(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Title of Each Class | Trading Symbol(s) | Name of Exchange on which Registered | ||||||
Large Accelerated Filer | ☐ | Accelerated Filer | ☐ | |||||||||||
☒ | Smaller Reporting Company | |||||||||||||
Emerging Growth Company |
Period | Total Number of Shares Purchased | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs | ||||||||||||||||||||||
January 1, 2023 through December 31, 2023 (1) | 2,930 | 80 | — | — | ||||||||||||||||||||||
Total | 2,930 | $ | 80 | — | $ | — |
Period | Total Number of Shares Purchased | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs | ||||||||||||||||||||||
January 1, 2023 - January 31, 2023 | — | $ | — | — | — | |||||||||||||||||||||
February 1, 2023 - February 28, 2023 | 5,381 | 37 | 1,549,843 | — | ||||||||||||||||||||||
March 1, 2023 - March 31, 2023 | 22,060 | 59 | 1,571,903 | — | ||||||||||||||||||||||
Total for the quarter ended March 31, 2023 | 27,441 | 55 | 1,571,903 | $ | 26,900,931 | |||||||||||||||||||||
April 1, 2023 - April 30, 2023 | — | — | 1,571,903 | — | ||||||||||||||||||||||
May 1, 2023 - May 31, 2023 | 2,930 | 80 | 1,574,833 | — | ||||||||||||||||||||||
June 1, 2023 - June 30, 2023 | — | — | 1,574,833 | — | ||||||||||||||||||||||
Total for the quarter ended June 30, year | 2,930 | 80 | 1,574,833 | $ | 26,665,137 | |||||||||||||||||||||
July 1, 2023 - July 31, 2023 | — | — | 1,574,833 | — | ||||||||||||||||||||||
August 1, 2023 - August 31, 2023 | — | — | 1,574,833 | — | ||||||||||||||||||||||
September 1, 2023 - September 30, 2023 | 66,349 | 7 | 1,641,182 | — | ||||||||||||||||||||||
September 1, 2023 - September 30, 2023 (Stock Dividend) | 46,444 | — | 1,687,626 | — | ||||||||||||||||||||||
Total for the quarter ended September 30, | 112,793 | 4 | 1,687,626 | $ | 26,199,193 | |||||||||||||||||||||
October 1, 2023 - October 31, 2023 | 66,802 | 7 | 1,754,428 | — | ||||||||||||||||||||||
October 1, 2023 - October 31, 2023 (Stock Dividend) | 46,761 | — | 1,801,189 | — | ||||||||||||||||||||||
November 1, 2023 - November 30, 2023 | 92,120 | 3 | 1,893,309 | — | ||||||||||||||||||||||
December 1, 2023 - December 31, 2023 | 132,694 | 5 | 2,026,003 | — | ||||||||||||||||||||||
Total for the quarter ended December 31, 2023 | 338,377 | $ | 4 | 2,026,003 | $ | 24,841,192 |
Year ended December 31, | |||||||||||
2023 | 2022 | ||||||||||
Net cash used in operating activities | $ | (11,773) | $ | (27,064) | |||||||
Net cash provided by (used in) investing activities | 62,894 | (85,249) | |||||||||
Net cash (used in) provided by financing activities | (55,180) | 46,779 | |||||||||
Total cash flows | $ | (4,059) | $ | (65,534) |
Exhibit Number | Description | |||||||
Separation Agreement, dated as of December 21, 2012, between Altisource Asset Management Corporation and Altisource Portfolio Solutions S.A. (incorporated by reference to Exhibit 2.1 of the Registrant's Current Report on Form 8-K filed with the SEC on December 28, 2012). | ||||||||
Amended and Restated Articles of Incorporation of Altisource Asset Management Corporation (incorporated by reference to Exhibit 3.1 of the Registrant's Current Report on Form 8-K filed with the SEC on January 5, 2017). | ||||||||
Fifth Amended and Restated Bylaws of Altisource Asset Management Corporation (incorporated by reference to Exhibit 3.2 of the Registrant's Current Report on Form 8-K filed with the SEC on July 6, 2022). | ||||||||
Certificate of Designations establishing the Company’s Series A Convertible Preferred Stock (incorporated by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K filed with the SEC on March 19, 2014). | ||||||||
Incorporated by reference to Exhibit 4.1 of the Registrant’s Annual Report on Form 10-K filed with the SEC on March 27, 2023 | ||||||||
10.1† | Altisource Asset Management Corporation 2012 Equity Incentive Plan (incorporated by reference to Exhibit 10.11 of the Registrant's Amendment No. 4 to Form 10 filed with the SEC on December 18, 2012). | |||||||
10.2† | Altisource Asset Management Corporation 2016 Preferred Stock Plan (incorporated by reference to Exhibit 10.22 of the Registrant's Annual Report on Form 10-K filed with the SEC on March 1, 2017). | |||||||
10.3† | Form of Preferred Stock Agreement under 2016 Employee Preferred Stock Plan (incorporated by reference to Exhibit 10.1 of the Registrant's Current Report on Form 8-K filed with the SEC on January 5, 2017). | |||||||
10.4† | Altisource Asset Management Corporation 2020 Equity Incentive Plan (incorporated by reference to Exhibit 4.3 of the Registrant's Form S-8 filed with the SEC on December 21, 2020). | |||||||
Settlement Agreement dated as of February 17, 2021, between Altisource Asset Management Corporation and Putnam Focused Equity Fund, a series of Putnam Funds Trust, dated as of February 17, 2021 (incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed with the SEC on February 18, 2021). | ||||||||
Settlement Agreement dated as of August 27, 2021, between Altisource Asset Management Corporation and Ithan Creek Master Investors (Cayman) L.P., Bay Pond Investors (Bermuda) L.P., Bay Pond Partners, L.P. and Wellington Management Company LLP (together, the “Wellington Parties”). (incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed with the SEC on August 30, 2021). | ||||||||
Non-Exclusive Patent & Technology License Agreement between System 73 Limited and Altisource Asset Management Corporation dated October 6, 2023 (incorporated by reference to Exhibit 99.1 to the Registrant's Current Report on Form 8-K filed with the SEC on October 10, 2023). | ||||||||
Settlement Agreement, dated January 11, 2024, by and between Luxor Capital Group, LP; Luxor Capital Partners Offshore Master Fund, LP; Luxor Capital Partners, LP; Luxor Wavefront, LP; Luxor Spectrum, LLC; and Thebes Offshore Master Fund, LP, Nathaniel Redleaf, and Altisource Asset Management Corporation (incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed with the SEC on January 16, 2024). | ||||||||
21* | Schedule of Subsidiaries. | |||||||
23* | Consent of Ernst & Young LLP. | |||||||
24* | Power of Attorney (incorporated by reference to the signature page of this Annual Report on Form 10-K). | |||||||
31.1* | Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act. | |||||||
31.2* | Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act. | |||||||
32.1** | Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act. | |||||||
32.2** | Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act. | |||||||
Altisource Asset Management Corporation Clawback Policy | ||||||||
101.INS* | XBRL Instance Document. | |||||||
101.SCH* | XBRL Taxonomy Extension Schema Document. | |||||||
101.CAL* | XBRL Taxonomy Extension Calculation Linkbase Document. | |||||||
101.DEF* | XBRL Taxonomy Extension Definition Linkbase Document. |
Exhibit Number | Description | |||||||
101.LAB* | XBRL Extension Label Linkbase Document. | |||||||
101.PRE* | XBRL Taxonomy Extension Presentation Linkbase Document. |
Altisource Asset Management Corporation | ||||||||||||||
Date: | March 29, 2024 | By: | /s/ | William C. Erbey | ||||||||||
William C. Erbey | ||||||||||||||
Chief Executive Officer | ||||||||||||||
Date: | March 29, 2024 | By: | /s/ | Richard G. Rodick | ||||||||||
Richard G. Rodick | ||||||||||||||
Chief Financial Officer |
Signature | Title | Date | ||||||||||||
/s/ Charles L. Frischer | Director | March 29, 2024 | ||||||||||||
Charles L. Frischer | ||||||||||||||
/s/ Ricardo C. Byrd | Director | March 29, 2024 | ||||||||||||
Ricardo C. Byrd | ||||||||||||||
/s/ John A. Engerman | Director | March 29, 2024 | ||||||||||||
John A. Engerman | ||||||||||||||
/s/ William C. Erbey | Director and Chief Executive Officer | March 29, 2024 | ||||||||||||
William C. Erbey | ||||||||||||||
/s/ Richard G. Rodick | Chief Financial Officer (Principal Financial Officer, Principal Accounting Officer and Secretary) | March 29, 2024 | ||||||||||||
Richard G. Rodick | ||||||||||||||
Loans Held for Sale or Investment, at Fair Value | ||||||||
Description of the Matter | The Company’s loans held for sale or investment, at fair value (collectively, the “loans receivable, at fair value”) totaled $10.1 million in aggregate as of December 31, 2023, inclusive of accrued interest. As more fully described in Note 2 to the consolidated financial statements, the Company has elected the fair value option to measure its loans receivable, at fair value on a recurring basis at each reporting period end. The loans receivable, at fair value were valued as of December 31, 2023 using a discounted cash flow model to estimate the net present value of the future cash flows expected from each loan. Auditing management’s estimate of the fair value of the Company’s loans receivable, at fair value involved a high degree of subjectivity in evaluating management’s assumptions due to the significant estimation required in determining fair value. Specifically, the estimated fair value of the loans receivable, at fair value is sensitive to changes in the discount rate applied to the net present value of future cash flows expected from each loan and, for nonaccrual loans, to changes in the discount applied to the estimated cash flows expected to be derived from the future sale of the collateral. | |||||||
How We Addressed the Matter in Our Audit | Our audit procedures related to the valuation of the loans receivable, at fair value, included, among others, evaluating the reasonableness of the valuation methodology used by the Company to estimate fair value, testing the mathematical accuracy of the valuation models and calculations, and testing the completeness and accuracy of the data inputs used in the valuation of the loans held as of the balance sheet date. Also, with the assistance of our valuation specialists, we evaluated the discount rate assumption and the discount applied to the value of the collateral for nonaccrual loans and concluded fair values of the loans held as of the balance sheet date. |
December 31, 2023 | December 31, 2022 | ||||||||||
ASSETS | |||||||||||
Loans held for sale, at fair value | $ | $ | |||||||||
Loans held for investment, at fair value | |||||||||||
Cash and cash equivalents | |||||||||||
Restricted cash | |||||||||||
Other assets | |||||||||||
Total assets | $ | $ | |||||||||
LIABILITIES AND EQUITY | |||||||||||
Liabilities | |||||||||||
Accrued expenses and other liabilities | $ | $ | |||||||||
Lease liabilities | |||||||||||
Credit facility | |||||||||||
Total liabilities | $ | $ | |||||||||
Commitment and contingencies (Note 6) | |||||||||||
Redeemable preferred stock: | |||||||||||
Preferred stock, $ | |||||||||||
Stockholders' deficit: | |||||||||||
Common stock, $ | |||||||||||
Additional paid-in capital | |||||||||||
Retained earnings | |||||||||||
Accumulated other comprehensive income | |||||||||||
Treasury stock, at cost, | ( | ( | |||||||||
Total stockholders' deficit | ( | ( | |||||||||
Total liabilities and deficit | $ | $ |
Year ended December 31, | |||||||||||
2023 | 2022 | ||||||||||
Revenues: | |||||||||||
Loan interest income | $ | $ | |||||||||
Loan fee income | |||||||||||
Servicing fee revenue | |||||||||||
Realized losses on loans held for sale, net | ( | ||||||||||
Total revenues | |||||||||||
Expenses: | |||||||||||
Salaries and employee benefits | |||||||||||
Legal fees | |||||||||||
Professional fees | |||||||||||
General and administrative | |||||||||||
Servicing and asset management expense | |||||||||||
Acquisition charges | |||||||||||
Interest expense | |||||||||||
Direct loan expense | |||||||||||
Loan sales and marketing expense | |||||||||||
Impairment of operating lease right-of-use assets | |||||||||||
Impairment of intangible assets | |||||||||||
Total expenses | |||||||||||
Other income (expense) | |||||||||||
Change in fair value of loans | ( | ||||||||||
Realized losses on loans held for investment, net | ( | ||||||||||
Other | |||||||||||
Total other expense | ( | ( | |||||||||
Net loss before income tax | ( | ( | |||||||||
Income tax expense | |||||||||||
Net loss | $ | ( | $ | ( | |||||||
Earnings per share | |||||||||||
Net loss | ( | ( | |||||||||
Gain of preferred stock transaction | |||||||||||
Numerator for earnings per share | $ | ( | $ | ( | |||||||
Loss per share of common stock - Basic: | |||||||||||
Loss per basic common share | $ | ( | $ | ( | |||||||
Weighted average common stock outstanding | |||||||||||
Loss per share of common stock - Diluted: | |||||||||||
Loss per diluted common share | $ | ( | $ | ( | |||||||
Weighted average common stock outstanding |
Year ended December 31, | |||||||||||
2023 | 2022 | ||||||||||
Net loss | $ | ( | $ | ( | |||||||
Other comprehensive loss: | |||||||||||
Currency translation adjustments, net | ( | ( | |||||||||
Total other comprehensive loss | ( | ( | |||||||||
Comprehensive loss | $ | ( | $ | ( |
Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | Total Stockholders' Deficit | ||||||||||||||||||||||||||||||||||||||||||
Preferred Stock | Number of Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||||
December 31, 2021 | $ | $ | $ | $ | $ | $ | ( | $ | ( | ||||||||||||||||||||||||||||||||||||||
Common shares issued under share-based compensation plans, net of shares withheld for employee taxes | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Treasury shares repurchased | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||
Share-based compensation, net of tax | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Currency translation adjustments, net | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
Preferred stock conversion | ( | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||
December 31, 2022 | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Adjustment for stock dividend | — | ( | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Common shares issued under share-based compensation plans, net of shares withheld for employee taxes | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Treasury shares repurchased | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||
Share-based compensation, net of tax | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Currency translation adjustments, net | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||
December 31, 2023 | $ | $ | $ | $ | $ | $ | ( | $ | ( |
Year ended December 31, | |||||||||||
2023 | 2022 | ||||||||||
Operating activities: | |||||||||||
Net loss | $ | ( | $ | ( | |||||||
Adjustments to reconcile net loss to net cash used in operating activities | |||||||||||
