ITEM 1A. 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.
Table of Content
Summary
• We derive a significant portion of revenue from Onity and Rithm. The Rithm Brokerage Agreement expired on August 31, 2025 and was not renewed. Separately, Rithm notified Onity of termination of its subservicing agreement effective January 31, 2026. Any material reduction in referrals, MSR volumes or scope of services, or termination by either customer, would adversely affect our revenue, liquidity and financial condition.
• Technology failures or intellectual property disputes could disrupt operations, impair service delivery and increase costs or regulatory exposure.
• Cyberattacks, ransomware, data breaches, AI exploitation or other security incidents could disrupt operations, expose us to liability, penalties or litigation and materially harm our financial condition and reputation. Insurance may be unavailable or insufficient.
• Failure to prevent or detect fraudulent activity could result in financial loss, liability and reputational harm.
• Unauthorized access, disclosure or processing of proprietary or personal information, or non-compliance with privacy, data protection, AI or notification laws, could result in investigations, fines, litigation and significant costs.
• Business interruptions, pandemics, governmental shutdowns or system failures may not be adequately addressed by our continuity and recovery plans, resulting in operational or compliance disruptions.
• Formation of a stockholder “group,” change-of-control events or certain business sales may trigger termination or default rights under material agreements, limiting strategic flexibility.
• Certain economic or housing market conditions adverse to our businesses could reduce demand for certain of our services.
• Government shutdowns or funding lapses affecting courts or agencies could delay foreclosures and REO activity, reduce volumes and impair performance metrics.
• Failure to adapt to technological change, regulatory developments or customer consolidation may reduce demand or competitiveness.
• Restrictions on online foreclosure or REO auctions could negatively impact our auction and brokerage revenues.
• Changes reducing the frequency or requirement for default or origination services may decrease demand for certain of our services.
• Reduced foreclosures, constrained REO supply, buyer participation limits or inability to meet contractual performance metrics could adversely affect our default and related services.
• Changes to brokerage commissions, auction fees or other transaction compensation structures could reduce revenues.
• Anticipated sales from awarded contracts or pipeline opportunities may not materialize or may be delayed.
• Our remote work environment may reduce productivity, impair controls and increase cybersecurity, tax and regulatory risks.
• Reliance on vendors exposes us to service failures, pricing increases, compliance deficiencies and potential liability for vendor misconduct.
• Reclassification of contractors as employees could result in taxes, penalties and increased compensation costs.
• Loss of key directors, executives or personnel, or difficulty attracting leadership in Luxembourg, could adversely affect operations.
• Failure to attract and retain skilled and licensed employees could impair service delivery and growth.
• International operations expose us to political, economic, corruption, sanctions, trade and labor risks.
• We do not expect to pay cash dividends; stockholder returns depend on stock appreciation.
• Our relatively small market capitalization may increase stock volatility, limit liquidity and restrict access to capital or analyst coverage.
• Issuance of additional shares, exercise of warrants or vesting of equity awards could dilute stockholders and affect trading prices.
• The market price and trading volume of our common stock and Stakeholder Warrants have been and may remain volatile, and significant resales could increase volatility or lead to litigation.
• Public float limitations restrict our use of Form S-3 and may impair our ability to raise capital efficiently.
• Significant ownership by lender stockholders may create conflicts.
• Insufficient cash flow, limited capital access or reduced borrowing capacity could impair liquidity and strategic flexibility.
Table of Content
• Our indebtedness, variable interest rates, mandatory prepayments and covenant restrictions limit financial flexibility and increase sensitivity to performance.
• Failure to comply with loan covenants could result in default, acceleration and enforcement against collateral.
• We may be unable to repay or refinance debt at maturity on favorable terms or at all.
• Luxembourg net operating loss may expire unused, and changes in tax laws, audits or transfer pricing determinations could result in additional taxes, interest, penalties and reduced realization of deferred tax assets. Impairment of goodwill or intangible assets could require write-downs and reduce earnings.
• Loss, misappropriation or insolvency of financial institutions holding our cash or escrow funds could result in unrecoverable losses.
• Currency exchange rate fluctuations could increase costs and reduce profitability.
• As a Luxembourg company, stockholder rights differ from those of U.S. companies, enforcement of judgments may be difficult, and Luxembourg requirements may increase compliance burdens and limit operational flexibility. Challenges to Luxembourg tax treatment or interpretations could result in additional liabilities.
• Changes in trade, tariff or cross-border tax policies affecting foreign service providers could increase costs or reduce competitiveness.
• Extensive and evolving regulation may require operational changes and expose us to audits, penalties or litigation.
• Loss or suspension of required licenses could restrict our ability to provide services.
• Violations by customers in selecting or using our services could expose us to liability.
• Allegations of legal violations or litigation could result in penalties, customer loss or operational restrictions.
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. The Rithm Brokerage Agreement expired on August 31, 2025 and was not renewed. Rithm has no contractual obligation to continue to use Altisource for REO management or provide referrals. However, following the expiration of the Rithm Brokerage Agreement, Rithm has continued to provide discretionary referrals with limited exceptions. Any reduction or cessation would negatively affect related brokerage and ancillary revenue. Additionally, Rithm notified Onity that it is terminating their subservicing agreement effective January 31, 2026. If Rithm were to remove Onity as its subservicer, we would experience a reduction in the volume of services provided to Onity which would negatively impact our business, results of operations, liquidity, and financial condition. 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, results of operations, liquidity, and financial condition. 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 reduction in the MSRs for which Onity 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. 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 receivables 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.
Table of Content
Technology disruptions, failures, defects, inadequacies, delays, difficulties in implementing technology modifications, acts of vandalism, the introduction of harmful code or intellectual property disputes 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, LOLA, Keystone, REALSynergy, RentRange, Trelix Connect, Vendorly®, and others . Certain of these technologies incorporate licensed open source and third-party code or may be created or maintained using artificial intelligence, low-code, or similar techniques, each of which carry inherent risks. Any material defect, outage, data integrity issue, or required redesign could disrupt our services and negatively impact revenue and customer relationships. The use of outdated, unsupported, unpatched, misconfigured, or improperly licensed components or third-party libraries could expose us to cybersecurity vulnerabilities, operational failures, service disruptions, business interruptions, or intellectual-property disputes.
We also depend on access to critical third-party technology and data sources, including MLS feeds, GSE systems, application programming interfaces (APIs), and consumer credit-reporting data. Loss, restriction, degradation, or increased cost of access to any such technology or data sources could impair our ability to perform services, meet contractual or regulatory requirements, satisfy service-level expectations, or retain customers
The integration of artificial intelligence into our services and operations introduces distinct risks, including operational failures unrelated to malicious misuse, training-data vulnerabilities, transparency and explainability obligations, automated-decision-making restrictions, and emerging state and federal artificial intelligence governance requirements. Failure to manage these risks could result in defective outputs, disclosure of proprietary or personal information, operational failures, regulatory scrutiny, customer disputes, or litigation.
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 reliance on one or more major cloud-service providers for hosting, storage, and processing creates concentration risk. Outages, service limitations, pricing increases, security failures, or termination of services by these providers could disrupt our operations, impair service delivery, increase costs, or require significant time and investment to migrate to alternative environments. Any such event could negatively impact our business, customer relationships, or results of operations.
Many of our services and processes require effective interoperation with internal and external technology platforms, data feeds, services and other systems. Failures in such interoperation may result in service disruptions, service level agreement breaches, regulatory exposure, or other negative impact on our operations and the operations of our customers. Our customers may require modifications to the services we provide to them to manage the volume and complexity of or laws or regulations applicable to their businesses, or to interoperate with other systems, which modifications may be unfeasible, unsuccessful, costly or time-consuming to implement, or may create disruptions in our provision of systems to customers. Our customers may refuse to agree to modifications to technology or infrastructure services which we provide or which interoperate with the technology or infrastructure services we provide and we believe are desirable to improve the reliability, performance, efficiency or cost in delivering services. Additionally, the improper implementation or use of Altisource services, such as Equator and others, by customers could adversely impact the operation of our services. The foregoing could potentially cause harm to our reputation, loss of customers, negative publicity, or exposure to liability claims or government investigations or actions.
Cyberattacks, ransomware, data breaches, malicious activity or other security incidents targeting our systems, data or platforms could disrupt our operations, expose us to liability, and materially harm our financial condition and reputation.
Because we store and process consumer information and operate public-facing technology platforms, including our Hubzu marketing platform, we may be a target for network hackers or others with malicious intent. We may be subject to ransomware attacks or other attempts by malicious third parties to interrupt or prevent our access to systems or data to extract payment of a ransom or meet other conditions. We may determine that it is necessary or expedient to pay a ransom or meet other conditions which could be harmful to the Company in seeking to regain access to our systems or data. There can be no guarantee that paying a ransom or satisfying conditions would enable us to regain access to our systems or data or that the same would not be corrupted or made more vulnerable to subsequent attacks. If we were to pay a ransom or satisfy other conditions, our actions could encourage further malicious acts. We may not be able to recover ransom from the third-party malicious actors.
