|
UNITED STATES VIRGIN ISLANDS
|
66-0783125
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
Large Accelerated Filer
|
o
|
|
Accelerated Filer
|
o
|
Non-Accelerated Filer
|
x
|
(Do not check if a smaller reporting company)
|
Smaller Reporting Company
|
o
|
|
|
|
Emerging Growth Company
|
o
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
Common stock, par value $0.01 per share
|
AAMC
|
NYSE American
|
•
|
our ability to implement our business strategy and the business strategy of Front Yard;
|
•
|
our ability to retain Front Yard as a client;
|
•
|
our ability to retain and maintain our strategic relationships;
|
•
|
the ability of Front Yard to generate returns in amounts that would enable our management fees to increase;
|
•
|
our ability to obtain additional asset management clients;
|
•
|
our ability to effectively compete with our competitors;
|
•
|
Front Yard's ability to complete future or pending transactions;
|
•
|
the failure of our service providers to effectively perform their obligations under their agreements with us;
|
•
|
our ability to integrate newly acquired rental assets into Front Yard’s portfolio;
|
•
|
our ability to effectively manage the performance of Front Yard’s internal property manager at the level and/or the cost that it anticipates;
|
•
|
the effects of potential redemptions of our Series A Preferred Stock commencing in March 2020, including our ability to pay with funds legally available therefor;
|
•
|
our failure to maintain Front Yard’s qualification as a REIT;
|
•
|
general economic and market conditions; and
|
•
|
governmental regulations, taxes and policies.
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
|
(unaudited)
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
20,978
|
|
|
$
|
27,171
|
|
Short-term investments
|
892
|
|
|
584
|
|
||
Front Yard common stock, at fair value
|
19,851
|
|
|
14,182
|
|
||
Receivable from Front Yard
|
3,992
|
|
|
3,968
|
|
||
Prepaid expenses and other assets
|
3,070
|
|
|
1,552
|
|
||
Total current assets
|
48,783
|
|
|
47,457
|
|
||
|
|
|
|
||||
Non-current assets:
|
|
|
|
||||
Right-of-use lease assets
|
2,733
|
|
|
—
|
|
||
Other non-current assets
|
1,598
|
|
|
1,910
|
|
||
Total non-current assets
|
4,331
|
|
|
1,910
|
|
||
Total assets
|
$
|
53,114
|
|
|
$
|
49,367
|
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
|||
Accrued salaries and employee benefits
|
$
|
3,510
|
|
|
$
|
5,583
|
|
Accounts payable and accrued liabilities
|
759
|
|
|
1,188
|
|
||
Short-term lease liabilities
|
171
|
|
|
—
|
|
||
Total current liabilities
|
4,440
|
|
|
6,771
|
|
||
Long-term lease liabilities
|
2,604
|
|
|
—
|
|
||
Total liabilities
|
7,044
|
|
|
6,771
|
|
||
|
|
|
|
||||
Commitments and contingencies (Note 4)
|
—
|
|
|
—
|
|
||
|
|
|
|
||||
Redeemable preferred stock:
|
|
|
|
||||
Preferred stock, $0.01 par value, 250,000 shares issued and outstanding as of June 30, 2019 and December 31, 2018; redemption value $250,000
|
249,855
|
|
|
249,752
|
|
||
|
|
|
|
||||
Stockholders' deficit:
|
|
|
|
|
|
||
Common stock, $0.01 par value, 5,000,000 authorized shares; 2,886,009 and 1,590,739 shares issued and outstanding, respectively, as of June 30, 2019 and 2,862,760 and 1,573,691 shares issued and outstanding, respectively, as of December 31, 2018
|
29
|
|
|
29
|
|
||
Additional paid-in capital
|
43,531
|
|
|
