolidated Statements of Income (in thousands, except per share data) | Metric | Three months ended March 31, 2019 | Three months ended March 31, 2018 | | :--- | :--- | :--- | | Net interest income | $13,767 | $13,097 | | Total income | $15,184 | $14,743 | | Total expense | $6,992 | $6,405 | | Consolidated net income | $8,121 | $8,322 | | Consolidated net income attributable to common stockholders | $7,330 | $7,665 | | Basic earnings per common share | $0.39 | $0.41 | | Diluted earnings per common share | $0.36 | $0.38 | [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities significantly increased to $5.0 million in Q1 2019, contributing to a $13.6 million decrease in cash and cash equivalents Net Cash Flow Summary (in thousands) | Cash Flow Activity | Three months ended March 31, 2019 | Three months ended March 31, 2018 | | :--- | :--- | :--- | | Net cash from operating activities | $(5,044) | $(715) | | Net cash from investing activities | $(5,593) | $12,824 | | Net cash from financing activities | $(2,968) | $(45,386) | | **Net change in cash** | **$(13,605)** | **$(33,277)** | [Notes to Consolidated Interim Financial Statements](index=10&type=section&id=Notes%20to%20Consolidated%20Interim%20Financial%20Statements) These notes detail the company's business, accounting policies, asset and liability composition, debt financing, and related party transactions - The company primarily acquires **re-performing loans (RPLs)** and **small balance commercial (SBC) loans**, and is externally managed by **Thetis Asset Management LLC** with loans serviced by the affiliated **Gregory Funding LLC**[15](index=15&type=chunk) - Acquired loans with credit deterioration are accounted for under **ASC 310-30**, which involves estimating expected cash flows to determine an **accretable yield**, recognized as interest income over the life of the loan pool[25](index=25&type=chunk)[26](index=26&type=chunk)[28](index=28&type=chunk) - The company uses various financing methods, including **securitization trusts (VIEs)**, **repurchase facilities**, and **convertible senior notes** to fund its operations and acquisitions[41](index=41&type=chunk)[43](index=43&type=chunk)[44](index=44&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=45&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2019 financial performance, highlighting net income of $7.3 million, portfolio composition, liquidity, and $63.2 million cash collection from assets - For Q1 2019, net income attributable to common stockholders was **$7.3 million**, with basic EPS of **$0.39** and diluted EPS of **$0.36**[260](index=260&type=chunk) - The company collected **$63.2 million** in cash during the quarter, including **$49.8 million** from its mortgage loan and REO portfolio and **$13.4 million** from its investments in debt securities and beneficial interests[262](index=262&type=chunk) Portfolio Carrying Value (in millions) | Asset Type | March 31, 2019 | December 31, 2018 | | :--- | :--- | :--- | | Residential RPL loan pools | $1,229.0 | $1,242.2 | | SBC loan pools & non-pooled | $49.7 | $32.3 | | Residential NPL loan pools | $35.0 | $36.3 | | REO | $37.8 | $37.0 | | Investment in debt securities | $152.1 | $146.8 | | Investment in beneficial interests | $30.8 | $22.1 | | **Total Real Estate Assets** | **$1,534.4** | **$1,516.7** | [Results of Operations](index=49&type=section&id=Results%20of%20Operations) Net interest income after provision increased to $13.6 million in Q1 2019, while total expenses rose to $7.0 million, impacting overall profitability Results of Operations Summary (in thousands) | Metric | Three months ended March 31, 2019 | Three months ended March 31, 2018 | | :--- | :--- | :--- | | Net interest income after provision | $13,613 | $13,097 | | Total income | $15,184 | $14,743 | | Total expense | $6,992 | $6,405 | | Net income attributable to common stockholders | $7,330 | $7,665 | - Book value per share remained stable at **$15.59** at March 31, 2019, the same as at December 31, 2018[273](index=273&type=chunk)[274](index=274&type=chunk) [Mortgage Loan Portfolio](index=53&type=section&id=Mortgage%20Loan%20Portfolio) In Q1 2019, the company acquired $7.2 million in RPLs and $17.8 million UPB in SBC loans, bringing the total mortgage loan portfolio to a $1.3 billion carrying value - Acquired **38 RPLs** for **$7.2 million** (**84.8% of UPB**) and **19 SBC loans** with **$17.8 million UPB** during Q1 2019[275](index=275&type=chunk)[276](index=276&type=chunk)[277](index=277&type=chunk) Loan Portfolio Activity Q1 2019 (in thousands) | Activity | Amount | | :--- | :--- | | Beginning carrying value | $1,310,873 | | Portfolio acquisitions | $24,998 | | Accretion recognized | $26,586 | | Payments received, net | $(44,460) | | Reclassifications to REO | $(4,171) | | **Ending carrying value** | **$1,313,677** | [Liquidity and Capital Resources](index=59&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity is supported by securities offerings and secured borrowings, with $41.5 