We may not have insurance coverage for any resulting losses or may be unable to recover our losses from insurance. Our cyber, technology, errors and omissions, and other insurance coverages may be unavailable, insufficient, subject to exclusions, limited by aggregate caps, contain retroactive-date gaps, or may not apply to certain cyber incidents, operational failures, or regulatory
Table of Content
actions. We may also be unable to renew coverage on favorable terms or obtain coverage. Any uncovered losses could materially impact our liquidity, financial condition, or results of operations.
Malicious exploitation of artificial intelligence models — such as model-poisoning attacks, prompt-injection, input-manipulation, or inference attacks — could compromise the integrity of our systems, expose proprietary or personal information, or disrupt operations. These risks are distinct from normal AI operational risks and may increase as AI adoption may expand. We depend on our ability to use services, products, data, infrastructure and solutions provided by third parties to maintain and grow our businesses.
We may not successfully prevent or detect fraudulent activity which could harm our services, clients, third parties, reputation, and our results of operations.
Our provision of certain services in connection with real estate-related transactions relies upon information provided by and actions of employees and in some cases third parties, including our vendors and customers, and upon certain technology systems. The provisions of such services could be negatively impacted by fraudulent or incorrect information provided by employees or third parties. Vulnerabilities in technology systems and controls on which we rely to provide certain services could permit employees or third parties to introduce fraudulent information into those systems or otherwise compromise those systems or applicable controls, impacting our ability to provide services without error, negatively impacting, us, our clients and third parties.
Employees and third parties have, in the past, engaged in fraudulent activity and may attempt to do so in the future. This activity may result in, among others, transferring funds or real estate property titles to fraudulent actors, paying for services which were not performed or failed to meet applicable requirements, disbursing construction funds when applicable conditions have not been satisfied, selling real estate for below market values, issuing title insurance based on fraudulent ownership documentation, underwriting mortgage applications based on fraudulent information, and insuring fraudulent mortgages. Persistent and pervasive fraudulent activity may harm our client relationships and our reputation and could result in financial loss, thereby adversely affecting our business and 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, government enforcement actions, private litigation, claims from third parties, and significant financial and operational costs.
As part of our business, we collect, store, process, transfer and dispose in tangible and electronic forms customer, consumer, vendor and employee personal information (“PI”). We and our vendors rely on processes that are intended to provide necessary notices, processes and controls regarding the collection, access, storage, processing and destruction of PI, and to permit subjects to exercise their legal rights concerning their PI in our possession. If those notices, processes or controls are not sufficient, or our processes or controls experience an error or other disruption, we or our vendors may fail to comply with applicable requirements concerning PI. In addition, we rely on the security of our facilities, networks, databases, systems, processes and controls, and, in certain circumstances, third parties, such as vendors, to protect PI. If such facilities, networks, databases, systems, processes and controls, or those of our customers or vendors, are not effective, are outdated or compromised, or do not exist, or if we, our customers or vendors fail to detect or respond to attacks or intrusions, unauthorized parties may gain access to our networks or databases or information, or those of our customers or vendors with which we interconnect or share information, and they may be able to steal, publish, delete, or modify PI. In addition, employees may intentionally or inadvertently process PI in an unauthorized manner or cause data or security breaches that result in unauthorized release of such PI. Further, our efforts to process, delete or destroy PI may not be consistent with our disclosed policies or may not be successful, resulting in the theft or unintentional disclosure of PI, including when disposing of media on which PI may be stored. In such circumstances, our business could be harmed, and we could be liable to our customers, employees or vendors, or to regulators, consumers or other parties, as well as be subject to disclosure or notification requirements, and regulatory or other actions for breaching applicable laws, failing to make or provide required disclosures or notifications, or failing to adequately protect such information. This could result in costly investigations and litigation, civil or criminal penalties, large scale remediation requirements, operational changes or other response measures, significant penalties, fines, settlements, costs, consent orders, loss of consumer confidence in our security measures and negative publicity.
Table of Content
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.
Our business continuity and disaster recovery plans and other adjustments to business may not be sufficient to anticipate impacts of, or address or adequately recover from, business interruptions or a pandemic, or may not be maintained, updated and implemented on a timely or error free basis in response to business interruptions or a pandemic, resulting in negative operational impacts and errors.
Under certain material agreements to which we are currently a party or into which we may enter in the future, the formation by shareholders of Altisource of a “group” with beneficial ownership of a defined percentage of the combined voting power or economic interest of Altisource capital stock exceeding a defined percentage may give rise to a termination event or an event of default.
Under certain of our material agreements a change of control would be deemed to occur if, among other things, a “group” (as that term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) is formed by shareholders holding beneficial ownership of a defined percentage of the combined voting power or economic interest of our capital stock. The formation of a “group” could occur without the involvement of or input by us, and we are not in a position to prevent such an event from occurring. Such a change of control could constitute a termination event or an event of default under these agreements which could negatively impact us.
In addition, under our long-term agreements with Onity, beginning September 1, 2028 a change of control of Altisource to a competitor of Onity would give Onity a contractual right to terminate the agreement if Onity reasonably believes the transaction may negatively impact it and the parties cannot agree on remedial actions. These agreements also provide that, after September 1, 2028, a sale or transfer to an Onity competitor of all or part of the Altisource business supporting Onity— even if not constituting a change of control of Altisource — would give Onity a right to terminate the applicable services if the parties cannot agree on remedial measures. These provisions may limit our flexibility to pursue certain strategic transactions, including change-of-control transactions or sales of business lines, and could delay, restrict or prevent transactions that might otherwise be in the interests of our shareholders.
Risks Related to Our Industry
Changes in economic and market conditions that depress residential real estate sales, values or mortgage origination volumes could negatively impact demand for our services.
Economic or market fluctuations such as a low number of residential real estate sales, depressed sales prices or values of residential properties or origination volumes or lengthy sales transaction timelines could reduce the demand for certain of our services related to marketing and real estate sale transactions, including services ancillary to such transactions, such as closing services and title insurance services. Typically, the volume of residential property sales decline and transaction timelines increase as residential mortgage interest rates increase, financing options and availability for borrowers decline or consumer confidence falls. Governmental actions or announcements intended to influence mortgage interest rates or mortgage market functioning, including large-scale purchases of mortgage-backed securities by government-sponsored enterprises or other policy interventions, may alter borrower and investor behavior, and create volatility in origination, refinancing, servicing and default activity. These actions may be reversed, modified, delayed, or challenged through legislative, regulatory or judicial processes, making the timing and demand for our services less predictable and potentially adversely affecting our results of operations. A reduction in the volume of real estate transactions or the sales price of real estate could negatively impact our residential real estate brokerage and auction businesses which earn commission fees generally set as a percentage based on the property sale price. Demand for services from other businesses, such as mortgage origination, valuation, title and closing, may also decline as a result of depressed residential real estate transaction volumes including from increased residential real estate values or mortgage interest rates. Residential real estate value appreciation typically increases equity in borrowers’ homes providing borrowers with more options to avoid foreclosure, potentially reducing foreclosure auction and REO referrals and ancillary services such as closing and title insurance services.
Economic or market fluctuations that depress the volume or value of residential mortgage origination or refinancings could depress the demand for our mortgage origination and mortgage insurance related services, including those provided to members of the Lenders One mortgage cooperative. Relatively high residential mortgage interest rates or a scarcity of financing availability for borrowers, potentially due to an inflationary environment or government actions, could depress demand for these services. Elevated residential real estate values could also depress the number of sale transactions, leading to a decrease in new mortgage origination.
Table of Content
Government shutdowns, funding lapses or other disruptions affecting federal, state or local governmental operations could adversely affect our business, results of operations and cash flows.
A full or partial shutdown of federal, state or local government operations, or a lapse in appropriations or funding, could delay, restrict or suspend the operations of courts, bankruptcy courts, recording offices and governmental authorities involved in residential mortgage servicing, foreclosure, eviction and REO conveyance, including HUD, the Federal Housing Administration (“FHA”), VA, USDA and government-sponsored enterprises. Such disruptions could slow or halt foreclosure proceedings, approvals, recordings, REO conveyance, marketing and sale activities, create operational backlogs that persist after governmental operations resume, and reduce or delay the volume and timing of orders for our services. Government shutdowns or funding lapses could also adversely affect liquidity in REO and residential real estate markets, lengthen transaction timelines, increase costs, adversely affect pricing, and impair our ability to meet contractual performance metrics tied to conversion rates, aging, time-on-market or other percentage-based or timing requirements. Any failure to satisfy applicable service levels or performance metrics could result in reduced volumes, fee adjustments, termination of services or loss of referrals by customers, which could negatively impact our business, cash flows, results of operations and financial condition.