42,245
|
|
||
Retained earnings
|
28,827
|
|
|
26,558
|
|
||
Accumulated other comprehensive income
|
17
|
|
|
—
|
|
||
Treasury stock, at cost, 1,295,270 shares as of June 30, 2019 and 1,289,069 shares as of December 31, 2018
|
(276,189
|
)
|
|
(275,988
|
)
|
||
Total stockholders' deficit
|
(203,785
|
)
|
|
(207,156
|
)
|
||
Total liabilities and equity
|
$
|
53,114
|
|
|
$
|
49,367
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Management fees from Front Yard
|
$
|
3,556
|
|
|
$
|
3,644
|
|
|
$
|
7,102
|
|
|
$
|
7,371
|
|
Conversion fees from Front Yard
|
—
|
|
|
53
|
|
|
29
|
|
|
116
|
|
||||
Expense reimbursements from Front Yard
|
342
|
|
|
219
|
|
|
670
|
|
|
481
|
|
||||
Total revenues
|
3,898
|
|
|
3,916
|
|
|
7,801
|
|
|
7,968
|
|
||||
Expenses:
|
|
|
|
|
|
|
|
||||||||
Salaries and employee benefits
|
4,238
|
|
|
4,524
|
|
|
8,656
|
|
|
8,738
|
|
||||
Legal and professional fees
|
1,356
|
|
|
467
|
|
|
1,698
|
|
|
819
|
|
||||
General and administrative
|
880
|
|
|
843
|
|
|
1,919
|
|
|
1,790
|
|
||||
Total expenses
|
6,474
|
|
|
5,834
|
|
|
12,273
|
|
|
11,347
|
|
||||
Other income (loss):
|
|
|
|
|
|
|
|
||||||||
Change in fair value of Front Yard common stock
|
4,792
|
|
|
601
|
|
|
5,669
|
|
|
(2,339
|
)
|
||||
Dividend income on Front Yard common stock
|
243
|
|
|
243
|
|
|
487
|
|
|
487
|
|
||||
Other income
|
49
|
|
|
49
|
|
|
53
|
|
|
92
|
|
||||
Total other income (loss)
|
5,084
|
|
|
893
|
|
|
6,209
|
|
|
(1,760
|
)
|
||||
Income (loss) before income taxes
|
2,508
|
|
|
(1,025
|
)
|
|
1,737
|
|
|
(5,139
|
)
|
||||
Income tax (benefit) expense
|
(781
|
)
|
|
42
|
|
|
(712
|
)
|
|
292
|
|
||||
Net income (loss) attributable to stockholders
|
3,289
|
|
|
(1,067
|
)
|
|
2,449
|
|
|
(5,431
|
)
|
||||
Amortization of preferred stock issuance costs
|
(52
|
)
|
|
(52
|
)
|
|
(103
|
)
|
|
(103
|
)
|
||||
Net income (loss) attributable to common stockholders
|
$
|
3,237
|
|
|
$
|
(1,119
|
)
|
|
$
|
2,346
|
|
|
$
|
(5,534
|
)
|
|
|
|
|
|
|
|
|
||||||||
Earnings (loss) per share of common stock – basic:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Earnings (loss) per basic common share
|
$
|
2.04
|
|
|
$
|
(0.69
|
)
|
|
$
|
1.48
|
|
|
$
|
(3.44
|
)
|
Weighted average common stock outstanding – basic
|
1,589,492
|
|
|
1,612,382
|
|
|
1,585,775
|
|
|
1,608,163
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||
Earnings (loss) per share of common stock – diluted:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Earnings (loss) per diluted common share
|
$
|
1.81
|
|
|
$
|
(0.69
|
)
|
|
$
|
1.34
|
|
|
$
|
(3.44
|
)
|
Weighted average common stock outstanding – diluted
|
1,820,244
|
|
|
1,612,382
|
|
|
1,830,263
|
|
|
1,608,163
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net income (loss) attributable to stockholders
|
$
|
3,289
|
|
|
$
|
(1,067
|
)
|
|
$
|
2,449
|
|
|
$
|
(5,431
|
)
|
|
|
|
|
|
|
|
|
||||||||
Other comprehensive income:
|
|
|
|
|
|
|
|
||||||||
Currency translation adjustments, net
|
5
|
|
|
—
|
|
|
17
|
|
|
—
|
|
||||
Total other comprehensive income
|
5
|
|
|
—
|
|
|
17
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Comprehensive income (loss)
|
$
|
3,294
|
|
|
$
|
(1,067
|
)
|
|
$
|
2,466
|
|
|
$
|
(5,431
|
)
|
|
Common Stock
|
|
Additional Paid-in Capital
|
|
Retained Earnings
|
|
Accumulated Other Comprehensive Income
|
|
Treasury Stock