million in cash and $739.9 million in total contractual obligations as of March 31, 2019 - Cash and cash equivalents decreased by **$13.6 million** during the quarter to **$41.5 million** as of March 31, 2019[291](index=291&type=chunk) - The company had **$560.4 million** outstanding under repurchase agreements and **six outstanding secured borrowings** as of March 31, 2019[298](index=298&type=chunk)[306](index=306&type=chunk) Contractual Obligations as of March 31, 2019 (in thousands) | Obligation | Total | Less than 1 Year | 1 – 3 Years | 3 – 5 Years | More than 5 Years | | :--- | :--- | :--- | :--- | :--- | :--- | | Convertible senior notes | $123,850 | $— | $— | $— | $123,850 | | Borrowings under repurchase agreements | $560,404 | $560,404 | $— | $— | $— | | Interest on convertible senior notes | $47,514 | $8,979 | $17,958 | $17,958 | $2,619 | | Interest on repurchase agreements | $8,083 | $8,083 | $— | $— | $— | | **Total** | **$739,851** | **$577,466** | **$17,958** | **$17,958** | **$126,469** | [Quantitative and Qualitative Disclosures About Market Risk](index=67&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company identifies real estate, interest rate, prepayment, and credit risks as primary market exposures, each impacting asset values, financing costs, or yields - Key market risks include **real estate risk** from property value volatility, **interest rate risk** affecting asset values and financing costs, **prepayment risk** impacting yields, and **credit risk** from borrower defaults[328](index=328&type=chunk) - **Rising interest rates** may slow refinancing and home price increases, but could also be accompanied by inflation and higher household incomes, potentially benefiting rental income and property values[329](index=329&type=chunk)[331](index=331&type=chunk) - An **increase in prepayments** on the company's discounted loan portfolio would accelerate the repayment of the discount and increase yield, but also introduces **re-investment risk**[332](index=332&type=chunk) [Controls and Procedures](index=68&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2019, with no material changes to internal control over financial reporting - The CEO and CFO concluded that as of the end of Q1 2019, the company's disclosure controls and procedures were **effective**[336](index=336&type=chunk) - **No material changes** were made to the company's internal control over financial reporting during the first quarter of 2019[337](index=337&type=chunk) [PART II Other Information](index=69&type=section&id=PART%20II%20Other%20Information) This section provides additional information including legal proceedings, risk factors, equity sales, and a list of exhibits filed with the report [Legal Proceedings](index=69&type=section&id=Item%201.%20Legal%20Proceedings) The company and its affiliates are not subject to any material legal or regulatory proceedings as of the report date - As of the report date, the company is **not involved in any material legal proceedings**[339](index=339&type=chunk) [Risk Factors](index=69&type=section&id=Item%201A.%20Risk%20Factors) No material changes have occurred to the risk factors previously disclosed in the company's 2018 Annual Report on Form 10-K - **No material changes** have occurred to the risk factors disclosed in the 2018 Form 10-K[340](index=340&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=69&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company issued common stock in private transactions to its Manager and independent directors for fees, exempt from registration under Section 4(a)(2) of the Securities Act - On February 19, 2019, issued **1,549 shares** to the Manager for the incentive fee[341](index=341&type=chunk) - On March 6, 2019, issued **51,007 shares** to the Manager for the management fee[342](index=342&type=chunk) - On March 6, 2019, issued **606 shares** to each of the four independent directors for their quarterly fees[343](index=343&type=chunk) [Exhibits](index=69&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including CEO and CFO certifications and XBRL data files - The report includes **required certifications** from the CEO and CFO, as well as **XBRL instance documents**[344](index=344&type=chunk)[346](index=346&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO SECTIONS 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2018 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to 001-36844 (Commission file number) GREAT AJAX CORP. (E ...

Great Ajax Corp (NYSE:AJX) Q4 2018 Earnings Conference Call March 5, 2019 5:00 PM ET Company Participants Lawrence Mendelsohn - Chairman & CEO Mary Doyle - CFO Conference Call Participants Timothy Hayes - B. Riley FBR Steven Delaney - JMP Securities Peter Stettler - Piper Jaffray Operator Good day everyone and welcome to the Great Ajax Corp Fourth Quarter and Year-End 2018 Financial Results Conference Call. All participants will be listen only mode. [Operator Instructions] Please note that today's event is ...