ASPS

MKT CAP $62.7MP/E —DIV YIELD —FCF YIELD -3.78%REV TTM $182.5M +8.5%NET INCOME −$10.5MNET DEBT $163M52W 4.34 – 11.71SEC XBRL · TTM TO Invalid Date

How ASPS rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025

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Risk Factors - Risks Related to Financing, Our Indebtedness and Capital Structure.
Off-Balance Sheet Arrangements Our off-balance sheet arrangements consist of escrow and certain other account arrangements.
We hold customers’ assets in escrow and other accounts at various financial institutions pending completion of certain real estate and construction review activities.
These amounts are held in escrow and other accounts for limited periods of time and are not included in the accompanying consolidated balance sheets.
Amounts held in escrow and other accounts were $ 50.5 million and $ 20.4 million as of December 31, 2025 and 2024, respectively.
CRITICAL ACCOUNTING POLICIES, ESTIMATES AND RECENT ACCOUNTING PRONOUNCEMENTS We prepare our consolidated financial statements in accordance with GAAP.
In applying many of these accounting principles, we need to make assumptions, estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses in our consolidated financial statements.
We base our estimates and judgments on historical experience and other assumptions that we believe are reasonable under the circumstances.
These assumptions, estimates and judgments, however, are often subjective.
Actual results may be negatively affected based on changing circumstances.
If actual amounts are ultimately different from our estimates, the revisions are included in our results of operations for the period in which the actual amounts become known.
We have identified the critical accounting policies and estimates addressed below.
We also have other key accounting policies, which involve the use of assumptions, estimates and judgments that are significant to understanding our results.
For additional information, see Note 2 to the consolidated financial statements.
Although we believe that our assumptions, estimates and judgments are reasonable, they are based upon information presently available.
Actual results may differ significantly from these estimates under different assumptions, judgments or conditions.
Table of Content Goodwill We evaluate goodwill for impairment annually during the fourth quarter or more frequently when an event occurs or circumstances change in a manner that indicates the carrying value may not be recoverable.
We first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value as a basis for determining whether we need to perform the quantitative goodwill impairment test.
Only if we determine, based on qualitative assessment, that it is more likely than not that a reporting unit’s fair value is less than its carrying value will we calculate the fair value of the reporting unit.
When performing the quantitative assessment, we make use of estimates and assumptions to evaluate the fair value of each reporting unit, using a weighting of the income and market valuation approaches as described below.
The income approach applies a fair value methodology to each reporting unit using discounted cash flows, including an estimation of future cash flows, which is based on our internally-developed revenue and profitability forecasts, including estimations of the long-term rate of growth of our business; estimations of the useful life over which cash flows will occur and the determination of our weighted average cost of capital, which is risk-adjusted to reflect the specific risk profile of the reporting unit being tested.
The market approach includes an analysis of revenue and earnings multiples of guideline public companies compared to the Company.
We base fair value estimates on assumptions we believe to be reasonable but that are unpredictable and inherently uncertain.
Our forecasts may change compared to prior period projections due to a variety of factors, including reductions in the rates of residential mortgage delinquencies, defaults, foreclosures and REO volume and economic or market fluctuations that reduce the volume or value of residential mortgage origination or refinancings.
We also perform sensitivity analyses of certain significant assumptions in our forecasts and assess the historical accuracy of our estimates.
Actual future results may differ from those estimates.
Income Taxes We record income taxes in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 740, Income Taxes (“ASC Topic 740”).
We account for certain income and expense items differently for financial reporting purposes and income tax purposes.
We recognize deferred income tax assets and liabilities for these differences between the financial reporting basis and the tax basis of our assets and liabilities as well as expected benefits of utilizing net operating loss and credit carryforwards.
The most significant temporary differences relate to accrued compensation, amortization, loss carryforwards and valuation allowances.
We measure deferred income tax assets and liabilities using enacted tax rates expected to apply to taxable income in the years in which we anticipate recovery or settlement of those temporary differences.
The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period when the change is enacted.
Tax laws are complex and subject to different interpretations by the taxpayer and respective governmental taxing authorities.
Significant judgment is required in determining tax expense and in evaluating tax positions including evaluating uncertainties under ASC Topic 740.
We recognize tax benefits from uncertain tax positions only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position.
The tax benefits recognized in the financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement.
Resolution of these uncertainties in a manner inconsistent with management’s expectations could have a material impact on our results of operations.