|
|
Total Stockholders' Deficit
|
|||||||||||||||
|
Number of Shares
|
|
Amount
|
|
|
|
|
|
||||||||||||||||||
December 31, 2018
|
2,862,760
|
|
|
$
|
29
|
|
|
$
|
42,245
|
|
|
$
|
26,558
|
|
|
$
|
—
|
|
|
$
|
(275,988
|
)
|
|
$
|
(207,156
|
)
|
Cumulative effect of adoption of ASC 842 (Note 1)
|
—
|
|
|
—
|
|
|
—
|
|
|
(77
|
)
|
|
—
|
|
|
—
|
|
|
(77
|
)
|
||||||
Common shares issued under share-based compensation plans, net of shares withheld for employee taxes
|
21,383
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Shares withheld for taxes upon vesting of restricted stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(195
|
)
|
|
(195
|
)
|
||||||
Amortization of preferred stock issuance costs
|
—
|
|
|
—
|
|
|
—
|
|
|
(51
|
)
|
|
—
|
|
|
—
|
|
|
(51
|
)
|
||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
698
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
698
|
|
||||||
Currency translation adjustments, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12
|
|
|
—
|
|
|
12
|
|
||||||
Net loss attributable to stockholders
|
—
|
|
|
—
|
|
|
—
|
|
|
(840
|
)
|
|
—
|
|
|
—
|
|
|
(840
|
)
|
||||||
March 31, 2019
|
2,884,143
|
|
|
29
|
|
|
42,943
|
|
|
25,590
|
|
|
12
|
|
|
(276,183
|
)
|
|
(207,609
|
)
|
||||||
Common shares issued under share-based compensation plans, net of shares withheld for employee taxes
|
1,866
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Shares withheld for taxes upon vesting of restricted stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
(6
|
)
|
||||||
Amortization of preferred stock issuance costs
|
—
|
|
|
—
|
|
|
—
|
|
|
(52
|
)
|
|
—
|
|
|
—
|
|
|
(52
|
)
|
||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
588
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
588
|
|
||||||
Currency translation adjustments, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
5
|
|
||||||
Net income attributable to stockholders
|
—
|
|
|
—
|
|
|
—
|
|
|
3,289
|
|
|
—
|
|
|
—
|
|
|
3,289
|
|
||||||
June 30, 2019
|
2,886,009
|
|
|
$
|
29
|
|
|
$
|
43,531
|
|
|
$
|
28,827
|
|
|
$
|
17
|
|
|
$
|
(276,189
|
)
|
|
$
|
(203,785
|
)
|
|
Common Stock
|
|
Additional Paid-in Capital
|
|
Retained Earnings
|
|
Accumulated Other Comprehensive Loss
|
|
Treasury Stock
|
|
Total Stockholders' Deficit
|
|||||||||||||||
|
Number of Shares
|
|
Amount
|
|
|
|
|
|
||||||||||||||||||
December 31, 2017
|
2,815,122
|
|
|
$
|
28
|
|
|
$
|
37,765
|
|
|
$
|
38,970
|
|
|
$
|
(1,330
|
)
|
|
$
|
(272,328
|
)
|
|
$
|
(196,895
|
)
|
Cumulative effect of adoption of ASU 2016-01 (Note 1)
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,330
|
)
|
|
1,330
|
|
|
—
|
|
|
—
|
|
||||||
Common shares issued under share-based compensation plans, net of shares withheld for employee taxes
|
15,339
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
||||||
Shares withheld for taxes upon vesting of restricted stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(196
|
)
|
|
(196
|
)
|
||||||
Amortization of preferred stock issuance costs
|
—
|
|
|
—
|
|
|
—
|
|
|
(51
|
)
|
|
—
|
|
|
—
|
|
|
(51
|
)
|
||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
1,257
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,257
|
|
||||||
Net loss attributable to stockholders
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,364
|
)
|
|
—
|
|
|
—
|
|
|
(4,364
|
)
|
||||||
March 31, 2018