A depressed rate of residential mortgage delinquencies, defaults or foreclosures, and REO volume can negatively affect demand for certain of our services.
We provide certain services to residential mortgage servicers and subservicers, as well as government sponsored entities, federal agencies and others, to protect, preserve, manage and potentially dispose of properties securing residential mortgage loans, when such loans become delinquent, default, undergo foreclosure or become REO assets. Rates of residential mortgage delinquencies, defaults and foreclosures, and REO volume can be negatively impacted by numerous factors, such as strengthening economic conditions, increasing housing equity from high home values, low residential mortgage interest rates, reductions in the number of residential mortgages outstanding, reductions in homeownership levels or governmental or servicer action. National servicing standards, federal and state government scrutiny and regulation, requirements specifying loan loss mitigation, modification and foreclosure procedures, rules instituted by governmental authorities, GSEs, servicers or investors preventing actions related to loan delinquencies and foreclosures, including moratoriums on foreclosures and mortgage payment forbearance plans, may also reduce the number of mortgage loans entering the foreclosure process or suspend pending foreclosure and eviction actions. Such conditions could negatively impact demand for our default services. Depressed rates of residential mortgage delinquencies, defaults, foreclosures and REO volume would likely negatively impact demand for our services related to non-judicial foreclosures, inspecting, maintaining, valuing, marketing and selling such assets. Policies or programs intended to improve housing affordability, suppress borrowing costs, extend loan amortization periods or otherwise seek to increase borrower leverage, may distort housing market dynamics or delay or suppress the normal progression of credit stress and foreclosure activity and could reduce near-term demand for our default-related services, obscure underlying credit conditions or disrupt historical demand patterns. These effects could adversely affect the timing, volume and mix of our default and transactional service activity, impair planning and resource allocation, reduce operating efficiency, and increase volatility and unpredictability in our results of operations.
If faced with an extended period of depressed demand for and revenue from certain of our services as a result of economic conditions, borrower loss mitigation or relief measures, or due to government, GSE, servicer or investor restrictions related to loan delinquencies and foreclosures, including moratoriums on foreclosures and mortgage payment forbearance plans, we may be unable to sufficiently adjust our cost structure, in our operations that provide such impacted services or at the corporate level, to avoid negative impacts to net revenue or profits. We also may be unable to maintain our ability to offer such services in the future. The expiration dates of certain requirements, loss mitigation or relief measures that impact demand for our services may be indefinite or extended in the future making it difficult to predict when such requirements or measures may end. In response to such conditions, we may be required to modify or suspend such operations which could negatively impact our ability to timely respond to an increase in demand for such services or to provide such services in the future, or which could cause us to incur significant expense to restart or scale such services in response to an increase in demand.
We may fail to adapt our services to changes in technology or in the marketplace related to mortgage servicing or origination, changing requirements of governmental authorities, GSEs and customers. Customers may seek to reduce the number of their service providers.
The markets for our services are characterized by constant technological and other changes, frequent introduction of new services by competitors, and evolving industry standards and government regulations. We frequently develop and introduce new services and technologies and modify existing services and technologies. Our future success depends on our ability to complete these efforts, enhance our services and technologies, and developing new services that address changes in technology, competing services, applicable marketplaces, or customer needs. These efforts carry risks, including of cost overruns, delays,
Table of Content
lack of market acceptance, and performance shortfalls. There is no assurance that we will successfully develop, enhance, market, sell, or implement new or improved technologies or services.
Customers may also reduce the number of service providers employed through vendor consolidation, insourcing, or other means, which could decrease demand for our services and impact pricing control.
Changes that reduce or limit the use of online default real estate auctions or otherwise reduce the volume or rate of success of such auctions can negatively impact our auction marketplace, real estate brokerage and related default services.
Governmental, GSE, servicer or investor actions or action by others that restrict online real estate auctions (foreclosure and REO), reduce the permissible fees or direct the use of auction providers other than us, could negatively impact demand for our auction marketplace, real estate brokerage and related services, revenues we receive related to such real estate auctions and impact our ability to meet certain contractual performance metrics. If we fail to satisfy applicable performance metrics or perform in a manner satisfactory to our customers, such customers may reduce the services they acquire from us or otherwise terminate us as a provider.
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.
Industry or regulatory changes related to servicing residential mortgages which are delinquent, in default or in foreclosure, or related to residential mortgage loan origination requirements, could reduce the frequency and volume of orders for our services. Any reduction in frequency or volume of providing services would have a negative impact on our cash flow and financial condition.
Developments that impact residential foreclosures or the supply, sale price or sale of REO could negatively affect demand for certain of our default-related services and impact our ability to meet certain contractual performance metrics.
A reduction in residential foreclosures or the supply or sale of REO in the United States could reduce the demand for services, including foreclosure trustee, foreclosure auction, REO asset management, REO property inspection and preservation, real estate brokerage, real estate auction and marketing services, as well as sales of REO, especially in cases where more loans are resolved prior to foreclosure or sold at foreclosure auctions, and therefore do not convert to REO. REO properties, or lower sales volumes, could impair our ability to meet certain contractually required service metrics, including conversion percentage requirements, as the size of the applicable REO inventory declines and the remaining properties are often the most difficult to sell. Reduced volumes may also diminish operating efficiencies, increase per unit costs, and make it more challenging to secure and retain vendors at economically viable scale.
Proposals or actions which seek to limit or restrict participation by institutional investors or other buyer classes in single-family housing or REO markets could depress demand for REO, change the composition of the pool of potential REO buyers, lengthen REO sales cycles, or negatively impact pricing for REO assets. Any such developments could adversely affect demand for our REO disposition, auction, brokerage, marketplace and related services, increase execution complexity, reduce the value of REO and associated sales commission and auction fees, or impair our ability to satisfy contractual performance metrics.
In addition, changes in policies, regulations, or program requirements imposed by federal housing agencies or government-sponsored enterprises, including the FHA, HUD, Fannie Mae and Freddie Mac, could adversely affect foreclosure and post-foreclosure processes, auction participation, reimbursement programs and related economics. For example, changes to foreclosure bidding requirements, credit bidding thresholds, eligibility for claims without conveyance of title or similar programs, reimbursement of foreclosure or auction-related costs, conveyance requirements, or other loss mitigation and post-foreclosure programs could reduce the volume of assets eligible for third-party sale, alter servicer behavior at foreclosure auctions, reduce referral volumes, lengthen timelines, negatively impact pricing or fees associated with foreclosure auctions and REO disposition services, or impair our ability to meet contractual performance metrics. Governmental actions that influence mortgage interest rates, mortgage-backed securities markets, or participation by certain buyer classes in residential real estate markets could further reduce demand for our services or increase volatility in volumes and execution complexity.
We may not be able to effectively manage rapid or unanticipated increases in foreclosures or the supply, sale price or sale of REO which could negatively impact our ability to satisfy service level metrics that are tied to conversion rates or other percentage requirements. For example, if a service metric specifies that a certain percentage of the total REO inventory is to be sold within a defined period of time, a rapid increase in the total REO inventory may increase the risk of failing to meet the defined percentage metric during the period required to prepare the newly added REO to be marketed. Some of the service metrics which may be impacted include those related to REO conversion rates, aging of REO, time on market and sale price
Table of Content
compared to valuation. If we fail to satisfy applicable performance metrics or perform in a manner satisfactory to our customers, such customers may reduce the services they acquire from us or otherwise terminate us as a service provider.
Changes to compensation paid in connection with residential property transactions could negatively impact us.
Changes to residential real estate brokerage commission structures or compensation paid in connection with residential real estate transactions, such as auction fees or buyers’ premiums, which reduce compensation for services or limit commission sharing or cooperative commissions among brokerages or brokers could negatively impact the commissions we receive and certain contractual arrangements. Changes to fees paid permitted or paid in connection with foreclosure or REO sales or auctions could negatively impact our revenue.
Risks Related to Our Growth Strategy
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.
As part of our business and financial planning, we make assumptions about the quantity and timing of services that our customers and prospective customers will order from us. In many instances, however, our customers may not be obligated to acquire our services or may only be obligated to acquire our services to the extent they can make use of them. Our anticipated sales volume may not materialize if customers or prospective customers choose other service providers, or if economic, industry, or company-specific conditions reduce their demand for services or fees paid for the services. For example, economic conditions, restrictions imposed by governmental authorities, GSEs, servicers or investors, or the sale, consolidation or failure of current or potential customers may negatively impact the quantity or timing of customer demand for our services despite existing agreements. Customers may also reduce the quantity or mix of services acquired from us versus other providers. Even in cases where our customer contracts require minimum purchases, we may be unable or decide not to enforce or collect the contractual minimums.
