Executive Summary

Q3 2022 marked a step-change in revenue generation as AAMC’s Alternative Lending Group ramped, delivering $1.906M total revenues, up from $0 in Q3 2021 and $0.533M in Q2 2022, while net loss narrowed year over year to $(4.0)M; diluted EPS was $(2.24) .
The company accelerated loan production and funding: more than $79.1M in loan commitments acquired/originated in Q3, $52.5M drawn on the new $50M Flagstar warehouse line, and $97.7M of loans at fair value at quarter-end, underpinned by yields of 12.5%+ and tightened advance rates .
Liquidity remained adequate with a $13.5M cash position at quarter-end (net of loans on balance sheet), alongside share buybacks of 286,873 shares at $10.00 per share; legal overhang eased with a favorable ruling against the former CEO .
Management highlighted delayed forward flow asset sales amid fixed income volatility but emphasized progress on bringing take-out capital; narrative catalysts center on sustained loan origination momentum, stabilization of fair value marks, and funding scalability .
Wall Street consensus estimates were unavailable via S&P Global for AAMC this quarter; estimate-driven beat/miss analysis cannot be performed—this underscores limited sell-side coverage and potential for outsized stock moves on operational disclosures .

What Went Well and What Went Wrong

What Went Well

Rapid ramp in lending revenues: Q3 total revenues reached $1.906M, reflecting $1.739M loan interest and $0.166M loan fees as ALG scaled origination/acquisition activity .
Funding and scaling achieved: $52.5M drawn on the $50M Flagstar line by quarter-end, supporting $97.7M in loans at fair value; management cited origination yields of 12.5%+ and reduced advance rates to protect profitability in higher-rate environment .
Strategic execution and legal progress: Opened Tampa sales HQ, hired Head of Sales, repurchased ~287k shares for $2.87M; “The current volatility in the fixed income market has delayed our forward flow initiative for selling assets. We continue to make significant strides of bringing new capital to the bridge space as take-out investors...” — CEO Jason Kopcak .

What Went Wrong

Continued net losses and negative fair value marks: Q3 net loss to common shareholders was $(3.986)M; change in fair value of loans was $(1.563)M, pressuring profitability despite revenue growth .
Elevated operating costs as platform scales: Q3 total expenses were $4.191M, driven by salaries/benefits ($1.563M), legal ($0.796M), G&A ($0.779M), and interest expense ($0.435M), reflecting investment phase and funding costs .
Forward flow sales delayed: Fixed income market volatility impeded asset sale initiatives, slowing capital recycling and potentially increasing hold durations and mark-to-market exposure .

Financial Results

Income Statement Trend vs Prior Quarters and Year

Metric	Q3 2021	Q1 2022	Q2 2022	Q3 2022
Total Revenues ($USD Millions)	$0.000	— (not disclosed)	$0.533	$1.906
Loan Interest Income ($USD Millions)	$0.000	— (not disclosed)	$0.524	$1.739
Loan Fee Income ($USD Millions)	$0.000	— (not disclosed)	$0.009	$0.166
Net Loss ($USD Millions)	$(5.697)	$(3.698)	$(4.132)	$(3.986)
Diluted EPS ($USD)	$4.76 (includes $16.1M preferred gain)	$0.66 (APIC gain included)	$(2.00)	$(2.24)
Net Loss Margin %	N/M (no revenue)	N/A	−775% (calc from revenue and net loss)	−209% (calc from revenue and net loss)

Notes: Q1 2022 revenue was not disclosed in the 8-K exhibits; EPS in Q1/Q3 includes gains related to preferred share transactions in the EPS numerator .

Balance Sheet Snapshot

Metric	Dec 31, 2021	Jun 30, 2022	Sep 30, 2022
Loans Held for Investment (FV) ($USD Millions)	$0.000	$31.981	$90.514
Loans Held for Sale (FV) ($USD Millions)	$0.000	—	$7.158
Cash and Cash Equivalents ($USD Millions)	$78.349	$31.317	$10.195
Restricted Cash ($USD Millions)	$0.000	—	$3.000
Credit Facility ($USD Millions)	$0.000	—	$52.467
Total Assets ($USD Millions)	$81.476	$67.013	$115.678

Revenue Composition

Revenue Component ($USD Millions)	Q2 2022	Q3 2022
Loan Interest Income	$0.524	$1.739
Loan Fee Income	$0.009	$0.166
Servicing Fee Revenue	—	$0.001
Total Revenues	$0.533	$1.906

Operating Expenses and Marks

Item ($USD Millions)	Q2 2022	Q3 2022
Salaries & Employee Benefits	$1.555	$1.563
Legal Fees	$1.379	$0.796
General & Administrative	$0.828	$0.779
Interest Expense	—	$0.435
Servicing & Asset Mgmt Expense	$0.181	$0.252
Total Expenses	$4.341	$4.191
Change in FV of Loans	$(0.325)	$(1.563)
Total Other (Income)/Expense	$0.317	$1.555