|
2,830,461
|
|
|
28
|
|
|
39,025
|
|
|
33,225
|
|
|
—
|
|
|
(272,524
|
)
|
|
(200,246
|
)
|
||||||
Common shares issued under share-based compensation plans, net of shares withheld for employee taxes
|
2,001
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Shares withheld for taxes upon vesting of restricted stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(31
|
)
|
|
(31
|
)
|
||||||
Amortization of preferred stock issuance costs
|
—
|
|
|
—
|
|
|
—
|
|
|
(52
|
)
|
|
—
|
|
|
—
|
|
|
(52
|
)
|
||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
1,362
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,362
|
|
||||||
Net loss attributable to stockholders
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,067
|
)
|
|
—
|
|
|
—
|
|
|
(1,067
|
)
|
||||||
June 30, 2018
|
2,832,462
|
|
|
$
|
28
|
|
|
$
|
40,387
|
|
|
$
|
32,106
|
|
|
$
|
—
|
|
|
$
|
(272,555
|
)
|
|
$
|
(200,034
|
)
|
|
Six months ended June 30,
|
||||||
|
2019
|
|
2018
|
||||
Operating activities:
|
|
|
|
||||
Net income (loss) attributable to stockholders
|
$
|
2,449
|
|
|
$
|
(5,431
|
)
|
Adjustments to reconcile net income (loss) to net cash used in operating activities:
|
|
|
|
||||
Share-based compensation
|
1,286
|
|
|
2,619
|
|
||
Change in fair value of Front Yard common stock
|
(5,669
|
)
|
|
2,339
|
|
||
Depreciation
|
188
|
|
|
214
|
|
||
Amortization of operating lease right-of-use assets
|
106
|
|
|
—
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Receivable from Front Yard
|
(24
|
)
|
|
(101
|
)
|
||
Prepaid expenses and other assets
|
(1,496
|
)
|
|
(349
|
)
|
||
Other non-current assets
|
199
|
|
|
350
|
|
||
Accrued salaries and employee benefits
|
(2,079
|
)
|
|
(2,537
|
)
|
||
Accounts payable and accrued liabilities
|
(528
|
)
|
|
(1,372
|
)
|
||
Operating lease liabilities
|
(51
|
)
|
|
—
|
|
||
Net cash used in operating activities
|
(5,619
|
)
|
|
(4,268
|
)
|
||
Investing activities:
|
|
|
|
||||
Investment in short-term investments
|
(1,083
|
)
|
|
—
|
|
||
Proceeds from maturities of short-term investments
|
775
|
|
|
483
|
|
||
Investment in property and equipment
|
(117
|
)
|
|
(74
|
)
|
||
Proceeds from disposition of property and equipment
|
42
|
|
|
—
|
|
||
Net cash (used in) provided by investing activities
|
(383
|
)
|
|
409
|
|
||
Financing activities:
|
|
|
|
||||
Proceeds from stock option exercises
|
—
|
|
|
3
|
|
||
Shares withheld for taxes upon vesting of restricted stock
|
(201
|
)
|
|
(227
|
)
|
||
Net cash used in financing activities
|
(201
|
)
|
|
(224
|
)
|
||
Net change in cash and cash equivalents
|
(6,203
|
)
|
|
(4,083
|
)
|
||
Effect of exchange rate changes on cash
|
10
|
|
|
—
|
|
||
Cash and cash equivalents as of beginning of the period
|
27,171
|
|
|
33,349
|
|
||
Cash and cash equivalents as of end of the period
|
$
|
20,978
|
|
|
$
|
29,266
|
|
|
|
|
|
||||
Supplemental disclosure of cash flow information:
|
|
|
|
||||
Income taxes paid
|
$
|
313
|
|
|
$
|
1,181
|
|
Right-of-use lease assets recognized - operating leases
|
2,839
|
|
|
—
|
|
||
Operating lease liabilities recognized
|
2,826
|
|
|
—
|
|
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
|
Carrying Amount
|
|
Quoted Prices in Active Markets
|
|
Observable Inputs Other Than Level 1 Prices
|
|
Unobservable Inputs
|
||||||||
June 30, 2019
|
|
|
|
|
|
|
|
||||||||
Recurring basis (assets):