Depreciation and amortization | |||||||||||
Share-based compensation | |||||||||||
Amortization of operating lease right-of-use assets | |||||||||||
Change in fair value of loans | ( | ||||||||||
Net realized loss on sale of loans held for investment | |||||||||||
Net realized loss on sale of held for sale loans | |||||||||||
Impairment of operating lease right-of-use asset | |||||||||||
Loss on discarded assets | |||||||||||
Impairment of intangible assets | |||||||||||
Gain on repayment of debt | ( | ||||||||||
Changes in operating assets and liabilities: | |||||||||||
Originations of held for sale loans | ( | ( | |||||||||
Additional fundings of held for sale loans | ( | ( | |||||||||
Proceeds from sales of held for sale loans | |||||||||||
Principal payments on held for sale loans | |||||||||||
Interest receivable | ( | ||||||||||
Amortization of deferred financing fees | |||||||||||
Prepaid expenses and other assets | ( | ||||||||||
Accrued compensation and benefits | |||||||||||
Accounts payable and other accrued liabilities | ( | ||||||||||
Other liabilities and operating lease liabilities | ( | ( | |||||||||
Net cash used in operating activities | ( | ( | |||||||||
Investing activities: | |||||||||||
Website development | ( | ||||||||||
Purchase of loans held for investment | ( | ( | |||||||||
Additional fundings of loans held for investment | ( | ( | |||||||||
Proceeds from sales of loans held for investment | |||||||||||
Principal payments on loans held for investment | |||||||||||
Investment in property and equipment | ( | ( | |||||||||
Net cash provided by (used in) investing activities | ( | ||||||||||
Financing activities | |||||||||||
Conversion of preferred stock | ( | ||||||||||
Proceeds from borrowed funds | |||||||||||
Repayment of borrowed funds | ( | ( | |||||||||
Deferred financing fees | ( | ||||||||||
Proceeds and payment of tax withholding on exercise of stock options, net | ( | ||||||||||
Repurchase of common stock | ( | ( | |||||||||
Net cash (used in) provided by financing activities | ( | ||||||||||
Net decrease in cash and cash equivalents | ( | ( | |||||||||
Effect of exchange rate changes on cash and cash equivalents | ( | ( | |||||||||
Consolidated cash, cash equivalents, and restricted cash, beginning of period |
Year ended December 31, | |||||||||||
2023 | 2022 | ||||||||||
Consolidated cash, cash equivalents, and restricted cash, end of period | $ | $ | |||||||||
Supplemental disclosure of cash information: | |||||||||||
Cash paid for interest | $ | $ | |||||||||
Cash paid for income taxes | |||||||||||
Other Disclosures | |||||||||||
Right-of-use lease assets recognized - operating leases | $ | $ | |||||||||
Operating lease liabilities incurred | |||||||||||
Reconciliation of Cash, Cash Equivalents and Restricted Cash | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Restricted cash | |||||||||||
Total cash, cash equivalents, and restricted cash | $ | $ |
Held for Sale | Held for Investment | |||||||||||||||||||||||||
December 31, 2023 | December 31, 2022 | December 31, 2023 | December 31, 2022 | |||||||||||||||||||||||
Total loan commitments | $ | $ | $ | $ | ||||||||||||||||||||||
Less: construction holdbacks (1) | ( | ( | ( | ( | ||||||||||||||||||||||
Total principal outstanding | ||||||||||||||||||||||||||
Change in fair value of loans | ( | ( | ( | |||||||||||||||||||||||
Total loans at fair value | $ | $ | $ | $ |
Loans Held for Sale | Loans Held for Investment | |||||||||||||
Balance at December 31, 2022 | $ | $ | ||||||||||||
Acquisitions | ||||||||||||||
Originations | ||||||||||||||
Proceeds from sales of loans (1) | ( | ( | ||||||||||||
Additional fundings | ||||||||||||||
Interest receivable | ( | |||||||||||||
Payoffs and repayments | ( | ( | ||||||||||||
Fair value adjustment | ||||||||||||||
Balance at December 31, 2023 | $ | $ |
State | Commitment | Percent of Portfolio | ||||||||||||
Florida | $ | % | ||||||||||||
Washington | % | |||||||||||||
Arkansas | % | |||||||||||||
Texas | % | |||||||||||||
Michigan | % | |||||||||||||
New Mexico | % | |||||||||||||
Pennsylvania | % | |||||||||||||
Other | % | |||||||||||||
Total | $ | % |
Assets | Carrying | Fair Value Measurements Using | ||||||||||||||||||||||||
(In thousands) | Value | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||
December 31, 2023 | ||||||||||||||||||||||||||
Loans held for sale | $ | $ | $ | $ | ||||||||||||||||||||||
Loans held for investment | ||||||||||||||||||||||||||
Total measured | $ | $ | $ | $ | ||||||||||||||||||||||
December 31, 2022 | ||||||||||||||||||||||||||
Loans held for sale | $ | $ | $ | $ | ||||||||||||||||||||||
Loans held for investment | ||||||||||||||||||||||||||
Total measured | $ | $ | $ | $ |
Operating Lease Liabilities | |||||
2024 | $ | ||||
2025 | |||||
2026 | |||||
2027 | |||||
Total lease payments | |||||
Less: interest | |||||
Lease liabilities | $ |
Number of Shares | Weighted Average Grant Date Fair Value | |||||||||||||
December 31, 2021 | $ | |||||||||||||
Granted | ||||||||||||||
Vested(1) | ( | |||||||||||||
December 31, 2022(2) | ||||||||||||||
Vested(1) | ( | |||||||||||||
Forfeited | ( | |||||||||||||
December 31, 2023(2) | $ |
December 31, 2023 | ||||||||
Stock options outstanding | ||||||||
Possible future issuances under share-based compensation plans | ||||||||
Year ended December 31, | ||||||||||||||
2023 | 2022 | |||||||||||||
AAMC | $ | ( | $ | ( | ||||||||||
Year ended December 31, | ||||||||||||||
2023 | 2022 | |||||||||||||
Current | ||||||||||||||
Federal | $ | $ | ||||||||||||
State | ||||||||||||||
International | ||||||||||||||
Total current tax expense | ||||||||||||||
Deferred | ||||||||||||||
Federal | ||||||||||||||
State | ||||||||||||||
Total deferred tax expense | ||||||||||||||
Total tax expense | $ | $ |
December 31, 2023 | December 31, 2022 | |||||||||||||
Deferred tax assets: | ||||||||||||||
Stock compensation | $ | $ | ||||||||||||
Accrued expenses | ||||||||||||||
Net operating losses (1) | ||||||||||||||
Lease liabilities | ||||||||||||||
Other | ||||||||||||||
Total gross deferred tax assets | ||||||||||||||
Less: Valuation allowance | ( | ( | ||||||||||||
Total net deferred tax assets | ||||||||||||||
Deferred tax liabilities: | ||||||||||||||
Right-of-use assets | ||||||||||||||
Investments | ||||||||||||||
Unrealized gains | ||||||||||||||
Total gross deferred tax liabilities | ||||||||||||||
Deferred tax assets, net | $ | ( | $ |
Year ended December 31, | ||||||||||||||
2023 | 2022 | |||||||||||||
U.S. Virgin Islands income tax rate | % | % | ||||||||||||
State and local income tax rates | ||||||||||||||
EDC benefits in the USVI | ( | ( | ||||||||||||
Foreign tax rate differential | ( | ( | ||||||||||||
Permanent and other | ( | ( | ||||||||||||
Valuation allowance | ( | ( | ||||||||||||
Other adjustments | ( | ( | ||||||||||||
Effective income tax rate | ( | % | ( | % |
December 31, 2023 | December 31, 2022 | |||||||||||||
Unrecognized tax benefits at the beginning of the year | ||||||||||||||
Current period tax position increases | ||||||||||||||
Prior period tax position increases | ||||||||||||||
Decreases due to lapse in applicable statute of limitations | ||||||||||||||
Unrecognized tax benefits at the end of the year |
Year ended December 31, | |||||||||||
2023 | 2022 | ||||||||||
Numerator | |||||||||||
Net loss | $ | ( | $ | ( | |||||||
Gain of preferred stock transaction | |||||||||||
Numerator for earnings per share - net loss attributable to common stockholders | $ | ( | $ | ( | |||||||
Denominator | |||||||||||
Weighted average common stock outstanding - basic | |||||||||||
Weighted average common stock outstanding - diluted | |||||||||||
Loss per basic common share | $ | ( | $ | ( | |||||||
Loss per diluted common shares | $ | ( | $ | ( |
Year ended December 31, | |||||||||||
2023 | 2022 | ||||||||||
Denominator | |||||||||||
Restricted stock | |||||||||||
Preferred stock, if converted |
Name of Entity | Jurisdiction of Incorporation | |||||||
AAMC US, Inc. | Delaware | |||||||
Altisource Consulting S.á r.l | Luxembourg | |||||||
Finsight Business Solutions Private Ltd. | India | |||||||
NewSource Reinsurance Company Ltd. | Bermuda | |||||||
AAMC Real Estate Strategies Offshore Fund 1 (Cayman), LP (f/k/a AAMC EBO Offshore Fund 1 (Cayman), LP) | Cayman Islands | |||||||
Alternative Lending Group LLC | Delaware | |||||||
Grapetree Lending LLC | U.S. Virgin Islands | |||||||
Shoys Lending LLC | U.S. Virgin Islands | |||||||
Premieria LLC | U.S. Virgin Islands | |||||||
St. Croix Servicing LLC | U.S. Virgin Islands | |||||||
Alternative Residential Credit LLC | Delaware |
Date: | March 29, 2024 | By: | /s/ | William C. Erbey | ||||||||||
William C. Erbey | ||||||||||||||
Chief Executive Officer |
Date: | March 29, 2024 | By: | /s/ | Richard G. Rodick | ||||||||||
Richard G. Rodick | ||||||||||||||
Chief Financial Officer |
Date: | March 29, 2024 | By: | /s/ | William C. Erbey | ||||||||||
William C. Erbey | ||||||||||||||
Chief Executive Officer |
Date: | March 29, 2024 | By: | /s/ | Richard G. Rodick | ||||||||||
Richard G. Rodick | ||||||||||||||
Chief Financial Officer |
Audit Information |
12 Months Ended |
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Dec. 31, 2023 | |
Auditor Information [Abstract] | |
Auditor Firm ID | 42 |
Auditor Name | Ernst & Young LLP |
Auditor Location | Atlanta, Georgia |
Consolidated Balance Sheets (Parenthetical) - USD ($) |
Dec. 31, 2023 |
Dec. 31, 2022 |
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Statement of Financial Position [Abstract] | ||
Temporary equity, par or stated value (in per share) | $ 0.01 | $ 0.01 |
Temporary equity, authorized (in shares) | 250,000 | 250,000 |
Temporary equity, shares outstanding (in shares) | 144,212 | |
Temporary equity, redemption amount | $ 144,212 | |
Common stock, par value (in USD per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Common stock, shares issued (in shares) | 4,684,485 | 3,432,294 |
Common stock, shares outstanding (in shares) | 2,554,512 | 1,783,862 |
Treasury stock, shares (in shares) | 2,129,973 | 1,648,432 |
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands |
12 Months Ended | |
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Dec. 31, 2023 |
Dec. 31, 2022 |
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Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (32,546) | $ (15,934) |
Other comprehensive loss: | ||
Currency translation adjustments, net | (6) | (34) |
Total other comprehensive loss | (6) | (34) |
Comprehensive loss | $ (32,552) | $ (15,968) |
Organization and Basis of Presentation |
12 Months Ended |
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Dec. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Basis of Presentation | 1. Organization and Basis of Presentation Altisource Asset Management Corporation (“we,” “our,” “us,” “AAMC,” or the “Company”) was incorporated in the U.S. Virgin Islands (“USVI”) on March 15, 2012 (our “inception”), and commenced operations as an asset manager on December 21, 2012. As disclosed in our public filings, the Company’s prior business operations ceased in the first week of 2021. The Company previously operated as the external manager for Front Yard Residential Corporation (“Front Yard”), a public real estate investment trust (“REIT”) focused on acquiring and managing quality, affordable, single-family rental (“SFR”) properties throughout the United States. During 2021, AAMC engaged in a comprehensive assessment to either internally develop a new business operation or acquire a separate operating company. A range of industries were analyzed, including, but not limited to, real estate, lending cryptocurrency, block-chain technology and insurance operations. Outside professional firms, including among others, Cowen and Company, LLC, an investment bank, and Norton Rose Fulbright LLP, a global law practice, were engaged to provide due diligence, legal and valuation expertise to assist in our search. As of March 2022, the Company created the Alternative Lending Group (“ALG”), to generate alternative private credit loans through Direct to Borrower Lending, Wholesale Originations, and Correspondent Loan Acquisitions. The initial operations of ALG entailed the following: •Build out a niche origination platform as well as a loan acquisition team; •Fund the originated or acquired alternative loans from a combination of Company equity and existing or future lines of credit; •Sell the originated and acquired alternative loans through forward commitment and repurchase contracts; •Leverage senior management’s expertise in this space; and •Utilize AAMC’s existing operations in India to drive controls and cost efficiencies. ALG's primary sources of income is derived from mortgage banking activities generated through the origination and acquisition of loans, and their subsequent sale or securitization as well as net interest income from loans while held on the balance sheet for investment. Following a full year of operating the new ALG business line, our board of directors mandated a comprehensive review of the Company’s mortgage platform to improve the performance of the business. This review involved assessments of operational efficiency and capacity issues, opportunities for cost reductions, strategies for improving liquidity, among other initiatives, all with a view toward enhancing financial performance. The Company has made significant progress in reducing costs and streamlining operations, including an across-the-board employee right-sizing, reducing expenditures for third-party professional services and reducing reliance on lines of credit. On October 6, 2023, the Company signed a non-exclusive patent and technology licensing agreement (“PTL Agreement”) with System73 Limited (an entity controlled and managed by the majority owners of the Company’s common stock). The Company acquired a non-exclusive license for a set of patents which seek to improve the efficiency of electric vehicles. The patents, among additional items, seek to use multiple electric motors in electric machines to improve the efficiency beyond the standard single motor drive used currently in most of these vehicles. System73 has strategically aligned itself with two companies, Seabird Technologies and Purple Sector, to facilitate the creation of a prototype electric vehicle over the next 18 months. These two partners have extensive relationships with auto manufacturers and suppliers and are incentivized to generate