See Note 20 to the consolidated financial statements for a discussion on the uncertain tax positions.
Recently Adopted and Future Adoption of New Accounting Pronouncements See Note 2 to the consolidated financial statements for a discussion of the recent adoption of new accounting pronouncements and the future adoption of new accounting pronouncements.
OTHER MATTERS Customer Concentration Onity 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.

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RISK FACTORS The following risk factors and other information included in this Annual Report on Form 10-K should be carefully considered.
The risks and uncertainties described below address the most material risks of which we are currently aware but are not the only ones we face.
Therefore, the following risk factors should not be considered a complete list of potential risks that we may face.
Any risk factor described in this Annual Report on Form 10-K or in any of our other SEC filings, or any risk not currently known to us or that we currently anticipate to be immaterial, may, by itself or together with other factors, materially adversely affect our business, reputation, prospects, competitive position, liquidity, results of operations, capital position, or financial condition, including by materially increasing our expenses or decreasing our revenues or profits, which could result in material losses.
If any of these risks materialize, they could negatively impact the trading price of our common stock and investors could lose all or part of their investment in our common stock.
While insurance coverage may help address certain risks that result in losses, recovery under our insurance policies may not be available or sufficient to compensate for damages, expenses, fines, penalties, and other losses we may incur as a result of these and other risks.
In this ITEM 1A unless the context otherwise clearly indicates, references to our “services” include any services, products or solutions provided, or made available by us.
Summary • A significant portion of our revenue is generated from providing services to two customers, the loss of some or all of these customer(s)’ business would negatively impact us. • If the Rithm Brokerage Agreement is terminated, expires, is breached, or if there is a significant reduction in the volume of services that we provide pursuant to such agreement, our business and results of operations would be adversely affected. • Technology disruptions, failures, defects, inadequacies, delays, difficulties in implementing software or hardware modifications, acts of vandalism, or the introduction of harmful code could negatively affect our operations and relationships with clients and stakeholders. • We depend on third-party services, products, data, infrastructure and solutions to maintain and grow our businesses, the loss or disruption of which could negatively impact us. • We may not successfully prevent or detect fraudulent activity, which could harm our services, clients, third parties, reputation, and our results of operations. • Our databases contain our proprietary information, the proprietary information of third parties, and personal information about our customers, consumers, vendors, and employees.
Unauthorized disclosure, access or processing of such information, whether due to a cybersecurity incident, human error or other vulnerabilities, or our failure to comply with applicable information management requirements, privacy laws, or notification obligations, could result in adverse publicity, loss of trust, investigations, regulatory fines, loss of customers, government enforcement actions, private litigation, claims from third parties, and significant financial and operational costs. • Our business continuity and disaster recovery plans may not adequately address potential impacts from business interruptions or pandemics, which could result in operational disruptions, financial losses, or regulatory compliance issues. • The insurance underwriting loss limitation methods we used may not be effective or sufficient. • Certain shareholder arrangements could trigger termination or events of defaults under some of our material agreements. • Changes in economic or market conditions that reduce residential real estate sales, values, or mortgage origination volumes could negatively impact demand for our services. • Changes in residential mortgage delinquencies, defaults, or foreclosures could negatively affect demand for some of our services. • Adapting to changes in technology or marketplace dynamics related to mortgage servicing or origination and changing requirements of governmental authorities, GSEs and customers, could pose risks to us. • Changes to compensation paid in connection with residential property transactions could negatively impact us . • Changes that reduce the frequency or alter or eliminate requirements to use default or origination services of the type we provide may reduce the volume of sales of our services. • Developments impacting residential foreclosures, REO supply, or sales could negatively affect us. • Changes to real estate brokerage commission structures or transaction rates could adversely affect us by reducing revenue from brokerage activities and impacting profitability. • Sales from our awarded business or pipeline may not occur or may take longer than anticipated to develop which could result in lower-than-expected revenue and impact our financial performance. • Business expansion carries potential risks and uncertainties, which could lead to operational inefficiencies, increased costs, or failure to achieve anticipated growth. • Acquisitions to support growth initiatives involve inherent risks. • A majority of our employees and contractors work remotely, potentially impacting control environments, productivity, and cybersecurity. • Dependence on vendors for many aspects of our business exposes us to risks related to vendor availability, performance, and oversight. • Extensive use of contractors could result in reclassification risks, incurring additional costs or penalties. • Our performance could be negatively impacted by the loss of the experience and relationships of certain directors, executives, and key personnel. • Attracting, motivating, and retaining skilled employees could prove difficult. • The presence of operations in multiple countries subjects us to unique risks endemic to those countries and regions. • We may not pay cash dividends, limiting returns to stock appreciation. • Our smaller market capitalization could increase the volatility, and limit investors in and analyst coverage, of our stock. • The market price and trading volume of our stock may be volatile. • As a "smaller reporting company," reduced disclosure requirements may affect the information we provide to stockholders. • Loss of Form S-3 eligibility or offering limitations under SEC regulations could restrict our ability to raise capital efficiently and on favorable terms. • The large number of authorized shares and outstanding warrants may make the market price and trading volume of our stock volatile. • Future issuances of common stock, warrants, or equity grants could dilute existing shareholders' economic and voting interests, potentially negatively impacting the trading price of our stock and leading to litigation. • We may be delisted from the Nasdaq Global Select Market, which could negatively impact the market for our common stock and our business. • We could have conflicts of interest with certain shareholders, lenders, members of management and our Board of Directors.