|
|
|
|
|
|
|
|
||||||||
Front Yard common stock
|
$
|
19,851
|
|
|
$
|
19,851
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2018
|
|
|
|
|
|
|
|
||||||||
Recurring basis (assets):
|
|
|
|
|
|
|
|
||||||||
Front Yard common stock
|
$
|
14,182
|
|
|
$
|
14,182
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Fair Value
|
||||||||
June 30, 2019
|
|
|
|
|
|
|
|
||||||||
Front Yard common stock
|
$
|
20,596
|
|
|
$
|
—
|
|
|
$
|
745
|
|
|
$
|
19,851
|
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2018
|
|
|
|
|
|
|
|
||||||||
Front Yard common stock
|
$
|
20,596
|
|
|
$
|
—
|
|
|
$
|
6,414
|
|
|
$
|
14,182
|
|
(1)
|
Excludes the
six months ended June 30, 2019
.
|
•
|
Base Management Fee.
Front Yard will pay a quarterly base management fee (the “Base Management Fee”) to us as follows:
|
◦
|
Initially, commencing on the Effective Date and until the Reset Date (as defined below), the quarterly Base Management Fee will be (i)
$3,584,000
(the “Minimum Base Fee”)
plus
(ii) an additional amount (the “Additional Base Fee”), if any, of
50%
of the amount by which Front Yard's per share Adjusted AFFO (as defined in the Amended AMA) for the quarter exceeds
$0.15
per share (provided that the Base Management Fee for any calendar quarter prior to the Reset Date cannot be less than the Minimum Base Fee or greater than
$5,250,000
). Beginning in 2021, the Base Management Fee may be reduced, but not below the Minimum Base Fee, in the fourth quarter of each year by the amount that Front Yard's AFFO (as defined below) on a per share basis is less than an aggregate of
$0.60
for the applicable calendar year (the “AFFO Adjustment Amount”); and
|
◦
|
Thereafter, commencing in the first quarter after which the quarterly Base Management Fee first reaches
$5,250,000
(the “Reset Date”), the Base Management Fee will be
25%
of the sum of (i) the applicable Annual Base Fee Floor
plus
(ii) the amount calculated by multiplying the applicable Manager Base Fee Percentage by the amount, if any, that Front Yard's Gross Real Estate Assets (as defined below) exceeds the applicable Gross Real Estate Assets Floor (in each case of the foregoing clauses (i) and (ii), as set forth in the table below),
minus
(iii) solely in the case of the fourth quarter of a calendar year, the AFFO Adjustment Amount (if any); provided, that the Base Management Fee for any calendar quarter shall not be less than the Minimum Base Fee.
|
Gross Real Estate Assets (1)
|
|
Annual Base Fee Floor
|
|
Manager Base Fee Percentage
|
|
Gross Real Estate Assets Floor
|
Up to $2,750,000,000
|
|
$21,000,000
|
|
0.325%
|
|
$2,250,000,000
|
$2,750,000,000 – $3,250,000,000
|
|
$22,625,000
|
|
0.275%
|
|
$2,750,000,000
|
$3,250,000,000 – $4,000,000,000
|
|
$24,000,000
|
|
0.250%
|
|
$3,250,000,000
|
$4,000,000,000 – $5,000,000,000
|
|
$25,875,000
|
|
0.175%
|
|
$4,000,000,000
|
$5,000,000,000 – $6,000,000,000
|
|
$27,625,000
|
|
0.125%
|
|
$5,000,000,000
|
$6,000,000,000 – $7,000,000,000
|
|
$28,875,000
|
|
0.100%
|
|
$6,000,000,000
|
Thereafter
|
|
$29,875,000
|
|
0.050%
|
|
$7,000,000,000
|
(1)
|
Gross Real Estate Assets is generally defined as the aggregate book value of all residential real estate assets owned by Front Yard and its subsidiaries before reserves for depreciation, impairment or other non-cash reserves as computed in accordance with GAAP.