Risks Related to Human Capital
A majority of our employees and contractors work from locations other than in our facilities, which could negatively impact our control environment or productivity and create additional risks for our business, including increasing our risk for cybersecurity breaches or failures.
A majority of our workforce works from a remote work environment. We may incur significant costs associated with the remote work environment and we may not be able to increase our fees to cover the additional costs. Employing a remote work environment could decrease workforce productivity, including due to a lower level of oversight, supervision or monitoring, increased distractions, impediments to real-time communication or other challenges to effective collaboration, use of slower residential internet connections, the instability, inadequacy or unavailability of our network, unstable electrical services or unreliable internet access. We also may face increased data privacy and security risks resulting from the use of non-Altisource networks to access and process information and to provide services.
Additional risks to our systems and data, as well as customer, vendor and borrower data, include increased phishing activities targeting our workforce, vendors and counterparties in transactions, and potential attacks on our systems or systems of our remote workforce. A remote work environment could also negatively impact certain controls, such as our financial reporting systems, internal control over financial reporting, disclosures and procedures, as well as controls designed to detect or prevent misconduct.
In addition, our remote work environment may result in difficulties creating and maintaining current and accurate records of where our employees are working. Such uncertainty in employee location may subject us to risks related to taxing jurisdictions or maintaining certain licenses.
We rely on vendors for many aspects of our business. If our vendor oversight activities are ineffective, we may fail to meet customer or regulatory requirements. We may face difficulties sourcing required vendors or supplies or managing our relationships with vendors.
We rely on vendors to provide goods and services in relation to many aspects of our operations, including field services and renovation providers, data providers, and certain providers of web-based services or software as services. Our dependence on these vendors makes our operations vulnerable to the unavailability of such vendors, the pricing and quality of services and products offered by such vendors, solvency of those vendors, deficiencies and failures of technology, security and business continuity and disaster recovery plans and efforts of such vendors, and such vendors’ failure to perform adequately under our agreements with them. In addition, where a vendor provides services or products that we are required to provide under a
Table of Content
contract with a customer, we are generally responsible for such performance and could be held accountable by the customer for any failure of performance by our vendors or related defects. If our vendor sourcing efforts are not effective or if we are otherwise not able to secure an appropriate supply and quality of vendors, services or supplies, if vendors are unable to hire or retain employees or acquire supplies, or are prohibited or prevented from performing the services or providing the products for which we contract, including as the result of restrictions imposed by state or local governments or health departments, we may be unable to provide services or compliant services, or our services may become more expensive. If our vendor oversight activities are ineffective, if a vendor fails to provide the services or products that we require or expect, or fails to meet contractual requirements, such as service levels or compliance with applicable laws, or if a vendor engages in misconduct, the failure or misconduct could negatively impact our business by adversely affecting our ability to serve our customers or by subjecting us to litigation and regulatory risk for ineffective vendor oversight. Furthermore, the failure to obtain services or products at anticipated pricing could impact our cost structure and the prices of our services and we may not be able to increase our fees to cover the additional costs. In addition, Altisource may be contractually required by its customers or by applicable regulations to oversee its vendors and document procedures performed to demonstrate that oversight. If we fail to meet such customer or regulatory requirements, or we face difficulties managing our relationships with vendors, we may lose customers or may no longer be granted referrals for certain services or could be subject to adverse regulatory action.
We make extensive use of contractors in certain of our lines of business. If we are required to reclassify contractors as employees, we may incur fines and penalties and additional costs and taxes.
A significant number of contractors provide services in our operations for which we do not pay or withhold any federal, state or local employment tax or provide employee benefits. These contractors may be retained by us or retained by vendors providing services to us. There can be no assurance that we are or will be in compliance the various tests used in determining whether an individual is an employee or a contractor, or that legislative, judicial or regulatory (including tax) authorities will not introduce proposals or assert interpretations of existing rules and regulations that would change, or at least challenge, the classification of our contractors. Authorities may determine that we or our vendors have misclassified contractors for employment tax or other purposes and, as a result, seek additional taxes from us, require us to pay certain compensation or benefits to wrongly classified employees, or attempt to impose fines or penalties. In addition, our contractor, and contractors and employees of our vendors may assert claims that they are our employees and seek to recover compensation, benefits, damages and penalties from us. If we are required to pay employer taxes, pay backup withholding compensation, benefits, damages or penalties with respect to or on behalf of our contractors or contractors or employees of our vendors, our costs would increase and we would be financially harmed.
Our success depends on the relevant industry experience and relationships of certain members of our Board of Directors, executive officers and other key personnel.
Our success is dependent on the efforts and abilities of members of our Board of Directors, our executive officers and other key employees, many of whom have significant experience in the real estate and mortgage, financial services and technology industries or play a substantial role in our relationship with certain customers. In addition, certain executive officers or other key employees have relationships with certain customers or vendors that facilitate our business and operations. The loss of the services of any of these members of our Board of Directors, executives or key personnel could have an adverse effect on our business and results of operations or relationships with certain customers or vendors.
To maintain our substance and leadership as a Luxembourg company, we seek to convene at least one Board of Directors meeting in Luxembourg each year and our executive management is largely based in Luxembourg. The travel required by our directors to Luxembourg, and potential future restrictions on and requirements for such travel, may serve as an impediment to attract and retain directors and director candidates. Our Luxembourg location can also make it difficult to attract and retain executive officers and other senior leadership and to achieve diversity and succession planning in such roles.
Attracting, motivating, and retaining skilled employees could prove difficult.
Our business is labor intensive and places significant importance on our ability to recruit, engage, train and retain skilled employees. Additionally, demand for qualified employees with experience in certain businesses or technologies may exceed available supply. Our ability to recruit and train employees is critical to achieving our growth objective. Further, some of our business operations require recruiting and retaining employees with certain professional licenses, particularly in the United States. An increase in demand for professionals licensed to work in our origination, real estate brokerage and auction, and default business, and significant turnover in those areas, may negatively impact our ability to attract and retain such professionals. We face inflationary wage pressures which may continue for an extended period. We may continue to encounter significant challenges in attracting and retaining employees as needed to satisfy demand or growth expectations for our services, or to be able to limit compensation related costs to make operations economically viable. We may not be able to attract or retain skilled employees. We may face an increase in wages or other costs of attracting, training or retaining skilled
Table of Content
employees. In addition, attrition of current employees may negatively impact our ability to provide services of a quality or volume that satisfies applicable contractual obligations or supports our planned growth or expansion of services.
The presence of our operations in multiple countries subjects us to risks endemic to those countries.
We have employees and operations outside of the United States, in countries such as Luxembourg, India and Uruguay. The occurrence of natural disasters, epidemics or other health emergencies, or political or economic instability impacting these countries, could interfere with work performed by these labor sources or could result in us having to replace or reduce these labor sources.
We operate in jurisdictions that have experienced corruption, bribery and other similar practices from time-to-time. We are subject to the Foreign Corrupt Practices Act and similar anti-corruption laws in other jurisdictions, and the failure to comply with these laws could result in substantial penalties.
Furthermore, the practice of utilizing labor based in foreign countries has at times come under increased scrutiny in the United States. Governmental authorities could seek to impose financial costs or restrictions on foreign companies providing services to customers in the United States. Governmental authorities may attempt to prohibit or otherwise discourage our United States-based customers from sourcing services from foreign companies. Some of our customers may require us to use labor based in the United States or cease doing business with Altisource. To the extent that we are required to use labor based in the United States, we may not be able to pass on the increased costs of higher-priced United States-based labor to our customers.
Risks Related to Our Common Stock
We may never pay cash dividends on our common stock so any returns would be limited to the potential appreciation of our stock.
We currently anticipate that we will retain future earnings for the development, operation and expansion of our business and do not anticipate we will declare or pay any cash dividends for the foreseeable future. In addition, the terms of applicable debt agreements may preclude us from paying dividends. Any return to shareholders could therefore, be limited to potential stock appreciation.
Our smaller market capitalization could increase the volatility, and limit investors in and analyst coverage, of our stock
As a company with a relatively small market capitalization, our stock may be subject to increased volatility compared to larger, more established companies. Small-cap stocks can experience greater price fluctuations due to lower trading volumes, which may result in limited liquidity for shareholders. This volatility may make it more difficult for investors to buy or sell shares at favorable prices. Additionally, our market capitalization may make it harder to access capital through public markets or secure favorable financing terms. Furthermore, the limited liquidity and volatility of our stock may restrict certain institutional investors, such as mutual funds or pension funds, from investing, as they may have policies that exclude smaller-cap companies.
