ASPS Altisource Portfolio Solutions SA

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934

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Preliminary Proxy Statement

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Confidential, For Use of the Commission only (as permitted by Rule 14a-6(e)(2))

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Definitive Proxy Statement

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Definitive Additional Materials

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Soliciting Material under §240.14a-12

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ALTISOURCE PORTFOLIO SOLUTIONS S.A.

(Name of Registrant as Specified in its Charter)

N/A

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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Fee paid previously with preliminary materials.

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Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a6(i)(1) and 0-11.

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[           ], 2024

Dear Fellow Shareholder:

On behalf of our Board of Directors, I cordially invite you to attend the Extraordinary General Meeting of Shareholders (the “Extraordinary Meeting”) of Altisource Portfolio Solutions S.A. (the “Company”), which will be held at our registered office located at 33, Boulevard Prince Henri, L-1724 Luxembourg, Grand Duchy of Luxembourg on [           ], 2025, at 9:00 a.m. Central European Time. Immediately following, at 9:30 a.m. Central European Time, we will hold a Special General Meeting of Shareholders (the “Special Meeting” and, collectively with the Extraordinary Meeting, the “Meetings”) at the same location.

Your vote is requested to approve the proposals described in the attached proxy statement. These proposals aim to facilitate a series of transactions to recapitalize the Company, including:

1)

The issuance of shares of our common stock representing up to 63.5% of the outstanding shares immediately following the effective date of the transactions, subject to certain exceptions described in the accompanying proxy statement (the “Debt Exchange Shares”) in exchange for the contribution of up to $72.8 million1 in principal amount of our existing debt from our lenders, subject to certain exceptions detailed in the proxy statement.

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2)

The provision of a new debt facility by current lenders.

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3)

The issuance of warrants to certain of our stakeholders (including shareholders, holders of penny warrants and holders of restricted stock units) as of a record date set prior to the closing of the transactions. These warrants, which will not be issued with respect to Debt Exchange Shares, are designed to provide stakeholders an opportunity to offset dilution resulting from the issuance of the Debt Exchange Shares if Altisource’s share price exceeds the warrant exercise price for the requisite period.

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The expected benefits of these transactions include:

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Strengthening the Company’s balance sheet and cash flow.

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Allowing time for the Company to benefit from:

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The potential normalization of the default market to pre-pandemic foreclosure levels;

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The anticipated growth in the Company’s origination and real estate investor solutions;

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Reducing management, employee and customer distractions; and

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Providing pre-transaction stakeholders potential ownership increases through the warrant issuance.

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Details regarding the proposed transactions, the Meetings’ agendas, and voting instructions are provided in the accompanying materials.

It is very important that you be present or represented at the Meetings, regardless of the number of shares you own or whether you are able to attend in person. If you are a shareholder of record (that is, you hold your shares in your name with our transfer agent), you may authorize your proxy online or by mail as described in the accompanying materials for the Special Meeting. For the Extraordinary Meeting, you may authorize your proxy by mail only. If you hold your shares through a bank or broker, please follow the voting instructions you receive from your bank or broker. Authorizing your proxy in advance will ensure that your vote is counted even if you are unable to attend, without preventing you from voting in person. Thank you for your continued support and interest in Altisource Portfolio Solutions S.A.

Sincerely,

William B. Shepro
Chairman and Chief Executive Officer

1

Based on the estimated outstanding balance on our existing term loans of $232.8 million as of December 31, 2024.

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ALTISOURCE PORTFOLIO SOLUTIONS S.A.
33, Boulevard Prince Henri
L-1724 Luxembourg
Grand Duchy of Luxembourg
R.C.S. Luxembourg B72391

NOTICE OF EXTRAORDINARY GENERAL MEETING OF SHAREHOLDERS AND
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS
FOR THE EXTRAORDINARY GENERAL MEETING OF SHAREHOLDERS TO BE HELD ON [           ], 2025

NOTICE

Our Extraordinary General Meeting of Shareholders (“Extraordinary Meeting”) will be held:

PURPOSE

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To approve an amendment to Article 5 of the Company’s Amended and Restated Articles of Incorporation (the “Articles”) to (i) cancel the nominal value of all existing shares of the Company’s common stock, and (ii) decrease the par value of the Company’s common stock from US$1.00 per share to US$0.01 per share through a decrease of the share capital of the Company by an amount of thirty million four hundred and seventy-seven thousand fifty-seven and ninety-three cents United States Dollars (US$30,477,057.93) without cancellation of shares of the Company’s common stock, in order to bring the share capital of the Company from its current amount of thirty million seven hundred eighty-four thousand nine hundred seven United States Dollars (US$30,784,907) to an amount of three hundred and seven thousand eight hundred forty-nine and seven cents United States Dollars (US$307,849.07) represented by thirty million seven hundred and eighty-four thousand nine hundred seven (30,784,907) shares of the Company’s common stock without designation of nominal value, and by allocating thirty million four hundred and seventy-seven thousand fifty-seven and ninety-three cents United States Dollars (US$30,477,057.93) derived from the share capital decrease to the share premium account of the Company.

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To approve an increase in the number of shares the Board of Directors of the Company is authorized to issue from 100,000,000 to 250,000,000 and the renewal of the authority of the Board of Directors to issue shares by (i) approving an amendment to Article 6 of the Articles to renew and amend the authorization of the Board of Directors of the Company to (a) issue shares of the Company’s common stock, within the limits of the Company’s authorized share capital of up to two million and five hundred thousand United States Dollars (US$2,500,000) divided into two hundred fifty million (250,000,000) shares of the Company’s common stock without nominal value and, (b) issue any warrants, options, or other similar instruments exercisable into shares and rights to subscribe for shares and set the terms and conditions of these instruments, each for a term of five (5) years and, in connection with any such issuance, to limit or cancel the preferential subscription rights of shareholders, and (ii) acknowledging receipt of the report issued by the Board of Directors of the Company pursuant to article 420-26 (5) of the Luxembourg Law of 10 August 1915 on commercial companies, as amended.

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To transact such other business as may properly come before the meeting and any adjournment or postponement of the meeting.

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PROCEDURES

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Our Board of Directors has fixed December [•], 2024 as the record date for the determination of shareholders entitled to notice of and to vote at the Extraordinary Meeting.

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Only shareholders as of the close of business on the record date will be able to vote at the Extraordinary Meeting.

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In order to be admitted to the Extraordinary Meeting, shareholders must present proof of ownership as of the record date and valid government-issued photo identification. Shareholders holding shares in “street name” through a bank or broker, must also obtain a “legal proxy” from the holder of record to vote at the Extraordinary Meeting. Shareholders are encouraged to vote in advance of the Extraordinary Meeting to ensure their vote is counted even if they are unable to attend in person. Instructions for voting in advance are included in the accompanying materials.

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The proxy statement for our Extraordinary Meeting will be available on our website at https://ir.altisource.com/financial-information. In accordance with the rules of the U.S. Securities and Exchange Commission, the proxy statement and annual report can also be accessed at www.proxyvote.com, a website that does not identify or track visitors to the site, by entering the Control Number provided in the Notice and Access Card, proxy card or email notification, as applicable.

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The presence at the Extraordinary Meeting of holders of at least 50% of the issued and outstanding shares of common stock able to be voted, whether represented in person or by proxy, will constitute a quorum for the transaction of business at the Extraordinary Meeting. In case the quorum of at least 50% of the issued and outstanding shares of common stock able to be voted is not met at the Extraordinary Meeting, in accordance with Luxembourg law, we will hold a second extraordinary meeting with a prior notice of at least 15 days before the second extraordinary meeting in lieu of an adjourned meeting. At the second extraordinary meeting in lieu of an adjourned meeting the quorum of at least 33 1∕3% of our issued and outstanding shares of common stock able to be voted shall apply.

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By order of our Board of Directors,

Gregory J. Ritts
Corporate Secretary

December [•], 2024
Luxembourg, Grand Duchy of Luxembourg

 

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ALTISOURCE PORTFOLIO SOLUTIONS S.A.
33, Boulevard Prince Henri
L-1724 Luxembourg
Grand Duchy of Luxembourg
R.C.S. Luxembourg B72391

NOTICE OF SPECIAL GENERAL MEETING OF SHAREHOLDERS AND
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS
FOR THE SPECIAL GENERAL MEETING OF SHAREHOLDERS TO BE HELD ON [           ], 2025

NOTICE

The Special General Meeting of Shareholders (“Special Meeting”) of Altisource Portfolio Solutions S.A. (the “Company”) will be held:

PURPOSE

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To approve, as required by applicable Nasdaq Stock Market listing rules, the issuance by the Board of Directors of shares of our common stock (our “common stock”) in exchange for the contribution to Altisource from lenders under our current debt facility of a portion of our outstanding debt;

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To approve an amendment to the Altisource Portfolio Solutions S.A. Amended and Restated 2009 Equity Incentive Plan (the “2009 Equity Incentive Plan”) to increase the number of shares of common stock reserved for issuance under the 2009 Equity Incentive Plan by 4,645,875 shares from 11,666,667 shares to 16,312,542 shares; and

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To transact such other business as may properly come before the Special Meeting and any adjournment or postponement thereof.

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PROCEDURES

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Our Board of Directors has fixed December [•], 2024 as the record date for the determination of shareholders entitled to notice of and to vote at the Special Meeting.

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Only shareholders as of the close of business on the record date will be eligible to vote at the Special Meeting.

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In order to be admitted to the Special Meeting, shareholders must present proof of ownership as of the record date and valid government-issued photo identification. Shareholders holding shares in “street name” through a bank or broker, must also obtain a “legal proxy” from the holder of record to vote at the Special Meeting. Shareholders are encouraged to vote in advance of the Special Meeting to ensure their vote is counted even if they are unable to attend in person. Instructions for voting in advance are included in the accompanying materials.

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The proxy statement for our Special Meeting will be available on our website at https://ir.altisource.com/financial-information. In accordance with the rules of the U.S. Securities and Exchange Commission, the proxy statement and annual report can also be accessed at www.proxyvote.com, a website that does not identify or track visitors to the site, by entering the Control Number provided in the Notice and Access Card, proxy card or email notification, as applicable.

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Although Luxembourg law does not require a quorum for the conduct of business at the Special Meeting, in accordance with the requirements of the Nasdaq Stock Market listing standards, we have established that the presence at the Special Meeting of holders of at least 33 1∕3% of our issued and outstanding shares of common stock able to be voted, whether represented in person or by proxy, will constitute a quorum for the transaction of business at the Special Meeting.

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By order of our Board of Directors,

Gregory J. Ritts
Corporate Secretary

December [•], 2024
Luxembourg, Grand Duchy of Luxembourg

 

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ALTISOURCE PORTFOLIO SOLUTIONS S.A.

PROXY STATEMENT

TABLE OF CONTENTS

 

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LEGAL MATTERS

Forward-Looking Statements

This proxy statement contains forward-looking statements that involve a number of risks and uncertainties. These forward-looking statements include all statements that are not historical fact, including statements that relate to, among other things, future events or our future performance or financial condition, including without limitation, statements relating to the Company’s entry into and the terms of the definitive documents relating to the transactions contemplated by the TSA (as defined in this proxy statement) described and consummating the Transactions, as well as the number of shares for which the Stakeholder Warrants (as defined in this proxy statement) may be exercisable. These statements may be identified by words such as “anticipate,” “intend,” “expect,” “may,” “could,” “should,” “would,” “plan,” “estimate,” “seek,” “believe,” “potential” or “continue” or the negative of these terms and comparable terminology. Such statements are based on expectations as to the future and are not statements of historical fact. Furthermore, forward-looking statements are not guarantees of future performance and involve a number of assumptions, risks and uncertainties that could cause actual results to differ materially. Important factors that could cause actual results to differ materially from those suggested by the forward-looking statements include, but are not limited to, the risks discussed in Item 1A of Part I “Risk Factors” in our Form 10-K for the year ended December 31, 2023 filed with the Securities and Exchange Commission, as the same may be updated from time to time in our Form 10-Q filings. We caution you not to place undue reliance on these forward-looking statements which reflect our view only as of the date of this report. We are under no obligation (and expressly disclaim any obligation) to update or alter any forward-looking statements contained herein to reflect any change in our expectations with regard thereto or change in events, conditions or circumstances on which any such statement is based. The risks and uncertainties to which forward-looking statements are subject include, but are not limited to, risks related to the COVID-19 pandemic, customer concentration, the timing of the anticipated increase in default related referrals following the expiration of foreclosure and eviction moratoriums and forbearance programs, the timing of the expiration of such moratoriums and programs, and any other delays occasioned by government, investor or servicer actions, the use and success of our products and services, our ability to retain existing customers and attract new customers and the potential for expansion or changes in our customer relationships, technology disruptions, our compliance with applicable data requirements, our use of third party vendors and contractors, our ability to effectively manage potential conflicts of interest, macro-economic and industry specific conditions, our ability to effectively manage our regulatory and contractual obligations, the adequacy of our financial resources, including our sources of liquidity and ability to repay borrowings and comply with our debt agreements, including the financial and other covenants contained therein, as well as Altisource’s ability to retain key executives or employees, behavior of customers, suppliers and/or competitors, technological developments, governmental regulations, taxes and policies, and the risks and uncertainties related to completion of the transactions described in this proxy statement and contemplated by the TSA on the anticipated terms or at all, including the negotiation of and entry into the definitive agreements and the satisfaction of the closing conditions of such definitive agreements, including obtaining the required shareholder approvals. The financial projections and scenarios contained in this proxy statement are expressly qualified as forward-looking statements and, as with other forward-looking statements, should not be unduly relied upon. We undertake no obligation to update these statements, scenarios and projections as a result of a change in circumstances, new information or future events, except as required by law.