revenues from these patents over the 24-month period following development of the prototype. The Company can terminate the PTL with System73 Limited at any time or for any reason and in the event System73 Limited grants a license to the patents to another entity or markets or otherwise commercializes the technology to or with another party. While no cash or other consideration was transferred by the Company to System73 Limited at the time of the execution of the PTL, the PTL provides for certain equity incentive payments to System73 Limited based on performance. The Agreement sets out AAMC Common Stock Milestones, defined as each instance where the average closing price of the Company’s common stock for the preceding twenty (20) day period reaches an amount equal to or in excess of a multiple of $100 (i.e., $100, $200, $300, etc.). Upon the occurrence of each such Stock Milestone, System 73 would be awarded the number of shares of AAMC Common Stock equal to ten percent of the AAMC fully-diluted Shares. The Company determined that the equity contract with System73 Limited should be accounted for as a derivative requiring mark-to-market accounting. As of December 31, 2023, the Company determined that the equity contract has a di minimis value. Basis of presentation and use of estimates The accompanying audited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). All wholly owned subsidiaries are included, and all intercompany accounts and transactions have been eliminated. Use of estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Loans held for sale or investment, carried at fair market value We originate and purchase alternative loans. These loans will either be classified as held for investment or held for sale depending upon the determination of management. We have elected to measure these alternative loans at fair value on a loan by loan basis. This option is available when we first recognize a financial asset. Subsequent changes in the fair value of these loans will be recorded in our Consolidated Statements of Operations in the period of the change. Purchased loans, also known as correspondent loans, can be bought with a net strip interest component in that the seller of the loan will receive an agreed upon percentage of the coupon interest generated from the sold loan. This strip component is reflected as service and asset management expense on the Consolidated Statements of Operations. A fair value measurement represents the price at which an orderly transaction would occur between willing market participants at the measurement date. We estimate the fair values of the loans held for investment or sale based on available inputs from the marketplace. The market for the loans that we have or will invest in is generally illiquid. Establishing fair values for illiquid assets is inherently subjective and is often dependent upon our estimates and modeling assumptions. In circumstances where relevant market inputs cannot be obtained, increased analysis and management judgment are required to estimate fair value. This generally requires us to establish internal assumptions about future cash flows and appropriate risk-adjusted discount rates. Regardless of the valuation inputs we apply, the objective of fair value measurement for assets is unchanged from what it would be if markets were operating at normal activity levels and/or transactions were orderly; that is, to determine the current exit price. When the Company sells a loan, a gain or loss will be recognized at the time of the sale in net income for the difference between the fair value and the book value. The fair value is measured as the agreed upon selling price from the contractual agreement with the buyer. See Note 3 - Loans Held for Sale or Investment at Fair Value for further discussion on fair value measurements. Interest for these loans is recognized as revenue based on the stated coupon when earned and deemed collectible or until a loan becomes more than 90 days past due, at which point the loan is placed on nonaccrual status and any accrued interest is reversed against interest income. When a seriously delinquent loan previously placed on nonaccrual status has been cured, meaning all delinquent principal and interest have been remitted by the borrower, the loan will be placed back on accrual status. Interest accrued as of period end is included within loans held for sale, at fair value or loans held for investment, at fair value in the Consolidated Balance Sheets as applicable. We evaluate transfers of loans held for sale or investment at fair value under the guidance in Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") No. 860, "Transfers and servicing of financial assets" ("ASC 860"), and account for such transfers as sales when three conditions in ASC 810-10-45-5 have been met. That is, we account for transfers of such financial assets as sales when the assets have been isolated from the Company, when the transferee has the right to pledge or exchanges the assets it receives and there are no restrictions on the transferee that constrain such right, and when the Company has no effective control over the transferred financial assets. Each of the loans transferred during the year ended December 31, 2023 qualified for sale accounting under ASC 860, as each of the loans was transferred to a third-party "as is" in exchange for cash, and the Company has no continuing involvement with the transferred financial assets or the transferees. As result of such transfers, the Company realized an aggregate loss totaling $2.2 million and $14.9 million for the year ended December 31, 2023 on loans held for sale and loans held for investment, respectively, which is included in Realized losses on loans held for sale, net and Realized losses on loans held for investment, net, respectively, in the accompanying Consolidated Statement of Operations. There were no transfers of financial assets during the year ended December 31, 2023. Redeemable preferred stock Issuance of Series A Convertible Preferred Stock in 2014 Private Placement During the first quarter of 2014, we issued 250,000 shares of convertible preferred stock for $250.0 million to institutional investors. Under the Certificate of Designations of the Series A Shares (the “Certificate”), we had the option to redeem all of the Series A Shares on March 15, 2020 and on each successive five-year anniversary of March 15, 2020 thereafter. In connection with these same redemption dates, each holder of our Series A Shares had the right to give notice requesting us to redeem all of the Series A Shares held by such holder out of legally available funds. In accordance with the terms of the Certificate, if we had legally available funds to redeem all, but not less than all, of the Series A Shares requested to be redeemed on a redemption date, we would deliver to those holders who had requested redemption in accordance with the Certificate a notice of redemption. If we did not have legally available funds to redeem all, but not less than all, of the Series A Shares requested to be redeemed on a redemption date, we would not provide a notice of redemption. The redemption right would have been exercisable in connection with each redemption date every five years until the mandatory redemption date in 2044. If we had been required to redeem all of the holder’s Series A Shares, we would have been required to do so for cash at a price equal to $1,000 per share (the issuance price) out of funds legally available therefor. Due to the redemption provisions of the Series A Shares, we classified these shares as mezzanine equity, outside of permanent stockholders' equity. The holders of our Series A Shares were not entitled to receive dividends with respect to their Series A Shares. The Series A Shares were convertible into shares of our common stock at a conversion price of $1,250 per share (or an exchange rate of 0.8 shares of common stock for Series A Share), subject to certain anti-dilution adjustments. Upon certain change of control transactions or upon the liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, before any payment or distribution could have been made to holders of junior shares, the holders of the Series A Shares would have been entitled to receive an amount in cash per Series A Share equal to the greater of: (i) $1,000 plus the aggregate amount of cash dividends paid on the number of shares of common stock into which such Series A Shares were convertible on each ex-dividend date for such dividends; and (ii) The number of shares of common stock into which the Series A Shares were then convertible multiplied by the then-current market price of the common stock. Because not all of these potential transactions were wholly within the control of the Company, the Series A Shares were classified as mezzanine equity. The Certificate conferred no voting rights to holders, except with respect to matters that materially and adversely affect the voting powers, rights or preferences of the Series A Shares or as otherwise required by applicable law. With respect to the distribution of assets upon the liquidation, dissolution or winding up of the Company, the Series A Shares ranked senior to our common stock and on parity with all other classes of preferred stock that may have been issued by us in the future. The Series A Shares were recorded net of issuance costs, which were amortized on a straight-line basis through the first potential redemption date in March 2020. Between January 31, 2020 and February 3, 2020, we received purported notices from all of the holders of our Series A Shares requesting us to redeem an aggregate of $250.0 million liquidation preference of our Series A Shares on March 15, 2020. We did not have legally available funds to redeem all, but not less than all, of the Series A Shares on March 15, 2020. As a result, we did not believe, under the terms of the Certificate, that we were obligated to redeem any of the Series A Shares under the Certificate. Related litigation –Luxor (plaintiff) v. AAMC (defendant) On February 3, 2020, Luxor filed a complaint in the Supreme Court of the State of New York, County of New York, against AAMC for breach of contract, specific performance, unjust enrichment, and related damages and expenses. The complaint alleged that AAMC’s position that it would not redeem any of Luxor’s Series A Shares on the March 15, 2020 redemption date was a material breach of AAMC’s redemption obligations under the Certificate. Luxor sought an order requiring AAMC to redeem its Series A Shares, recovery of no less than $144,212,000 in damages, which is equal to the amount Luxor would have received if AAMC redeemed all of Luxor’s Series A Shares at the redemption price of $1,000 per share set forth in the Certificate, as well as payment of its costs and expenses in the lawsuit. In the alternative, Luxor sought a return of its initial purchase price of $150,000,000 for the Series A Shares, as well as payment of its costs and expenses in the lawsuit. On May 25, 2020, Luxor’s complaint was amended to add Putnam Equity Spectrum Fund and Putnam Capital Spectrum Fund (collectively, “Putnam”), which also invested in the Series A Shares, as plaintiff. On June 12, 2020, AAMC moved to dismiss the Amended Complaint in favor of AAMC’s first-filed declaratory judgment action in the U.S. Virgin Islands. On August 3, 2020, the court denied AAMC’s motion to dismiss. On February 23, 2021, in accordance with the terms of the Putnam Agreement described below, Putnam agreed to discontinue all claims against AAMC with prejudice. AAMC and Luxor each filed summary judgment motions on July 19, 2022. On December 1, 2022, having heard oral arguments on the summary judgment motions, the trial court denied both parties’ motions. AAMC and Luxor appealed the trial court’s ruling to the Appellate Division - First Department, of the Supreme Court of the State of New York. On June 13, 2023, the Appellate Division issued a unanimous decision, finding in favor of AAMC that it did not breach any contractual obligation to redeem Luxor’s Series A Shares and directing the trial court to enter judgment dismissing Luxor’s complaint. On July 19, 2023, Luxor filed a request for a further appeal to the New York Court of Appeals, and AAMC filed an opposition thereto on August 7, 2023. As noted below, pursuant to a settlement agreement entered into by the parties dated January 11, 2024, this litigation has been terminated and dismissed with prejudice. See Note 11 - Subsequent Events. –AAMC (plaintiff) v. Nathaniel Redleaf (defendant) On October 31, 2022, AAMC filed a complaint with demand for jury trial in the Superior Court of the Virgin Islands, Division of St. Croix, against Nathaniel Redleaf alleging breach of fiduciary duty to AAMC. Mr. Redleaf was a member of AAMC’s Board of Directors for five years and the Company’s complaint alleges that he breached his fiduciary duty, by among other things, disclosing AAMC’s confidential information to Luxor. AAMC sought a number of remedies, including compensatory damages, disgorgement of any benefit received by Luxor or Mr. Redleaf as a result of such breaches. On January 4, 2023, this action was removed to the United States District Court of the Virgin Islands, Division of St. Croix. On February 28, 2023, defendant Redleaf filed a motion to dismiss the complaint. AAMC filed its opposition to defendant’s motion on April 4, 2023 and the parties thereafter stipulated to a stay of proceedings through January 17, 2024. As noted below, pursuant to a settlement agreement entered in by the parties dated January 11, 2024, all litigation with Mr. Redleaf and Luxor has been terminated and dismissed with prejudice. Settlement activities On February 17, 2021, the Company entered into a settlement agreement dated as of February 17, 2021 (the “Putnam Agreement”) with Putnam. Pursuant to the Putnam Agreement, AAMC and Putnam exchanged all of Putnam’s 81,800 Series A Shares for 288,283 shares of AAMC’s common stock. Additionally, AAMC paid Putnam $1,636,000 within business days of the effective date of the Putnam Agreement and $1,227,000 on the one-year anniversary of the effective date of the Putnam Agreement, and in return Putnam released AAMC from all claims related to the Series A Shares and enter into a voting rights agreement as more fully described in the Putnam Agreement. Finally, AAMC granted to Putnam a most favored nations provision with respect to future settlements