Moreover, as a small-cap company, we may not receive the same level of analyst coverage as larger firms, which can lead to a lack of publicly available information about our performance, prospects, and financial health. This lack of visibility may make it more difficult for investors to make informed decisions about our stock. As a result, potential investors should be aware that investing in small-cap companies involves heightened risks, including the possibility of significant losses, limited investor participation, and limited access to research and analysis.
Owners of our securities could be diluted.
Issuing new shares of common stock or other securities could dilute the economic and voting interests of current shareholders. We have 250 million authorized shares of common stock, approximately 11.3 million of which were outstanding as of February 26, 2026. The unissued shares are available for future issuance by our Board of Directors. Our Board of Directors has the authority to issue shares without requiring shareholder approval and may, under certain circumstances, limit or cancel the preferential subscription rights of shareholders. If the Board exercises this authority, shareholders may not have the opportunity to participate in future issuances on a pro rata basis and could have their economic and voting interests diluted.
In addition, as of February 26, 2026, the Stakeholder Warrants could be exercised for up to approximately 14.3 million shares of common stock at an implied per share exercise price of $9.5998 per share. In addition, as of February 26, 2026, we had approximately 0.6 million RSUs outstanding. Outstanding warrants and RSUs entitle the holders thereof to receive shares of our common stock upon the exercise of the warrants or the vesting of RSUs. If the Stakeholder Warrants are exercised and/or the outstanding RSUs vest, a significant number of additional shares of common stock will be issued, which could adversely
Table of Content
impact the trading price of our common stock and would further dilute the economic and voting interests of existing shareholders. Similarly, any future equity grants to employees, executives, or directors under the Equity Plan, or issuance of additional warrants, if exercised, would increase the number of outstanding shares, further diluting the ownership percentage of existing shareholders.
The market price and trading volume of our common stock and Stakeholder Warrants has been and may continue to be volatile.
The price of our common stock has fluctuated significantly, and it may continue to do so. As of February 26, 2026, the closing price of our common stock on the Nasdaq Global Select Market was $7.94. From May 28, 2025 (the first day of trading of our common shares after we consolidated our common shares at a ratio of 1-for-8) to February 26, 2026, the closing price of our common stock on the Nasdaq Global Select Market ranged from a high of $15.04 to a low of $4.34. The price of our common stock may continue to fluctuate due to a variety of factors, including those set forth in this Item 1A of this Annual Report Form 10-K (this “Form 10-K”).
The resale of the Debt Exchange Shares has been registered under the Securities Act of 1933, as amended, on a registration statement filed with the SEC (the “Resale Registration Statement”), which covers the resale of up to 7,224,028 of our common shares, or approximately 66% of our outstanding common shares as of December 31, 2025. Accordingly, the Debt Exchange Shares may be freely sold pursuant to that Resale Registration Statement. Further, certain persons that may sell shares of our common stock pursuant to the Resale Registration Statement beneficially own a significant percentage of our common stock. Matthew Winkler, a member of our Board of Directors, is a Managing Director at Benefit Street Partners, LLC (“BSP”), which is an investment adviser registered with the SEC pursuant to the Investment Advisers Act of 1940, as amended. BSP serves, either directly or through one or more of its advisory affiliates, as the investment adviser to several funds that beneficially own in the aggregate 3,945,232 shares of our common stock (including 2,173,114 shares of common stock issuable upon exercise of Stakeholder Warrants), or approximately 36% of our common stock as of December 31, 2025. Mary C. Hickok, a member of our Board of Directors, serves as Managing Director at Deer Park Road Management, LP (“Deer Park”), which is the investment manager for certain funds that beneficially own 3,340,589 shares of common stock (including 1,855,050 shares of common stock issuable upon exercise of Stakeholder Warrants), or approximately 30% of our common stock as of December 31, 2025. The resale of many of the shares beneficially owned by BSP and Deer Park are covered by the Resale Registration Statement.
The potential for large-scale resales of the Debt Exchange Shares by significant shareholders or otherwise in the public market, or the perception that such sales could occur, may contribute to significant fluctuations in the trading volume and trading price of our common stock. Volatility in our stock could negatively affect investor confidence and impair our ability to raise additional capital in future equity financings.
Additionally, the existence of the Stakeholder Warrants may further affect trading patterns and market price dynamics. If the market price of our common stock exceeds the Implied Per Share Exercise Price of the Stakeholder Warrants, a substantial number of shares could be issued upon exercise of the Stakeholder Warrants. The potential for such issuances and the resulting dilution could adversely affect trading volume and market price.
In addition, the trading prices of the Stakeholder Warrants has also fluctuated significantly. As of February 26, 2026, the closing prices of the Cash Exercise Stakeholder Warrants and the Net Settle Stakeholder Warrants and the on the Nasdaq Global Select Market were $0.33 and $0.39, respectively. From May 7, 2025 (the first day of trading of Stakeholder Warrants) to February 26, 2026, the closing price of the Cash Exercise Stakeholder Warrants ranged from a high of $1.13 to a low of $0.21 and the closing price of the Net Settle Stakeholder Warrants ranged from a high of $1.15 to a low of $0.28, in each case, on the Nasdaq Global Select Market.
We may take advantage of specified reduced disclosure requirements applicable to a “smaller reporting company” or a “non-accelerated filer” under Regulation S-K, and the information that we provide to shareholders may be different from the information they might receive from other public companies.
We are a “smaller reporting company,” as defined under Item 10(f)(1) of Regulation S-K. As such, we intend to take advantage of reduced disclosure and other requirements applicable to smaller reporting companies, including scaled disclosure requirements, simplified executive compensation disclosures, and certain other reduced disclosure obligations in our SEC filings.
Because of our status, as a “non-accelerated filer” under SEC rules we are not required to comply with Section 404(b) of the Sarbanes-Oxley Act of 2002, which requires an independent registered public accounting firm to provide an attestation report on management’s assessment of the Company’s internal control over financial reporting.
Table of Content
We intend to utilize these allowances until we no longer qualify as a smaller reporting company or are no longer a “non-accelerated filer”, as applicable. Therefore, the information we provide shareholders may differ from that provided by other public companies which are not smaller reporting companies. If some investors find our shares less attractive as a result, our stock could experience reduced trading activity and increased volatility in the market price.
We are not currently eligible to file new short form registration statements on Form S-3 for the primary offering of securities, except in limited circumstances. As a result, our ability to raise capital on favorable terms or at all may be impaired.
Form S-3 permits eligible issuers to conduct registered offerings using a short form registration statement that allows the issuer to incorporate by reference its past and future filings and reports made under the Exchange Act. In addition, Form S-3 enables eligible issuers to conduct primary offerings “off the shelf” under Rule 415 of the Securities Act of 1933, as amended (the “Securities Act”). The shelf registration process, combined with the ability to forward incorporate information, allows issuers to avoid delays and interruptions in the offering process and to access the capital markets in a more expeditious and efficient manner than raising capital in a standard registered offering pursuant to a registration statement on Form S-1.
We registered the sale of $100,000,000 of common stock and warrants on Form S-3 on December 12, 2022 (the “Form S-3”), of which $62.5 million remains available as of the date of the filing of this Form 10-K. However, our public float was less than $75.0 million as of the date of filing of this Annual Report on Form 10-K. As a result, under General Instruction I.B.6 to Form S-3, the amount of funds we can raise through primary public offerings of securities, in any 12-month period using our registration statement on Form S-3 is limited to one-third of the aggregate market value of the shares of our common stock held by our non-affiliates. We are subject to this limitation until such time as our public float exceeds $75.0 million. If we are required to file a new registration statement on another form, we may incur additional costs and be subject to delays due to review by the SEC. As of February 26, 2026, our public float (i.e., the aggregate market value of our outstanding equity securities held by non-affiliates) was approximately $18.9 million, based on 2.4 million shares of outstanding common stock held by non-affiliates and on the closing price of $7.94 per share of our common stock, as calculated in accordance with General Instruction I.B.6 of Form S-3. In accordance with General Instruction I.B.6 of Form S-3, we can only sell $6.3 million (one-third of our public float) of common stock and warrants pursuant to the Form S-3 in a 12-month period, and that amount will not increase unless the market value of the shares of our common stock held by our non-affiliates increases.
Volatility in the trading price of our common stock or other securities could result in litigation.
In the past, following periods of volatility in the market price of a company’s securities, shareholders have often instituted class action securities litigation against those companies. Such litigation, if instituted, could result in substantial costs and divert management’s attention adversely affecting profitability and reputation.
Risks Related to Shareholder Structure and Governance
The individual and collective interests and objectives of the lenders under our New Facility which are also our shareholders (collectively, the “Lender Shareholders”) may conflict with those of our other shareholders.