Website References

Website references throughout this proxy statement are inactive textual references and provided for convenience only, and the content on the referenced websites is not incorporated herein by reference and does not constitute a part of the proxy statement.

Currency Presentation

Unless otherwise indicated, all references to “dollars,” “$,” “US$,” “USD,” or “U.S. dollars” are to the lawful currency of the United States. All references in this proxy statement to “euro” or “€” are to the currency introduced at the start of the third stage of the European Economic and Monetary Union pursuant to the Treaty establishing the European Community, as amended.

Where in this proxy statement we refer to amounts in euros, we have for your convenience also, in certain cases, provided a conversion of those amounts to U.S. dollars.

 

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ALTISOURCE PORTFOLIO SOLUTIONS S.A.
JOINT PROXY STATEMENT
SPECIAL GENERAL MEETING OF SHAREHOLDERS AND EXTRAORDINARY GENERAL MEETING OF SHAREHOLDERS

Proxy Statement Summary

General Information

We have made this joint proxy statement available to you on or about [•], 2024 as a holder of our common stock because our Board of Directors is soliciting your proxies to be used at our Extraordinary Meeting and our Special Meeting, and any adjournment or postponement thereof or, if required by Luxembourg law, a second extraordinary meeting if we do not have quorum at the Extraordinary Meeting. The Extraordinary Meeting will be held on [DAY OF WEEK], [MONTH] [DAY OF MONTH], 2025, at 9:00 a.m. Central European Time for the purposes listed in the Notice of Extraordinary Meeting of Shareholders. The Special Meeting will be held on the same day at 9:30 a.m. Central European Time for the purposes listed in the Notice of Special Meeting of Shareholders. Both meetings will be held at our registered office located at 33, Boulevard Prince Henri, L-1724 Luxembourg, Grand Duchy of Luxembourg.

This summary highlights information contained elsewhere in this joint proxy statement (this “proxy statement”) for the Special General Meeting of Shareholders (the “Special Meeting”) and the Extraordinary General Meeting of Shareholders (the “Extraordinary Meeting,” and together with the Special Meeting, the “Meetings”) of Altisource Portfolio Solutions S.A. (“Altisource,” the “Company,” “we,” “us,” or “our”). This summary does not include all the information you should consider. Please read this entire proxy statement carefully before voting.

Summary of the Transactions to Which the Proposals in this Proxy Statement Relate

On December 16, 2024, Altisource and its wholly-owned subsidiary Altisource S.À R.L. (the “Borrower” and, collectively with Altisource, the “Company Parties”) entered into the Transaction Support Agreement included as Appendix A to this proxy statement (the “TSA”) with holders of approximately 99% of the total outstanding principal amount of term loans outstanding (the “Consenting Term Lenders”) under the existing credit agreement, dated as of April 3, 2018, and amended as of February 14, 2023, among the Borrower, Altisource, the lenders from time to time party thereto, and the other parties thereto (as amended, the “Existing Credit Agreement”). As of the Record Date, the Consenting Term Lenders owned approximately       % of the outstanding shares of our common stock.

We are asking for your vote to approve the proposals described in this proxy statement to facilitate the proposed transactions described in the TSA (the “Transactions”), which are designed to recapitalize the Company. The Transactions include, among others, (i) the issuance of shares of our common stock equal to up to 63.5% of our outstanding shares on a pro forma basis post transactions to certain of our current lenders (pro forma for the issuance of such shares and the issuance of Management RSUs (as defined below) and assuming the full exercise of the Existing Warrants (as defined below), but excluding any shares of common stock issued prior to the effective date of the Transactions (the “Transaction Effective Date”) pursuant to a capital raising transaction) (the “Debt Exchange Shares”) in exchange for the contribution to Altisource of up to $72.8 million2 in principal amount of the existing term loans (the “Existing Term Loans”) under the Existing Credit Agreement, (ii) the provision of a new debt facility by certain of our current lenders, and (iii) the issuance of warrants to certain stakeholders of Altisource, consisting of our shareholders, holders of penny warrants and holders of restricted stock units, in each case as of a record date that will be set prior to the closing of the transactions. The warrants will not be issued with respect to Debt Exchange Shares and are being granted to certain of our stakeholders in an effort to provide such stakeholders with an opportunity to offset potential dilution resulting from the issuance of the Debt Exchange Shares if Altisource’s share price exceeds the warrant exercise price for the requisite period.

2

Based on the estimated outstanding balance on our existing term loans of $232.8 million as of December 31, 2024.

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The expected benefits of the proposed Transactions include:

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strengthening our balance sheet and cash flow;

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providing more time for the Company to benefit from the (a) default market’s potential return to a historical, pre-pandemic foreclosure environment and (b) continued development and anticipated growth of the Company’s origination and real estate Investor solutions;

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reducing management, employee and customer distractions; and

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providing pre-transaction stakeholders with the potential to increase their ownership in the company through the issuance of warrants to such stakeholders.

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For more information regarding the benefits of our proposed recapitalization, see “Description of the TSA and the Transactions Contemplated Thereby—Expected Benefits of the Proposed Transactions.”

Information About the Meetings

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Date of the Meetings: [•], 2025

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Extraordinary Meeting Time: 9:00 a.m. Central European Time

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Special Meeting Time: 9:30 a.m. Central European Time

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Place for both Meetings: 33, Boulevard Prince Henri, L-1724 Luxembourg, Grand Duchy of Luxembourg

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Record Date for both Meetings: [•], 2024 (the “Record Date”)

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Agendas: The Meetings will cover the proposals listed below, and any other business that may properly come before the meeting

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Extraordinary Meeting Voting Matters and Recommendations of our Board of Directors

 

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Special Meeting Voting Matters and Recommendations of our Board of Directors

The Share Nominal Value Cancellation and Par Value Decrease Proposal, the Authorized Share Increase and Renewal Proposal, the Stock Issuance Proposal and the Plan Amendment Proposal are collectively referred to herein as the “Proposals”.

All of the Proposals are conditioned upon the approval of all of the other Proposals. If any one of the Proposals fails to receive the approval of our shareholders at the Meetings, the Transactions will not be completed, and we will not implement any of the Proposals.

 

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Description of the TSA and the Transactions Contemplated Thereby

Background and Purpose of the TSA

As previously reported, on February 9, 2023, the Company, its wholly owned subsidiary Altisource S.À R.L. (the “Borrower”), and its subsidiary guarantors, entered into Amendment No. 2 (the “Second Amendment”) to the Existing Credit Agreement. In connection with the Second Amendment, we issued warrants (the “Existing Warrants”) to purchase shares of our common stock at an exercise price of $0.01 per share to the lenders party to the Second Amendment. As of the Record Date, there were 1,515,083 Existing Warrants outstanding. The Existing Warrants are currently exercisable, and, to the extent the Existing Warrants are then in the money, unexercised Existing Warrants will be automatically exercised on May 22, 2027, the expiration date of the Existing Warrants. The maturity date of the Existing Credit Agreement is April 30, 2025, with an option to extend the maturity date to April 1, 2026, subject to certain conditions and payment of an extension payment equal to 2.00% of the then outstanding principal amount of the outstanding loans, which amount would be added to the principal of the loans. As of the Record Date, there was an outstanding principal balance of approximately $230.6 million under the Existing Credit Agreement.

Certain Transactions Contemplated by the TSA

Exchange of Debt for Equity and New Credit Agreement

Pursuant to the terms and subject to the conditions of the Definitive Documents (as defined in the TSA), the Consenting Term Lenders will tender the Existing Term Loans held, in the amount up to approximately $231 million as of December 23, 2024 (which will be up to approximately $235 million as of March 31, 2025), to the Borrower and will receive (i) their respective pro rata shares of (a) up to $110 million of interest-bearing first lien loans (the “New Debt”) and (b) an up to $50 million non-interest-bearing exit fee (the “Exit Fee” and collectively with the New Debt, the “New Facility”) and (ii) Debt Exchange Shares that, in the aggregate, will equal up to 63.5% of the common stock outstanding immediately following the Transaction Effective Date (pro forma for the issuance of the Debt Exchange Shares and the issuance of Management RSUs (as defined below) and assuming full exercise of the Existing Warrants, but excluding any shares of common stock issued prior to the Transaction Effective Date pursuant to a capital raising transaction) (the “Pro Forma Outstanding Share Amount”). The Consenting Term Lenders will contribute to Altisource up to $72.8 million3 in principal amount of the Existing Term Loans in exchange for the issuance of the Debt Exchange Shares. For more information, please see “Summary of Expected Terms of our New Debt Facilities”.

Super Senior Credit Facility

In connection with entering into the TSA, the Company also executed a commitment letter and term sheet for a $12.5 million super senior credit facility (the “Super Senior Facility”) to replace that certain $15 million revolving credit facility entered into on June 22, 2021 by and among the Borrower and one of its lenders and to pay certain fees, cost and expenses associated with the Transactions and for general corporate purposes. The Super Senior Credit Facility would have a term of four years and be secured by the assets of the Company that secure the New Debt on a senior basis. For more information, please see “Summary of Expected Terms of our New Debt Facilities”.

Issuance of Management RSUs

Under the terms of the TSA, as part of the Transactions, certain members of the Company’s management, including its executive officers, are expected to receive restricted share units (“RSUs”) which, if vested pursuant to their terms, would, in the aggregate, equal up to 5% of our common stock outstanding immediately following the Transaction Effective Date (the “Management RSUs”). The provision of the Management RSUs to members of the Company’s management was important to the Consenting Term Lenders to ensure that management is sufficiently incentivized to grow the Company’s business and to reenforce the alignment between management and shareholders by tying executive compensation to the Company’s long-term performance and value creation, which, in turn, should increase the value of the Debt Exchange Shares and help ensure that the New Debt and the debt under the Super Senior Credit Facility are repaid.

3

Based on the estimated outstanding balance on our Existing Term Loans of $232.8 million as of December 31, 2024.

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The Compensation Committee of the Board of Directors (the “Compensation Committee”) will allocate the Management RSUs to members of management in its sole discretion prior to the Meetings, and the Management RSUs will be issued prior to the Stakeholder Warrant Issuance Record Date (as defined below). One third of the Management RSUs will vest on each of the first three anniversaries of the Transaction Effective Date; provided, however, no Management RSUs will vest if the Transactions do not close. It is expected that the majority of the Management RSUs will be awarded to our executive officers.

Issuance of Stakeholder Warrants

Under the terms of the TSA, the following are to receive their pro rata share of warrants (the “Stakeholder Warrants”) to purchase up to 115 million shares of our common stock at an exercise price of $1.20 per share, subject to proportionate adjustment in the event of stock splits and similar events:

•

each share of our common stock held by shareholders as of a record date preceding the Transaction Effective Date (the “Stakeholder Warrant Issuance Record Date”);

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•

each restricted share unit (“RSU”), including each Management RSU that is to be issued as part of the Transactions, held as of the Stakeholder Warrant Issuance Record Date (but Stakeholder Warrants relating to an RSU will be subject to forfeiture in the event such RSU to which such Stakeholder Warrants relate does not vest); and

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•

each Existing Warrant held as of the Stakeholder Warrant Issuance Record Date.

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Each person entitled to receive a Stakeholder Warrant is referred to as a “Stakeholder” in this proxy statement.

The approval of the Authorized Share Increase and Renewal Proposal at the Extraordinary Meeting is required to enable the Company to issue the Stakeholder Warrants to purchase up to 115 million shares of our common stock, which is intended to provide Stakeholders with an opportunity to offset potential dilution resulting from the issuance of the Debt Exchange Shares if the VWAP Condition (as defined below) is satisfied.

We expect to announce the Stakeholder Warrant Issuance Record Date by press release at least 10 calendar days prior to the distribution of the Stakeholder Warrants, which is expected to occur on or about the Transaction Effective Date. The issuance of the Stakeholder Warrants is contingent upon the closing of the Transactions.

Fifty percent of the Stakeholder Warrants shall require cash settlement through the cash payment to the Company of the exercise price (the “Cash Exercise Stakeholder Warrants”), and the other fifty percent of the Stakeholder Warrants shall be exercisable on a cashless basis (the “Net Settle Stakeholder Warrants”). The Stakeholder Warrants may be exercised at any time prior to the applicable expiration date; provided, however, that the Stakeholder Warrants may only be exercised after the first date on which the volume weighted average price of our common stock equals or exceeds the $1.20 exercise price (subject to proportionate adjustment in the event of stock splits and similar events) of the Stakeholder Warrants for a period of fifteen consecutive trading days (the “VWAP Condition”). The Cash Exercise Stakeholder Warrants, if not previously exercised or terminated, will expire on March 31, 2029. The Net Settle Stakeholder Warrants, if not previously exercised or terminated, will expire on April 30, 2032.

We expect that, for each share of common stock, RSU or Existing Warrant held as of the Stakeholder Warrant Issuance Record Date, a Stakeholder will receive (i) one Cash Exercise Stakeholder Warrant to purchase approximately 1.625 shares of common stock (subject to adjustment pursuant to the terms of the Stakeholder Warrants) and (ii) one Net Settle Stakeholder Warrant to purchase approximately 1.625 shares of common stock (subject to adjustment pursuant to the terms of the Stakeholder Warrants).