|
•
|
For any calendar year in which average Gross Real Estate Assets is less than
$2,250,000,000
, the aggregate fees payable to us shall not exceed
$21,000,000
; or
|
•
|
For any calendar years in which average Gross Real Estate Assets exceeds
$2,250,000,000
, the aggregate fees payable to us shall not exceed the sum of (i) the applicable Aggregate Fee Floor
plus
(ii) the amount calculated by multiplying the applicable Aggregate Fee Percentage by the amount, if any, by which average Gross Real Estate Assets exceed the applicable Gross Real Estate Assets Floor, in each case as set forth in the table below.
|
Gross Real Estate Assets
|
|
Aggregate Fee Floor
|
|
Aggregate Fee Percentage
|
|
Gross Real Estate Assets Floor
|
$2,250,000,000 – $2,750,000,000
|
|
$21,000,000
|
|
0.650%
|
|
$2,250,000,000
|
$2,750,000,000 – $3,250,000,000
|
|
$24,250,000
|
|
0.600%
|
|
$2,750,000,000
|
$3,250,000,000 – $4,000,000,000
|
|
$27,250,000
|
|
0.500%
|
|
$3,250,000,000
|
$4,000,000,000 – $5,000,000,000
|
|
$31,000,000
|
|
0.450%
|
|
$4,000,000,000
|
$5,000,000,000 – $6,000,000,000
|
|
$35,500,000
|
|
0.250%
|
|
$5,000,000,000
|
$6,000,000,000 – $7,000,000,000
|
|
$38,000,000
|
|
0.125%
|
|
$6,000,000,000
|
Thereafter
|
|
$39,250,000
|
|
0.100%
|
|
$7,000,000,000
|
•
|
Base Management Fee
. We were entitled to a quarterly base management fee equal to
1.5%
of the product of (i) Front Yard’s average invested capital (as defined in the Former AMA) for the quarter
multiplied by
(ii)
0.25
, while it had fewer than
2,500
single-family rental properties actually rented (“Rental Properties”). The base management fee percentage increased to
1.75%
of average invested capital while Front Yard had between
2,500
and
4,499
Rental Properties and increased to
2.0%
of invested capital while Front Yard had
4,500
or more Rental Properties. Because Front Yard had more than
4,500
Rental Properties, we were entitled to receive a base management fee of
2.0%
of Front Yard’s invested capital during the
three and six months ended June 30, 2019
and 2018;
|
•
|
Incentive Management Fee
. We were entitled to a quarterly incentive management fee equal to
20%
of the amount by which Front Yard's return on invested capital (based on AFFO, defined as net income attributable to holders of common stock calculated in accordance with GAAP
plus
real estate depreciation expense
minus
recurring capital expenditures on all real estate assets owned by Front Yard) exceeded an annual hurdle return rate of between
7.0%
and
8.25%
(or
1.75%
and
2.06%
per quarter), depending on the
10
-year treasury rate. To the extent Front Yard had an aggregate shortfall in its return rate over the previous seven quarters, that aggregate return rate shortfall was added to the normal quarterly return hurdle for the next quarter before we would be entitled to an incentive management fee. The incentive management fee increased to
22.5%
while Front Yard has between
2,500
and
4,499
Rental Properties and increased to
25%
while Front Yard has
4,500
or more Rental Properties.
No
incentive management fee under the Former AMA was earned by us because Front Yard's return on invested capital (as defined in the AMA) was below the cumulative required hurdle rate; and
|
•
|
Conversion Fee
. We were entitled to a quarterly conversion fee equal to
1.5%
of assets converted into leased single-family homes by Front Yard for the first time during the applicable quarter.