As a result of the Transactions, the Lenders received approximately 63.5% of our outstanding common stock (including RSUs granted to management) as of the closing of the Transactions. The individual and collective interests and objectives of Lender Shareholders may not align or may conflict with those of our other shareholders. Lender Shareholders may, as shareholders or lenders, take actions or support decisions that prioritize debt recovery over equity appreciation, pursue strategies that prioritize short-term liquidity at the expense of long-term growth, or resist initiatives requiring additional capital investment that could dilute their ownership or delay repaying of the debt.
Because the Lender Shareholders collectively hold a significant portion of our outstanding common stock, they may exert significant influence over the composition of our Board of Directors, operational decisions, and key business initiatives, which may not align with the interests of non-debt-holding shareholders. In particular, two directors currently serving on our Board were nominated by the Lender Shareholders pursuant to one-time nomination rights granted in connection with the Transactions and were elected at our most recent annual meeting of shareholders. One of these directors is Matthew Winkler, a Managing Director at BSP, which through its affiliates, is a Lender Shareholder. In addition, a third director, Mary C. Hickok, is employed by Deer Park, which, through its affiliates is a Lender Shareholder.
There can be no assurance that the interests of Lender Shareholders will align with the long-term interests of the Company or all of its other stakeholders. Potential conflicts between the Lender Shareholders and non-debt-holding shareholders could complicate decision-making and negatively impact our operations. Non-debt-holding shareholders may have limited ability to influence the direction or governance of the company.
Table of Content
There is no assurance that we will be able to implement or maintain measures to manage these potential conflicts effectively. Even if such measures are in place, they may not fully mitigate all conflicts of interest, and any resolution could be less favorable to us than if we were dealing with unrelated third parties.
Risks Related to Financing, Our Indebtedness and Capital Structure
If we are unable to generate sufficient cash flow or access the capital markets or our borrowing capacity is reduced, our liquidity and competitive position would be negatively affected.
An extended period of reduced demand for all or certain of our services would negatively impact our cash flow such that we may need to use unrestricted cash to satisfy our obligations, which would reduce our cash balance negatively impacting our liquidity.
In addition, our liquidity could be adversely affected by an inability to access the capital markets, volatility in the capital markets, unforeseen outflows of cash, funding for contingencies and increased regulatory liquidity requirements.
Our ability to borrow money could be limited, or our cost of borrowing could increase, due to volatility in the capital markets, worsening terms on which credit is available or limitations in our loan agreements. In addition, our financial results, reduced revenue or cash flow, or volatility in the markets which we support, could negatively impact our customer and prospective customer relationships, as well as our ability to borrow or our ability to continue to satisfy the covenants and terms of our loan agreements. If we were to have a default under our loan agreements, we would not be able borrow additional funds under our existing agreements and our lenders could seek to enforce the remedies available to them under our loan agreements. A reduction in our ability to borrow funds to support our operations or a reduction in cash flow would also reduce our ability to pursue our business strategy to diversify and grow our customer base. Significant litigation, regulatory penalties, indemnification obligations, or settlements could require substantial cash outflows, impair liquidity, reduce capital available for operations, or cause us to breach covenants under our loan agreements.
Our level of debt and the variable interest rate on our New Facility and the Super Senior Facility make us sensitive to the effects of our financial performance and interest rate increases; our level of debt and provisions of the New Facility and the Super Senior Facility could limit our ability to react to changes in the economy or our industry.
Our term loans under the New Facility and Super Senior Facility expose us to potential risks because a portion of our cash flows from operations and current cash on the balance sheet is dedicated to servicing our debt and is not available for other purposes. The term loans under the New Facility and the Super Senior Facility are secured by virtually all of our assets.
Our ability to raise additional debt is limited, and in many circumstances, is subject to lender approval and could require modifications to certain loan agreements. The provisions of the New Facility and the Super Senior Facility could have other negative consequences to us, including the following:
• limiting our ability to borrow money for our working capital, capital expenditures, debt service requirements, or other general corporate purposes;
• limiting our flexibility in planning for, or reacting to, changes in our operations, business, or the industry in which we compete;
• if we have Consolidated Excess Cash Flow, requiring us to prepay the debt by the lesser of (a) 75% of the Consolidated Excess Cash Flow and (b) the amount that would leave the Company with no less than $30 million of total cash on the balance sheet to prepay outstanding debt, beginning with the fiscal year ending December 31, 2025;
• to the extent we receive proceeds from the exercise of the Cash Exercise Stakeholder Warrants, requiring us to use 95% of the proceeds to prepay debt; and
• placing us at a competitive disadvantage by limiting our ability to invest in our business.
Our ability to make payments on our indebtedness depends on our ability to generate cash in the future. As a result of low default, foreclosure and REO levels, and lower origination volumes, compared to historical levels, our cash flows were and remain severely impacted. There can be no assurance that we will be able to achieve historical levels of revenues and cash flows (adjusted for businesses sold or discontinued). If we do not generate sufficient cash flows and do not have sufficient cash on hand to meet our debt service and working capital requirements, we may need to seek additional financing, raise equity, or sell assets, and our ability to take these actions may be limited by the terms of the New Facility and the Super Senior Facility or the market.
In addition, the New Facility and the Super Senior Facility contain covenants that limit our flexibility in planning for, or reacting to, changes in our business and our industry, including limitations on incurring additional indebtedness, making
Table of Content
investments, adding new lines of service, disposing or selling of assets or equity, granting liens, and merging or consolidating with other companies. Complying with these covenants may impair our ability to finance our future operations or capital needs or to engage in other favorable business activities.
Our failure to comply with the covenants or terms contained in the New Facility or the Super Senior Facility, including as a result of events beyond our control, could result in an event of default.
The New Facility and the Super Senior Facility require us to comply with various operational, reporting and other covenants or terms including, among other things, limiting us from engaging in certain types of transactions. If we do not have appropriate controls, or the controls we implement fail or are not effective, we could experience an event of default. If we experience an event of default that is not cured or waived, it could result in the debt being called and immediately due and payable in full. Our assets or cash flows may not be sufficient to fully repay the accelerated debt and we may not be able to refinance or restructure the payments on such debt, which could lead to a going concern uncertainty, which in turn could provide certain of our customers the ability to terminate our agreements. An event of default would allow the holders of the defaulted debt to cause all amounts outstanding with respect to that debt to be immediately due and payable and permit the lenders to execute on applicable security interests.
We may be unable to repay or refinance the balance of our loans under the New Facility or the Super Senior Facility prior to maturity, particularly if cash from operations is not sufficient, assets are not readily available for sale, or we are unable to refinance on favorable terms or at all.
The New Facility requires us to repay the outstanding balance by April 30, 2030. The Super Senior Facility requires us to repay the outstanding balance by February 19, 2029.
The New Facility and the Super Senior Facility impose restrictions on our ability to incur additional indebtedness or refinancing.
There can be no assurance that our cash from operations, cash balances, or other assets readily available for sale will be sufficient to meet our debt obligations. If we are unable to generate sufficient cash flow or refinance our debt under favorable terms, we may be required to sell assets, raise equity, or seek alternative financing. There can be no assurance that such actions will be available to us, or that we will be able to refinance the remaining debt on acceptable terms or at all.
We may not be able to refinance our then-existing indebtedness when it becomes due or obtain alternative financing on terms that are acceptable to us or at all. If we refinance our then-existing debt, the refinancing could be on less favorable terms which would further limit our ability to finance and operate our business.
We could be forced to sell assets or reduce costs under unfavorable circumstances to make up for any shortfall in our payment obligations. We may be unable to sell assets or reduce costs quickly enough or for sufficient consideration to enable us to meet our obligations. Failure to meet our debt service obligations would result in an event of default under our loan agreements which, if not cured or waived, could result in the holders of the defaulted debt causing all outstanding amounts with respect to that debt to be immediately due and payable and permit lenders to execute applicable security interests. If we were to default on our debt, our lenders could take action adverse to our interests under the loan agreements, including seeking to take possession of applicable collateral, negatively impacting our future operations or ability to engage in other favorable business activities. Additionally, a default could result in conditions triggering termination events under certain of our client or vendor agreements, which could negatively impact our revenue, cash flow, or ability to provide services. If we are unable to agree upon a resolution with our lenders, we might seek applicable legal protections, including under bankruptcy law, which could further provide certain of our customers or vendors the ability to terminate our agreements.
We have a significant net operating loss recognized by our Luxembourg entities. We may not be able to fully utilize this deferred tax asset before the net operating loss expires.
As of December 31, 2025, our Luxembourg entities have net operating losses of approximately $2.1 billion, creating a deferred tax asset of $498.9 million. The Company has recognized a full valuation allowance with respect to this deferred tax asset. The net operating losses are scheduled to expire between the years 2034 and 2042. If our Luxembourg entities are unable to generate sufficient pretax income prior to the expiration of the net operating losses, the Company may not be able to fully utilize this deferred tax asset. In addition, changes in our structure or operations could prevent us from fully realizing some or all of the benefit of such deferred tax asset.
