What changed in this filing

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Item 1. Business

2025-03-31 compared with 2024-03-07 · 107 added, 98 removed, 110 unchanged (65% of the section changed)

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Within the Servicer and Real Estate segment we provide:

Our Solutions business includes property preservation and inspection services, title insurance (as an agent) and settlement services, real estate valuation services, foreclosure trustee services, and residential and commercial construction inspection and risk mitigation services.

Our Marketplace business includes the Hubzu ® online real estate auction platform and real estate auction, real estate brokerage and asset management services.

Our Solutions business includes property preservation and inspection services, title insurance (as an agent) and settlement services, real estate valuation services, foreclosure trustee services, residential and commercial construction inspection and risk mitigation services, and residential real estate renovation services.

Our Marketplace business includes the Hubzu ® online real estate auction platform, real estate brokerage and asset management services.

Technology and software-as-a-service (“SaaS”) Products

Our Technology and SaaS Products business includes Equator ® (a SaaS-based technology to manage real estate owned (“REO”), short sales, foreclosure, bankruptcy and eviction processes), Vendorly Invoice (a vendor invoicing and payment system), RentRange ® (a single and multi-family rental data, analytics and rent-based valuation solution), REALSynergy ® (a commercial loan servicing platform), and NestRange TM (an automated residential valuation model and analytics solution).

Our Technology and SaaS Products business includes Equator ® (a SaaS-based technology to manage real estate owned (“REO”) and investor homes, short sales, foreclosure, bankruptcy and eviction processes), Vendorly Invoice (a vendor invoicing and payment system), RentRange ® (a single and multi-family rental data, analytics and rent-based valuation solution), REALSynergy ® (a commercial loan servicing platform), and NestRange TM (a single family automated valuation model and analytics solution).

Origination segment provides originators with solutions and technologies that span the mortgage origination lifecycle.

Within the Origination segment we provide:

Our Solutions business includes title insurance (as an agent) and settlement services, real estate valuation services, and loan fulfillment, certification and certification insurance services.

Our Solutions business includes title insurance (as an agent) and settlement services, real estate valuation services, loan fulfillment and insurance services.

Our Lenders One business includes management services provided to the Best Partners Mortgage Cooperative, Inc., doing business as Lenders One ® (“Lenders One”), and certain loan manufacturing and capital markets services provided to the members of the Lenders One cooperative.

Technology and SaaS Products

Our Technology and SaaS Products business includes Vendorly Monitor (a vendor management platform), Lenders One Loan Automation (“LOLA”) (a marketplace to order services and a tool to automate components of the loan manufacturing process), TrelixAI TM (technology to manage the workflow and automate components of the loan fulfillment, pre and post-close quality control and service transfer processes), and ADMS (a document management and data analytics delivery platform).

Our Technology and SaaS Products business includes Vendorly Monitor (a vendor management platform), Lenders One Loan Automation (“LOLA”) (a marketplace to order services and a tool to automate components of the loan manufacturing process), TrelixAI TM (technology to manage the workflow and automate components of the loan fulfillment and pre and post-close quality control), and ADMS (a document management and data analytics delivery platform).

Corporate and Others includes interest expense and costs related to corporate functions including executive, infrastructure and certain technology groups, finance, law, compliance, human resources, vendor management, facilities, risk management and eliminations between reportable segments.

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Lenders One is a mortgage cooperative managed, but not owned, by Altisource.

The Lenders One members’ earnings are included in revenue and reduced from net income to arrive at net income attributable to Altisource.

2023 Highlights

The Lenders One members’ earnings are included in revenue and reduced from net loss to arrive at net loss attributable to Altisource.