Stakeholder Warrants may only be exercised into a whole number of shares of common stock. No fractional shares will be issued upon exercise of Stakeholder Warrants. If, upon exercise of the Stakeholder Warrants, a holder would otherwise be entitled to receive a fractional interest in a share, the Company will, upon exercise, instead round down to the nearest whole number of shares of common stock to be issued to the warrant holder (based on the total number of Shareholder Warrants exercised by the relevant warrant holder at such time).

The Company is seeking to list the Stakeholder Warrants on Nasdaq or some other trading market. However, no assurances can be provided that the Company will be able to list the Stakeholder Warrants on a trading

 

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exchange or, even if it does so list the Stakeholder Warrants, that an active trading market in the Stakeholder Warrants will develop or be maintained. Accordingly, a Stakeholder may not be able to sell their Stakeholder Warrants.

A minimum of 95% of proceeds the Company receives in connection with the exercise of Cash Exercise Stakeholder Warrants will be used to prepay the New Facility.

The Stakeholder Warrants are intended to provide Stakeholders with the opportunity to increase their ownership of the Company and to correspondingly increase their participation in the potential growth and financial upside of the Company. The Stakeholder Warrants will be freely tradable (except by affiliates of the Company). The Company expects to file a registration statement under the Securities Act of 1933, as amended (the “Securities Act”), to register the issuance of the common stock issuable upon exercise of the Stakeholder Warrants so that such shares of common stock will be freely tradeable (except by affiliates of the Company).

The Stakeholder Warrants will contain customary beneficial ownership limitation provisions, pursuant to which the holder of Stakeholder Warrants (together with its affiliates and any other persons acting as a group together with such holder or any of its affiliates (such persons, the “attribution parties”)) may not exercise any portion of the Stakeholder Warrants held by such holder to the extent that such holder (together with its affiliates and attribution parties) would beneficially own more than 9.99% of the outstanding common stock immediately after exercise, excluding for purposes of such determination shares of common stock issuable upon (i) exercise of such Stakeholder Warrants which have not been exercised and (ii) exercise or conversion of the unexercised or nonconverted portion of any of our other securities subject to a limitation on conversion or exercise analogous to the limitation contained in the Stakeholder Warrants beneficially owned by the holder or any of its affiliates or attribution parties (the “Beneficial Ownership Limitation); provided, however, the Beneficial Ownership Limitation may be waived by the holder of the Stakeholder Warrant upon 61 days’ notice to the Company. In addition, the Beneficial Ownership Limitation will not apply to persons that are greater than 10% beneficial owners at the time the Stakeholder Warrants are issued.

Stakeholder Warrants will not be issued until after, and their issuance will be contingent upon, the closing of the Transactions; Stakeholders will not be entitled to the Stakeholder Warrants if the Transactions fail to close.

Governance

The TSA contemplates and the Definitive Documents are to provide that certain Consenting Rolling Lenders (as defined in the TSA) having beneficial ownership of no more than 40% of our outstanding common stock on a pro forma basis, as of the date of the closing of the Transactions, shall have the right to nominate, a total of two board members to the Company’s Board of Directors (“Lender Board Representatives”), and the Company will propose such Lender Board Representatives as nominees subject to the Lender Board Representatives satisfying any applicable requirements set forth in the Definitive Documents or applicable law. It is expected that the Lender Board Representatives will be identified and nominated for election to the Board of Directors at the Company’s next annual meeting of shareholders.

Certain Terms and Conditions to Closing

The Transactions shall be subject to (1) agreement by 100% of the outstanding Existing Term Loans immediately prior to the Transaction Effective Date to become Consenting Term Lenders (or such lower amount as may be determined by the Company with the consent of the Required Consenting Lenders) and (2) other conditions precedent satisfactory to the Company and the Required Consenting Lenders.

As of the date of this proxy statement, lenders holding approximately 99% of the aggregate principal amount of the Existing Term Loans have entered into the TSA. If the holders of 100% of the Existing Term Loans do not agree to the terms of the Transactions and the Required Consenting Lenders do not consent to agree to a lesser percentage, then the Transactions will not close. If, on the other hand, the Required Consenting Lenders do agree to close the Transactions with less than 100% of the Existing Term Loans agreeing to the Transactions, upon the closing of the Transactions, there will continue to be a portion of the Existing Term Loans outstanding, which may be amended.

The TSA contains certain customary terms and conditions. Among other things, the executing lenders’ obligations under the TSA are subject to certain conditions, including, without limitation: (i) Company not entering into a

 

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credit facility, bond issuance, or other financing, rights offering, or issuing debt or equity securities, or (ii) the Company not undertaking or otherwise supporting or participating in any reorganization, merger, consolidation, business combination, or other recapitalization or debt restructuring (whether through a judicial process or otherwise) other than in the ordinary course of business or in connection with the Transactions.

Registration Rights Agreement

Under the terms of the TSA, the Altisource Debt Exchange Shares will be subject to a customary registration rights agreement with respect to the registration of the resale the Debt Exchange Shares under the Securities Act.

Termination Provisions of the TSA

•

The TSA contains termination rights for the benefit of the Required Consenting Lenders, subject, in certain circumstances to cure rights. The Required Consenting Lenders may terminate the TSA upon three days’ prior written notice thereof, if, among other circumstances, (A) any Company Party (as defined in the TSA) breaches the TSA or any other agreement to be entered into in connection with the Transactions, which breach remains uncured in accordance with the terms of the TSA for a period of three business days; (B) any Definitive Document does not comply with the terms and standards set forth in the TSA; (C) any Company Party (I) (x) publicly announces its intention to pursue, (y) delivers a term sheet or proposal in respect of, or (z) consummates or enters into a binding agreement to consummate, in each case, an Alternative Transaction (as defined in the TSA) or (II) publicly announces its intention to not pursue the Transactions; (D) any Company party has breached, in any material respect, any of its obligations under the Existing Documents (as defined in the TSA) and certain related documents; (E) the occurrence and, to the extent applicable, continuance beyond any grace or cure period of an Event of Default as defined and set forth in any of the Existing Documents; (F) this preliminary proxy statement in form and substance reasonably acceptable to the Required Consenting Lenders is not filed with the SEC on or before December 31, 2024 (or such later date as may be agreed by the Required Consenting Lenders); (G) the failure of the Company to pay certain fees and expenses; (H) a Material Adverse Effect (as defined in the Existing Credit Agreement) occurs or there is a termination of certain agreements; and (I) all shareholder approvals that are necessary to implement the Transactions have not been obtained by the Company Parties on or before March 31, 2025 (or such later date as may be agreed by the Required Consenting Lenders).

​

•

The TSA contains termination rights for the benefit of the Company (on behalf of itself and the Company Parties) subject, in certain cases, to cure rights. The Company may terminate the TSA with respect to any particular Consenting Term Lender (but not as to all of the other Parties) upon a breach by such Consenting Term Lender of any of its representations, warranties, covenants, or obligations which remains uncured for three business days after the receipt by all of the Consenting Term Lenders of written notice of such breach.

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•

Any party to the TSA may terminate such agreement upon the issuance by any governmental authority, including any regulatory authority or court of competent jurisdiction, of, or the initiation or threatened initiation of any legal action by any governmental authority seeking, any ruling or order making illegal or otherwise enjoining, preventing, or prohibiting the consummation of a material portion of the Transactions, which legal action, threatened initiation of a legal action, ruling, or order has not been withdrawn or discharged after thirty 30 days.

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In addition, the TSA will automatically terminate:

•

if the Transactions are not consummated on or before 5:00 p.m., New York City time, on April 15, 2025 (the “Deadline”), as such date may be extended by mutual written consent of the Company and the Required Consenting Lenders; provided that in the event of an extension beyond April 15, 2025, any Consenting Term Lender that does not consent to such extension may terminate the TSA solely with respect to itself upon notice to the Company and the other Consenting Term Lenders;

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•

certain bankruptcy related events;

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•

the taking of any binding corporate action by any of the Company Parties or any of their respective subsidiaries in furtherance of any action described in the foregoing sentences; and

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•

upon the consummation of the Transactions on the Closing Date.

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Definitive Documents to be Negotiated and Entered Into

The TSA provides the framework pursuant to which the parties will negotiate the Definitive Documents (as such term is defined in the TSA) and take other actions to implement the Transactions. The TSA will terminate upon, among other things, the closing of the Transactions and the terms of the New Facility will be governed by any Definitive Documents agreed to by the Company and the Consenting Term Lenders. Pursuant to and subject to the terms and conditions of the TSA, the parties to the TSA have agreed to support and take all commercially reasonable actions necessary or reasonably requested to facilitate the implementation and consummation of the Transaction and negotiate in good faith the Definitive Documents. If the closing date of the Transactions is extended beyond the Deadline, any Consenting Term Lender that does not consent to such extension may terminate the Agreement solely with respect to itself upon notice to the Company and the other Consenting Term Lenders. Although the Company intends to pursue the Transactions in accordance with the terms set forth in the TSA, there can be no assurance that the Company will be successful in completing the Transactions or any other similar transaction on the terms set forth in the TSA, on different terms or at all.

The foregoing description of the TSA is qualified in its entirety by reference to the TSA, which is attached hereto as Appendix A and incorporated herein by reference.

Expected Benefits of the Proposed Transactions

The benefits that are expected to come from the proposed Transactions, include, without limitation:

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Reducing Company’s outstanding debt obligations by 25% from approximately $230.6 million (as of December 16, 2024) to approximately $172.5 million (at the closing of the Transactions), comprised of:

​

•

up to $110 million in principal amount of interest-bearing New Debt; and

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an up to $50 million non-interest-bearing Exit Fee to be paid at maturity of the New Debt; and

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a $12.5 million Super Senior Credit Facility;

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Reducing Company’s annual cash and paid-in-kind (“PIK”) interest on outstanding debt obligations by approximately $18 million from an anticipated $31 million to approximately $13 million:

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Cash interest reduced by approximately $9 million; and

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PIK interest reduced by approximately $9 million;4

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Setting the interest rate on the New Debt and the Super Senior Facility at Secured Overnight Financing Rate (“SOFR”) + 6.50% with a 3.50% SOFR floor, payable quarterly in cash;

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Interest rate on the Existing Term Loans is SOFR + 8.75%.

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Extending the maturity date under the New Debt and Exit Fee by five years to April 30, 2030 (compared to the April 30, 2025 maturity date for the Existing Term Loans, with a possible extension by 12 months, subject to certain conditions)

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•

Providing lenders under the New Facility with up to approximately 57.9 million shares of our common stock, representing up to 63.5% of the Pro Forma Outstanding Share Amount; and

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•

Providing Stakeholders with Stakeholder Warrants to purchase up to 115 million shares of our common stock at an exercise price of $1.20 per share (subject to proportionate adjustment in the event of stock splits and similar events), potentially reducing dilution from the Debt Exchange Shares being issued to the Consenting Term Lenders.

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4

Reduction in annual cash interest is based on the Secured Overnight Financing Rate (SOFR) of 4.36% as of December 4, 2024 and the anticipated outstanding balance on the Existing Term Loans as of December 31, 2024. Reduction in annual PIK interest is based on anticipated PIK interest expense in 2025 under the Existing Term Loans, which includes quarterly compounding of PIK interest. Actual cash interest reduction versus existing loan terms will vary based on actual SOFR rate.

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Approval of the Proposals at the Meetings is necessary to implement the recapitalization plan, which is designed to:

•

Substantially reduce the amount of and the effective interest rate on the Company’s outstanding debt

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•

Extend the maturity of the Company’s debt to April 30, 2030 with respect to the New Facility

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Improve financial flexibility and position the Company for future growth

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Provide Stakeholders with an opportunity to offset potential dilution resulting from the issuance of the Debt Exchange Shares if the VWAP Condition is satisfied

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Summary of Expected Terms of our New Debt Facilities

New Facility

5

Any mandatory or voluntary prepayments of the New Facility will be applied on a pro rata basis to par value of New Debt and the Exit Fee.

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Summary of Terms of Super Senior Credit Facility

 

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Additional Financial Information Relating to the Transactions

For additional financial information relating to the Transactions, please see the information attached hereto as Appendix B.

Consequences of the Failure of Shareholders to Approve the Proposals

If our shareholders fail to approve the Proposals, we will not be able to implement the Transactions and we would likely seek to extend the term of the Existing Credit Agreement by 12 months to April 30, 2026, at the cost of increasing the principal outstanding balance by a 2.00% payment-in-kind extension fee, which would increase the principal of our current debt by approximately $4.7 million, and require us to continue to pay a higher effective interest rate on a higher principal amount than we would pay if the Proposals are approved and the Transactions are implemented. The extension of the Existing Credit Agreement would be subject to the Borrower being in compliance with the applicable extension terms. During the extended term, the Scheduled Repayments (as such term is defined in the Existing Credit Agreement) would increase to $0.3 million in January 2026 and $2.5 million in each of February 2026 and March 2026 with the balance due at the April 2026 maturity date. In addition, as the extended maturity date of the loan nears 12 months or less, Altisource could become subject to an auditor going concern qualification in the auditor’s opinion of the Company’s audited financial statements, which could have a material negative impact on the Company’s business, results of operations and financial condition, including by negatively impacting client acquisition and retention, bond ratings and employee recruiting and retention efforts, and by potentially constituting a breach of or providing a termination right under certain existing client agreements. The Company may be unable to refinance the Existing Term Loans on better terms than the Transactions or at all.