We have significant investments in goodwill and intangible assets recorded as a result of prior acquisitions and an impairment of these assets would require a write-down that would reduce our net income.
Table of Content
As a result of prior investments, we have significant goodwill and intangible assets recorded in our financial statements. Goodwill and intangible assets are assessed for impairment annually or sooner if circumstances indicate a possible impairment. Factors that could lead to impairment of goodwill and intangible assets include significant under-performance relative to historical or projected future operating results, a significant decline in our stock price and market capitalization and negative industry or economic trends, among other indications of impairment. If the recorded values of goodwill and intangible assets are impaired, any such impairment would be charged to earnings in the period of impairment. In the event of significant volatility in the capital markets or a worsening of current economic conditions, we may be required to record an impairment charge, which would adversely affect our business and results of operations.
Cash, cash equivalents and escrow funds we hold at financial institutions could be lost and not recoverable.
We hold our cash and cash equivalents, including customer deposits held in escrow accounts pending completion of certain real estate activities, at various financial institutions. These cash balances expose us to purposeful misappropriation of cash by employees or others and unintentional mistakes resulting in a loss of cash which may not be recoverable. Cash may be invested in certain securities or products which could lose value. Cash deposits could exceed amounts insured by the Federal Deposit Insurance Corporation or other applicable depository insurers.
Amounts that are held in escrow accounts for limited periods of time are not included in the accompanying consolidated balance sheets. We may become liable for funds owed to third parties as a result of purposeful misappropriation of cash by employees or others, unintentional mistakes or the failure of one or more of these financial institutions. There is no guarantee we would recover the funds deposited, whether through depository insurer coverage, private insurance or otherwise.
Fluctuations in currency exchange rates could expose us to losses.
We have operations in India, Luxembourg and Uruguay which may result in us being party to transactions denominated, or incurring obligations, in currencies other than the United States dollar, including, for example, payroll, taxes, facilities-related expenses. Weakness of the United States dollar in relation to these applicable currencies (e.g., Euro, Indian rupee, Uruguayan peso) may increase our costs.
Risks Relating to Luxembourg Organization and Ownership of Our Shares
We are a Luxembourg company. The rights of shareholders under Luxembourg law may differ in certain respects from the rights afforded to shareholders of companies organized under laws in other jurisdictions. Luxembourg may also impose additional requirements which may limit our ability to manage the company and respond to market conditions.
We are a public limited liability company (société anonyme) organized and existing under the laws of, and headquartered in, Luxembourg. As a result, Luxembourg law and our amended and restated articles of incorporation, as amended from time to time (“Articles”) govern the rights of shareholders. The rights of shareholders under Luxembourg law may differ from the rights of shareholders of companies incorporated in other jurisdictions. A significant portion of our assets are owned outside of the United States. It may be difficult for our investors to obtain and enforce, in the United States, judgments obtained in United States courts against us or our directors based on the civil liability provisions of the United States securities laws or to enforce, in Luxembourg, judgments obtained in other jurisdictions including the United States.
As a Luxembourg company, we are subject to Luxembourg requirements which may limit our operational flexibility and affect how we manage and govern the Company.
Our corporate governance and activities are subject to Luxembourg’s legal and regulatory framework. Luxembourg law imposes certain requirements regarding corporate structure, board composition, director duties and the conduct and location of board and shareholder meetings. In addition, evolving substance expectations may require that certain strategic decisions, management functions and oversight activities be conducted in Luxembourg, and that directors or officers maintain an appropriate level of local presence and involvement.
These requirements may limit our management and operational flexibility, present challenges to attendance of stockholders annual or extraordinary meetings of the Company, and may increase operational complexity and costs. Failure to comply with Luxembourg legal requirements could result in regulatory scrutiny, tax challenges, reputational harm or other adverse consequences.
Additionally, Luxembourg maintains a rigorous legal framework relating to anti-money laundering (AML) and counter-terrorism financing (CTF), including oversight of corporate governance and internal controls. Compliance with these requirements may require significant resources and ongoing monitoring. Non-compliance could result in penalties, enforcement actions, restrictions on business activities or reputational damage.
Table of Content
Changes in Luxembourg law, regulatory interpretation, tax guidance, or increased enforcement focus on corporate substance or; director presence in Luxembourg, governance oversight or operational decision-making could increase our compliance obligations, limit our operational flexibility, or adversely affect our financial condition, results of operations and growth prospects.
A significant challenge of the Luxembourg tax regime or of its interpretation by the Luxembourg tax authorities, or its application to us or our business could have a negative impact us.
We received and historically operated under a tax ruling from the Luxembourg tax authorities, which would have expired in 2019 unless extended or renewed. In connection with an internal reorganization by the Company during 2017, we no longer operate under this tax ruling. The European Commission (“EC”) has initiated investigations into several EU member states, including Luxembourg, to determine whether these EU member states have provided tax advantages to companies pursuant to tax rulings or otherwise on a basis not allowed by the EU. While the EC’s investigations continue, it has concluded that certain companies in certain EU member states, including Luxembourg, have been provided such tax advantages. The EC is requiring these EU member states to recover from certain companies the prior year tax benefits they received.
Changes in trade policies, including tariffs, taxes or restrictions on foreign service providers, could adversely affect our business.
As a Luxembourg-based company providing services primarily to customers located in the United States, we are subject to risks related to changes in trade, tax and tariff policies of the United States or the European Union. Tariffs, trade restrictions, or other protectionist measures affecting us as a non-United States domiciled service provider or owner of intellectual property, our ability to contract with clients or our transfer pricing structure could negatively impact our operations and financial performance. Additionally, new or increased tariffs, cross-border taxation, or regulatory burdens on foreign businesses operating in the United States could increase our costs, reduce our competitiveness, or limit our ability to expand our operations. We may not be able to increase our prices to cover our increases in costs.
Risks Relating to Regulation
Our business and the business of our customers are subject to extensive scrutiny and legal requirements. We, or our services, may fail or be perceived as failing to comply with applicable legal requirements.
Our business and the business of our customers are subject to extensive scrutiny and regulation by federal, state and local governmental authorities including the FTC, the CFPB, the SEC, HUD and state and local agencies, including those which license or oversee certain of our auction, real estate brokerage, mortgage services, trustee services, residential mortgage origination services, title insurance and other insurance services, as well as collection and use of personal information. We also must comply with a number of federal, state and local consumer protection laws. We are subject to various foreign laws and regulations based on our operations or the location of our affiliates as well, including those pertaining to data protection, such as the GDPR. These foreign, federal, state and local requirements can and do change as statutes and regulations are enacted, promulgated or amended. Furthermore, the interpretation or enforcement by regulatory authorities of these requirements may change over time or may not be predictable or consistent with our interpretations or expectations. The creation of new regulatory authorities or changes in the regulatory authorities overseeing applicable laws and regulations may also result in changing interpretation or enforcement of such laws or regulations.
Evolving privacy, data-protection, artificial-intelligence, and automated-decision-making regulations may impose new obligations on our technology and services. These requirements may include restrictions on training-data use, data-minimization mandates, documentation and testing obligations, explainability and transparency requirements, risk assessments, or limitations on automated decision-making. Such regulations continue to develop in the United States and in the European Union and EEA, including under U.S. state privacy and artificial intelligence laws, GDPR, and the EU Artificial Intelligence Act. Compliance may require changes to our technology, processes, or services, may increase operational costs, and may expose us to government inquiries, enforcement actions, or litigation.
If governmental authorities impose new or more restrictive requirements or enhanced oversight related to our services or operations, we may be required to increase or decrease our prices, modify our contracts or course of dealing and/or we may incur significant additional costs to comply with such requirements. Additionally, we may be unable to adapt our services or operations to conform to the new laws and regulations.
Periodically, we are subject to audits and examinations by federal, state and local governmental authorities and receive subpoenas, civil investigative demands or other requests for information from such governmental authorities in connection with their regulatory or investigative authority. Responding to audits, examinations and inquiries will cause us to incur costs, including legal fees or other charges, which may be material in amount, and in addition, may result in management distraction
Table of Content
or may cause us to modify or terminate certain services we currently offer. If any such audits, examinations or inquiries result in allegations or findings of non-compliance, we could incur significant penalties, fines, settlements, costs and consent orders that may curtail, restrict or otherwise have an adverse effect on our business.