of the Series A Shares. As a result of this settlement, we recognized a one-time gain directly to Additional paid in capital of $71.9 million in the first quarter of 2021. On August 27, 2021, the Company entered into a settlement agreement (the “Wellington Agreement”) with certain funds managed by Wellington Management Company LLP (collectively, “Wellington”). Under the Wellington Agreement, the Company paid Wellington $2,093,000 in exchange for 18,200 Series A Shares ($18.2 million of liquidation preference) held by Wellington, and in return Wellington agreed to release AAMC from all claims related to the Series A Shares. As a result of this settlement, we recognized a one-time gain directly to Additional paid in capital of $16.1 million gain in the third quarter of 2021. On January 6, 2022, the Company entered into a settlement agreement (the "Settlement Agreement") with two institutional investors. Under the Settlement Agreement, the Company paid the institutional investors approximately $665 thousand in cash in exchange for 5,788 Series A Shares ($5.79 million of liquidation preference) held by the institutional investors. As a result of this settlement, the Company recognized a one-time gain directly to Additional paid in capital of approximately $5.1 million in the first quarter of 2022. On July 18, 2022, the Company entered into an agreement (the "Purchase Agreement") with Putnam in which the Company repurchased 286,873 shares of common stock of the Company owned by Putnam (the "Putnam Shares"). The aggregate purchase price of the Putnam Shares was $2,868,730, or $10 per share. Pursuant to the Purchase Agreement, the Company and Putnam also agreed to terminate the most favored nation clause granted to Putnam in the Putnam Agreement. The Company and Putnam also agreed to terminate all of Putnam's shareholder voting obligations included in the Putnam Agreement. In addition to the above-disclosed settlements with various holders of Series A Shares, effective January 11, 2024 the Company entered into settlement agreements with Luxor Capital (and related entities) and Nathaneal Redleaf which provide for the redemption by the Company of all Series A Shares held by Luxor (and related entities) and the termination and dismissal with prejudice of the litigation with respect thereto and with respect to the Company’s claims against Mr. Redleaf. See Note 11 - Subsequent Events. 2016 Employee Preferred Stock Plan On May 26, 2016, the 2016 Employee Preferred Stock Plan (the “Employee Preferred Stock Plan”) was approved by our stockholders. Pursuant to the Employee Preferred Stock Plan, the Company may grant one or more series of non-voting preferred stock, par value $0.01 per share, in the Company to induce certain employees to become employed and remain employees of the Company in the USVI, and any of its future USVI subsidiaries, to encourage ownership of shares in the Company by such USVI employees and to provide additional incentives for such employees to promote the success of the Company’s business. Pursuant to our stockholder approval of the Employee Preferred Stock Plan, on December 29, 2016, the Company authorized 14 additional series of preferred stock of the Company, consisting of Series B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock, Series E Preferred Stock, Series F Preferred Stock, Series G Preferred Stock, Series H Preferred Stock, Series I Preferred Stock, Series J Preferred Stock, Series K Preferred Stock, Series L Preferred Stock, Series M Preferred Stock, Series N Preferred Stock and Series O Preferred Stock, and each series shall consist of up to an aggregate of 1,000 shares. We have issued shares of preferred stock under the Employee Preferred Stock Plan to certain of our USVI employees. These shares of preferred stock are mandatorily redeemable by us in the event of the holder's termination of service with the Company for any reason. At December 31, 2023 and 2022, we had 1,200 and 3,200 and shares outstanding, respectively, and we included the redemption value of these shares of $12,000 and $32,000 respectively, within accounts payable and accrued liabilities in our Consolidated Balance Sheets. In December 2022, our Board of Directors declared and paid an aggregate $0.4 million of dividends on these shares of preferred stock. Such dividends are included in salaries and employee benefits in our Consolidated Statements of Operations. Recently issued accounting standards Recently issued accounting standards adopted In December 2019, the FASB issued ASU 2019-12, “Income Taxes - Simplifying the Accounting for Income Taxes (Topic 740),” which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. Our adoption of this standard in the first quarter of 2022 did not have a material impact on our consolidated financial statements. Recently issued accounting standards not yet adopted In March 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting,” which provides practical expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The expedients and exceptions provided by the amendments in this update apply only to contracts, hedging relationships, and other transactions that reference the London interbank offered rate (“LIBOR”) or another reference rate expected to be discontinued as a result of reference rate reform. These amendments are not applicable to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022. ASU No. 2020-04 is effective as of March 12, 2020 through December 31, 2022 and may be applied to contract modifications and hedging relationships from the beginning of an interim period that includes or is subsequent to March 12, 2020. In December 2022, the FASB extended the temporary accounting rules under Topic 848 from December 31, 2022 to December 31, 2024. We will adopt this standard when LIBOR is discontinued. We are evaluating the impact the new standard will have on our consolidated financial statements and related disclosures, but do not anticipate a material impact. Recent accounting pronouncements pending adoption not discussed above or in the 2022 Form 10-K are either not applicable or will not have, or are not expected to have a material impact on our consolidated financial position, results of operations, or cash flows.
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Summary of Significant Accounting Policies |
12 Months Ended |
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Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Cash equivalents We consider highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. Certain account balances exceed FDIC insurance coverage and, as a result, there is a concentration of credit risk related to amounts on deposit in excess of FDIC insurance coverage. To mitigate this risk, we maintain our cash and cash equivalents at large national or international banking institutions. Restricted cash Historically, we were required to maintain $2 million of restricted cash in a Flagstar deposit account under the Master Repurchase Agreement with Flagstar bank. See Note 4 - Borrowings. We have no restrictions on cash balances at December 31, 2023. Consolidations The consolidated financial statements include the accounts of AAMC and its consolidated subsidiaries, which include the voting interest entities in which we are determined to have a controlling financial interest. Our voting interest entities consist entirely of our wholly owned subsidiaries. We also consider variable interest entities (“VIEs”) for consolidation where we are the primary beneficiary. We had no VIEs or potential VIEs as of and for the years ended December 31, 2023 or 2022. Earnings per share Basic earnings per share is computed by dividing net income or loss, less amortization of preferred stock issuance costs, by the weighted average common stock outstanding during the period. Diluted earnings per share is computed by dividing net income or loss by the weighted average common stock outstanding for the period plus the dilutive effect of (i) stock options and restricted stock outstanding using the treasury stock method and (ii) Series A Preferred Shares using the if-converted method. Weighted average common stock outstanding - basic excludes the impact of unvested restricted stock since dividends paid on such restricted stock are non-participating. Any gain on settlement of preferred shares, which is recorded directly to equity, is included in the numerators for our earnings per share calculations. Fair value of financial instruments We designate fair value measurements into three levels based on the lowest level of substantive input used to make the fair value measurement. Those levels are as follows: •Level 1 - Quoted prices in active markets for identical assets or liabilities. •Level 2 - Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities. •Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Income taxes Income taxes are provided for using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted rates expected to apply to taxable income in the years in which management expects those temporary differences to be recovered or settled. The effect on deferred taxes of a change in tax rates is recognized in income in the period in which the change occurs. Subject to our judgment, we reduce a deferred tax asset by a valuation allowance if it is “more likely than not” that some or the entire deferred tax asset will not be realized. Tax laws are complex and subject to different interpretations by the taxpayer and respective governmental taxing authorities. Significant judgment is required in evaluating tax positions, and we recognize tax benefits only if it is more likely than not that a tax position will be sustained upon examination by the appropriate taxing authority. For all temporary differences, we have considered the potential future sources of taxable income against which they may be realized. In so doing, we have taken into account temporary differences that we expect to reverse in future years and those where it is unlikely. Where it is more likely than not that there will not be potential future taxable income to offset a temporary difference, a valuation allowance has been recorded. Lastly, the Company accounts for the tax on global intangible low-taxed income (“GILTI”) as incurred and therefore has not recorded deferred taxes related to GILTI on its foreign subsidiaries. Leases On January 1, 2019, we adopted ASU 2016-02, including various associated updates and amendments, which together comprise the requirements for lease accounting under ASC 842. ASC 842 fundamentally changes accounting for operating leases by requiring lessees to recognize a liability to make lease payments and a right-of-use asset over the term of the lease. We also adopted the “package of practical expedients,” which permits us not to reassess our prior conclusions about lease identification, lease classification and initial direct costs under the new standard. We also elected the short-term lease exemption for all leases that qualify; as a result, we will not recognize right-of-use assets or lease liabilities for leases with a term of less than 12 months at inception. We lease office space under two operating leases. We recognized lease expense for these leases on a straight-line basis over the lease term and combine lease and non-lease components for all leases. Our office leases are generally for terms of to five years and typically include renewal options, which we consider when determining our lease right-of-use assets and lease liabilities to the extent that a renewal option is reasonably certain of being exercised. Along with base rents, we are generally required to pay common area maintenance, property taxes and insurance, each of which vary from period to period and are accounted for as variable lease costs and therefore, expensed as incurred. Other assets Other assets includes leasehold improvements; right-of-use assets; furniture, fixtures and equipment; deferred tax assets, refunds due and miscellaneous other assets. The cost basis of fixed assets is depreciated using the straight-line method over an estimated useful life of to five years based on the nature of the components. During the year ended December 31, 2023, the Company wrote off capitalized costs associated with the development of a website for use in the mortgage business as it was determined that the future cash flows attributable to that line of business did not support its recoverability given the scale back of our lending operations. The write off totaled $0.5 million and is included in impairment expense in the consolidated statement of operations. Interest income and loan fees Interest revenue is recognized based on the stated coupon when earned and deemed collectible or until a loan becomes more than 90 days past due, at which point the loan is place on nonaccrual status and any accrued interest is reversed against interest revenue. Upon a nonaccrual loan being reinstated, meaning all delinquent principal and interest payments have been remitted by the borrower, the loan will be placed back on accrual status. Interest accrued as of period end is included within loans for sale, at fair value, or loans held for investment, at fair value, in the Consolidated Balance Sheets as applicable. Loan fees represent origination fees charged to borrowers and are recognized to revenue upon the origination date of the loan. Share-based compensation We amortize the grant date fair value of restricted stock as expense on a straight-line basis over the service period with an offsetting increase in stockholders' equity. The grant date fair value of awards with only service-based vesting conditions is determined based upon the share price on the grant date. We recognize share-based compensation expense related to (i) awards to employees in salaries and employee benefits and (ii) awards to Directors or non-employees in general and administrative expense in our Consolidated Statements of Operations. Forfeitures of share-based awards are recognized as they occur. Treasury stock We account for repurchased common stock under the cost method and include such treasury stock as a component of total stockholders’ equity. We have repurchased shares of our common stock (i) under our Board approval to repurchase up to $300 million in shares of our common stock and (ii) upon our withholding of shares of our common stock to satisfy tax withholding obligations in connection with the vesting of our restricted stock.