2024 Highlights and Certain Subsequent Events

Company, Corporate and Financial :

• Improved total Company loss from operations by $16.4 million in 2023 compared to 2022 by (1) improving operating income as a percentage of service revenue in the Servicer and Real Estate and Origination segments (together, “Business Segments”) to 19.1% in 2023 from 13.2% in 2022, and (2) reducing Corporate and Others operating loss as a percentage of total Company service revenue to (31.4)% in 2023 from (36.1)% in 2022, primarily through efficiency initiatives and cost savings measures

• Amended the senior secured term loans (“SSTL”) and revolving credit facility to, among other things, extend the maturity dates to April 2025, with options to extend both to April 2026, subject to certain terms and conditions

• Generated $38.8 million in net proceeds from the sale of common stock and used $30 million to partially repay the SSTL

• Ended the year with $32.5 million of cash and cash equivalents, $15.0 million available under a revolving credit facility and $191.6 million of net debt

Business Segments :

• In the face of serious market headwinds for both Business Segments, service revenue in the Servicer and Real Estate segment was only down 4% and service revenue in the Origination segment outperformed the overall market with a decline of 11% compared to a 36% decline in industrywide residential origination volume

• Improved income from operations in the Business Segments by $7.0 million to $26.1 million, representing 19.1% of service revenue, in 2023 compared to $19.0 million, representing 13.2% of service revenue, in 2022, primarily through efficiency and cost cutting initiatives

• Grew service revenue by $13.8 million, or 10%, to $150.4 million in 2024 compared to 2023

• Full year 2024 total Company income (loss) from operations of $3.2 million was $20.0 million higher than 2023 due to (1) improving operating income as a percentage of service revenue in the Servicer and Real Estate and Origination segments (together “Business Segments”) to 25.3% in 2024 from 19.1% in 2023, and (2) reducing Corporate and Others operating loss as a percentage of total Company service revenue to (23.1)% in 2024 from (31.4)% in 2023, primarily through efficiency initiatives and cost savings measures and service revenue growth

• Ended the year with $29.8 million of cash and cash equivalents

• On February 19, 2025, the Company executed and closed an exchange transaction with 100% of lenders under the Company’s senior secured term loans whereby the lenders exchanged the Company’s senior secured term loans with an outstanding balance of $232.8 million for a $160.0 million new first lien loan and the issuance of approximately 58.2 million common shares of Altisource (the “Term Loan Exchange Transaction”);

the new first lien loan is comprised of a $110 million term loan and a $50 million non-interest bearing exit fee which is reduced on a pro-rata basis with the repayment of the term loan

• In connection with the Term Loan Exchange Transaction, Altisource will be issuing transferable warrants to holders as of February 14, 2025 of the Company’s (i) common stock, (ii) restricted share units and (iii) outstanding penny warrants, to purchase approximately 114.5 million shares of Altisource common stock for $1.20 per share (the “Stakeholder Warrants”);

once issued, the Stakeholder Warrants will provide Stakeholders with the ability to purchase approximately 3.25 shares of Altisource common stock for each share of or right to common stock held

• On February 19, 2025, Altisource also executed and closed on a $12.5 million super senior credit facility to fund transaction costs related to the Term Loan Exchange Transaction and for general corporate purposes

Business and Industry :

• In the face of serious market headwinds for both Business Segments, service revenue in the Servicer and Real Estate segment increased by 11% to $120 million and service revenue in the Origination segment increased by 6% to $30 million

• Improved income from operations in the Business Segments by $12.0 million to $38.0 million in 2024 compared to $26.1 million in 2023;

improved income from operations as a percentage of service revenue in the Business Segments to 25.3% in 2024 from 19.1% in 2023;

improvements were primarily through scale benefits and efficiency and cost cutting initiatives

• Ended 2024 with a weighted average sales pipeline between $38 million and $47 million of potential estimated revenue on a stabilized basis based upon forecasted probability of closing (comprised of between $26 million and $33 million in the Servicer and Real Estate segment and between $12 million and $15 million in the Origination segment)

• Generated 2023 sales wins which we estimate represent potential annualized revenue on a stabilized basis of $58.4 million for the Servicer and Real Estate segment and $10.3 million for the Origination segment

• Generated 2024 sales wins which we estimate represent potential annualized service revenue on a stabilized basis of $25.8 million for the servicer and Real Estate segment and $13.6 million for the Origination segment

• Industrywide foreclosure initiations were 6% lower in 2024 compared to 2023 (and 35% lower than the same pre-COVID-19 period in 2019)

• Industrywide foreclosure sales were 8% higher in 2023 compared to 2022 (and 46% lower than the same pre-COVID-19 period in 2019)

• Industrywide early-stage mortgage delinquencies (30-days late) increased by 15% and borrowers who have missed two payments (60-days past due) increased by 16% in December 2023 compared to December 2022

• Industrywide mortgage origination volume decreased by 36% in 2023 compared to 2022

• Industrywide seriously delinquent mortgage rate (90+ day past due and loans in foreclosure) decreased to 1.3% in December 2023 compared to 1.6% in December 2022

Our customers include large financial institutions, government-sponsored enterprises (“GSEs”), banks, asset managers, servicers, investors, property management firms, real estate brokerages, insurance companies, mortgage bankers, originators, correspondent and private money lenders.