Regulatory inquiries or determinations of failures to comply with applicable requirements could increase our costs and expose us to sanctions which could include limitations on our ability to provide services or otherwise reduce demand for our services. Furthermore, even if we believe we comply with applicable laws and regulations, we may choose to settle such allegations to avoid the potentially significant costs of defending such allegations and to further avoid the risk of increased damages if we ultimately were to receive an unfavorable outcome, but such settlements may also result in further claims or create issues for existing and potential customers. Such settlements and additional actions could increase costs, place limitations on our services, and result in a reduction in demand.
From time to time, we may be subject to costly and time-consuming regulatory or legal proceedings that claim legal violations or wrongful conduct, including claims for violations of consumer protection laws, laws concerning PI or third-party intellectual property rights. These proceedings may involve regulators, customers, our customers’ clients, vendors, competitors, third parties or other large groups of plaintiffs and, if resulting in findings of violations, could result in substantial damages or indemnification obligations. Additionally, we may be forced to settle some claims and change our existing practices, services processes or technologies that are currently revenue generating. Certain regulations to which we are subject provide for potentially significant penalties such that even if we believe we have no liability for the alleged regulatory or legal violations or wrongful conduct, we may choose to settle such regulatory or legal proceedings in order to avoid the potentially significant costs of defending such allegations and to further avoid the risk of increased damages if we ultimately were to receive an unfavorable outcome; however, such settlements may also result in further claims or create issues for existing and potential customers. Such proceedings and settlement could increase our costs and expose us to sanctions, including limitations on our ability to provide services, or otherwise reduce demand for our services.
Failure to comply with applicable sanctions, including blocking certain activities in sanctioned countries, could expose us to penalties and other adverse consequences.
Our business activities may be subject to sanctions laws in the jurisdictions in which we operate, including restrictions or prohibitions on transactions with, or on dealing in funds transfers to or from certain embargoed jurisdictions. We have implemented internet protocol (“IP”) address blocking and screening mechanisms to promote compliance with US sanctions rules and regulations, although the blocking and screening mechanisms may not be able to completely block all unwanted IP access. A determination that we have failed to comply with applicable sanctions, whether knowingly or inadvertently, could result in the imposition of substantial penalties, including enforcement actions, fines, and civil and/or criminal penalties, and may adversely affect our business.
If we fail to timely make required disclosure filings with the United States Department of Treasury Financial Crimes Enforcement Network, we could be subject to penalties.
We operate as a title insurance agent through one or more subsidiaries. As a title insurance agent, we are contractually required by certain insurance underwriters to make Financial Crimes Enforcement Network Currency Transaction Report filings with the U.S. Department of the Treasury in connection with cash real estate transactions in specified United States jurisdictions which satisfy certain requirements (the “Filing Requirements”). Filings pursuant to the Filing Requirements must be made within a specified time period after a subject transaction closes and must be accompanied by certain information concerning the applicable transaction. If our procedures fail to identify transactions which are subject to the Filing Requirements, or if we fail to make required filings or fail to provide the required transaction information, we could be subject to civil, criminal and monetary penalties. The failure to satisfy the Filing Requirements could also cause us to be in breach of our agreements with the title insurance underwriter and could subject us to liability and lead to termination of such agreements.
We are subject to licensing and regulation as a provider of certain services. If we fail to maintain our licenses or if our licenses are suspended or terminated, we may not be able to provide certain of our services. In addition, the lack of certain licenses in one or more jurisdictions could cause us to breach applicable contracts.
We are required to have and maintain licenses as a provider of certain services including, among others, services as a residential mortgage origination underwriter, valuation provider, appraisal management company, asset manager, property manager, title insurance agent, insurance broker and underwriter, real estate broker, auctioneer, foreclosure trustee and credit report provider in a number of jurisdictions. Our employees and subsidiaries may be required to be licensed by various state or regulatory commissions or bodies for the particular type of service provided and to participate in regular continuing education programs. If one or more of our licenses are lost, revoked, expire or limited, or if we fail to maintain or otherwise surrender one or more such license, we may be prohibited from doing business in certain markets. Further, certain of our agreements require that we
Table of Content
possess and maintain certain licenses. The failure to hold such licenses may result in us breaching certain agreements, which could cause us to be subject to claims for damages, termination of applicable agreements or unable to obtain inputs required for certain of our services.
A violation by our customers of applicable legal requirements in the selection or use of our services could generate legal liability for us.
Certain of our services are provided at the direction and pursuant to the identified requirements of our customers, including property preservation, inspection, title, valuations, brokerage, auction, foreclosure and eviction services that are triggered by information provided by our customers. The failure of our customers to properly identify or account for regulatory requirements applicable to the use of our services, in selecting appropriate services for the intended purposes, or in specifying how services are rendered could expose us to significant penalties, fines, litigation, settlements, costs and consent orders.
Our services, regulatory obligations and tax compliance requirements expose us to significant penalties, litigation, customer loss and increased costs.
Participants in the industries in which we operate are subject to a high level of oversight and regulation. The failure of our services to meet applicable legal requirements could subject us to civil and criminal liability, loss of licensure, damage to our reputation, significant penalties, fines, settlements, adverse publicity, litigation, including class action lawsuits or administrative enforcement actions, costs and consent orders against us or our customers that may curtail or restrict our business as it is currently conducted. Such failures could also cause customers to reduce or cease using our services.
Certain of our customers are subject to vendor oversight requirements. As such, we are subject to oversight by our customers. If we do not meet the standards established by or imposed upon our customers, regulators allege that services provided by Altisource fail to meet applicable legal requirements, or if any other oversight procedures result in a negative outcome for Altisource, we may lose customers, may no longer be granted referrals for certain services, or may have to conform our business to address these standards.
The tax regulations, and the interpretation thereof, in the countries, states and local jurisdictions in which we operate periodically change, which may adversely affect our results due to higher taxes, interest and penalties, or our inability to utilize operating losses or other tax credits available to us.
Certain of our subsidiaries provide services in the United States, India and other countries. Those jurisdictions are subject to changing tax environments, which may result in higher operating expenses or taxes and which may introduce uncertainty as to the application of tax laws and regulations to our operations. Furthermore, we may determine that we owe additional taxes or may be required to pay taxes for services provided in prior periods as interpretations of tax laws and regulations are clarified or revised. Changes in laws concerning sales tax, gross recipient tax, dividends, retained earnings, application of operating or other losses, and intercompany transactions and loans, among others, could impact us. We may not be able to raise our prices to customers or pass-through such taxes to our customers or vendors in response to changes, which would adversely affect our results of operations. If we fail to accurately anticipate or apply tax laws and regulations to our operations, we could be subject to liabilities and penalties. We may be unable to take advantage of operating losses or other tax credits to the full extent available or at all due to changes in tax regulations or our results of operations.
Our operations and intercompany arrangements are subject to the tax laws of various jurisdictions, and we could be obligated to pay additional taxes, which would harm our results of operations.
We conduct our operations in several countries, states and local jurisdictions and may be required to report our taxable income in various jurisdictions worldwide based upon our business operations in those jurisdictions. Our intercompany relationships are subject to complex transfer pricing regulations administered by taxing authorities in various jurisdictions. These regulations are designed to ensure that transactions between related entities are conducted at arm’s length, i.e., at prices that would be agreed upon by unrelated parties in the open market. Transfer pricing regulations, and associated guidelines, are complex and vary from country to country, and changes in the tax treatment of transfer pricing could have a material effect on the Company.
The amount of taxes paid in different jurisdictions may depend on the application of the tax laws of the various jurisdictions to our business activities, changes in tax rates, new or revised tax laws or interpretations of existing tax laws and policies, and our ability to operate our business in a manner consistent with our corporate structure and intercompany arrangements. The relevant taxing authorities may disagree with our determinations as to the transfer pricing, income and expenses attributable to specific jurisdictions. If such a disagreement were to occur, and our position was not sustained, we could be required to pay additional taxes, interest and penalties, which could result in one-time tax charges, higher effective tax rates, reduced cash flows and lower overall profitability of our operations.
Table of Content
We are subject to income, withholding, transaction and other taxes in numerous jurisdictions. Significant judgment will be required in evaluating our tax positions and our worldwide provision for taxes. During the ordinary course of our business, there are many activities and transactions for which the ultimate tax determination may be uncertain. We may be audited in various jurisdictions, and such jurisdictions may assess additional taxes, sales taxes and value added taxes against it. Even if we believe our tax estimates are reasonable, the final determination of any tax audits or litigation could be materially different from our historical tax provisions and accruals, which could have an adverse effect on our results of operations or cash flows in the period or periods for which a determination is made.
Additionally, evolving tax policies focused on combating base erosion and profit shifting may lead to more aggressive tax enforcement by authorities, increased documentation and compliance requirements, and the potential for disputes with tax authorities. This could lead to unexpected tax adjustments, higher operating costs, and delays in operations as the Company seeks to address any tax challenges or compliance issues.
