GlobeNewswire Inc | Nov 6, 2020 07:30AM EST

November 06, 2020

CHRISTIANSTED, U.S. Virgin Islands, Nov. 06, 2020 (GLOBE NEWSWIRE) -- Altisource Asset Management Corporation (AAMC or the Company) (NYSE American: AAMC) today announced financial and operating results for the third quarter of 2020.

Third Quarter 2020 Highlights and Recent Developments

-- Negotiated and executed a Termination and Transition Agreement (the Termination Agreement) with Front Yard Residential Corporation (Front Yard) on terms resulting in payments to AAMC of over $54 million plus management fees through the date that Front Yard delivers written notice to AAMC that the transition has been satisfactorily completed. -- Further developed new business lines for AAMC, including formation of an investment fund, targeted commencement of a short-term investor loan aggregation business and the establishment of strategic relationships with real estate loan originators.

We expect that our new business lines will leverage our history and experience in asset management, real estate investing and real estate operations, stated Indroneel Chatterjee, Co-Chief Executive Officer. We have taken steps to reduce our annual operating expenses, including reductions in our physical office footprint and the optimization of our workforce upon the termination of our asset management agreement with Front Yard. We expect that AAMC will be able to generate management fees and returns on its own investments through each of our new opportunities, and we are targeting the achievement of positive net income for both 2020 and 2021. We believe these new business initiatives will benefit our stockholders over the long term.

Third Quarter 2020 Financial Results

AAMCs net income for the third quarter of 2020 was $11.8 million, or $7.20 per diluted common share, which included a $0.1 million change in the fair value of its shares of Front Yard common stock, compared to a net loss of $3.5 million, or $2.25 per diluted common share, which included a $(1.1) million change in the fair value of its shares of Front Yard common stock, for the third quarter of 2019.

AAMC's net income for the nine months ended September 30, 2020 was $0.2 million, or $0.07 per diluted common share, which included a $(5.8) million change in the fair value of its shares of Front Yard common stock, compared to a net loss of $1.1 million, or $0.77 per diluted common share, which included a $4.6 million change in the fair value of its shares of Front Yard common stock, for the nine months ended September 30, 2019.

About AAMC

AAMC is an asset management company that provides portfolio management and corporate governance services to investment vehicles.Additional information is available at www.altisourceamc.com.

Forward-looking Statements

This press release contains forward-looking statements that involve a number of risks and uncertainties. Those forward-looking statements include all statements that are not historical fact, including statements about managements beliefs and expectations. Forward-looking statements are based on managements beliefs as well as assumptions made by and information currently available to management. Because such statements are based on expectations as to future economic performance and are not statements of historical fact, actual results may differ materially from those projected. The risks and uncertainties to which forward-looking statements are subject include, but are not limited to: our ability to implement our business strategy and the business strategy of Front Yard; risks associated with the termination of our asset management agreement with Front Yard, including the potential effects that the termination can have on our new business initiatives, results of operations and financial condition; our ability to successfully complete the transition period under the Termination Agreement; our ability to retain and recruit key employees; our ability to develop and implement new businesses or, to the extent such businesses are developed, our ability to make them successful or sustain the performance of any such businesses; our ability to build, retain and maintain our strategic relationships; our ability to obtain additional asset management clients; the potential for the COVID-19 pandemic to adversely affect our business, financial position, operations, business prospects, customers, employees and third-party service providers; our ability to effectively compete with our competitors; Front Yard's ability to complete its announced merger transaction, which could affect the value of the shares of Front Yard held by us or to be acquired as part of the Termination Agreement; the failure of our service providers to effectively perform their obligations under their agreements with us; our ability to effectively manage the performance of Front Yard through the termination of the asset management agreement with Front Yard pursuant to the Termination Agreement; developments in the litigations regarding AAMC's redemption obligations under the Certificate of Designations of its Series A Convertible Preferred Stock (the Series A Shares), including AAMC's ability to obtain declaratory relief confirming that AAMC was not obligated to redeem any of the Series A Shares on the March 15, 2020 redemption date since AAMC did not have funds legally available to redeem all, but not less than all, of the Series A Shares requested to be redeemed on that redemption date; general economic and market conditions; governmental regulations, taxes and policies and other risks and uncertainties detailed in the Risk Factors and other sections described from time to time in the Companys current and future filings with the Securities and Exchange Commission. The foregoing list of factors should not be construed as exhaustive.

The statements made in this press release are current as of the date of this press release only. The Company undertakes no obligation to publicly update or revise any forward-looking statements or any other information contained herein, whether as a result of new information, future events or otherwise.