• Industrywide foreclosure sales were 14% lower in 2024 compared to 2023 (and 53% lower than the same pre-COVID-19 period in 2019)

• Industrywide mortgage origination volume increased by 20% in 2024 compared to 2023, comprised of a 2% decline in purchase origination and a 112% increase in refinance origination

• Industrywide seriously delinquent mortgage rate (90+ day past due and loans in foreclosure) increased to 1.4% in December 2024 compared to 1.3% in December 2023

Our customers include large financial institutions, government-sponsored enterprises (“GSEs”), banks, asset managers, servicers, real estate and mortgage investors, property management firms, real estate brokerages, insurance companies, mortgage bankers, originators, correspondent and private money lenders.

Customer Concentration

Ocwen Financial Corporation (together with its subsidiaries, “Ocwen”) is a residential mortgage loan servicer of mortgage servicing rights (“MSRs”) it owns, including those MSRs in which others have an economic interest, and a subservicer of loans owned by others.

During the year ended December 31, 2023, Ocwen was our largest customer, accounting for 44% of our total revenue.

Ocwen purchases certain mortgage services from us under the terms of services agreements and amendments thereto (collectively, the “Ocwen Services Agreements”) with terms extending through August 2030.

Certain of the Ocwen Services Agreements contain a “most favored nation” provision and also grant the parties the right to renegotiate pricing, among other things.

Revenue from Ocwen primarily consists of revenue earned from the loan portfolios serviced and subserviced by Ocwen when Ocwen engages us as the service provider, and revenue earned directly from Ocwen, pursuant to the Ocwen Services Agreements.

For the years ended December 31, 2023 and 2022, we recognized revenue from Ocwen of $63.2 million and $63.5 million, respectively.

Revenue from Ocwen as a percentage of segment and consolidated revenue was as follows:

Onity Group Inc.

(together with its subsidiaries, “Onity”) (formerly Ocwen Financial Corporation, or “Ocwen”) is a residential mortgage loan servicer of mortgage servicing rights (“MSRs”) it owns, including those MSRs in which others have an economic interest, and a subservicer of loans owned by others.

During the year ended December 31, 2024, Onity was our largest customer, accounting for 44% of our total revenue.

Onity purchases certain mortgage services from us under the terms of services agreements and amendments thereto (collectively, the “Onity Services Agreements”) with terms extending through August 2030.

Certain of the Onity Services Agreements contain a “most favored nation” provision and also grant the parties the right to renegotiate pricing, among other things.

Revenue from Onity primarily consists of revenue earned from the loan portfolios serviced and subserviced by Onity when Onity engages us as the service provider, and revenue earned directly from Onity, pursuant to the Onity Services Agreements.

For the years ended December 31, 2024 and 2023, we recognized revenue from Onity of $70.4 million and $63.2 million, respectively.

Revenue from Onity as a percentage of segment and consolidated revenue was as follows:

Servicer and Real Estate 55 % 55 %

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Consolidated revenue 44 % 44 %

We earn additional revenue related to the portfolios serviced and subserviced by Ocwen when a party other than Ocwen or the MSRs owner selects Altisource as the service provider.

We earn additional revenue related to the portfolios serviced and subserviced by Onity when a party other than Onity or the MSR owner selects Altisource as the service provider.

For the years ended December 31, 2024 and 2023, we recognized $9.6 million and $9.2 million, respectively, of such revenue.

These amounts are not included in deriving revenue from Ocwen and revenue from Ocwen as a percentage of revenue discussed above.

As of December 31, 2023, accounts receivable from Ocwen totaled $3.4 million, $2.2 million of which was billed and $1.2 million of which was unbilled.

As of December 31, 2022, accounts receivable from Ocwen totaled $4.0 million, $3.2 million of which was billed and $0.8 million of which was unbilled.