We strongly encourage all shareholders to carefully review this proxy statement and vote in favor of the Proposals to support the Company’s financial stability and future success.

Potential Adverse Consequences of the Approval of the Proposals and the Consummation of the Transactions

Significant Dilution of Existing Shareholders as a Result of the Transactions

As discussed above, the Debt Exchange Shares will equal up to 63.5% of the Pro Forma Outstanding Share Amount, which will result in substantial dilution to the ownership and voting power of our current shareholders, other than holders of our common stock that are Consenting Term Lenders to the extent they are holders of our common stock. Approval of the Plan Amendment Proposal will facilitate the Issuance of the Management

 

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RSUs, which will also dilute existing shareholders. While the issuance of the Stakeholder Warrants could help offset in the future the amount of dilution experienced by our shareholders as a result of the issuance of the Debt Exchange Shares, there is no guarantee that the Stakeholder Warrants will ever be in the money or that the VWAP Condition will be met, and they may expire worthless.

Potential Future Dilution as a Result of the Authorized Share Increase and Renewal Proposal

The Authorized Share Increase and Renewal Proposal, if approved by our shareholders, increases our authorized shares from 100,000,000 to 250,000,000. As of December 16, 2024, we had approximately 32.8 million shares of common stock outstanding or reserved for issuance, which allows the Board of Directors to issue approximately 67.2 million shares currently for capital-raising or other purposes in the future, subject to compliance with Nasdaq listing rules and other applicable laws or regulations. If the Proposals are approved and the Transactions are completed, depending upon the price at which the Net Settle Stakeholder Warrants are cashlessly exercised (to the extent they are exercised at all), the Board of Directors may have the ability to issue significantly more shares of common stock than it currently can issue for capital-raising or any other purpose in the future for a period of five years, subject to compliance with Nasdaq listing rules and other applicable laws or regulations, and any such issuance would not require shareholder approval.

Market Effects

The issuance of the Debt Exchange Shares could affect trading patterns and adversely affect the market price of our common stock. Additionally, sales in the public market of the Debt Exchange Shares, or the perception that such sales could occur, could adversely affect the prevailing market price of our common stock and/or impair our ability to raise capital in future equity financings. In addition, the existence of the Stakeholder Warrants may have a negative effect on the trading volume and the market price of our common stock due to the possibility that many shares of our common stock could be issued upon exercise of the Stakeholder Warrants in the event the market price of our common stock exceeds the $1.20 exercise price per share (subject to proportionate adjustment in the event of stock splits and similar events) of the Stakeholder Warrants.

Concentration of Ownership and Influence

Following the issuance of the Debt Exchange Shares and the Stakeholder Warrants, the ownership of the outstanding shares of our common stock will be further concentrated. Immediately following the issuance of the Debt Exchange Shares and the Stakeholder Warrants, the funds, accounts, and investment vehicles managed by UBS Asset Management (Americas) LLC (collectively, “UBS”) is expected to beneficially own approximately 22.7% of our common stock and will represent the largest ownership position in the Company. As a result, UBS on its own, and the shareholders representing other large ownership positions in the Company, acting alone or together, could be able to exert significant influence over matters requiring approval by our shareholders, including the election of directors and mergers, acquisitions or other extraordinary transactions. UBS and the other shareholders representing other large ownership positions in the Company may have interests that differ from ours or yours, and they may vote or otherwise act in ways with which you disagree and that may be adverse to your interests. In addition, the concentration of ownership may have the effect of delaying, preventing or deterring a change of control of the Company, which could deprive our shareholders of an opportunity to receive a premium for their shares of common stock as part of a sale of the Company, or conversely, could facilitate a change of control at a time or under circumstances when you and other shareholders may prefer not to sell. Further, the concentration of ownership could adversely affect the prevailing market price for our common stock.

Stakeholder Warrants May Expire Worthless and, Even If They Have Value, Stakeholders May Not Be Able to Exercise All the Stakeholder Warrants They Receive

As of December 20, 2024, the closing price of our common stock on the Nasdaq Global Select Market was $0.549 per share. The Stakeholder Warrants will have a per share exercise price of $1.20 (subject to proportionate adjustment in the event of stock splits and similar events). The market price of our common stock may never exceed the per share exercise price of Stakeholder Warrants, and the VWAP Condition may not be satisfied. Accordingly, the Stakeholder Warrants may expire worthless. In addition, as discussed above, fractional shares that would otherwise be issuable upon the exercise of the Stakeholder Warrants will be rounded down to the nearest whole number. Accordingly, a stakeholder will not receive the benefit of fractional shares that would otherwise result from the exercise of Stakeholder Warrants.

 

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Information Relating to the Meetings

Internet Availability of Proxy Materials

Consistent with historical practice, we are using the “Notice and Access” method of furnishing proxy materials to our shareholders via the Internet, instead of mailing printed copies of those materials to each shareholder. By doing so, we reduce the environmental impact of the meeting and save costs. We expect to commence mailing Notices of Internet Availability of Proxy Materials (the “Notices” and each a “Notice”) to participating shareholders on or about January [•] ,2024. The Notice contains instructions about how to access our proxy materials. If you would like to receive a paper copy of our proxy materials, please follow the instructions included in the Notice. Beneficial shareholders, other than those who previously chose to receive our proxy materials in paper format, will receive an email with links to the online proxy materials. If you previously requested to receive paper copies of the proxy materials by mail, you will receive the proxy materials by mail until you elect otherwise.

Shareholders of record will receive a paper copy of the proxy materials for the Meetings by mail except to the extent they previously requested or authorized delivery of proxy materials electronically. The proxy card included with the proxy materials contains instructions on how to request electronic delivery of future proxy materials for the Meetings.

Who May Vote

You are entitled to vote at the Meetings, and any adjournment or postponement thereof, if you were a holder of our common stock at the close of business on [•], 2024. At the close of business on [•], 2024, there were [    ] shares of common stock issued, outstanding and able to be voted, and there was no other class of equity securities outstanding. Each share of our common stock is entitled to one vote at the Special Meeting and one vote at the Extraordinary Meeting on all matters properly presented for a vote at each such meeting.

Voting Procedures

Shareholders of Record

For the Special Meeting

If you are a shareholder of record, which means you hold your shares through an account with our transfer agent, Equiniti Stock Transfer & Trust Company, LLC, you may vote by one of the following options:

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Over the Internet, at www.proxyvote.com, by following the instructions on your proxy card or the instructions that you received by email; or

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•

By completing, dating, signing and returning the proxy card for the Special Meeting by mail.

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For the Extraordinary Meeting

•

By completing, dating, signing and returning the proxy card for the Extraordinary Meeting by mail.

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Beneficial Holders

If you are a beneficial holder, meaning you hold your shares in “street name” through an account with a bank or broker, please follow the voting directions on the voting instruction form that your bank or broker provides to you.

Your ability to vote over the Internet depends on the voting procedures of your bank or broker.

Voting Over the Internet

If you vote over the Internet, your vote must be received by no later than 9:59 p.m. Central European Time (3:59 p.m. Eastern Time) on [•], 2025, in order to allow sufficient time to tabulate the votes prior to the start of the meeting.

 

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Voting at the Meeting

Shareholders may also vote in person at the Meetings. All shareholders must present proof of share ownership as of the Record Date and valid government-issued photo identification to vote in person at the Meeting. If a bank or broker holds your shares, you must also obtain and present a “legal proxy” from the holder of record to vote at the Meetings. For specific instructions, please refer to the proxy card, Notice or email notification you receive.

Even if you plan to attend the Meetings, we recommend that you vote your shares in advance of each Meeting in one of the manners available to you so that your vote will be counted if later you are unable to attend in person.

Voting Mechanics and “Broker Non-Votes”

If you properly submit your proxy as instructed, and do not revoke it prior to its use, it will be voted in accordance with your instructions. If you are a shareholder of record and you sign your proxy card or vote over the Internet but do not give instructions with respect to how your shares should be voted, your shares will be voted “FOR” each of the proposals identified on the agendas for the Meetings and, with regard to any other business that properly comes before the Meetings, each proxy will be voted in accordance with the discretion of the persons appointed as proxies.

If the shares you own are held by a bank or broker and you do not provide specific voting instructions to your bank or broker on a “non-routine” item as defined by the New York Stock Exchange, the bank or broker will be prohibited from voting your shares. This is commonly referred to as a “broker non-vote.” All of the Proposals are expected to be “non-routine” proposals. Therefore, if you do not instruct your bank or broker how to vote your shares with respect to the Proposals, your shares will not be counted.

How to Revoke a Proxy

Your proxy may be used only at the Meetings and any adjournment or postponement thereof and may not be used for any other meeting. If you are a shareholder of record, you have the power to revoke your proxy at any time before it is exercised by:

•

providing written notice, received by our Corporate Secretary at the following address:

​

Gregory J. Ritts, Corporate Secretary
Altisource Portfolio Solutions S.A.
33, Boulevard Prince Henri
L-1724 Luxembourg
Grand Duchy of Luxembourg;

•

submitting a properly executed proxy bearing a later date; or

​

•

appearing at the meeting and giving the Corporate Secretary notice of your intention to vote in person.

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If you are a beneficial holder, meaning you hold your shares in “street name” through an account with a bank or broker, your bank or broker can provide you with instructions on how to change your vote.

Quorum and Voting Information

Although Luxembourg law does not require a quorum for the conduct of business at the Special Meeting, in accordance with the requirements of Nasdaq listing standards, the Company has established that the presence at the Special Meeting of holders of at least 33 1∕3% of our issued and outstanding shares of common stock able to be voted, represented in person or by proxy, will constitute a quorum for the transaction of business at the Special Meeting.

The presence at the Extraordinary Meeting of holders of at least 50% of our issued and outstanding shares of common stock able to be voted, whether represented in person or by proxy, will constitute a quorum for the transaction of business at the Extraordinary Meeting. In case the quorum of at least 50% of the issued and

 

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outstanding shares of common stock able to be voted is not met at the Extraordinary Meeting of shareholders, in accordance with Luxembourg law, we will hold a second extraordinary meeting with a prior notice of at least 15 days before the second extraordinary meeting in lieu of an adjourned meeting. At such second meeting a quorum of at least 33 1∕3% of our issued and outstanding shares of common stock able to be voted shall apply.

Abstentions will be treated as present for purposes of determining a quorum at the Meetings. Because there are no “routine” matters being considered at the Meetings, there will be no broker non-votes.

The votes needed to approve the proposals at each of the Meetings are as follows:

Any other matter properly submitted for your consideration will be approved with such vote as required by Luxembourg law. Abstentions and broker non-votes will not be counted in determining the number of votes cast in connection with the proposals on the agendas for the Meetings.

 

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PROPOSALS TO BE CONSIDERED AT THE EXTRAORDINARY MEETING

Proposal 1: The Share Nominal Value Cancellation and Par Value Decrease Proposal

We are seeking shareholder approval of an amendment to Article 5 of the Company’s Amended and Restated Articles of Incorporation (the “Articles”) to (i) cancel the nominal value of all existing shares of the Company’s common stock, and (ii) decrease the par value of the Company’s common stock from US$1.00 per share to US$0.01 per share through a decrease of the share capital of the Company by an amount of thirty million four hundred and seventy-seven thousand fifty-seven and ninety-three cents United States Dollars (US$30,477,057.93) without cancellation of shares of the Company’s common stock, in order to bring the share capital of the Company from its current amount of thirty million seven hundred eighty-four thousand nine hundred seven United States Dollars (US$30,784,907) to an amount of three hundred and seven thousand eight hundred forty-nine and seven cents United States Dollars (US$307,849.07) represented by thirty million seven hundred and eighty-four thousand nine hundred seven (30,784,907) shares of the Company’s common stock without designation of nominal value, and by allocating thirty million four hundred and seventy-seven thousand fifty-seven and ninety-three cents United States Dollars (US$30,477,057.93) derived from the share capital decrease to the share premium account of the Company.

The form of the proposed amendment to the Articles is attached hereto as Appendix C. The foregoing description of the proposed amendment is qualified in its entirety by reference to the proposed amendment, which is attached hereto as Appendix C and incorporated herein by reference.

Rationale

Under Luxembourg law, the consideration received by the Company in consideration of the sale or transfer of shares of Company’s common stock must equal or exceed the nominal or par value of the common stock. By eliminating the nominal value and reducing the par value of the common stock, the Company has more flexibility in raising capital and engaging in transactions utilizing the Company’s common stock, including the exchange of shares of the Company’s common stock for Borrower debt in connection with the Transactions.

The cancellation of the nominal value of our common stock and reduction of the share capital of the Company have been proposed to facilitate closing the Transactions and to increase the flexibility of the Company to raise capital and use the Company’s common stock in connection with achieving strategic goals.