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Loans Held for Sale or Investment at Fair Value |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans Held for Sale or Investment at Fair Value | 3. Loans Held for Sale or Investment at Fair Value Our loan portfolio consists of business purpose loans secured by single family, multifamily and commercial real estate that were acquired from third party originators or issued by us. The composition of the loan portfolio by classification as of December 31, 2023 and 2022, respectively, is summarized in the table below ($ in thousands):
(1) Construction holdbacks include in process accounts such as payments, advances, interest reserve, accrued interest and other accounts. The loan portfolio consists of 21 loans at December 31, 2023, with a weighted average coupon of 10.4%, of which the Company receives a net yield of 10.2% after taking into account the strip interest to the sellers of the loans. The weighted average life of the portfolio is approximately 0.20 months. Three loans represent 74% of the total principal outstanding at December 31, 2023. There were nine loans on nonaccrual status or 90 days or more past due at December 31, 2023, with a fair value of $3.0 million. These loans have an unpaid principal balance of $2.8 million at December 31, 2023. As of December 31, 2023, we have commenced formal foreclosure proceedings on five loans with an aggregate fair value of $1.3 million in order to force the sale of the real estate that serves as collateral for such loans. We expect that the sale of the collateral will allow us to recover the full repayment of the outstanding loans and accrued interest as of December 31, 2023. There were no loans for which formal foreclosure proceedings had commenced at December 31, 2023. The table below represents activity within the loan portfolio by classification for the period shown ($ in thousands):
(1) Includes net realized loss on sale of loans. The composition of the total loan commitment by state as of December 31, 2023 is summarized below ($ in thousands):
For financial reporting purposes of our alternative loans, we follow a fair value hierarchy established under GAAP, as described in Note 2 - Summary of Significant Accounting Policies, that is used to determine the fair value of financial instruments. This hierarchy prioritizes relevant market inputs in order to determine an “exit price” at the measurement date, or at the price at which an asset could be sold or a liability could be transferred in an orderly process that is not a forced liquidation or distressed sale. In certain cases, inputs used to measure fair value fall into different levels of the fair value hierarchy. In such cases, the level at which the fair value measurement falls is determined based on the lowest level input that is significant to the fair value measurement. Our assessment of the significance of a particular input requires judgment and considers factors specific to the asset or liability being measured. The following table presents the assets that are reported at fair value on a recurring basis as of December 31, 2023 and 2022, as well as the fair value of hierarchy of the valuation inputs used to measure fair value. We did not have any liabilities to report at fair value on a recurring basis as of December 31, 2023 and 2022.
The estimated fair value for our business purpose loans is determined using the discounted cash flow model (“DCF”) to estimate the net present value of the future cash flows expected from each loan. For performing loans, the DCF is based on the future expected cash flows of each loan in accordance with its contractual terms net of the strip component. Cash flows for performing loans with construction holdbacks incorporate the draws to complete the required improvements to the underlying property securing the loan. For nonaccrual loans, the estimated cash flows are based on the current fair value of the collateral of the loans, in which the Company will utilize a third-party appraisal to determine the fair value (Level 3). On a loan by loan basis, the weighted average discount rate range utilized for the DCF applied to the net yield to be received by the Company was 10.0% which is less than the overall yield on the portfolio of 10.2%, resulting in the increase in value of the portfolio at December 31, 2023. The determination of the discount rate was based on analysis of the current interest rates charged for business purpose loans in conjunction with the increase in rates for other underlying base rates such as the 10-year U.S. treasury bond and the 30 day Secured Overnight Financing Rate ("SOFR") (Level 3). For nonaccrual loans, the discount applied to the value of the collateral was based on available market information on REO sales transaction as of the valuation date (Level 3). We did not transfer any assets from one level to another level during the years ended December 31, 2023 and 2022, respectively. We evaluate the change in fair value attributable to instrument-specific credit risk as the excess of the total change in fair value over the change in fair value attributable to changes in the risk-free rate. Instrument-specific credit risk had an immaterial impact on the change in fair value recognized for loans held during the years ended December 31, 2023 and 2022.
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Borrowings |
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Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Borrowings | 4. Borrowings In December 2022, the Company entered into a $50 million Master Repurchase Agreement (the "NexBank Line") with NexBank, as the buyer. The Company used the proceeds from the NexBank Line to fund the acquisition and origination of business purpose loans (the "Loans") secured by residential, multifamily and certain commercial properties. Each draw on the NexBank Line could be outstanding up to 180 days. NexBank had a security interest in the Loans subject to a transaction under the NexBank Line. The NexBank Line's maturity was 364 days from the execution date. The NexBank Line accrued interest at a rate equal to the greater of (a) the 1 month Term SOFR rate plus three and one-half percent (3.50%) or (b) four and one-quarter (4.25%). Interest was payable at 90 days. The carrying value of the NexBank Line approximated fair value as of December 31, 2022 due to its short-term nature and floating interest rate terms. NexBank Line’s outstanding balance was $9.2 million at December 31, 2022 and was collateralized by $10.4 million in loans. The NexBank line was paid off and terminated on November 7, 2023. In August 2022, the Company entered into a $50 million Master Repurchase Agreement (the “Flagstar Line”) with Flagstar Bank FSB (“Flagstar”), a federal savings bank, as a buyer and administrative agent. The Company used the proceeds from the Flagstar Line to fund the acquisition and origination of Loans secured by residential, multifamily and certain commercial properties. Each draw on the Flagstar Line could be outstanding up to 180 days. Flagstar had a security interest in the Loans subject to a transaction under the Flagstar Line and requires the Company to maintain restricted cash of $2 million in a Flagstar deposit account. The Flagstar Line's maturity was 364 days from the execution date. The Flagstar Line accrued interest at a base 1-Month Term SOFR rate plus a spread dependent upon the type of Loan subject to a transaction. Interest was payable at 90 days. The Company also incurred a fee on the unused portion of the $50 million if the average outstanding balance of the Flagstar Line is less than a threshold level of the total commitment. The carrying value of the Flagstar Line approximated fair value as of December 31, 2022 due to its short-term nature and floating interest rate terms. The Flagstar Line’s outstanding balance was $42.5 million at December 31, 2022 and was collateralized by $57.4 million in loans. The Flagstar line was paid off and terminated on September 7, 2023.
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Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | 5. Leases We currently lease office space under operating leases in Christiansted, St. Croix, U.S. Virgin Islands and Bengaluru, India. Prior to the termination of the lease in October 2023, we also leased space in Tampa, Florida. As of December 31, 2023 and 2022, our weighted average remaining lease term, including applicable extensions, was 3.3 years and 3.8 years, respectively, and we applied a discount rate of 7.0% and 7.0%, respectively, to our office leases. We determined the discount rate for each lease to be either the discount rate stated in the lease agreement or our estimated rate that we would charge to finance real estate assets. During the years ended December 31, 2023 and 2022, we recognized rent expense of $0.4 million and $0.3 million, respectively, related to long-term operating leases. We had no short-term rent expense for the years ended 2023 or 2022. We include rent expense as a component of general and administrative expenses in the Consolidated Statements of Operations. We had no finance leases during the years ended December 31, 2023 and December 31, 2022. The following table presents a maturity analysis of our operating leases as of December 31, 2023 ($ in thousands):
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Commitments and Contingencies |
12 Months Ended |
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Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 6. Commitments and Contingencies Litigation, claims and assessments From time to time, we may be involved in various claims and legal actions arising in the ordinary course of business. Set forth below is a summary of material legal proceedings to which we were a party as of December 31, 2023: Litigation regarding Luxor Capital Group, LP and certain of its managed funds and accounts ("Luxor") Please refer to Note 1 - Organization and Basis of Presentation – Section Issuance of Series A Convertible Preferred Stock in 2014 Private Placement. Executive Arbitrations Former Chief Executive Officer, Indroneel Chatterjee On May 3, 2021, Mr. Chatterjee, commenced an arbitration against the Company and each of its directors. The arbitration complaint alleges that the Company’s April 16, 2021 for cause termination of Mr. Chatterjee was in breach of Mr. Chatterjee’s Amended and Restated Employment Agreement and made extra contractual claims against the Company for not affording Mr. Chatterjee a “fair procedure” and placed him in a “false light” by disclosing Mr. Chatterjee’s termination in its public announcement of the for cause termination. In addition, the arbitration complaint also asserts a tort claim against each of the Company’s directors relating to that termination and against the Company for its April 16, 2021 public announcement of the for cause termination. Mr. Chatterjee’s arbitration complaint seeks unspecified damages for his contract claims including for loss of income, stock and bonus, and punitive damages on his tort claims. On June 10, 2021, the Company and its directors responded to the arbitration complaint and advanced counterclaims against Mr. Chatterjee. On October 20, 2021, the arbitrator granted the Company’s motion to dismiss with respect to Mr. Chatterjee’s “fair procedure” and “false light” claims, but denied the motion to dismiss the tort claim against each of the directors. Following the close of discovery on July 11, 2022, the Company moved for summary judgment seeking dismissal of Mr. Chatterjee's remaining claims against the Company and against its directors, and further seeking entry of judgment on the majority of the Company's counterclaims. On July 21, 2022, the Company and its directors filed a motion alleging that Mr. Chatterjee had engaged in fraud and seeking as sanctions for that abuse both the dismissal of all of Mr. Chatterjee's claims and the payment of the Company's legal fees resulting from that alleged abuse. Following briefing by all parties on the summary judgment and sanction motions, on October 19, 2022, the arbitrator found that Mr. Chatterjee engaged in serious and repeated misconduct, attempting to perpetrate a fraud on the arbitrator and the Company and accordingly (i) dismissed all of Mr. Chatterjee's remaining claims, both as a sanction for his misconduct and, independently, on the merits of the Respondents' motion for summary judgment; (ii) granted summary judgment on one of the Company's counterclaims requiring Mr. Chatterjee to pay the Company $400,000 (the return of half of his initial signing bonus); and, (iii) ordered that Mr. Chatterjee, as a further sanction for his misconduct, reimburse the Company for all expenses it incurred directly and solely as a result of his misconduct (which dollar amount has not yet been set). On December 29, 2022, the arbitrator entered a final order which granted an additional award of fees and costs to the Company in the amount of over $1 million, bringing the Company's total judgment against Mr. Chatterjee to approximately $1.6 million. In the arbitrator's final award, he also included the amounts he had previously awarded to the Company in his October 19, 2022 order, which were $400,000 plus interest at the U.S. Virgin Islands' 9.0% statutory rate for contractual claims (since Mr. Chatterjee's termination on April 16, 2021) and approximately $140,000 as reimbursement to the Company for all expenses the Company incurred directly and solely as a result of Mr. Chatterjee's misconduct in the arbitration. The Company has taken steps to attempt to enforce the judgment against Mr. Chatterjee and waives no rights or remedies with respect thereto. Erbey Holding Corporation et al. v. Blackrock Management Inc., et al. On April 12, 2018, an action was filed in the Superior Court of the Virgin Islands, Division of St. Croix under the caption Erbey Holding Corporation, et al. v. Blackrock Financial Management Inc., et al., case number SX-2018-CV-146. The action was initially filed by Plaintiffs Erbey Holding Corporation, John R. Erbey Family Limited Partnership, by its general partner Jupiter Capital, Inc., Salt Pond Holdings, LLC, Munus, L.P., Carisma Trust, by its trustee, Venia, LLC, and Tribue Limited Partnership (collectively, the “HoldCo Plaintiffs”). AAMC joined in the action as an additional named Plaintiff pursuant to Court order dated March 30, 2023. The action was filed against Defendants Blackrock Financial Management, Inc., Blackrock Investment Management, LLC, Blackrock Investments, LLC, Blackrock Capital Management, Inc., Blackrock, Inc, Pacific Investment Management Company LLC, PIMCO Investments, LLC and John and Jane Does 1-10. The complaint alleges that Defendants, aided by their agents and co-conspirators, engaged in an unlawful enterprise and conspiracy to harm Plaintiffs and related companies, including Ocwen Financial Corporation (“Ocwen”), by damaging their operations, business relationships and standing in the industry. The specific intent and purpose of the Defendants’ alleged illegal conduct, as detailed in the complaint, was to take profits from the forced foreclosures on struggling homeowners during the mortgage crisis and to retaliate against and financially ruin Ocwen and AAMC for pushing back against Defendants’ pro-foreclosure campaign. As set out in the complaint, the alleged wrongful and malicious conduct of Defendants, which included fraudulent disparagement and targeted short-selling, constitute common law intentional torts and violations of Section 605 of the Virgin Islands Criminally Influenced and Corrupt Organizations Act (“CICO”). AAMC and the HoldCo Plaintiffs seek compensatory damages in amounts reflecting the substantial diminution in value of their stock and stock holdings, respectively, and/or lost profits, plus lost future market value appreciation and profits. Any direct or indirect compensatory damages awarded under CICO are subject to automatic trebling. The action also seeks punitive damages of up to nine times any compensatory amounts based on the egregious nature of the alleged intentional torts, as well as an award of attorneys’ fees and other expenses incurred in prosecuting the case. Defendants filed multiple motions that sought to dismiss the case on various alleged grounds, including that Plaintiffs failed to adequately plead their respective statutory and common law tort claims and that the Court allegedly lacked personal jurisdiction over Defendants. On October 11, 2022, the trial judge appointed a Staff Master to review Defendants’ pending motions and issue a recommended decision thereon. On July 13, 2023, the Staff Master issued his recommendation that all of AAMC’s legal claims should be permitted to proceed and that the Court should exercise personal jurisdiction over four of the five named Blackrock-entity Defendants and both of the named PIMCO-entity Defendants. The Staff Master recommended that Blackrock, Inc. be dismissed for lack of personal jurisdiction. On December 4, 2023, the trial judge issued a memorandum decision and order fully adopting the Staff Master’s comprehensive recommendation and overruling Defendants’ objections to the portions adverse to them. The trial judge certified the findings of jurisdiction over Defendants for a potential interlocutory discretionary appeal. The Virgin Islands Supreme Court has not yet determined whether or not to accept Defendants’ appeal. The trial judge also entered a final order dismissing Blackrock, Inc., thus permitting an appeal by Plaintiffs as of right to the Virgin Islands Supreme Court. On February 27, 2024, the trial judge issued an order denying Defendants’ request for a stay of discovery proceedings in the Superior Court during the pendency of appellate matters before the Virgin Islands Supreme Court and directing the Staff Master to conduct a discovery conference on an expedited basis. The Staff Master has set a discovery conference for March 27, 2024. At this time, we are not able to predict the ultimate outcome of this matter, nor can we estimate the range of possible damages to be awarded to AAMC, if any. As such, we have not recorded a gain contingency for this matter at December 31, 2023 or 2022.