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Forward Flow Asset Sales	Ongoing (Q3 2022)	Targeted forward flow sales program	Delayed due to fixed income market volatility	Lowered/Delayed
Lending Yields	Near-term	N/A	Originations at total yield of 12.5%+	Introduced high-yield posture
Advance Rates (Bridge Originations)	Near-term	N/A	Lowered by 10 points	Tightened credit
Formal Financial Guidance (Revenue, Margins, OpEx)	FY/Q4	None provided	None provided	Maintained “no formal guidance”

No explicit numeric guidance ranges (revenue, margins, OpEx, EPS, tax rate) were provided in Q3 materials .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1–Q2 2022)	Current Period (Q3 2022)	Trend
Alternative Lending Group (ALG) Build-out	ALG launched; $40M equity commitment; $18.5M commitments; ramping operations	$79.1M loan commitments in Q3; $1.9M interest+fees; $97.7M loans FV; further scaling	Accelerating
Funding/Leverage	Flagstar $50M line announced; $40.2M drawn as of Aug 8	$52.5M drawn at 9/30; warehouse utilization supporting portfolio growth	Increasing
Macro/Rate Environment	Noted setup and early-stage ramp	Adjusted pricing higher; tightened LTC/LTV; 12.5%+ yields; loans remain profitable despite 225 bp Fed hike over 5 months	Proactive risk management
Asset Sales/Forward Flow	Program expected as part of plan	Forward flow sales delayed by market volatility; working to bring new take-out capital	Deferred; pursuing alternatives
Crypto-Enabled ATMs	ROFR with ForumPay; $2.0M earmarked	Continues to assess opportunities; ancillary to core lending	Exploratory
Legal/Regulatory	Lawsuit considerations vs Redleaf/Luxor; preferred stock settlements	Prevailed in litigation vs former CEO; reduces governance overhang	Improving

Management Commentary

“Since March 2022, AAMC’s Alternative Lending Group has utilized both its existing capital and new debt financing to place the Company in a strong position to execute on its business plan. We do not plan on being an aggregator; however, the current volatility in the fixed income market has delayed our forward flow initiative for selling assets. We continue to make significant strides of bringing new capital to the bridge space as take-out investors for the alternative assets that we are creating.” — Jason Kopcak, CEO .
“Produced over $123 million in loan commitments through both acquisitions and originations... dynamically raised our rates and currently are originating loans with a total yield of 12.5% or greater... lowered advance rates on bridge originations by 10 points... generated over $1.9 million in interest revenue and fees in the third quarter of 2022.” — Investor Presentation .
“We are creating alternative credit through two main areas: direct originations to real estate developers and investors and wholesale originations... current volatility in the fixed income market has delayed our forward flow initiative for selling assets.... Utilizing technology, data and analytics will be critical to our success.” — Investor Presentation .

Q&A Highlights

The company held a conference call and furnished an investor presentation, but the full transcript was not retrievable due to a database inconsistency. Q&A themes cannot be validated; management’s prepared commentary emphasized funding ramp, proactive credit posture, and delayed forward flow sales with pursuit of take-out capital .

Estimates Context

Wall Street consensus estimates via S&P Global were unavailable for AAMC this quarter; there appears to be limited formal sell-side coverage. As a result, comparisons to consensus for revenue and EPS cannot be performed .
Investors should monitor whether broader coverage develops as the lending platform scales, which would introduce consensus expectations and potential estimate revisions as revenue seasonality and fair value marks stabilize .

Key Takeaways for Investors

ALG scaling is real: Q3 revenues of $1.906M and $79.1M commitments reflect execution despite rate volatility; continued originations at 12.5%+ yields and tighter advance rates support near-term revenue durability .
Funding is in place: $52.5M drawn on Flagstar line underpins portfolio growth; watch warehouse availability, covenants, and cost of funds as rates evolve .
Marks matter: Negative fair value change (Q3: $(1.563)M) can overshadow revenue—stability in loan marks and the resumption of forward flow asset sales are critical to turning reported profitability .
Operating leverage ahead: Q3 expenses ($4.191M) largely reflect build-out; as volumes scale and marks normalize, loss per share should narrow—track expense discipline vs. origination growth .
Legal/Governance de-risking: Prevailing against the former CEO and completing buybacks reduce overhang; improved investor confidence may follow as disclosures remain consistent .
Near-term trading: With no consensus estimates, disclosures on funding, asset sales, and fair value marks can drive outsized moves; headline updates on forward flow/take-out capital are key catalysts .
Medium-term thesis: AAMC’s niche alternative credit strategy, data-driven origination, and focus on investment properties/affordable housing could compound if funding scales and secondary market liquidity improves; execution on credit quality and asset resolution remains the core risk .

Altisource Asset Management Corp (AAMC)·Q3 2022 Earnings Summary