The allocation of the reduction in share capital to the share premium account of the Company’s common stock is recommended to permit the Company to retain the liquidity of those funds. If the reduction were not allocated to the share premium account, the funds would need to be distributed to shareholders. The Company does not have sufficient cash-on-hand to distribute the reduction, which could negatively impact the Company, and doing so would likely result in significant short-term instability in the trading price of our common stock.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE APPROVAL OF THE SHARE NOMINAL VALUE CANCELLATION AND PAR VALUE DECREASE PROPOSAL

 

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Proposal 2: The Authorized Share Increase and Renewal Proposal

We are seeking shareholder approval of an increase in the number of shares the Board of Directors of the Company is authorized to issue from 100,000,000 to 250,000,000 and the renewal of the authority of the Board of Directors to issue shares by (i) approving an amendment to Article 6 of the Articles to renew and amend the authorization of the Board of Directors of the Company to (a) issue shares of the Company’s common stock, within the limits of the Company’s authorized share capital of up to two million and five hundred thousand United States Dollars (US$2,500,000) divided into two hundred fifty million (250,000,000) shares of the Company’s common stock without nominal value and, (b) issue any warrants, options, or other similar instruments exercisable into shares and rights to subscribe for shares and set the terms and conditions of these instruments, each for a term of five (5) years and in connection with any such issuance, to limit or cancel the preferential subscription rights of shareholders, and (ii) acknowledging receipt of the report issued by the Board of Directors of the Company pursuant to article 420-26 (5) of the Luxembourg Law of 10 August 1915 on commercial companies, as amended.

On December 17, 2024, our Board of Directors approved the Authorized Shares Increase Articles Amendment and Renewal, subject to shareholder approval. Accordingly, at the Extraordinary Meeting, shareholders will vote on the Authorized Share Increase and Renewal Proposal.

The form of the proposed amendment to the Articles is attached hereto as Appendix C. The foregoing description of the proposed amendment is qualified in its entirety by reference to the proposed amendment, which is attached hereto as Appendix C and incorporated herein by reference.

Rationale

Approval of the Authorized Share Increase and Renewal Proposal is necessary for the Company to have sufficient shares available to cover (a) the issuance of the Debt Exchange Shares; (b) the future potential exercise of the Stakeholder Warrants, and (c) the vesting of the Management RSUs. Accordingly, approval of the Authorized Share Increase and Renewal Proposal is necessary to complete the Transactions. Approval of the Authorized Share Increase and Renewal Proposal also provides the Board of Directors, in its discretion, the authority, for a period of five years to issue shares of common stock or warrants, options, or other similar instruments exercisable into shares, or rights to subscribe for shares and set the terms and conditions of these instruments, as long the number of shares of common stock issued and outstanding does not exceed 250,000,000 shares of common stock. The current Board of Director authorization expires on May 17, 2027.

Effects if the Authorized Share Increase and Renewal Proposal is Approved

If the Authorized Share Increase and Renewal Proposal is approved, the Board of Directors will, during a period ending five years after the date of publication of the minutes of the Extraordinary Meeting in the electronic gazette RESA (Recueil Electronique des Sociétés et Associations), be authorized to issue the additional shares of common stock, options, or other similar instruments exercisable into shares, or rights to subscribe for shares, and set the terms of these instruments, in its discretion, for capital-raising or any other purpose, subject to compliance with Nasdaq rules and other applicable laws or regulations, without further approval of the Company’s shareholders. The Board of Directors does not intend to seek shareholder approval prior to any issuance of the shares of common stock, except as required by Nasdaq rules and other applicable laws or regulations.

The additional shares of common stock for which authorization is sought would be identical to the shares of common stock the Company is presently authorized to issue. Holders of the common stock do not have preemptive rights to subscribe to additional securities which may be issued by the Company. The holders of the common stock are entitled to one vote for each share held of record on all matters to be voted on by shareholders. There is no cumulative voting with respect to the election of directors, with the result that the holders of more than 50% of the shares of the common stock voted in an election of directors can elect all of the Company’s directors. The holders of the common stock are entitled to receive dividends when, as, and if declared by the Board of Directors out of funds legally available therefor. We have not historically declared or paid cash dividends on our common stock. In addition, the provisions of our Existing Credit Agreement also limits our ability to pay dividends, and we expect that the New Facility will also limit our ability to pay dividends. In the event of the Company’s liquidation, dissolution or winding up, the holders of the common stock are entitled to share ratably

 

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in all assets remaining available for distribution after payment of liabilities and after provision has been made for each class of stock, if any, having preference over the common stock. There is no redemption or sinking fund provision applicable to the common stock.

The Articles currently authorize the Company to issue 100,000,000 shares of common stock. As of December 16, 2024, there were 27,226,033 shares of our common stock issued and outstanding (excluding treasury shares). In addition, as of December 16, 2024:

•

681,689 shares of common stock were issuable upon exercise of the Company’s outstanding stock options, at a weighted average exercise price of $21.78 per share;

​

•

1,997,887 shares of common stock were issuable upon the vesting of outstanding RSUs;

​

•

4,020,416 shares of common stock were reserved for issuance upon the grant of future equity awards under the 2009 Equity Incentive Plan; and

​

•

there were Existing Warrants exercisable for 1,515,083 shares of common stock.

​

In addition, upon the closing of the Transactions, the Company is expected to issue or be required to issue or reserve for issuance up to 62.456 million shares of common stock consisting of Debt Exchange Shares and the vesting of Management RSUs. In addition, the Company is expected to issue Stakeholder Warrants issuable for up to 115 million shares of common stock.

Expected Benefits of Approval of the Authorized Share Increase and Renewal Proposal and the Transactions

For a description of the expected benefits of approving the Authorized Share Increase and Renewal Proposal and the Transactions, please see “Description of the TSA and the Transactions Contemplated Thereby—Expected Benefits of the Proposed Transactions.”

Potential Adverse Consequences of Approval of the Authorized Share Increase and Renewal Proposal and the Transactions

For a description of the potential adverse consequences of approving the Authorized Share Increase and Renewal Proposal and the Transactions, please see “Description of the TSA and the Transactions Contemplated Thereby—Potential Adverse Consequences of the Approval of the Proposals and the Consummation of the Transactions.”

Wording of the Authorized Share Capital Amendment

The wording of the amended authorized share capital will read as follows:

Amendment and renewal of the authorized share capital of the Company of an amount of up to two million and five hundred thousand United States Dollars (US$2,500,000), represented by two hundred and fifty million (250,000,000) shares of common stock] without nominal value, for a period of five (5) years from the date of this extraordinary general meeting of the shareholders of the Company approving such amendment and renewal, and granting an authorization to the Board of Directors of the Company to:

•

Realize any increase of the issued share capital within the limits of the authorized share capital in one or several times, by the issuing of new Shares, grant of options, warrants or other similar instruments exercisable into Shares, rights to subscribe for Shares against payment in cash or in kind; by conversion of claims; by the increase of the par value of existing Shares; or in any other manner to be decided by the Board of Directors up to an amount of two million and five hundred thousand United States Dollars (US$2,500,000).

​

•

Issue any warrants, options, or other similar instruments exercisable into shares and rights to subscribe for shares and set the terms and conditions of these instruments,

​

•

Determine the terms and conditions of any increase of the issued share capital, including, but not limited to, the place and date of the issue or the successive issues, the issue price, the amount of new Shares to be issued, whether the new Shares are to be issued and subscribed, with or without an

​

 

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issue premium and the terms and conditions of the subscription of and paying up of the new Shares (in cash or in kind or by incorporation of available reserves or funds available on the capital contribution account (compte 115 “Apport en capitaux propres non rémunéré par des titres”), share premium account or retained earnings). If the consideration payable to the Company for newly issued Shares exceeds the par value of those Shares, the excess is to be treated as share premium in respect of the Shares in the books of the Company.

•

Limit or waive the preferential subscription right reserved to the then existing shareholder(s) in case of issue of Shares against payment in cash, by the issue of Shares up to an amount not to exceed the authorized share capital and by cancelling or limiting the existing shareholders’ preferential right to subscribe to such Shares in relation to the employee share option scheme program of the Company.

​

•

Do all things necessary to amend Articles 5 and 6 of the Articles in order to record the change of the issued share capital following any increase pursuant to the present Article. The Board of Directors is empowered to take or authorize the actions required for the execution and publication of such amendment in accordance with the Law. Furthermore, the Board of Directors may delegate to any duly authorized Director (as defined in Article 11) or officer of the Company, to an appointed committee thereof or to any other duly authorized person, the duties of accepting subscriptions and receiving payment for Shares or doing all things necessary to amend Articles 5 and 6 of the present Articles in order to record the change of share capital following any increase pursuant to the present Article.

​

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE APPROVAL OF THE AUTHORIZED SHARE CAPITAL AMENDMENT AND RENEWAL PROPOSAL

 

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PROPOSALS TO BE CONSIDERED AT THE SPECIAL MEETING

Proposal 1: The Stock Issuance Proposal

To approve, as required by applicable Nasdaq listing rules, the issuance by the Board of Directors of shares of our common stock in exchange for the contribution to Altisource from lenders under our current debt facility of a portion of our outstanding debt.

Subject to shareholder approval of this proposal and the satisfaction or waiver of the other conditions to closing of the Transactions under the terms of the Definitive Documents, as part of the Transactions, we will issue a number of Debt Exchange Shares equal to up to 63.5% of the Pro Forma Outstanding Share Amount to the Consenting Term Lenders, and the Consenting Term Lenders will contribute up to $72.8 million6 in principal amount of the Existing Term Loans (the “Debt Contribution Amount”). Based on the number of shares of common stock outstanding on the Record Date and the maximum number of shares of common stock expected to be issued between now and the Closing Date, we estimate the number of Debt Exchange Shares to be issued to the Consenting Term Lenders will not exceed 59,000,000. Dividing the Debt Contribution Amount by the maximum number of Debt Exchange Shares expected to be issued results in a minimum effective purchase price of $1.23 per Debt Exchange Share (the “Minimum Effective Price”).

Reasons for Requesting Shareholder Approval

Our common stock is listed on the Nasdaq Global Select Market, and we are subject to Nasdaq listing rules.

Nasdaq listing Rule 5635(b) requires shareholder approval prior to the issuance of securities when the issuance or potential issuance will result in a “change of control” of a company. This rule does not define when a change in control of a company may be deemed to occur. However, Nasdaq suggests in its guidance that a change of control would occur, subject to certain limited exceptions, if after a transaction a person or entity will hold 20% or more of the outstanding shares of common stock or voting power of a company and such ownership or voting power would represent the largest ownership position in such company.

Nasdaq listing Rule 5635(d) requires shareholder approval prior to a 20% Issuance at a price that is less than the Minimum Price. For purposes of Nasdaq listing rule 5635(d), (a) “20% Issuance” means a transaction, other than a public offering as defined in Nasdaq listing rules interpretation IM-5635-3, involving the sale, issuance or potential issuance by a company of common stock (or securities convertible into or exercisable for common stock), which alone or together with sales by officers, directors or substantial shareholders of the company, equals 20% or more of the common stock or 20% or more of the voting power outstanding before the issuance; and (b) “Minimum Price” means a price that is the lower of: (i) the Nasdaq Official Closing Price (as reflected on Nasdaq.com) immediately preceding the signing of the binding agreement; or (ii) the average Nasdaq Official Closing Price of the common stock (as reflected on Nasdaq.com) for the five trading days immediately preceding the signing of the binding agreement (the “Minimum Price”).

As of December 16, 2024, our largest shareholder, William C. Erbey, beneficially owned 6,000,709 shares of our common stock, or approximately 22.0% of our outstanding shares of common stock.

Subject to shareholder approval of this proposal and to the satisfaction or waiver of the other conditions to closing of the Transactions under the terms of the Definitive Documents, we will issue a maximum of 19.5 million Debt Exchange Shares to UBS, based on the Existing Term Loans currently held by funds managed by UBS. As such, on the Transaction Effective Date, we expect that UBS will beneficially own approximately 21.5 million shares of common stock, or approximately 22.7% of shares of common stock then outstanding. For purposes of calculating the foregoing percentage, all shares of common stock issuable upon exercise of Existing Warrants and all Stakeholder Warrants to be issued to UBS in accordance with the TSA were deemed to be outstanding immediately following the issuance of the Debt Exchange Shares, assuming all of the Existing Warrants are cashlessly exercised based on the closing price of the common stock on December 16, 2024 of $0.72 and ignoring the cashless exercise feature of the Net Settle Stakeholder Warrants and assuming 1.625 shares are issued for each Net Settle Stakeholder Warrant.

6

Based on the estimated outstanding balance on our Existing Term Loans of $232.8 million as of December 31, 2024.

​

 

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As noted above, subject to shareholder approval of this proposal and to the satisfaction or waiver of the other conditions to closing of the Transactions under the terms of the Definitive Documents, we expect that we will issue a maximum of 59,000,000 shares of common stock in exchange for the contribution by the lenders to Altisource of up to $72.87 million in principal amount of the Existing Term Loans, resulting in a Minimum Effective Price of $1.23 per Debt Exchange Share. If we had entered into the agreement to exchange the Existing Term Loans for the Debt Exchange Shares (the “Exchange Agreement”) prior to market open on the December 20, 2024, the Minimum Price would have been $0.549, which is lower than the Minimum Effective Price, and we would not have had a 20% Issuance at a price that is less than the Minimum Price and shareholder approval would not be required under Nasdaq listing Rule 5635(d). However, we do not expect to enter into the Exchange Agreement with the Consenting Lenders until on or prior to the Closing Date, and we do not know what the Minimum Price will be at that point in time. Accordingly, we are seeking shareholder approval under Nasdaq listing Rule 5635(d) in the event that the Minimum Effective Price is less than the Minimum Price at the time we enter into the Exchange Agreement. While we cannot predict the future price of our common stock, we expect that the Minimum Price will be lower than the Minimum Effective Price at the time we enter into the Exchange Agreement. However, to the extent it is not, unless we provide a supplement to this proxy statement, we will not issue Debt Exchange Shares if the Minimum Effective Price is less than 33 1/3% of the Minimum Price, which would mean the Minimum Price would have to exceed $3.69.