These amounts are not included in deriving revenue from Onity and revenue from Onity as a percentage of revenue discussed above.

As of December 31, 2024, accounts receivable from Onity totaled $4.4 million, $3.1 million of which was billed and $1.3 million of which was unbilled.

As of December 31, 2023, accounts receivable from Onity totaled $3.4 million, $2.2 million of which was billed and $1.2 million of which was unbilled.

Rithm Capital Corp.

(individually, together with one or more of its subsidiaries or one or more of its subsidiaries individually, “Rithm”) (formerly New Residential Investment Corp.) is an asset manager focused on the real estate and financial services industries.

Ocwen has disclosed that Rithm is a significant client of Ocwen’s.

As of December 31, 2023, Ocwen reported that approximately 16% of loans serviced and subserviced by Ocwen (measured in unpaid principal balance (“UPB”)) and approximately 67% of all delinquent loans that Ocwen services were related to Rithm MSRs or rights to MSRs (the “Subject MSRs”).

Rithm purchases brokerage services for REO exclusively from us, irrespective of the subservicer, subject to certain limitations, for certain MSRs set forth in and pursuant to the terms of a Cooperative Brokerage Agreement, as amended, and related letter agreement (collectively, the “Brokerage Agreement”) with terms extending through August 2025.

For the years ended December 31, 2023 and 2022, we recognized revenue from Rithm of $2.8 million and $3.2 million, respectively, under the Brokerage Agreement.

(individually, together with one or more of its subsidiaries or one or more of its subsidiaries individually, “Rithm”) is an asset manager focused on the real estate and financial services industries.

Onity has disclosed that Rithm is one of its largest servicing clients.

As of December 31, 2024, Onity reported that approximately 14% of loans serviced and subserviced by Onity (measured in unpaid principal balance (“UPB”)) and approximately 63% of all delinquent loans that Onity services were related to Rithm MSRs or rights to MSRs (the “Subject MSRs”).

Rithm purchases brokerage services for REO exclusively from us, irrespective of the subservicer, subject to certain limitations, for certain MSRs set forth in and pursuant to the terms of a Cooperative Brokerage Agreement, as amended, and related letter agreement (collectively, the “Rithm Brokerage Agreement”) with terms extending through August 2025.

For the years ended December 31, 2024 and 2023, we recognized revenue from Rithm of $2.3 million and $2.8 million, respectively, under the Rithm Brokerage Agreement.

For the years ended December 31, 2024 and 2023, we recognized additional revenue of $10.8 million and $12.6 million, respectively, relating to the Subject MSRs when a party other than Rithm selects Altisource as the service provider.

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Intellectual Property and Data

We rely on a combination of contractual restrictions, internal security practices, patents, trademarks and copyrights to establish and protect our trade secrets, intellectual property, software, technology and expertise.

We rely on a combination of contractual restrictions, internal security practices, trademarks and copyrights to establish and protect our trade secrets, intellectual property, software, technology and expertise.

We also own or, as we deem necessary and appropriate, have obtained licenses from third parties to intellectual property relating to our services, processes and businesses.

These intellectual property rights are important factors in the success of our businesses.

As of December 31, 2023, we have been awarded five patents that expire in 2025, one patent that expires in 2026, one patent that expires in 2027, one patent that expires in 2029, one patent that expires in 2030.

In addition, we have registered trademarks in a number of jurisdictions including the United States, the European Union (“EU”), India and five other jurisdictions.

These trademarks generally can be renewed indefinitely, provided they are being used in commerce.

We actively protect our rights and intend to continue our policy of taking the measures we deem reasonable and necessary to develop and protect our patents, trademarks, copyrights, trade secrets and other intellectual property rights.

As of December 31, 2024, we hold registered trademarks in a number of jurisdictions including the United States, the European Union (“EU”), India and four other jurisdictions.

These trademarks are generally renewable indefinitely, subject to continued use in commerce.

We strive to actively protect our rights and intend to continue our policy of taking the measures we deem reasonable and necessary to develop and protect our trademarks, copyrights, trade secrets and other intellectual property rights.

In addition, we may make use of data in connection with certain of our services.

This data generally relates to mortgage information, real property information and consumer information.