These conflicts may be resolved in a manner adverse to us. • Insufficient cash flow or access to capital markets could negatively affect liquidity and competitive positioning. • Debt levels and variable interest rates may constrain our financial flexibility and responses to customer, industry or economic changes. • The New Facility and the Super Senior Facility terms could limit cash and reduce liquidity available for operations and strategic investments. • Failure to comply with loan covenants in the New Facility or the Super Senior Facility would result in a loan default and could result in termination of either or both facilities and acceleration of amounts owing which, in turn, could have a negative impact on liquidity and our business. • The maturity extension risk under the New Facility or the Super Senior Facility and restrictions on refinancing could lead to challenges if market conditions worsen or alternative financing is unavailable. • Utilizing a significant deferred tax asset depends on future profitability; if profitability does not materialize, we may not be able to realize some or all of the tax benefit. • Cash, cash equivalents, and escrow funds held at financial institutions could be at risk. • Fluctuations in currency exchange rates could expose us to losses. • Shareholder rights under Luxembourg law differ from other jurisdictions. • Luxembourg requirements and limitations on company governance and actions could negatively impact our ability to manage the company and respond to market conditions. • Risks related to Luxembourg tax law could negatively impact our finances.
Changes in trade policies, including tariffs, taxes or restrictions on foreign service providers, could adversely affect our business. • Non-compliance with sanctions or licensing requirements could result in penalties. • Failure to comply with anti-money laundering and financial crime reporting requirements could result in penalties, contractual breaches, and potential termination of agreements with title insurance underwriters. • Failure to maintain regulatory compliance, required licenses, or timely filings could result in penalties, contract terminations, or operational restrictions. • Our business and customers are subject to extensive legal and regulatory scrutiny. • Our global operations and intercompany arrangements are subject to evolving tax laws, audits, and regulatory interpretations in multiple jurisdictions.
Changes in tax rates, disputes over taxable income allocation, or challenges to our transfer pricing practices could result in additional taxes, penalties, interest, or prevent us from utilizing operating losses or other tax credits, any of which would negatively impact our cash flow and profitability.
Risks Related to Our Business and Operations We earn a significant portion of our revenue in connection with providing services to two customers.
A significant portion of our revenue is earned from providing services to Onity and Rithm.
If either party substantially reduces the scope or volume of services acquired from us, or otherwise ceases using us as a vendor, it would negatively impact our business.
For example, we could experience a reduction in scope or volume of business as a direct or indirect result of the existence or outcome of regulatory matters impacting one or more of these clients, a change in the servicing relationship between these clients, a reduction in the MSRs for which Onity or Rithm acts as a servicer or subservicer or controls the rights to designate service providers, or a change in the contractual relationship between Altisource and Onity or Rithm.
In addition, providing services to these customers affords us the opportunity to provide certain services to third parties and the loss of these customers or reduction in the quantity of services provided to these customers would also result in the loss or reduction of these additional revenue streams.
For example, we may have the opportunity to earn commissions or fees from, or we may be able to provide on-line auction services, title insurance and escrow services, or other services to, buyers on certain real estate transactions, and the loss or reduction in the number of these customers would also prevent us from offering these additional services related to the underlying transaction.