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Incentive Compensation and Share-Based Payments |
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Incentive Compensation and Share-Based Payments | 7. Incentive Compensation and Share-Based Payments 2012 Special Equity Incentive Plan A special grant of stock options and restricted stock was made to certain employees of Altisource Portfolio Solutions N.A. (“ASPS”) related to our separation from ASPS under the 2012 Special Equity Incentive Plan (the “2012 Special Plan”). We included no share-based compensation in our consolidated financial statements for the portion of these grants made to ASPS employees. The shares of restricted stock became fully vested and were issued during 2017. Dividends received on restricted stock are forfeitable and are accumulated until the time of vesting at the same rate and on the same date as on shares of common stock. Upon the vesting of stock options and restricted stock, we may withhold up to the statutory minimum to satisfy the resulting employee tax obligation. Stock options During the years ended December 31, 2023 and 2022, we recorded no compensation expense related to grants of stock options. As of both December 31, 2023 and 2022, we had no outstanding options issued under all of our share-based compensation plans or as inducement awards. During the year ended December 31, 2022, 5,850 stock options were exercised on March 12, 2022 with a weighted average exercise price of $4.36 per share and an aggregate intrinsic value of $0.1 million. All options were exercised in March 2022. Restricted stock During the year ended December 31, 2023, we granted no shares of service-based restricted stock to members of management. During the year ended December 31, 2022, we granted a total of 38,250 shares of service-based restricted stock to members of management with a weighted average grant date value per share of $5.82. These shares of service-based restricted stock awards were granted either as inducement awards or under our Equity Incentive Plans. These grants will vest in three equal annual installments based on the grant date(s), subject to forfeiture or acceleration. We recorded $0.2 million of compensation expense related to these grants in both of the years ended December 31, 2023, and 2022, respectively. As of December 31, 2023, we had no unrecognized share-based compensation expense to be recognized. As of December 31, 2022, we had $0.3 million of total unrecognized share-based compensation cost to be recognized over a weighted average remaining estimated term 1.1 years. Additionally, during 2022 our Directors each received annual grants of restricted stock equal to $60,000 based on the market value of our common stock at the time of the annual stockholders meeting. This restricted stock vested on the date of the next Annual Meeting of Stockholders following the date of grant, service period subject to each Director attending at least 75% of the Board and committee meetings. No dividends were paid on the shares until the award was issued. During the year ended December 31, 2022, we granted 14,571 shares of stock pursuant to our Equity Incentive Plans with a weighted average grant date fair value per share of $12.35. There were no shares of stock granted under the Equity Incentive Plans during the year ended December 31, 2023. The following table sets forth the activity of our restricted stock:
_____________ (1)The vesting date fair value of restricted stock that vested during the years ended December 31, 2023 and 2022 was $0.2 million and $0.2 million, respectively. (2)The aggregate intrinsic value of restricted stock outstanding at December 31, 2023 and 2022 was $0.1 million and $0.7 million, respectively. The following table sets forth the number of shares of common stock reserved for future issuance. We may issue new shares or issue shares from treasury shares upon the exercise of stock options or the vesting of restricted stock.
As of December 31, 2023, we had 315,515 remaining shares of common stock, excluding treasury shares, authorized to be issued under our charter.
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | 8. Income Taxes We are domiciled in the USVI and are obligated to pay taxes to the USVI on our income. We applied for tax benefits from the USVI Economic Development Commission (“EDC”) and received our certificate of benefits (“the EDC Certificate”), effective as of February 1, 2013. Pursuant to the Certificate, so long as we comply its provisions, we will receive a 90% tax reduction on our USVI-sourced income until 2043. By letter dated April 13, 2023, the EDC approved an extension of the temporary full-time employment waiver (the "Waiver") of the Company's minimum employment requirements to five full-time USVI employees for the period from January 1, 2023 to June 30, 2023. By letter dated February 19, 2024, the EDC approved an additional extension for the period July 1, 2023 to December 31, 2024. At December 31, 2023, the Company met the minimum employment requirements required under the provisions of the Waiver. Beginning on January 1, 2017, AAMC US, Inc., a domestic U.S. corporation and wholly-owned subsidiary, began operations. This entity is based entirely in the mainland U.S. and is subject to U.S. federal and state corporate income tax. The following table sets forth the components of loss from operations before income taxes ($ in thousands):
The provision for income taxes from operations is summarized as follows ($ in thousands):
The following table sets forth the components of our total deferred tax assets ($ in thousands):
_____________ (1)Net operating loss (“NOL”) carry-forwards for tax years prior to 2018 expire in 2037. Beginning with 2018, NOLs are carried forward indefinitely. The change in deferred tax assets is included in changes in other assets and liabilities in the Consolidated Statement of Cash Flows. The significant factors contributing to the increase in our valuation allowance in 2023 are due to increases in the temporary differences attributable to net operating losses, accrued compensation, and unrealized gains. ASC 740 requires that the tax benefit of net operating losses, temporary differences and credit carryforwards be recorded as an asset to the extent that management assesses that realization is "more likely than not." Realization of the future tax benefits is dependent on the Company's ability to generate sufficient taxable income within the carryforward period. AAMC has historically been in a three-year cumulative loss position with the exception of 2020 due to the recognition of the Termination Fee payments as income that year. Removing this income from the analysis results in cumulative three-year book losses as of December 31, 2023. The Company believes that it is more likely than not that the Company will not realize the benefit of its net deferred tax assets. As such, the Company has recorded a full valuation allowance in 2022 against its net deferred tax assets. The valuation allowance increased by approximately $3.0 million during the year ended December 31, 2023. The following table sets forth the reconciliation of the statutory USVI income tax rate from operations to our effective income tax rate:
During the tax years ended December 31, 2023 and 2022, we recognized no interest or penalties associated with unrecognized tax benefits. We recorded $0.4 million as of December 31, 2023, excluding interest and penalties, as a liability for unrecognized tax benefits in Accrued expenses and other liabilities in the consolidated balance sheet. Had we recognized $0.4 million, along with related interest and penalties, it would have favorably impacted the annual effective tax rate. We do not anticipate any significant increases or decreases in our unrecognized tax benefits within the next 12 months. The following table presents a reconciliation of the beginning and ending amount of unrecognized tax benefits for the years ended December 31, 2023 and 2022 ($ in thousands):
AAMC believes that the tax positions taken in the AAMC tax returns satisfy the more-likely-than-not threshold for benefit recognition. Furthermore, a review of the AAMC entity trial balances suggests that AAMC has appropriately addressed the material book-tax differences. AAMC is confident that the amounts claimed (or expected to be claimed) in the tax returns reflect the largest amount of such benefits that are greater than fifty percent likely of being realized upon ultimate settlement. Accordingly, no ASC 740-10-25 liabilities except as noted above have been recorded by the Company as a result of ASC 740-10-25. We remain subject to tax examination in the USVI for tax years 2020 to 2023 and in the United States for tax years 2020 to 2023.
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Earnings Per Share |
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Earnings Per Share | 9. Earnings Per Share The following table sets forth the components of basic and diluted loss per share ($ in thousands, except share and per share amounts):
On September 8, 2023, the Company’s Board of Directors approved a 70% stock dividend. Each stockholder of record on September 18, 2023 received a dividend of seven tenths additional share of common stock for each then-held share, with any fractional shares rounded up, to be distributed after close of trading on October 31, 2023. The Company’s common stock began trading on a stock-adjusted basis on November 1, 2023, which is the ex-dividend date of the effective date of the dividend. The par value of the Company’s common stock was not affected by the split and remained at $0.01 per share. The computations of basic and diluted EPS have been adjusted on a retrospective basis for all periods presented. The common stock and per-share data has been retroactively adjusted as well, as the ex-dividend date occurred before the interim financial statements were issued. We excluded the items presented below from the calculation of diluted loss per share as they were antidilutive for the periods indicated, as the Company had a net loss from operations for each period presented ($ in thousands):
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Segment Information |
12 Months Ended |
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Dec. 31, 2023 | |
Segment Reporting [Abstract] | |
Segment Information | 10. Segment Information ALG is our primary segment. The Company’s chief operating decision maker, its Chief Executive Officer, reviews the financial information presented on a consolidated basis for purposes of allocating resources and evaluating its financial performance. Accordingly, the Company has determined that it operates in a single reportable segment.