We gather this data from a variety of third party sources, including from governmental entities and, subject to licensed usage rights, we use this data in connection with the delivery of

certain of our services, including combining it with proprietary data we generate to further enhance data and metrics in connection with our services.

We gather this data from a variety of third party sources,

including from governmental entities and, subject to licensed usage rights, we use this data in connection with the delivery of certain of our services, including combining it with proprietary data we generate to further enhance data and metrics in connection with our services.

Market and Competition

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We typically compete based upon product and service awareness and offerings, product performance and service delivery, quality and control environment, technology integration and support, national coverage, price, financial strength, reputation and customer service.

The markets for services provided to buyers and sellers of home for investment are highly competitive and generally consist of several national companies, a large number of regional and local providers and start-up companies.

We typically compete based upon product and service awareness and offerings, product performance and service delivery, national coverage, ease of transacting, price, quality and control environment, technology integration and support, customer service and personal service.

The markets for services provided to buyers and sellers of homes for investment are highly competitive and generally consist of several national companies, a large number of regional and local providers and start-up companies.

Our competitors may have greater financial resources, brand recognition, alternative or disruptive products and technology and other competitive advantages.

We cannot determine our market share with certainty, but believe for mortgage servicers we have a modest share of the market, and for the others we have a relatively small market share.

Public offerings of Common Stock

On February 14, 2023, Altisource closed on an underwritten public offering to sell 4,550,000 shares of its common stock, at a price of $5.00 per share, generating net proceeds of $20.5 million, after deducting the underwriting discounts and commissions and other offering expenses.

On September 7, 2023, Altisource closed on an underwritten public offering to sell 5,590,277 shares of its common stock, at a price of $3.60 per share, generating net proceeds of $18.4 million, after deducting the underwriting discounts and commissions and other offering expenses.

Term Loan Amendment

On February 9, 2023, we executed Amendment No.

2 (the “Second Amendment”) to the Credit Agreement effective February 14, 2023 (as amended by the Second Amendment, the “Amended Credit Agreement”).

The following is a summary of certain key terms of the Second Amendment and the Amended Credit Agreement.

• The maturity date of the term loans under the Amended Credit Agreement is April 30, 2025

• If the amount of par paydown that we make on the term loans (excluding amortization and other required payments) in the aggregate using proceeds from issuances of equity interest or from junior indebtedness prior to February 14, 2024 ("Aggregate Paydowns”) is equal to or greater than $30 million, then (subject to the representations and warranties being true and correct as of such date and there being no default or event of default being in existence as of such date) the maturity date of the term loans may be extended to April 30, 2026, at our option subject to Company's payment of a 2% payment-in-kind extension fee.

• The principal amortization of the term loans under the Amended Credit Agreement is 1.00% per year through April 30, 2025 and, if the maturity date is extended, 1% per month during the 12 month extension period.

• The interest rate on the term loans will initially be Secured Overnight Financing Rate (“SOFR”) plus 5.00% per annum payable in cash plus 5.00% per annum payable in kind (“PIK”).

The PIK component of the interest rate is subject to adjustment based on the amount of Aggregate Paydowns as set forth in the table below:

Aggregate Paydowns

PIK Component of Interest Rate

Less than $20 million 5.00%

$20 million+ but less than below 4.50%

$30 million+ but less than below 3.75%

$40 million+ but less than below 3.50%

$45 million+ but less than below 3.00%

$50 million+ but less than below 2.50%

$55 million+ but less than below 2.00%

$60 million+ but less than below 1.00%

$65 million+ but less than below 0.50%

$70 million+ 0.00%

• If, as of the end of any calendar quarter, (i) our amount of unencumbered cash and cash equivalents on a consolidated basis plus (ii) the undrawn commitment amount under our revolving credit facility is, or is forecast as of the end of the immediately subsequent calendar quarter to be, less than $35 million, then up to 2.00% in interest otherwise payable in cash in the following quarter may be paid in kind at our election

• The lenders under the Amended Credit Agreement received warrants (the “Warrants”) to purchase 3,223,851 shares of Altisource common stock (the “Warrant Shares”).

The number of Warrant Shares is subject to reduction based on the amount of Aggregate Paydowns as set forth in the table below.