Altisource Asset Management Corporation Condensed Consolidated Statements of Operations (In thousands, except share and per share amounts)(Unaudited)

Three months ended Nine months ended September 30, September 30, 2020 2019 2020 2019Expenses: Salaries and employee $ 1,668 $ 2,827 $ 8,081 $ 8,634 benefitsLegal and professional 1,455 351 4,681 1,964 feesGeneral and 559 658 1,709 1,690 administrativeTotal expenses 3,682 3,836 14,471 12,288 Other income (loss): Change in fair value of 65 (1,072 ) (5,848 ) 4,597 Front Yard common stockDividend income on Front ? 244 244 731 Yard common stockOther income 5 40 29 130 Total other income (loss) 70 (788 ) (5,575 ) 5,458 Net loss from continuingoperations before income (3,612 ) (4,624 ) (20,046 ) (6,830 )taxesIncome tax (benefit) (523 ) 843 (1,091 ) 29 expenseNet loss from continuing (3,089 ) (5,467 ) (18,955 ) (6,859 )operations Discontinued operations:^ (1)Income from operationsrelated to Front Yard, 14,843 1,944 19,117 5,785 net of taxGain on discontinued 14,843 1,944 19,117 5,785 operations Net income (loss) 11,754 (3,523 ) 162 (1,074 )Amortization of preferred ? (52 ) (42 ) (155 )stock issuance costsNet income (loss)attributable to common $ 11,754 $ (3,575 ) $ 120 $ (1,229 )stockholders Earnings (loss) per share of common stock ? basic:Continuing operations ? $ (1.89 ) $ (3.47 ) $ (11.69 ) $ (4.42 )basicDiscontinued operations ? 9.09 1.22 11.76 3.65 basicEarnings (loss) per basic $ 7.20 $ (2.25 ) $ 0.07 $ (0.77 )common shareWeighted average common 1,632,117 1,590,739 1,625,727 1,587,448 stock outstanding ? basic Earnings (loss) per shareof common stock ? diluted:Continuing operations ? $ (1.89 ) $ (3.47 ) $ (11.69 ) $ (4.42 )dilutedDiscontinued operations ? 9.09 1.22 11.76 3.65 dilutedEarnings (loss) per $ 7.20 $ (2.25 ) $ 0.07 $ (0.77 )diluted common shareWeighted average commonstock outstanding ? 1,632,117 1,590,739 1,625,727 1,587,448 diluted

___________________(1) Discontinued operations includes (i) the management fee revenues generated under our asset management agreements with Front Yard, (ii) expense reimbursements from Front Yard and the underlying expenses, (iii) the results of operations of our India and Cayman Islands subsidiaries, (iv) the employment costs associated with certain individuals wholly dedicated to Front Yard and (v) the costs associated with our lease in Charlotte, North Carolina, that is expected to be assumed by Front Yard.

Altisource Asset Management Corporation Condensed Consolidated Balance Sheets (In thousands, except share and per share amounts)

September December 30, 2020 31, 2019 (unaudited) Current assets: Cash and cash equivalents $ 30,711 $ 18,906 Front Yard common stock, at fair value 14,198 20,046 Receivable from Front Yard 34,967 5,014 Prepaid expenses and other assets 1,659 1,009 Current assets held for sale 2,619 2,176 Total current assets 84,154 47,151 Non-current assets: Right-of-use lease assets 675 732 Other non-current assets 1,287 1,470 Non-current assets held for sale 3,705 3,895 Total non-current assets 5,667 6,097 Total assets $ 89,821 $ 53,248 Current liabilities: Accrued salaries and employee benefits $ 3,991 $ 3,762 Accounts payable and accrued liabilities 2,920 1,165 Contract liability to Front Yard 33,733 ? Short-term lease liabilities 75 71 Current liabilities held for sale 2,001 2,002 Total current liabilities 42,720 7,000 Non-current liabilities: Non-current lease liabilities 620 675 Non-current liabilities held for sale 3,317 3,543 Total non-current liabilities 3,937 4,218 Total liabilities 46,657 11,218 Commitments and contingencies ? ? Redeemable preferred stock: Preferred stock, $0.01 par value, 250,000 sharesissued and outstanding as of September30, 2020 and 250,000 249,958 December31, 2019; redemption value $250,000 Stockholders' deficit: Common stock, $0.01 par value, 5,000,000 authorizedshares; 2,942,597 and 1,632,117 shares issued andoutstanding, respectively, as of September30, 2020 29 29 and 2,897,177 and 1,598,512 shares issued andoutstanding, respectively, as of December31, 2019Additional paid-in capital 45,865 44,646 Retained earnings 23,782 23,662 Accumulated other comprehensive loss (84 ) (33 )Treasury stock, at cost, 1,310,480 shares as ofSeptember30, 2020 and 1,298,665 shares as of (276,428 ) (276,232 )December31, 2019Total stockholders' deficit (206,836 ) (207,928 )Total liabilities and equity $ 89,821 $ 53,248

FOR FURTHER INFORMATION CONTACT:Investor RelationsT: +1-704-885-2461E: IR@AltisourceAMC.com