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Subsequent Events |
12 Months Ended |
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Dec. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | 11. Subsequent Events Effective as of January 11, 2024 (the “Effective Date”), AAMC entered into a settlement agreement (the “Settlement Agreement”) with Luxor Capital Group LP, Luxor Capital Partners Offshore Masters Fund, LP, Luxor Capital Partners, LP, Luxor Wavefront, LP, Luxor Spectrum, LLC, and Thebes Offshore Master Fund, LP (collectively, “Luxor”) and Nathaniel Redleaf, a former AAMC director (together with AAMC and Luxor, the “Parties”). Under the terms of the Settlement Agreement: •Luxor surrendered all 144,212 shares of AAMC Series A Convertible Preferred Stock it held to AAMC. Luxor and AAMC agreed that their related Securities Purchase Agreement dated March 13, 2014, along with the Certificate of Designations dated March 17, 2014 attached thereto, are void and all rights thereunder are extinguished. •The Company shall provide the following consideration to Luxor: ◦A $1,000,000 cash payment within five days of the Effective Date, plus ◦Three Promissory Notes in the following principal amounts and durations: ▪A Note in the principal amount of $2,000,000 due and payable on the -year anniversary of the Effective Date; ▪A Note in the principal amount of $3,000,000 due and payable on the -year anniversary of the Effective Date; and ▪A Note in the principal amount of $6,000,000 due and payable on the -year anniversary of the Effective Date. ◦Each Note bears annual interest at either 7.5% on a cash basis or 10% paid-in-kind (“PIK”) basis, at the election of AAMC. The Company shall refrain from making common stock repurchases or issuing dividends at any time the PIK option is in effect and is subject to certain additional covenants enumerated in the Notes. ▪The Company shall also pay Luxor 50% of any proceeds received in respect of its damage claims in the action brought by Erbey Holding Corporation pending in USVI Superior Court with case number SX-2018-CV-146, up to a cumulative payout cap to Luxor of $50,000,000. ▪The Parties agreed and stipulated to dismissal with prejudice of the following actions: (i) Luxor Capital Group LP, et. al v. Altisource Asset Management Corporation filed in the Supreme Court of the State of New York in the County of New York, with index number 650746/2020 (including Luxor’s withdrawal of its pending request for further appellate review by the New York Court of Appeals), and (ii) Altisource Asset Management Corporation v. Nathaniel Redleaf et. al pending in the United States District Court for the District of the Virgin Islands, with case number 1:23-cv-00002. The Parties exchanged mutual releases of their respective claims relating to the aforesaid actions, SPA and Certificate, as applicable, and agreed that the Settlement Agreement shall not be construed as an admission that any of the Parties violated the law, breached any contract or committed any wrong whatsoever.
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Pay vs Performance Disclosure - USD ($) $ in Thousands |
12 Months Ended | |
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Dec. 31, 2023 |
Dec. 31, 2022 |
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Pay vs Performance Disclosure | ||
Net loss | $ (32,546) | $ (15,934) |
Insider Trading Arrangements |
3 Months Ended |
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Dec. 31, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Summary of Significant Accounting Policies (Policies) |
12 Months Ended |
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Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of presentation | The accompanying audited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). All wholly owned subsidiaries are included, and all intercompany accounts and transactions have been eliminated.
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Use of estimates | The preparation of consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Loans held for sale or investment, carried at fair market value We originate and purchase alternative loans. These loans will either be classified as held for investment or held for sale depending upon the determination of management. We have elected to measure these alternative loans at fair value on a loan by loan basis. This option is available when we first recognize a financial asset. Subsequent changes in the fair value of these loans will be recorded in our Consolidated Statements of Operations in the period of the change. Purchased loans, also known as correspondent loans, can be bought with a net strip interest component in that the seller of the loan will receive an agreed upon percentage of the coupon interest generated from the sold loan. This strip component is reflected as service and asset management expense on the Consolidated Statements of Operations. A fair value measurement represents the price at which an orderly transaction would occur between willing market participants at the measurement date. We estimate the fair values of the loans held for investment or sale based on available inputs from the marketplace. The market for the loans that we have or will invest in is generally illiquid. Establishing fair values for illiquid assets is inherently subjective and is often dependent upon our estimates and modeling assumptions. In circumstances where relevant market inputs cannot be obtained, increased analysis and management judgment are required to estimate fair value. This generally requires us to establish internal assumptions about future cash flows and appropriate risk-adjusted discount rates. Regardless of the valuation inputs we apply, the objective of fair value measurement for assets is unchanged from what it would be if markets were operating at normal activity levels and/or transactions were orderly; that is, to determine the current exit price. When the Company sells a loan, a gain or loss will be recognized at the time of the sale in net income for the difference between the fair value and the book value. The fair value is measured as the agreed upon selling price from the contractual agreement with the buyer. See Note 3 - Loans Held for Sale or Investment at Fair Value for further discussion on fair value measurements. Interest for these loans is recognized as revenue based on the stated coupon when earned and deemed collectible or until a loan becomes more than 90 days past due, at which point the loan is placed on nonaccrual status and any accrued interest is reversed against interest income. When a seriously delinquent loan previously placed on nonaccrual status has been cured, meaning all delinquent principal and interest have been remitted by the borrower, the loan will be placed back on accrual status. Interest accrued as of period end is included within loans held for sale, at fair value or loans held for investment, at fair value in the Consolidated Balance Sheets as applicable. We evaluate transfers of loans held for sale or investment at fair value under the guidance in Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") No. 860, "Transfers and servicing of financial assets" ("ASC 860"), and account for such transfers as sales when three conditions in ASC 810-10-45-5 have been met. That is, we account for transfers of such financial assets as sales when the assets have been isolated from the Company, when the transferee has the right to pledge or exchanges the assets it receives and there are no restrictions on the transferee that constrain such right, and when the Company has no effective control over the transferred financial assets. Each of the loans transferred during the year ended December 31, 2023 qualified for sale accounting under ASC 860, as each of the loans was transferred to a third-party "as is" in exchange for cash, and the Company has no continuing involvement with the transferred financial assets or the transferees. As result of such transfers, the Company realized an aggregate loss totaling $2.2 million and $14.9 million for the year ended December 31, 2023 on loans held for sale and loans held for investment, respectively, which is included in Realized losses on loans held for sale, net and Realized losses on loans held for investment, net, respectively, in the accompanying Consolidated Statement of Operations. There were no transfers of financial assets during the year ended December 31, 2023.
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Recently issued accounting standards | Recently issued accounting standards Recently issued accounting standards adopted In December 2019, the FASB issued ASU 2019-12, “Income Taxes - Simplifying the Accounting for Income Taxes (Topic 740),” which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. Our adoption of this standard in the first quarter of 2022 did not have a material impact on our consolidated financial statements. Recently issued accounting standards not yet adopted In March 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting,” which provides practical expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The expedients and exceptions provided by the amendments in this update apply only to contracts, hedging relationships, and other transactions that reference the London interbank offered rate (“LIBOR”) or another reference rate expected to be discontinued as a result of reference rate reform. These amendments are not applicable to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022. ASU No. 2020-04 is effective as of March 12, 2020 through December 31, 2022 and may be applied to contract modifications and hedging relationships from the beginning of an interim period that includes or is subsequent to March 12, 2020. In December 2022, the FASB extended the temporary accounting rules under Topic 848 from December 31, 2022 to December 31, 2024. We will adopt this standard when LIBOR is discontinued. We are evaluating the impact the new standard will have on our consolidated financial statements and related disclosures, but do not anticipate a material impact. Recent accounting pronouncements pending adoption not discussed above or in the 2022 Form 10-K are either not applicable or will not have, or are not expected to have a material impact on our consolidated financial position, results of operations, or cash flows.
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Cash equivalents | Cash equivalents We consider highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. Certain account balances exceed FDIC insurance coverage and, as a result, there is a concentration of credit risk related to amounts on deposit in excess of FDIC insurance coverage. To mitigate this risk, we maintain our cash and cash equivalents at large national or international banking institutions. Restricted cash Historically, we were required to maintain $2 million of restricted cash in a Flagstar deposit account under the Master Repurchase Agreement with Flagstar bank. See Note 4 - Borrowings. We have no restrictions on cash balances at December 31, 2023.
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Consolidations | Consolidations The consolidated financial statements include the accounts of AAMC and its consolidated subsidiaries, which include the voting interest entities in which we are determined to have a controlling financial interest. Our voting interest entities consist entirely of our wholly owned subsidiaries. We also consider variable interest entities (“VIEs”) for consolidation where we are the primary beneficiary. We had no VIEs or potential VIEs as of and for the years ended December 31, 2023 or 2022.
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Earnings per share | Earnings per share Basic earnings per share is computed by dividing net income or loss, less amortization of preferred stock issuance costs, by the weighted average common stock outstanding during the period. Diluted earnings per share is computed by dividing net income or loss by the weighted average common stock outstanding for the period plus the dilutive effect of (i) stock options and restricted stock outstanding using the treasury stock method and (ii) Series A Preferred Shares using the if-converted method. Weighted average common stock outstanding - basic excludes the impact of unvested restricted stock since dividends paid on such restricted stock are non-participating. Any gain on settlement of preferred shares, which is recorded directly to equity, is included in the numerators for our earnings per share calculations.
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Fair value of financial instruments | Fair value of financial instruments We designate fair value measurements into three levels based on the lowest level of substantive input used to make the fair value measurement. Those levels are as follows: •Level 1 - Quoted prices in active markets for identical assets or liabilities. •Level 2 - Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities. •Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
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Income taxes | Income taxes Income taxes are provided for using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted rates expected to apply to taxable income in the years in which management expects those temporary differences to be recovered or settled. The effect on deferred taxes of a change in tax rates is recognized in income in the period in which the change occurs. Subject to our judgment, we reduce a deferred tax asset by a valuation allowance if it is “more likely than not” that some or the entire deferred tax asset will not be realized. Tax laws are complex and subject to different interpretations by the taxpayer and respective governmental taxing authorities. Significant judgment is required in evaluating tax positions, and we recognize tax benefits only if it is more likely than not that a tax position will be sustained upon examination by the appropriate taxing authority. For all temporary differences, we have considered the potential future sources of taxable income against which they may be realized. In so doing, we have taken into account temporary differences that we expect to reverse in future years and those where it is unlikely. Where it is more likely than not that there will not be potential future taxable income to offset a temporary difference, a valuation allowance has been recorded. Lastly, the Company accounts for the tax on global intangible low-taxed income (“GILTI”) as incurred and therefore has not recorded deferred taxes related to GILTI on its foreign subsidiaries.
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Leases | Leases On January 1, 2019, we adopted ASU 2016-02, including various associated updates and amendments, which together comprise the requirements for lease accounting under ASC 842. ASC 842 fundamentally changes accounting for operating leases by requiring lessees to recognize a liability to make lease payments and a right-of-use asset over the term of the lease. We also adopted the “package of practical expedients,” which permits us not to reassess our prior conclusions about lease identification, lease classification and initial direct costs under the new standard. We also elected the short-term lease exemption for all leases that qualify; as a result, we will not recognize right-of-use assets or lease liabilities for leases with a term of less than 12 months at inception. We lease office space under two operating leases. We recognized lease expense for these leases on a straight-line basis over the lease term and combine lease and non-lease components for all leases. Our office leases are generally for terms of to five years and typically include renewal options, which we consider when determining our lease right-of-use assets and lease liabilities to the extent that a renewal option is reasonably certain of being exercised. Along with base rents, we are generally required to pay common area maintenance, property taxes and insurance, each of which vary from period to period and are accounted for as variable lease costs and therefore, expensed as incurred.
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Other assets | Other assets Other assets includes leasehold improvements; right-of-use assets; furniture, fixtures and equipment; deferred tax assets, refunds due and miscellaneous other assets. The cost basis of fixed assets is depreciated using the straight-line method over an estimated useful life of to five years based on the nature of the components. During the year ended December 31, 2023, the Company wrote off capitalized costs associated with the development of a website for use in the mortgage business as it was determined that the future cash flows attributable to that line of business did not support its recoverability given the scale back of our lending operations. The write off totaled $0.5 million and is included in impairment expense in the consolidated statement of operations.
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Interest income and loan fees | Interest income and loan fees Interest revenue is recognized based on the stated coupon when earned and deemed collectible or until a loan becomes more than 90 days past due, at which point the loan is place on nonaccrual status and any accrued interest is reversed against interest revenue. Upon a nonaccrual loan being reinstated, meaning all delinquent principal and interest payments have been remitted by the borrower, the loan will be placed back on accrual status. Interest accrued as of period end is included within loans for sale, at fair value, or loans held for investment, at fair value, in the Consolidated Balance Sheets as applicable. Loan fees represent origination fees charged to borrowers and are recognized to revenue upon the origination date of the loan.
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Share-based compensation | Share-based compensation We amortize the grant date fair value of restricted stock as expense on a straight-line basis over the service period with an offsetting increase in stockholders' equity. The grant date fair value of awards with only service-based vesting conditions is determined based upon the share price on the grant date. We recognize share-based compensation expense related to (i) awards to employees in salaries and employee benefits and (ii) awards to Directors or non-employees in general and administrative expense in our Consolidated Statements of Operations. Forfeitures of share-based awards are recognized as they occur.
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Treasury stock | Treasury stock We account for repurchased common stock under the cost method and include such treasury stock as a component of total stockholders’ equity. We have repurchased shares of our common stock (i) under our Board approval to repurchase up to $300 million in shares of our common stock and (ii) upon our withholding of shares of our common stock to satisfy tax withholding obligations in connection with the vesting of our restricted stock.
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Loans Held for Sale or Investment at Fair Value (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accounts, Notes, Loans and Financing Receivable | The composition of the loan portfolio by classification as of December 31, 2023 and 2022, respectively, is summarized in the table below ($ in thousands):
(1) Construction holdbacks include in process accounts such as payments, advances, interest reserve, accrued interest and other accounts. The table below represents activity within the loan portfolio by classification for the period shown ($ in thousands):
(1) Includes net realized loss on sale of loans.