Aggregate Paydowns

Warrant Shares

Less than $20 million 3,223,851

$20 million+ but less than below 2,578,743

$30 million+ 1,612,705

• The exercise price per share of common stock under each Warrant is equal to $0.01.

The Warrants may be exercised at any time on and after February 14, 2024 and prior to their expiration date.

The Warrants are exercisable on a cashless basis and are subject to customary anti-dilution provisions.

The Warrants, if not previously exercised or terminated, will be automatically exercised on May 22, 2027.

The Warrants are subject to a lock-up agreement, subject to customary exceptions, ending on February 16, 2024

• The lenders under the Amended Credit Agreement were paid an amendment fee equal to 1.0%, substantially all of which was paid in cash at closing

• Various of the affirmative and negative covenants, mandatory prepayments, events of default and other terms to which we are subject under the Amended Credit Agreement have been modified including in many cases to be more restrictive or to reduce certain permissions previously available to us

• Based on the $30 million of Aggregate Paydowns made by Company during the year ended December 31, 2023, the maturity date may be extended to April 30, 2026 at the Company's option (subject to conditions described above), the PIK component of the interest rate decreased to 3.75%, the number of Warrant Shares decreased to 1,612,705 and there is no contractual amortization due until the April 30, 2025 maturity date.

If the maturity date is extended to April 30, 2026, the Company is required to make mandatory repayments of $5.2 million in the first quarter of 2026 with the remaining balance due at the April 2026 maturity

• As of December 31, 2023 the outstanding amount of our SSTL was $224.1 million.

Revolver Amendment

On February 9, 2023, we entered into Amendment No.

1 (the “First Revolver Amendment”) to our revolving credit facility (the “Revolver”) effective February 14, 2023.

The First Revolver Amendment establishes the credit available under our revolving credit facility at $15 million, extends the facility termination and maturity date to coincide with the maturity date of the term loans under the Amended Credit Agreement, and increases the interest rate under our revolving credit facility to 10% per annum payable in cash and 3% per annum PIK.

A usage fee of $0.75 million will be payable upon the initial drawing under our revolving credit facility following the effectiveness of the First Revolver Amendment.

Our revolving credit facility is secured by a first-priority lien on substantially all of our assets, which lien will be pari passu with liens securing the term loans under the Amended Credit Agreement, and our revolving credit facility will continue to be guaranteed by Altisource and substantially all of our material subsidiaries.

As of December 31, 2023, there are no outstanding amounts under the First Revolver Amendment and the First Amendment Revolver has never been drawn.

Debt and Equity Transactions

In April 2018, Altisource Portfolio Solutions S.A.

and its wholly-owned subsidiary, Altisource S.à r.l.

(the “Borrower”), entered into a credit agreement with Morgan Stanley Senior Funding, Inc., as administrative agent and collateral agent, and certain lenders (the “Credit Agreement”).

Under the Credit Agreement, Altisource borrowed $412 million in the form of senior secured term loans (the “SSTL”).

Effective February 14, 2023, Altisource Portfolio Solutions S.A.

and Altisource S.à r.l.

entered into Amendment No.

2 to the Credit Agreement (as amended by Amendment No.

2, the “Amended Credit Agreement”).

On December 16, 2024, Altisource Portfolio Solutions S.A.

and the Borrower entered into that certain Transaction Support Agreement, dated as of December 16, 2024 (the “Transaction Support Agreement”), with certain holders of the Company’s SSTL under the Amended Credit Agreement.

The transactions described below (the “Transactions”) were conducted pursuant to the Transaction Support Agreement.

On February 13, 2025, the Company granted approximately 4.6 million restricted share units (“RSUs”) (at a weighted average grant date fair value of $1.06 per share) under the Company’s 2009 Equity Incentive Plan (the “Equity Plan”) to senior management in connection with the Transactions.

On February 18, 2025, the Company’s shareholders approved an increase in the number of authorized shares of Altisource Portfolio Solutions S.A.

common stock (“common stock”) from 100.0 million to 250.0 million, a decrease in the par value of the Company’s common stock from $1.00 to $0.01 and an increase the number of shares of common stock reserved for issuance under the Equity Plan from approximately 11.7 million to approximately 16.3 million.