Customer concentration also exposes us to concentrated credit risk, as a significant portion of our accounts receivable may be from one or both of these customers.
If the characteristics of the portfolios of properties on which we provide services for either of these customers were to change, for example to become less delinquent, more rural or lower value, this could impact the type and volume of services that we provide, increase our costs of doing business, or reduce the value of commissions or fees we earn.
Our business concentration or relationships with these two customers may be viewed as a risk or otherwise negatively by other customers or potential customers, impeding our efforts to retain customers or obtain new customers.
If the Rithm Brokerage Agreement is terminated, expires, breached, or if there is a significant reduction in the volume of services that we provide pursuant to such agreement, our business and results of operations would be adversely affected.
On August 28, 2017, Altisource, through its licensed subsidiaries, entered into the Rithm Brokerage Agreement.
Under this agreement and related amendments, Altisource is the exclusive provider (with certain exceptions) of brokerage services for REO associated with certain MSRs through August 2025, irrespective of the subservicer, as long as Rithm owns such MSRs.
The Rithm Brokerage Agreement may be terminated by Rithm upon the occurrence of certain specified events.
Termination events include, but are not limited to, a breach of the terms of the Rithm Brokerage Agreement (including, without limitation, the failure to meet performance standards and non-compliance with law in a material respect), a failure to maintain licenses which materially prevents performance of the contract, regulatory allegations of non-compliance resulting in an adversarial proceeding against Rithm, voluntary or involuntary bankruptcy, appointment of a receiver, disclosure in a Form 10-K or Form 10-Q that there is significant uncertainty about Altisource’s ability to continue as a going concern, failure to maintain a specified level of cash and an unapproved change of control.
Rithm could decide to not renew or extend the term of the Rithm Brokerage Agreement upon its termination in August 2025, in which case Rithm may elect to use a brokerage service provider other than the Altisource subsidiaries for some or all of its REO.
If any one of these termination events occurs and the Rithm Brokerage Agreement is terminated or if the Rithm Brokerage Agreement is not renewed or extended or the volume of referrals under the Rithm Brokerage Agreement is reduced, Altisource’s business and results of operations would be adversely affected.
In addition to loss of the direct revenue from the Rithm Brokerage Agreement, we would likely experience the loss of significant revenue related to the Subject MSRs when a party other than Rithm selects us as the service provider.
In addition, Rithm operational changes, a breach of the Rithm Brokerage Agreement, or other actions that reduce the number of properties converting to REO status could: (i) reduce the volume of services that we provide on the applicable MSRs pursuant to our agreements with Onity, and (ii) reduce the volume of services that we provide pursuant to the Rithm Brokerage Agreement.
Technology disruptions, failures, defects, inadequacies, delays, difficulties in implementing software or hardware modifications, acts of vandalism, or the introduction of harmful code could damage our business operations and relationships with clients and stakeholders, and increase our costs.
We rely on critical technology to provide certain of our services, including our proprietary platforms such as Hubzu real estate marketing, Equator, Equator.com, NestRange, LOLA, Keystone, REALSynergy, RentRange, TrelixAI, Vendorly ® , and others.
Certain of our proprietary technologies incorporate licensed open source and third-party code or may be created or maintained using artificial intelligence, low-code, or other coding techniques, all of which carry inherent risks.
The integration of artificial intelligence into our services and operations introduces specific risks.
Artificial intelligence systems may produce errors or exhibit biases, leading to inaccurate or misleading information.
Such outcomes could result in liability or reputational harm.
Additionally, delays or difficulties in implementing artificial intelligence-related software changes may disrupt our operations.
Failure to effectively leverage these technologies could also place us at a competitive disadvantage, adversely affecting our business and results of operations.
We also leverage third-party technology to provide certain of our services, including using third-party order management and billing technology, and using third-party technology to access data or take actions, such as governmental filings, and externally hosted and managed data centers and operating environments.
Our ability to provide services, satisfy performance and legal requirements, and maintain the confidentiality and integrity of data could be negative impacted by disruptions, failures, defects, inadequacies in our technology or third-party technology or related services we utilize, delays or errors in developing or maintaining our technology, difficulties in implementing software or hardware modifications, acts of vandalism, misuse or malicious use of our services, system attacks or the introduction of malicious code in technology we utilize, the use of outdated or unsupported open source or third-party code, or the use of defective, compromised or insecure code.

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Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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