Accordingly, the issuance of the Debt Exchange Shares requires shareholder approval under Nasdaq listing rules, and we are seeking shareholder approval of this proposal to comply with Nasdaq listing rules, including but not limited to Nasdaq listing rules 5635(b) and 5635(d), to permit the issuance of the Debt Exchange Shares.

Why the Board Recommends a Vote “FOR” the Stock Issuance Proposal

The Board of Directors recommends that you vote in favor of the Stock Issuance Proposal as it will facilitate consummation of the Transactions. As discussed above, the issuance of the Debt Exchange Shares in exchange for the cancellation of a portion of our outstanding debt is a critical component of the Company’s recapitalization plan.

The expected benefits of the proposed issuance of the Debt Exchange Shares and consummation of the Transactions include:

•

strengthening the Company’s balance sheet and cash flow;

​

•

providing more time for the Company to benefit from the (a) default market’s potential return to a historical, pre-pandemic foreclosure environment and (b) continued development and anticipated growth of the Company’s origination and real estate Investor solutions;

​

•

reducing management, employee and customer distractions; and

​

•

providing pre-transaction Stakeholders with an opportunity to offset potential dilution resulting from the issuance of the Debt Exchange Shares if the VWAP Condition is satisfied.

​

For more information regarding the expected benefits of approving the Stock Issuance Proposal and the consummation of the Transactions, please see “Description of the TSA and the Transactions Contemplated Thereby—Expected Benefits of the Proposed Transactions.”

Effects if the Stock Issuance Proposal Is Approved

Issuance of Debt Exchange Shares

If the Stock Issuance Proposal is approved by our shareholders, then, subject to the satisfaction of the other conditions to closing the Transactions as will be set forth in the Definitive Documents, we will be able to issue the Debt Exchange Shares, which, if all the other Proposals are approved, will facilitate the Transactions.

Significant Increase in Ownership of Our Commons Stock by Consenting Term Lenders

The table below sets forth information regarding the beneficial ownership of certain of our shareholders as of December 16, 2024 and the estimated expected approximate beneficial ownership of our common stock by the

7

Based on the estimated outstanding balance on our Existing Term Loans of $232.8 million as of December 31, 2024.

​

 

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persons that are expected to be the beneficial owners of more than 5% of our common stock (excluding treasury shares) after giving effect to the issuance of the Debt Exchange Shares and, except as noted below, the Stakeholder Warrants based on the number of our shares of common stock outstanding as of December 16, 2024 and assuming all of the Existing Warrants are cashlessly exercised based on the closing price of the common stock on December 16, 2024 of $0.72. In addition, the estimated expected approximate beneficial ownership of our common stock in the table below ignores the cashless exercise feature of the Net Settle Stakeholder Warrants and assumes 1.625 shares are issued for each Net Settle Stakeholder Warrant.

(1)

The Estimated Approximate Number of Shares Expected to be Beneficially Owned includes approximately 1.8 million shares of our common stock that could be obtained from the exercise of Stakeholder Warrants.

​

(2)

For further details regarding Deer Park Road Management Company, LP’s beneficial ownership, refer to footnote (3) to the beneficial ownership table in the section titled, “Security Ownership of Certain Beneficial Owners and Management” below. The Estimated Approximate Number of Shares Expected to be Beneficially Owned includes approximately 15.0 million shares of our common stock that could be obtained from the exercise of Stakeholder Warrants.

​

(3)

For further details regarding Mr. Erbey’s beneficial ownership refer to footnote (2) to the beneficial ownership table in the section titled, “Security Ownership of Certain Beneficial Owners and Management” below. The Estimated Approximate Number of Shares Expected to be Beneficially Owned includes approximately 3.6 million shares of common stock that could be acquired upon the exercise of Stakeholder Warrants. Approximately 16.1 million shares of our common stock that could be obtained from the exercise of Stakeholder Warrants are excluded from the Estimated Approximate Number of Shares Expected to be Beneficially Owned due to the Beneficial Ownership Limitation.

​

Potential Adverse Consequences of Approval of the Stock Issuance Proposal and the Transactions

For a description of the potential adverse consequences of approving the Stock Issuance Proposal, see “Description of the TSA and the Transactions Contemplated Thereby—Potential Adverse Consequences of the Approval of the Proposals and the Consummation of the Transactions.”

Securities Law Matters

Neither this Stock Issuance Proposal nor any other disclosures contained in this proxy statement is either an offer to sell or a solicitation of an offer to buy any of our securities.

OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE STOCK ISSUANCE PROPOSAL

 

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Proposal 2: Plan Amendment Proposal

At the Special Meeting, shareholders will be asked to approve an amendment to the Altisource Portfolio Solutions S.A. Amended and Restated 2009 Equity Incentive Plan (the “2009 Equity Incentive Plan”) to increase the number of shares of common stock reserved for issuance under the 2009 Equity Incentive Plan by 4,645,875 shares from 11,666,667 shares to 16,312,542 shares.

On December 17, 2024, our Board of Directors, subject to shareholder approval, approved the Share Reserve Increase Amendment. The increase in the 2009 Equity Incentive Plan’s share reserve is intended to facilitate the issuance of the Management RSUs as described under the heading, “Description of the TSA and the Transactions Contemplated Thereby—Certain Transactions Contemplated by the TSA—Issuance of Management RSUs”.

As of December 16, 2024, we had 4,020,416 shares available for future grants of equity awards under the 2009 Equity Incentive Plan, and 2,679,576 shares were reserved for issuance pursuant to outstanding equity awards under the 2009 Equity Incentive Plan. We estimate that the Management RSUs will represent a maximum of 4,645,875 shares of common stock. Accordingly, if the Proposals are approved, we will not have a sufficient number of shares of common stock available under the 2009 Equity Incentive Plan’s share reserve to issue shares of common stock upon the vesting of RSUs.

The Management RSUs would be issued prior to the closing of the Transactions but would only be effective upon closing of the Transactions. If the Transactions fails to close, the Management RSUs will not vest and will be cancelled.

One third of the Management RSUs will vest each of the first three anniversaries of the Transaction Effective Date.

If approved and if the Transactions close, the Named Executive Officers receiving Management RSUs would not participate in the Company’s 2025, 2026 and 2027 Long Term Incentive Plans (which are three year plans).

Rationale

In connection with our entry into the TSA, our Compensation Committee and Board of Directors, based on input from Consenting Term Lenders and certain of the Company’s shareholders, determined that it is important to increase the number of RSUs held by members of the management team to continue the turnaround and strategic growth of Altisource. In support of this objective, the TSA contemplates and the Definitive Documents are to provide that members of our management, including our executive officers, are to receive RSUs equal to up to 5% of the Company’s equity post Transactions, which we refer to as the Management RSUs.

The Share Reserve Increase Amendment increases the share reserve under the 2009 Equity Incentive Plan by the maximum number of shares that management estimates could be issued pursuant to Management RSUs. To the extent the Share Reserve Increase Amendment increases the share reserve of the 2009 Equity Incentive Plan in an amount that is greater than is needed to issue the shares of common stock upon the vesting of the Management RSUs, those additional shares would be available for the grant additional equity awards under the 2009 Equity Incentive Plan in the discretion of our Compensation Committee.

The proposed increase in shares reserved for issuance to Company employees is aligned with the Company’s long-term compensation philosophy. The Company’s long-term compensation philosophy is designed to help retain and attract talent during this transition period, reenforce the alignment between management and shareholders by tying executive compensation to the Company’s long-term performance and value creation, and help the Company remain competitive in attracting talent in a market where executives are in high demand.

Other than the increase in the 2009 Equity Incentive Plan’s share reserve, the Share Reserve Increase Amendment does not alter the terms of the 2009 Equity Incentive Plan.

Summary of the 2009 Equity Incentive Plan

We currently maintain the 2009 Equity Incentive Plan. The purposes of the 2009 Equity Incentive Plan are to attract, to retain and to motivate directors and employees of outstanding ability, and to align their interests with

 

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those of our shareholders. The aggregate number of shares of our common stock that may be issued under the 2009 Equity Incentive Plan is currently 11,666,667 shares, subject to proportionate adjustment in the event of stock splits and similar events.

The following summarizes the terms of the 2009 Equity Incentive Plan as it is proposed to be amended. The following summary is qualified in its entirety by reference to the full text of the 2009 Equity Incentive Plan, as proposed to be amended, which is attached hereto as Appendix D.

Administration

The 2009 Equity Incentive Plan is administered by the Compensation Committee of the Board of Directors consisting of at least two Directors. Each member of the committee must be an “outside director” as defined in Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), a “non-employee director” as defined in Rule 16b-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and an “independent” director under the rules of the Nasdaq Global Select Market. The Committee has full authority, in its discretion, to interpret the 2009 Equity Incentive Plan and to determine the persons who will receive awards and the number of shares to be covered by each award.

Share Reserve

There are currently an aggregate of 11,666,667 shares reserved for issuance pursuant to the 2009 Equity Incentive Plan. If this proposal is approved, a maximum of [16,312,542] would be reserved for issuance under the 2009 Equity Incentive Plan. The closing price of a share of our common stock on December 16, 2024 was $0.549 per share.

If any shares to which an award relates are forfeited or the award otherwise terminates without shares being issued to the participant or if a payment is made to the participant in the form of cash, cash equivalents or other property other than shares, such shares will not be counted against the number of shares available for issuance under the 2009 Equity Incentive Plan, to the extent of any such forfeiture or termination or alternative payment, and will again be available for the grant of awards under the 2009 Equity Incentive Plan.

Eligibility

Under the 2009 Equity Incentive Plan, awards may be granted to our employees and employees of our affiliates, as well as members of our Board of Directors. As of December 16, 2024, approximately 1,150 employees, including three executive officers, and four non-employee directors were able to participate in the 2009 Equity Incentive Plan, based on its eligibility criteria.

Stock Options

The 2009 Equity Incentive Plan provides for the grant of stock options. A stock option becomes exercisable at such time or times and/or upon the occurrence of such event or events as the Compensation Committee may determine. No stock option may be exercised after the expiration of ten years from the date of grant. No participant may be granted options to purchase more than 666,667 shares in any calendar year.

The option price for each stock option will be payable to us in full in cash (or such other method of payment as the Compensation Committee may determine) at the time of exercise. No stock option granted under the 2009 Equity Incentive Plan is transferable other than by will or by the laws of descent and distribution, and a stock option may be exercised during an optionee’s lifetime only by the optionee. Subject to the foregoing and the other provisions of the 2009 Equity Incentive Plan, stock options granted under the 2009 Equity Incentive Plan to participants may be exercised at such times and in such amounts and be subject to such restrictions and other terms and conditions, if any, as shall be determined, in its discretion, by the Compensation Committee.

Restricted Stock

Restricted shares of our common stock awarded by the Compensation Committee will be subject to such restrictions (which may include restrictions on the right to transfer or encumber the shares while subject to restriction) as the Compensation Committee may impose and will be subject to forfeiture in whole or in part if certain events (which may, in the discretion of the Committee, include termination of employment and/or

 

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performance-based events) specified by the Committee occur prior to the lapse of the restrictions. The restricted stock agreement between us and the awardee will set forth the number of shares of restricted stock awarded to the awardee, the restrictions imposed thereon, the duration of such restrictions, the events the occurrence of which would cause a forfeiture of the restricted stock in whole or in part and such other terms and conditions as the Compensation Committee in its discretion deems appropriate. The restriction period applicable to restricted stock will, in the case of a time-based restriction, be not less than two years, with ratable vesting over such period or, in the case of a performance-based restriction period, be not less than one year.

Restricted Stock Units

The Compensation Committee may grant restricted stock units, which are the notional right to receive a specified number of shares upon the satisfaction of certain conditions, to eligible individuals. The restricted stock unit agreement between us and the awardee will set forth the number of restricted stock units awarded to the awardee, the restrictions imposed thereon, the duration of such restrictions, the events the occurrence of which would cause a forfeiture of the restricted stock units in whole or in part and such other terms and conditions as the Compensation Committee in its discretion deems appropriate. The restriction period applicable to restricted stock units will, in the case of a time-based restriction, be not less than two years, with ratable vesting over such period or, in the case of a performance-based restriction period, be not less than one year.

Performance Awards

The Compensation Committee may grant performance awards that may be settled in shares of our common stock based on the achievement, or the level of achievement, or specified performance goals during the specified performance period. The Compensation Committee will determine the applicable performance goals and performance period as well as the level of achievement of such goals.

In any one calendar year, a participant may earn a maximum of 666,667 shares pursuant to performance awards granted under the 2009 Equity Incentive Plan. In the case of multi-year performance periods, the amount which is earned in any one calendar year is the amount paid for the performance period divided by the number of calendar years in the period.