On February 18, 2025, the Company’s shareholders also approved proposals to enable, among other things, an issuance of warrants (the “Warrant Distribution”) to purchase approximately 114.5 million shares of common stock for $1.20 per share, subject to adjustment (the “Stakeholder Warrants”) to record and beneficial holders of the following securities of Altisource Portfolio Solutions S.A.

(collectively, “Stakeholders”):

(i) shares of common stock, (ii) RSUs, and (iii) warrants to purchase shares of common stock at an exercise price of $0.01 per share granted on February 14, 2023 (the “Penny Warrants”), in each case, as of 5:00 p.m., New York City time, on February 14, 2025 (such date and time, the “Distribution Record Date”).

Subject to the right of the Board of Directors to change the Distribution Record Date, the issuance of Stakeholder Warrants shall occur on a date to be subsequently determined by the Board of Directors that will be within 60 days after the Distribution Record Date (i.e., by April 15, 2025).

Fifty percent of the Stakeholder Warrants will expire on April 2, 2029 and require settlement through the cash payment to the Company of the exercise price of such Stakeholder Warrant (“Cash Exercise Stakeholder Warrants”).

Fifty percent of the Stakeholder Warrants will expire on April 30, 2032 and require settlement through the forfeiture of shares of common stock to the Company equal to the exercise price of such Stakeholder Warrants.

Pursuant to the Warrant

Distribution, each Stakeholder is expected to receive:

one Cash Exercise Stakeholder Warrant to purchase 1.625 shares of our common stock and one Net Settle Stakeholder Warrant to purchase 1.625 shares of our common stock for each (a) share of common stock held as of the Distribution Record Date, (b) RSU held as of the Distribution Record Date and (c) share of common stock that could be acquired upon exercise of Penny Warrants held as of the Distribution Record Date.

The Stakeholder Warrants are expected to be exercisable on the later of (i) 90 days after their issuance and (ii) first date on which the VWAP (as defined in the Warrant Agent Agreement for the Stakeholder Warrants (the “Warrant Agent Agreement”)) of the common stock equals or exceeds the Implied Per Share Exercise Price (as such term is defined in the Warrant Agent Agreement) of the Stakeholder Warrants, which is expected to initially be $1.20, for a period of fifteen consecutive trading days (the “VWAP Condition”).

The exercise price of the Stakeholder Warrants is $1.95 per Stakeholder Warrant.

On February 18, 2025, the Lenders exercised Penny Warrants for approximately 1.5 million shares of common stock.

On February 19, 2025, Altisource Portfolio Solutions S.A.

and the Borrower entered into agreements with 100% of the lenders under the SSTL (the “Lenders”) under the Amended Credit Agreement.

Under these agreements, the Lenders exchanged the SSTL with an outstanding balance of $232.8 million for a $160.0 million new first lien loan facility (the “New Facility”) and 58.2 million shares of common stock (the “Debt Exchange Shares”).

The New Facility is comprised of a $110.0 million interest-bearing loan (the “New Debt”) and a $50.0 million non-interest-bearing exit fee (the “Exit Fee”).

The following is a summary of certain terms of the New Facility:

• $158.6 million of the New Facility matures on April 30, 2030 and $1.4 million of the New Facility matures on January 15, 2029

• The interest rate on the New Debt is the Secured Overnight Financing Rate (“SOFR”) plus 6.50% per annum with a 3.50% SOFR floor

• The interest rate on the Exit Fee is 0%

• All mandatory and voluntary prepayments under the New Facility are allocated between the New Debt and the Exit Fee on a pro rata basis

• The principal amortization of the New Facility is 1.0% of the New Debt per year

• A minimum of 95% of the net proceeds the Company receives from the exercise of Cash Exercise Stakeholder Warrants (defined below) are to be used to prepay the New Facility

• Beginning with the fiscal year ending December 31, 2025, the lesser of (a) 75% of the aggregate Excess Cash Flow (as defined in the credit agreement) for the most recently ended fiscal year of the Company for which financial statements have been delivered and (b) such amount which, immediately after giving effect to such repayment, would result in the Company having no less than $30 million of total cash on its balance sheet, shall be applied first to the prepayment of the Super Senior Facility (defined below) and, second, to the prepayment of the New Facility

The payment of all amounts owing by the Borrower under the New Facility is guaranteed by Altisource Portfolio Solutions S.A.

and certain of its wholly-owned subsidiaries (the “Guarantors”) and is secured by a lien on substantially all of the assets of the Borrower, Altisource and the other Guarantors, subject to certain exceptions.