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
Deferred tax assets:
|
|
|
|
|
||||
Stock compensation
|
|
$
|
132
|
|
|
$
|
199
|
|
Accrued expenses
|
|
337
|
|
|
619
|
|
||
Front Yard common stock
|
|
172
|
|
|
1,482
|
|
||
Net operating losses
|
|
333
|
|
|
184
|
|
||
Other
|
|
48
|
|
|
35
|
|
||
|
|
1,022
|
|
|
2,519
|
|
||
Deferred tax liability:
|
|
|
|
|
||||
Depreciation
|
|
7
|
|
|
10
|
|
||
|
|
1,015
|
|
|
2,509
|
|
||
Valuation allowance
|
|
(493
|
)
|
|
(1,877
|
)
|
||
Deferred tax asset, net
|
|
$
|
522
|
|
|
$
|
632
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Numerator
|
|
|
|
|
|
|
|
||||||||
Net income (loss) attributable to stockholders
|
$
|
3,289
|
|
|
$
|
(1,067
|
)
|
|
$
|
2,449
|
|
|
$
|
(5,431
|
)
|
Amortization of preferred stock issuance costs
|
(52
|
)
|
|
(52
|
)
|
|
(103
|
)
|
|
(103
|
)
|
||||
Numerator for basic EPS – net income (loss) attributable to common stockholders
|
3,237
|
|
|
(1,119
|
)
|
|
2,346
|
|
|
(5,534
|
)
|
||||
Add back amortization of preferred stock issuance costs
|
52
|
|
|
—
|
|
|
103
|
|
|
—
|
|
||||
Numerator for diluted EPS – income (loss) available to common stockholders after assumed conversions
|
$
|
3,289
|
|
|
$
|
(1,119
|
)
|
|
$
|
2,449
|
|
|
$
|
(5,534
|
)
|
|
|
|
|
|
|
|
|
||||||||
Denominator
|
|
|
|
|
|
|
|
||||||||
Weighted average common stock outstanding – basic
|
1,589,492
|
|
|
1,612,382
|
|
|
1,585,775
|
|
|
1,608,163
|
|
||||
Stock options, treasury stock method
|
13,554
|
|
|
—
|
|
|
13,867
|
|
|
—
|
|
||||
Restricted stock, treasury stock method
|
17,198
|
|
|
—
|
|
|
30,621
|
|
|
—
|
|
||||
Preferred stock, if converted method
|
200,000
|
|
|
—
|
|
|
200,000
|
|
|
—
|
|
||||
Weighted average common stock outstanding – diluted
|
1,820,244
|
|
|
1,612,382
|
|
|
1,830,263
|
|
|
1,608,163
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Earnings (loss) per basic common share
|
$
|
2.04
|
|
|
$
|
(0.69
|
)
|
|
$
|
1.48
|
|
|
$
|
(3.44
|
)
|
Earnings (loss) per diluted common share
|
$
|
1.81
|
|
|
$
|
(0.69
|
)
|
|
$
|
1.34
|
|
|
$
|
(3.44
|
)
|
|
Three months ended
June 30, 2018
|
|
Six months ended
June 30, 2018
|
||||
Numerator
|
|
|
|
||||
Reversal of amortization of preferred stock issuance costs
|
$
|
52
|
|
|
$
|
103
|
|
|
|
|
|
||||
Denominator
|
|
|
|
||||
Stock options
|
23,544
|
|
|
25,566
|
|
||
Restricted stock
|
35,228
|
|
|
32,603
|
|
||
Preferred stock, if converted
|
200,000
|
|
|
200,000
|
|
|
Six months ended June 30,
|
||||||
|
2019
|
|
2018
|
||||
Net cash used in operating activities
|
$
|
(5,619
|
)
|
|
$
|
(4,268
|
)
|
Net cash (used in) provided by investing activities
|
(383
|
)
|
|
409
|
|
||
Net cash used in financing activities
|
(201
|
)
|
|
(224
|
)
|
||
Net change in cash and cash equivalents
|
$
|
(6,203
|
)
|
|
$
|
(4,083
|
)
|
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).