Other Equity-based Awards

The Compensation Committee shall be authorized, subject to limitations under applicable law, to grant to eligible employees, in lieu of salary or cash bonus, such other awards that are denominated or payable in, valued in whole or in part by reference to, or otherwise based on, or related to, shares of common stock, as deemed by the Compensation Committee to be consistent with the purposes of the 2009 Equity Incentive Plan, including, without limitation, purchase rights, appreciation rights, shares of common stock awarded without restrictions or conditions, convertible securities, exchangeable securities or other rights convertible or exchangeable into shares of common stock, as the Compensation Committee in its discretion may determine.

The Compensation Committee shall determine the terms and conditions of other stock-based awards. Any shares of common stock or securities delivered pursuant to a purchase right granted under the 2009 Equity Incentive Plan shall be purchased for such consideration, paid for by such methods and in such forms, including, without limitation, cash, shares of common stock, or other property or any combination thereof, as the Compensation Committee shall determine. However, the value of such consideration shall not be less than the fair market value of such shares of common stock or other securities on the date of grant of the purchase right. Appreciation rights may not be granted at a price less than the fair market value of the underlying shares on the date of grant.

Miscellaneous

Except to the extent otherwise determined by the Compensation Committee, no award and no rights or interests therein shall be assignable or transferable by a participant otherwise than by will or the laws of descent and distribution, and any stock option or other right to purchase or to acquire shares of common stock granted to a participant under the 2009 Equity Incentive Plan shall be exercisable during the participant’s lifetime only by such participant.

 

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The Board of Directors may amend, suspend or terminate the 2009 Equity Incentive Plan at any time without shareholder approval except to the extent that shareholder approval is required by law or stock exchange rules or if the amendment, alteration or other change materially increases the benefits accruing to participants, increases the number of shares available under the 2009 Equity Incentive Plan or modifies the requirements for participation under the 2009 Equity Incentive Plan or if the Board of Directors determines that shareholder approval is advisable. Without the consent of the participant, no amendment, suspension or termination of the 2009 Equity Incentive Plan or any award may materially and adversely affect the rights of such participant under any previously granted award.

Form S-8 Registration Statement

If Plan Share Amendment Proposal is approved, we intend to file a registration statement on Form S-8 to register all of the additional shares of our common stock to be reserved for issuance under the 2009 Equity Incentive Plan.

New Plan Benefits

The selection members of management that will be granted Management RSUs under the 2009 Equity Incentive Plan and the number of RSUs granted will be determined by the Compensation Committee in its discretion. None of the additional shares that will be authorized for issuance under the 2009 Equity Incentive Plan have been awarded to any of the directors or employees, and no commitment has been made to award any such shares. The Compensation Committee has authority to authorize future awards under the 2009 Equity Incentive Plan from time to time. The value of any future equity awards will ultimately depend on the nature and size of the awards, the future price of our common stock and the exercise decisions made by the participants, among other factors, and will be subject to such vesting conditions under the 2009 Equity Incentive Plan as the Compensation Committee determines from time to time. Therefore, the amount of any future awards under the 2009 Equity Incentive Plan is not yet determinable and it is not possible to predict the benefits or amounts that will be received by, or allocated to, particular individuals or groups of employees.

U.S. Federal Income Tax Consequences

The following is a summary of the U.S. federal income tax treatment applicable to us and the participants who receive awards under the 2009 Equity Incentive Plan based on the federal income tax laws in effect on the date hereof. This summary is not intended to be exhaustive and does not address all matters relevant to a particular participant based on their specific circumstances. The summary expressly does not discuss the income tax laws of any state, municipality or non-U.S. taxing jurisdiction, or the gift, estate, excise or other tax laws other than U.S. federal income tax law. Because individual circumstances may vary, we recommend that all participants to consult their own tax advisor concerning the tax implications of awards granted under the 2009 Equity Incentive Plan.

Stock Options

Stock options granted under the 2009 Equity Incentive Plan are nonstatutory stock options (“NSOs”) that are not intended to be incentive stock options pursuant to Section 422 of the Code. No taxable income is recognized by a participant upon the grant of an NSO. The participant in general will recognize ordinary income, in the year in which the NSO is exercised, equal to the excess of the fair market value of the purchased shares on the exercise date over the exercise price paid for the shares. We will be entitled to an income tax deduction equal to the amount of ordinary income recognized by the participant with respect to the exercised NSO.

Restricted Stock Awards

No taxable income is recognized at the time restricted stock awards are issued, but the participant will have to report as ordinary income, as and when those shares subsequently vest, an amount equal to the excess of (i) the fair market value of the shares on the vesting date over (ii) the cash consideration (if any) paid for the shares. The participant may, however, elect under Section 83(b) of the Code to include as ordinary income in the year the unvested shares are issued an amount equal to the excess of (a) the fair market value of those shares on the issue date over (b) the cash consideration (if any) paid for such shares. If the Section 83(b) election is made, the participant will not recognize any additional income as and when the shares subsequently vest.

 

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We will be entitled to an income tax deduction equal to the amount of ordinary income recognized by the participant at the time such ordinary income is recognized by the participant.

Other Awards

Generally, no taxable income is recognized upon receipt of restricted stock units, performance awards or other equity-based awards. The holder will recognize ordinary income in the year in which the shares subject to the award are actually issued. The amount of that income will be equal to the fair market value of the shares on the date of issuance.

We will be entitled to an income tax deduction equal to the amount of ordinary income recognized by the holder at the time the shares are issued.

Withholding

Prior to the delivery of any shares of our common stock pursuant to an award granted pursuant to the 2009 Equity Incentive Plan award (or exercise thereof), we have the authority to deduct or withhold, or require a participant to remit to us, an amount sufficient to satisfy federal, state, local or foreign taxes or other amounts required to be withheld with respect to such award (or exercise thereof).

Section 409A of the Code

Certain types of awards under the 2009 Equity Incentive Plan may constitute, or provide for, a deferral of compensation subject to Section 409A of the Code. Unless the awards comply with certain requirements set forth in Section 409A of the Code, holders of such awards may be taxed earlier than would otherwise be the case (e.g., at the time of vesting instead of the time of payment) and may be subject to an additional 20% penalty tax (and, potentially, certain interest, penalties and additional state taxes). To the extent applicable, the 2009 Equity Incentive Plan and awards granted under the 2009 Equity Incentive Plan are intended to be structured and interpreted in a manner intended to either comply with or be exempt from Section 409A of the Code and the Department of Treasury regulations and other interpretive guidance that may be issued under Section 409A of the Code.

Deductibility of Executive Compensation

Section 162(m) of the Code limits the deductibility for federal income tax purposes of certain annual compensation paid to any “covered employee” in excess of $1 million. For purposes of Section 162(m), the term “covered employee” includes any individual who serves or has served as our chief executive officer, chief financial officer or one of the other three most highly compensated executive officers for 2017 or any subsequent calendar year.

OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE PLAN AMENDMENT PROPOSAL.

 

34

 

Interests of Certain Persons in the Proposals

None of our directors or executive officers have any substantial interest, directly or indirectly, in the Proposals except to the extent of their ownership of shares of our common stock and except as follows:

•

Mary C. Hickok, who is a Director of the Company, serves as Managing Director at Deer Park Road Management Company, LP (“Deer Park”), an alternative investment management firm. Deer Park or affiliated funds beneficially own approximately 16.6% of our common stock and hold approximately 18.1% of the Existing Term Loans. Pursuant to the terms of the TSA, upon consummation of the Transactions, Deer Park or affiliated funds are expected to tender their Existing Term Loans to the Company and receive (i) approximately 18.1% of the New Facility and approximately 18.1% of the Debt Exchange Shares.

​

•

While our Compensation Committee has not made determinations with respect to the allocation of the Management RSUs among members of our management, it is expected that a significant portion of Management RSUs will be allocated to our executive officers, William B. Shepro, Michelle D. Esterman and Gregory J. Ritts. Accordingly, these persons have an interest in the Plan Amendment Proposal and the other Proposals, which will facilitate the issuance of the Management RSUs . In addition, holders of RSUs, including our executive officers and Directors, will receive Stakeholder Warrants with respect to RSUs they hold on the Stakeholder Warrant Issuance Record Date if the Proposals are approved and the Transactions close. Accordingly, such persons have an interest in all the Proposals being approved, as approval of those Proposals will facilitate the closing of the Transactions and the issuance of the Stakeholder Warrants.

​

 

35

Board of Directors’ Compensation

Compensation Arrangements for Non-Management Directors

Altisource’s director compensation program is designed to attract and retain highly qualified non-management directors. Our Compensation Committee believes that compensation for non-management directors should consist of both equity and cash to compensate members for their service on our Board of Directors and its committees and to align their interests with our shareholders.

In line with our philosophy that the interests of our Directors should align with the interests of our shareholders, and to encourage active membership, non-management Directors who attend at least 75% of all meetings of our Board of Directors and Committees on which they serve are entitled to receive an award of shares of our common stock at the end of the applicable service year based on an award value periodically approved by our shareholders. We determine the number of shares to be granted by dividing the award value by the average of the high and low prices of our common stock as reported on the Nasdaq Global Select Market on the first day of the service year.

For the 2022 to 2023 service year, our non-management Directors who attended at least 75% of all meetings of our Board of Directors and Committees on which they served received 12,327 shares of common stock at the end of the service year, based on an award value of $120,000, divided by the average of the high and low prices of the common stock as reported on the Nasdaq Global Select Market on May 18, 2022 (the first day of the 2022 to 2023 service year).

For the 2023 to 2024 service year, our non-management Directors who attended at least 75% of all meetings of our Board of Directors and Committees on which they serve received 28,037 shares of common stock at the end of the service year, based on an award value of $120,000, divided by the average of the high and low prices of the common stock as reported on the Nasdaq Global Select Market on May 17, 2023 (the first day of the 2023 to 2024 service year).

For the 2024 to 2025 service year, each non-management Director who, as of the end of the service year, has attended at least 75% of all meetings of our Board of Directors and Committees on which they served, will be entitled to 65,574 shares of common stock as of the end of the 2024 to 2025 service year (“Share Entitlement”), calculated by dividing $120,000 by the average of the high and low prices of the common stock as reported on the Nasdaq Global Select Market on May 31, 2024 (the first day of the service year), which was $1.83. Our Compensation Committee has determined that the Share Entitlement is an RSU under our 2009 Equity Incentive Plan, and the non-management Directors will be entitled to Stakeholder Warrants with respect to their Share Entitlements if the Proposals are approved and the Transactions close. The Stakeholder Warrants granted with respect to Share Entitlements will only become exercisable if the service requirements of the Share Entitlement are met as of the end of 2024 to 2025 service year.

In addition, in line with our philosophy that the interests of our Directors should be aligned with those of our shareholders, new non-management Directors are granted a one-time award of 500 restricted shares of common stock, which are scheduled to vest in four (4) equal installments, with the initial portion vesting on the date of the annual meeting following the award and vesting continuing on the dates of the next three (3) annual meetings.

As approved by our shareholders at our 2016 annual meeting of shareholders, each non-management member of our Board of Directors also receives the following annual cash compensation, in quarterly installments:

•

a retainer of $54,000;

​

•

an additional $100,000 to the Chairman of our Board of Directors, if not a member of the Company’s management(1);

​

•

an additional $25,000 to the Audit Committee Chair;

​

•

an additional $17,500 to the Compliance Committee Chair;

​

•

an additional $15,000 to the Compensation Committee Chair;

​

•

an additional $12,500 to the Nomination/Governance Committee Chair;

​

 

36

•

an additional $10,000 to all Audit Committee members (other than the Audit Committee Chair);

​

•

an additional $10,000 to all Compliance Committee members (other than the Compliance Committee Chair), if not a member of the Company’s management(1);

​

•

an additional $7,500 to all Compensation Committee members (other than the Compensation Committee Chair); and

​

•

an additional $5,000 to all Nomination/Governance Committee members (other than the Nomination/ Governance Committee Chair).

​

The Company also pays or reimburses our Directors for reasonable travel, lodging, food and other expenses incurred while attending Board of Directors, Committee or shareholder meetings, or other corporate functions.

Certain Directors are also required to file Luxembourg tax returns in connection with their compensation as Altisource Directors. In connection with this requirement, as approved by our shareholders at the 2018 Annual Meeting, the Company pays for tax preparation services for any Luxembourg tax returns that must be filed by non- resident Directors as a result of their membership on our Board of Directors.

Non-Management Director Compensation for 2023

The following table summarizes: (i) cash compensation earned in 2023 by each non-management member of our Board of Directors who served as a Director during 2023; (ii) stock awards made to our non-management Directors in 2023 for their service in the 2022 to 2023 service year; and (iii) any other compensation received from the Company in 2023. Mr. Shepro, as a member of the Company’s management, does not receive an annual retainer or any other additional compensation for his service on our Board of Directors.

(1)

Cash compensation for our non-management directors is established on a “service year” basis running from one annual meeting of shareholders to the next annual meeting of shareholders and is paid in equal installments at the end of each quarter during which the non-management director served as a member of our Board of Directors. Director compensation may be prorated for a Director serving less than a full one year term, as in the case of a Director joining our Board of Directors after an annual meeting of shareholders but during the service year. This table shows the amounts earned for service in 2023, including amounts earned for service in the fourth quarter of 2023 and paid in the first quarter of 2024.