The liens securing the New Facility are junior to the liens securing the Super Senior Facility (defined below) pursuant to, and as set forth in, an intercreditor agreement.

Pursuant to the terms of the Exchange Agreement, dated February 19, 2025, by and among the Borrower and Altisource Portfolio Solutions S.A., on the one hand, and the Lenders, on the other hand, with limited exceptions, the Lenders may not, among other things, sell, offer to sell, grant any option to purchase or otherwise dispose of any Debt Exchange Shares, without the prior written consent of Altisource Portfolio Solutions S.A., until the date that is the earlier of (i) September 17, 2025 or (ii) the date on which Altisource Portfolio Solutions S.A.

completes a liquidation, merger, stock exchange or other similar transaction that results in all of Altisource’s shareholders having the right to exchange their shares of common stock for cash, securities or other property (“Lock-Up”).

On February 19, 2025, Altisource Portfolio Solutions S.A.

and the Borrower also entered into a $12.5 million super senior credit facility (the “Super Senior Facility”) to fund transaction costs related to the Transactions (defined below) and for general corporate purposes.

The following is a summary of certain terms of the Super Senior Facility:

• The maturity date of the Super Senior Facility is February 19, 2029

• The original issue discount on the Super Senior Facility is 10.0%

• The interest rate on the Super Senior Facility is SOFR plus 6.50% with a 3.50% SOFR floor

have been delivered and (b) such amount which, immediately after giving effect to such repayment, would result in the Company having no less than $30 million of total cash on its balance sheet, shall be applied first to the prepayment of the Super Senior Facility and, second, to the prepayment of the New Facility

On February 19, 2025, Altisource entered into an agreement to terminate the $15.0 million revolving credit facility with STS Master Fund, Ltd, an investment fund managed by Deer Park Road Management Company, L.P.

As of December 31, 2024, we had the following number of employees:

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More specifically, revenues from property sales, loan originations and certain property preservation services in field services typically tend to be at their lowest level during the fall and winter months and at their highest level during the spring and summer months.

However, as a result of the COVID-19 pandemic and related measures and the rapid rise in mortgage interest rates, the seasonal impact to revenue may not follow historical patterns.

Current economic conditions, residential mortgage default rates and interest rates may impact historical revenue patterns.

Government Regulation

Our business and the business of our customers are or may be subject to extensive scrutiny and regulation by federal, state and local governmental authorities including the Federal Trade Commission (“FTC”), the CFPB, the Securities and Exchange Commission (“SEC”), the Department of Housing and Urban Development (“HUD”), the Treasury Department, various federal and state banking, financial and consumer regulators and the state and local agencies that license or oversee certain of our auction, real estate brokerage, title insurance agency, appraisal management, valuation, property preservation and inspection, mortgage and debt collection, trustee, mortgage origination underwriter and broker, property and asset management, insurance and credit report reselling services.

Our business and the business of our customers are or may be subject to extensive scrutiny and regulation by federal, state and local governmental authorities including the Federal Trade Commission (“FTC”), the Consumer Financial Protection Bureau (“CFPB”), the Securities and Exchange Commission (“SEC”), the Department of Housing and Urban Development (“HUD”), the Treasury Department, various federal and state banking, financial and consumer regulators and the state and local agencies that license or oversee certain of our auction, real estate brokerage, title insurance agency, appraisal management, valuation, property preservation and inspection, mortgage and debt collection, trustee, mortgage origination underwriter and broker, property and asset management, insurance and credit report reselling services.

We also must comply with a number of federal, state and local laws, which may include, among others:

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The Dodd-Frank Act is extensive and includes reform of the regulation and supervision of financial institutions, as well as the regulation of derivatives, capital market activities and consumer financial services.

The Dodd-Frank Act, among other things, created the CFPB, a

federal entity responsible for regulating consumer financial services and products.

The Dodd-Frank Act, among other things, created the CFPB, a federal entity responsible for regulating consumer financial services and products.

Title XIV of the Dodd-Frank Act contains the Mortgage Reform and Anti-Predatory Lending Act (“Mortgage Act”).

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business