|
|
3.2
*
|
|
Second Amended and Restated Bylaws of Altisource Asset Management Corporation adopted on July 24, 2019.
|
|
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).
|
|
|
Amended and Restated Asset Management Agreement, dated as of May 7, 2019, by and among Front Yard Residential Corporation, Front Yard Residential, L.P. and Altisource Asset Management Corporation (incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K filed with the SEC on May 8, 2019).
|
|
31.1
*
|
|
Certification of CEO Pursuant to Section 302 of the Sarbanes-Oxley Act
|
31.2
*
|
|
Certification of CFO Pursuant to Section 302 of the Sarbanes-Oxley Act
|
32.1
*
|
|
Certification of CEO Pursuant to Section 906 of the Sarbanes-Oxley Act
|
32.2
*
|
|
Certification of CFO Pursuant to Section 906 of the Sarbanes-Oxley Act
|
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
|
101.LAB*
|
|
XBRL Extension Labels Linkbase
|
101.PRE*
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
|
Altisource Asset Management Corporation
|
Date:
|
August 7, 2019
|
By:
|
/s/
|
Robin N. Lowe
|
|
|
|
|
Robin N. Lowe
|
|
|
|
|
Chief Financial Officer
|
(i)
|
any derivative action or proceeding brought on behalf of the Corporation;
|
(ii)
|
any action asserting a claim of breach of a fiduciary duty owed by any current or former director, officer or other employee of the Corporation to the Corporation or the Corporation’s shareholders;
|
(iii)
|
any action asserting a claim against the Corporation or any of its current or former directors, officers or other employees arising pursuant to any provision of (x) the General Corporation Law of the U.S. Virgin Islands, (y) the Amended and Restated Articles of Incorporation of the Corporation, including without limitation any certificate of designations for any series of preferred stock of the Corporation, or (z) these Bylaws (in each case (x) through (z), as may be amended from time to time); or
|
(iv)
|
any action asserting a claim against the Corporation or any of its current or former directors, officers or other employees governed by the internal affairs doctrine of the U.S. Virgin Islands, as in effect from time to time.
|
(i)
|
to have notice of, and to have consented to and agreed to comply with, the provisions of this Article XI; and
|
(ii)
|
to have consented to the personal jurisdiction of the relevant court referred to in the first paragraph of this Article XI in any proceeding brought to enjoin any action by that person or entity that is inconsistent with the exclusive jurisdiction provided for in this Article XI.
|
(i)
|
the personal jurisdiction of the Superior Court of the U.S. Virgin Islands, in connection with any action brought in any such court to enforce this Article XI (by removal or otherwise); and
|
(ii)
|
having service of process made upon such shareholder in any such action by service upon such shareholder’s counsel in the action as agent for such shareholder, in addition to any other valid service of process.
|
|
|
/s/ George G. Ellison
|
|
|
|
George G. Ellison
, Chief Executive Officer and President
|
|
|
|
|
|
|
|
Acknowledged by:
|
|
|
|
|
|
|
|
/s/ Stephen H. Gray
|
|
|
|
Stephen H. Gray
, Secretary
|
|
Date:
|
August 7, 2019
|
By:
|
/s/
|
George G. Ellison
|
|
|
|
|
George G. Ellison
|
|
|
|
|
Chief Executive Officer
|
Date:
|
August 7, 2019
|
By:
|
/s/
|
Robin N. Lowe
|
|
|
|
|
Robin N. Lowe
|
|
|
|
|
Chief Financial Officer
|
Date:
|
August 7, 2019
|
By:
|
/s/
|
George G. Ellison
|
|
|
|
|
George G. Ellison
|
|
|
|
|
Chief Executive Officer
|
Date:
|
August 7, 2019
|
By:
|
/s/
|
Robin N. Lowe
|
|
|
|
|
Robin N. Lowe
|
|
|
|
|
Chief Financial Officer
|