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Schedule of Loan Commitment Classified by Geographic Areas | The composition of the total loan commitment by state as of December 31, 2023 is summarized below ($ in thousands):
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Schedule of Fair Value Measurements, Recurring and Nonrecurring | The following table presents the assets that are reported at fair value on a recurring basis as of December 31, 2023 and 2022, as well as the fair value of hierarchy of the valuation inputs used to measure fair value. We did not have any liabilities to report at fair value on a recurring basis as of December 31, 2023 and 2022.
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Leases (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Maturity Analysis of Operating Leases | The following table presents a maturity analysis of our operating leases as of December 31, 2023 ($ in thousands):
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Incentive Compensation and Share-Based Payments (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Restricted Stock Activity | The following table sets forth the activity of our restricted stock:
_____________ (1)The vesting date fair value of restricted stock that vested during the years ended December 31, 2023 and 2022 was $0.2 million and $0.2 million, respectively. (2)The aggregate intrinsic value of restricted stock outstanding at December 31, 2023 and 2022 was $0.1 million and $0.7 million, respectively.
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Schedule of Shares Reserved for Future Issuance | The following table sets forth the number of shares of common stock reserved for future issuance. We may issue new shares or issue shares from treasury shares upon the exercise of stock options or the vesting of restricted stock.
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Income Taxes (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Income by Jurisdiction | The following table sets forth the components of loss from operations before income taxes ($ in thousands):
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Schedule of Components of Income Tax Expense (Benefit) | The provision for income taxes from operations is summarized as follows ($ in thousands):
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Schedule of Deferred Tax Assets and Liabilities | The following table sets forth the components of our total deferred tax assets ($ in thousands):
_____________ (1)Net operating loss (“NOL”) carry-forwards for tax years prior to 2018 expire in 2037. Beginning with 2018, NOLs are carried forward indefinitely.
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Schedule of Effective Income Tax Rate Reconciliation | The following table sets forth the reconciliation of the statutory USVI income tax rate from operations to our effective income tax rate:
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Schedule of Unrecognized Tax Benefits Roll Forward | The following table presents a reconciliation of the beginning and ending amount of unrecognized tax benefits for the years ended December 31, 2023 and 2022 ($ in thousands):
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Earnings Per Share (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Basic and Diluted Loss Per Share | The following table sets forth the components of basic and diluted loss per share ($ in thousands, except share and per share amounts):
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Schedule of Antidilutive Securities Excluded From Computation of Loss Per Share | We excluded the items presented below from the calculation of diluted loss per share as they were antidilutive for the periods indicated, as the Company had a net loss from operations for each period presented ($ in thousands):
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Summary of Significant Accounting Policies (Details) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2023
USD ($)
lease
|
Dec. 31, 2022
USD ($)
|
|
Property, Plant and Equipment [Line Items] | ||
Restricted cash, minimum deposit required | $ 2,000 | |
Number of operating leases | lease | 2 | |
Write off | $ 511 | $ 0 |
Loans receivable, threshold period past due | 90 days | |
Authorized amount of stock to repurchase | $ 300,000 | |
Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Operating lease, term of contract | 1 year | |
Property useful life | 3 years | |
Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Operating lease, term of contract | 5 years | |
Property useful life | 5 years |
Loans Held for Sale or Investment at Fair Value - Schedule of Accounts, Notes, Loans and Financing Receivable (Details) - USD ($) $ in Thousands |
Dec. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loan commitments | $ 13,655 | |
Total loans at fair value | 5,633 | $ 83,143 |
Loans Held for Sale | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loan commitments | 7,420 | 15,080 |
Less: construction holdbacks | (2,988) | (3,350) |
Total principal outstanding | 4,432 | 11,730 |
Change in fair value of loans | 24 | (137) |
Total loans at fair value | 4,456 | 11,593 |
Loans Held for Investment | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loan commitments | 6,235 | 98,157 |
Less: construction holdbacks | (214) | (13,188) |
Total principal outstanding | 6,021 | 84,969 |
Change in fair value of loans | (388) | (1,826) |
Total loans at fair value | $ 5,633 | $ 83,143 |
Leases - Additional Information (Details) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Leases [Abstract] | ||
Weighted average remaining lease term | 3 years 3 months 18 days | 3 years 9 months 18 days |
Operating lease, discount rate | 7.00% | 7.00% |
Rent expense- long term lease | $ 400,000 | $ 300,000 |
Rent expense- short term lease | 0 | 0 |
Finance lease, liability | 0 | 0 |
Impairment of operating lease right-of-use asset | $ 58,000 | $ 0 |
Leases - Maturity Analysis of Operating Leases (Details) - USD ($) $ in Thousands |
Dec. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Operating Lease Liabilities | ||
2024 | $ 300 | |
2025 | 309 | |
2026 | 320 | |
2027 | 76 | |
Total lease payments | 1,005 | |
Less: interest | 105 | |
Lease liabilities | $ 900 | $ 1,323 |
Commitments and Contingencies - Litigation Settlement Narrative (Details) - Former Chief Executive Officer, Indroneel Chatterjee $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 29, 2022
USD ($)
|
Oct. 19, 2022
USD ($)
counterclaim
|
Dec. 31, 2023
USD ($)
|
|
Loss Contingencies [Line Items] | |||
Number of counterclaims with a granted summary judgement | counterclaim | 1 | ||
Amount awarded to company | $ 1,000 | $ 400 | $ 1,600 |
Amount awarded to company, interest rate | 0.090 | ||
Reimbursement of legal expenses | $ 140 |
Commitments and Contingencies - Gain Contingency Narrative (Details) - Erbey Holding Corporation et al. v. Blackrock Management Inc., et al. - Positive Outcome of Litigation $ in Thousands |
Dec. 31, 2023
USD ($)
|
Jul. 13, 2023
defendant
|
Mar. 30, 2023 |
Dec. 31, 2022
USD ($)
|
---|---|---|---|---|
Gain Contingencies [Line Items] | ||||
Compensatory amounts multiplier of alleged intentional torts | 9 | |||
Number of defendants the court should exercise personal jurisdiction over | 4 | |||
Number of defendants | 5 | |||
Gain contingency | $ | $ 0 | $ 0 |
Incentive Compensation and Share-Based Payments - Schedule of Restricted Stock Activity (Details) - USD ($) $ / shares in Units, $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Weighted Average Grant Date Fair Value | |||
Vesting date fair value of restricted stock that vested | $ 0.2 | $ 0.2 | |
Aggregate intrinsic value, outstanding | $ 0.1 | ||
Restricted stock | |||
Number of Shares | |||
Beginning balance (in shares) | 61,887 | 25,901 | |
Granted (in shares) | 52,821 | ||
Vested (in shares) | (18,984) | (16,835) | |
Forfeited (in shares) | (28,332) | ||
Ending balance (in shares) | 14,571 | 61,887 | |
Weighted Average Grant Date Fair Value | |||
Beginning balance (in USD per share) | $ 12.35 | $ 8.36 | $ 13.62 |
Granted (in USD per share) | 7.62 | ||
Vested (in USD per share) | 8.25 | 14.11 | |
Forfeited (in USD per share) | 6.39 | ||
Ending balance (in USD per share) | $ 12.35 | $ 8.36 | $ 13.62 |
Aggregate intrinsic value, outstanding | $ 0.1 | $ 0.7 |
Incentive Compensation and Share-Based Payments - Schedule of Shares Reserved for Future Issuance (Details) |
Dec. 31, 2023
shares
|
---|---|
Share-Based Payment Arrangement [Abstract] | |
Stock options outstanding (in shares) | 0 |
Possible future issuances under equity incentive plan (in shares) | 107,884 |
Common stock reserved for future issuance (in shares) | 107,884 |
Common stock, shares available to be issued under charter (in shares) | 315,515 |
Income Taxes - Narrative (Details) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2023
USD ($)
employee
|
Dec. 31, 2022
USD ($)
|
Dec. 31, 2021
USD ($)
|
|
Income Tax Disclosure [Abstract] | |||
Income tax exemption, percentage | 90.00% | ||
Minimum employee requirement | employee | 5 | ||
Cumulative loss position, duration | 3 years | ||
Valuation allowance, increase | $ 3,000,000 | ||
Unrecognized tax benefit, interest and penalties expensed | 0 | $ 0 | |
Unrecognized tax benefits | $ 437,000 | $ 0 | $ 0 |
Income Taxes - Schedule of Income by Jurisdiction (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Income Tax Disclosure [Abstract] | ||
Loss before income taxes | $ (31,973) | $ (15,584) |
Income Taxes - Schedule of Components of Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Current | ||
Federal | $ 437 | $ 195 |
State | 0 | 4 |
International | 73 | 55 |
Total current tax expense | 510 | 254 |
Deferred | ||
Federal | 54 | 94 |
State | 9 | 2 |
Total deferred tax expense | 63 | 96 |
Total tax expense | $ 573 | $ 350 |
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands |
Dec. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Deferred tax assets: | ||
Stock compensation | $ 6 | $ 2 |
Accrued expenses | 53 | 84 |
Net operating losses | 4,506 | 1,109 |
Lease liabilities | 10 | 54 |
Other | 4 | 76 |
Total gross deferred tax assets | 4,579 | 1,325 |
Less: Valuation allowance | (4,313) | (1,266) |
Total net deferred tax assets | 266 | 59 |
Deferred tax liabilities: | ||
Right-of-use assets | 9 | 53 |
Investments | 0 | 6 |
Unrealized gains | 320 | 0 |
Total gross deferred tax liabilities | 329 | 59 |
Deferred tax assets, net | $ (63) | $ 0 |
Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details) |
12 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Income Tax Disclosure [Abstract] | ||
U.S. Virgin Islands income tax rate | 23.10% | 23.10% |
State and local income tax rates | 0.00% | 0.00% |
EDC benefits in the USVI | (14.20%) | (19.50%) |
Foreign tax rate differential | (0.60%) | (0.20%) |
Permanent and other | (0.20%) | (0.50%) |
Valuation allowance | (9.50%) | (4.90%) |
Other adjustments | (0.40%) | (0.30%) |
Effective income tax rate | (1.80%) | (2.30%) |
Income Taxes - Schedule of Unrecognized Tax Benefits Roll Forward (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Unrecognized tax benefits at the beginning of the year | $ 0 | $ 0 |
Current period tax position increases | 0 | 0 |
Prior period tax position increases | 437 | 0 |
Decreases due to lapse in applicable statute of limitations | 0 | 0 |
Unrecognized tax benefits at the end of the year | $ 437 | $ 0 |
Earnings Per Share - Schedule of Components of Diluted Earnings (Loss) Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Numerator | ||
Net loss | $ (32,546) | $ (15,934) |
Gain of preferred stock transaction | 0 | 5,122 |
Numerator for earnings per share - net loss attributable to common stockholders | $ (32,546) | $ (10,812) |
Denominator | ||
Weighted average common stock outstanding – basic (in shares) | 2,925,744 | 3,259,755 |
Weighted average common stock outstanding – diluted (in shares) | 2,925,744 | 3,259,755 |
Loss per share of common stock - Basic: | ||
Loss per basic common share (in USD per share) | $ (11.12) | $ (3.32) |
Loss per share of common stock - Diluted: | ||
Loss per diluted common share (in USD per share) | $ (11.12) | $ (3.32) |
Earnings Per Share - Narrative (Details) - $ / shares |
Sep. 18, 2023 |
Sep. 08, 2023 |
Dec. 31, 2023 |
Dec. 31, 2022 |
---|---|---|---|---|
Earnings Per Share [Abstract] | ||||
Common stock, dividend rate approved | 70.00% | |||
Dividends, number of additional shares issued per share owned (in shares) | 0.7 | |||
Common stock, par value (in USD per share) | $ 0.01 | $ 0.01 | $ 0.01 |
Earnings Per Share - Schedule of Antidilutive Securities Excluded From Computation of Earnings Per Share (Details) - shares |
12 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Restricted stock | ||
Denominator | ||
Antidilutive shares excluded from computation of earnings per share (in shares) | 35,595 | 28,840 |
Preferred Stock | ||
Denominator | ||
Antidilutive shares excluded from computation of earnings per share (in shares) | 196,128 | 196,238 |
Segment Information (Details) |
12 Months Ended |
---|---|
Dec. 31, 2023
segment
| |
Segment Reporting [Abstract] | |
Number of operating segments | 1 |
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