​

(2)

Non-management Directors who attended at least 75% of all meetings of our Board of Directors and Committees on which they served for the 2022 to 2023 service year were entitled to receive an award of Altisource common stock at the end of such service year. The number of shares of common stock was determined by dividing $120,000 by the average of the high and low prices of the common stock as reported on the Nasdaq Global Select Market on the first day of the service year. This table shows the aggregate award date fair value of such shares on the date awarded in May 2023.

​

(3)

On the date of his initial election to our Board of Directors, Mr. Aldridge received a one-time grant of 500 shares of common stock. This award was scheduled to vest in four equal installments beginning on the date of the 2023 annual meeting of shareholders and the final installment vesting on the date of the 2026 annual meeting of shareholders, subject to Mr. Aldridge’s continued service on our Board of Directors. As of December 31, 2023, Mr. Aldridge held 28,412 unvested shares.

​

(4)

On the date of her initial election to our Board of Directors, Ms. Hickok received a one-time grant of 500 shares of common stock. This award was scheduled to vest in four equal installments beginning on the date of the 2022 annual meeting of shareholders and the final installment vesting on the date of the 2025 annual meeting of shareholders, subject to Ms. Hickok’s continued service on our Board of Directors. All cash compensation related to Ms. Hickok’s service as a Director is paid to STS Master Fund, Ltd. Shares

​

 

37

granted to Ms. Hickok for her service as a Director are transferred to the account of DPR CC LLC, a C-Corp wholly-owned by Deer Park/STS Master Fund Ltd. As of December 31, 2023, Ms. Hickok held 28,287 unvested shares.

(5)

Mr. Müller-Ineichen’s cash compensation was paid in euros using the following exchange rates that were in effect on the 15th day of the last month of the quarter for which the payment was made: for the first quarter 2023, an exchange rate of 0.93963 euros to the U.S. dollar; for the second quarter 2023, an exchange rate of 0.91939 euros to the U.S. dollar; for the third quarter 2023, an exchange rate of 0.93812 euros to the U.S. dollar and for the fourth quarter, an exchange rate of 0.91351 euros to the U.S. dollar. The cash amounts reported herein are the U.S. dollar amounts prior to conversion to euros. As of December 31, 2023, Mr. Müller-Ineichen held 28,037 unvested shares.

​

Minimum Stock Ownership Requirements

To further align our non-management Directors’ interests with those of our shareholders, our Board of Directors has adopted minimum stock ownership requirements for non-management Directors. Pursuant to these ownership requirements, each non-management Director is required to attain and maintain stock ownership at a level equal to three times his or her annual cash retainer. The minimum number of shares is determined as of the date of such person’s initial election as a non-management director, or if elected prior to the policy’s adoption, the date when he or she first became subject to this policy. Each non-management Director has two years from the effective date of his or her initial election or from the date on which he or she first becomes subject to the policy, whichever is later, to comply with these requirements. The minimum stock ownership level will not change as a result of fluctuations in the market price of the Company’s common stock. Incremental increases in the level of required stock ownership will be determined as of the effective date of any increase in the annual cash retainer paid to non-management Directors. Each of our Directors currently meets the minimum stock ownership requirements. The minimum stock ownership requirements for our non-management Directors and our Chief Executive Officer are set forth in our Corporate Governance Guidelines, which are available on our website at https://ir.altisource.com/corporate-governance.

 

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Security Ownership of Certain Beneficial Owners and Management

Beneficial Ownership of Common Stock

The following table sets forth certain information regarding the beneficial ownership of our common stock by the following persons as the Record Date:

a.

all persons known by Altisource to beneficially own five percent or more of the outstanding common;

​

b.

each Director and Named Executive Officer (as defined below) of Altisource; and

​

c.

all Directors and current executive officers of Altisource as a group.

​

The table is based upon information supplied to us by Directors, executive officers and principal shareholders and filings under the Exchange Act and is based on an aggregate of 27,226,033 shares issued and outstanding as of the Record Date of December 16, 2024. Unless otherwise indicated in the footnotes below, the information is provided as of the Record Date.

Unless otherwise noted, the address for contacting our Directors and Named Executive Officers listed below is: Altisource Portfolio Solutions S.A., 33, Boulevard Prince Henri, L-1724 Luxembourg, Grand Duchy of Luxembourg.

Shares Beneficially Owned(1)

*

Less than one percent (1%)

​

(1)

For purposes of this table, an individual is considered the beneficial owner of shares of common stock if he or she directly or indirectly has, or shares, voting power or investment power, as defined in the rules promulgated under the Exchange Act, or has the right to acquire such beneficial ownership within 60 days of December 16, 2024. Therefore, the table includes options to purchase shares of our common stock that are currently exercisable or will become exercisable within such 60-day period and restricted shares and restricted share units (“RSUs”) that vest within 60 days, even if the share exercise price of such options exceeds the share value of such options. It does not include restricted shares that do not vest within such 60-day period and under which the holder has no voting rights until vested. With respect to shares, unless otherwise indicated, an individual has sole voting power and sole investment power with respect to the indicated shares. In accordance with Company policy, no shares have been pledged as security for indebtedness by our Named Executive Officers or Directors.

​

(2)

Based on information contained in a Schedule 13D/A filed with the SEC on May 21, 2021, Mr. Erbey’s holdings consist of (a) 548,220 shares of common stock held by Mr. Erbey and (b) 5,452,489 shares of common stock held by Salt Pond Holdings, LLC, a United States Virgin Islands limited liability company (“Salt Pond”), of which the Christiansted Trust, a United States Virgin Islands trust (the “C-Trust”) and Erbey Holding Corporation, Inc., a Delaware corporation (“Erbey Holding”) are members. Erbey Holding is wholly owned by the Carisma Trust, a Nevada trust, the trustee of which is Venia, LLC, a Nevada limited liability company (“Venia”). The members of Venia are John Erbey (Mr. Erbey’s brother) and Andrew Burnett, although Mr. Erbey is given sole investment and voting control over any securities owned by Venia or the

​

 

39

Carisma Trust. Mr. Erbey, John Erbey and Salt Pond are co-trustees of the C-Trust. Mr. Erbey, Erbey Holding, the C-Trust, the Carisma Trust and Venia each may be deemed to beneficially own the 5,452,489 shares of common stock held by Salt Pond. Mr. Erbey’s business address is P.O. Box 25437, Christiansted, United States Virgin Islands 00824.

(3)

Based on information contained in a Form 13F filed with the SEC on November 14, 2024, by Deer Park Road Corp. (“Deer Park”), on behalf of itself and Deer Park Road Management GP, LLC, Deer Park Road Management Company, LP and AgateCreek LLC (collectively, the “Reporting Managers”), Deer Park’s holdings consist of 4,277,138 shares, which include 125 restricted shares of common stock received as part of a one-time grant to Ms. Hickok when she joined our Board of Directors (which are scheduled to vest on the date of the 2025 annual meeting of shareholders) and 291,738 Existing Warrants held by Deer Park. Shares granted to Ms. Hickok for her service on Altisource’s Board of Directors are transferred to the account of DPR CC LLC, a C-Corp wholly owned by Deer Park/STS Master Fund, Ltd., over which the Deer Park Reporting Managers share voting and dispositive power. Deer Park serves as investment adviser to STS Master Fund, Ltd., an exempt company organized under the laws of the Cayman Islands. The business address of the Deer Park Reporting Managers is 1195 Bangtail Way, Steamboat Springs, Colorado 80487.

​

(4)

Based on information contained in a Schedule 13D filed with the SEC on February 21, 2023, by Hoak Public Equities, L.P., a Texas limited partnership (“HPE”), on behalf of itself and Hoak Fund Management, L.P., a Texas limited partnership and HPE’s general partner (“Hoak Management”); Hoak & Co., a Texas corporation and the general partner of Hoak Management; J. Hale Hoak, President of Hoak & Co.; James M. Hoak, Jr., controlling shareholder and Chairman of Hoak & Co., and trustee of the GRAT (as defined below); and the Nancy Hoak 2023 GRAT Agreement, a grantor retained annuity trust established in the State of Texas (“GRAT”) (collectively, the “Hoak Reporting Persons”). Each of Hoak Management, Hoak & Co., James M. Hoak, Jr., and J. Hale Hoak may be deemed to be the beneficial owners of all shares of common stock held by HPE. The business address of each of the Hoak Reporting Persons is 3963 Maple Avenue, Suite 450, Dallas, TX 75219.

​

(5)

Includes 864,559 shares of common stock held by the William B. Shepro Revocable Trust (as to which Mr. and Mrs. Shepro share voting and dispositive power) and 252,400 exercisable options to purchase shares of common stock that have or will become exercisable within 60 days after December 16, 2024 held by Mr. Shepro. Also includes 19,411 shares, 26,507 shares and 31,639 shares granted to Mr. Shepro on April 9, 2024, July 23, 2024, and October 22, 2024, respectively, pursuant to his voluntary temporary modification of his cash compensation for the quarters ended March 31, 2024, June 30, 2024, and September 30, 2024, replacing 30% of his base salary with Altisource common stock. The William B. Shepro Revocable Trust holds these shares.

​

(6)

Includes 180,770 shares of common stock held jointly by Ms. Esterman and her spouse, Gregory F. Esterman and 49,466 exercisable options to purchase shares of common stock that have or will become exercisable within 60 days after December 16, 2024 held by Ms. Esterman. Also includes 12,591 shares, 17,202 shares and 20,527 shares granted to Ms. Esterman on April 9, 2024, July 23, 2024 and October 22, 2024, respectively, pursuant to her voluntary temporary modification of her cash compensation for the quarters ended March 31, 2024, June 30, 2024 and September 30, 2024 replacing 30% of her base salary with Altisource common stock. Ms. Esterman and her spouse jointly hold these shares.

​

(7)

Includes 63,229 shares of common stock, 27,642 exercisable options to purchase shares of common stock that have or will become exercisable within 60 days after December 16, 2024, directly held by Mr. Ritts.

​

(8)

Consists of 88,392 shares of common stock held directly by Mr. Aldridge and 250 restricted shares of common stock received as part of a one-time grant to Mr. Aldridge when he joined our Board of Directors (which are scheduled to vest in equal increments on the dates of the 2025 and 2026 annual meetings of shareholders).

​

(9)

Shares received by Ms. Hickok for her services as a non-management director of Altisource are transferred to the account of DPR CC LLC, a C-Corp wholly owned by Deer Park/STS Master Fund, Ltd.

​

 

40

Equity Compensation Plan Information

The following table sets forth information as of December 31, 2023 year with respect to compensation plans under which our equity securities are authorized for issuance.

 

41

Executive Compensation

Summary Compensation Table

This section provides an overview of our executive compensation programs, including a narrative description of the material factors necessary to understand the information disclosed in the summary compensation table below.

Our named executive officers for the year ended December 31, 2023 were as follows (our “Named Executive Officers”):

1)

William B. Shepro, Chief Executive Officer

​

2)

Michelle D. Esterman, Chief Financial Officer

​

3)

Gregory J. Ritts, Chief Legal and Compliance Officer

​

The following table discloses compensation of our Named Executive Officers for fiscal years 2022 and 2023.

​

(1)

Represents amounts earned in corresponding year.

​

(2)

Represents the grant date fair value in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 of the RSUs granted during each year presented. The value was determined by using the grant date fair value per award multiplied by the shares or RSUs granted, as per the grant date.

​

(3)

Consists of the cash portion of annual incentive compensation related to performance in the year indicated and awarded in the first quarter of the following year.

​

(4)

Consists of payments made to each Named Executive Officer or on their behalf pursuant to their respective employment agreements and relocation/expatriate plans, as detailed in the applicable footnotes.

​

(5)

Mr. Shepro’s base salary is set in U.S. dollars and paid in euros. His base salary was converted to euros using an exchange rate of 0.83 euros to the U.S. dollar in accordance with his employment agreement. The base salary reported on the table above is the U.S. dollar base salary prior to conversion to euros. Mr. Shepro volunteered to temporarily modify his cash compensation effective November 1, 2023 by providing the Company with the option to replace up to 30% of his base salary with a grant of unrestricted Altisource common stock on a quarterly basis (the “Adjustment”). Beginning on the effective date of the Adjustment, the cash portion of Mr. Shepro’s base salary may be reduced by up to 30% at the election of the Compensation Committee of our Board of Directors (the “Reduced Amount”). At the end of each calendar quarter (each a “Period”), so long as the Adjustment is in place, the Compensation Committee will determine the portion of the Reduced Amount to be paid in Altisource common stock, with the remainder of the Reduced Amount (if any) to be paid in cash. To the extent that the Company opts to pay any portion of the Reduced Amount in Altisource common stock, such stock grant will occur on the last day of the applicable quarter and vest immediately, with the amount of common stock granted being determined based on the lower of the average closing stock price for such quarter and the closing stock price on the day immediately preceding the date of such grant. The amount of Mr. Shepro’s cash compensation reduction in 2023 was paid in Restricted Share Units in January 2024. To the extent the Company opts to pay a portion of the Reduced Amount in cash, such amount paid will be increased to include interest on such amount based on the

​

 

42

average 3-month U.S. Treasury rate in effect for such Period in a manner to make Mr. Shepro whole with respect to such amount. Mr. Shepro may revoke the Adjustment upon written notice to our Board of Directors, upon which Mr. Shepro’s cash payment for his base salary will revert to the amount immediately preceding the Adjustment, adjusted for any applicable inflationary adjustments required by Luxembourg law.

(6)

Includes personal use of a company car, an education allowance, a goods and services allowance, a travel allowance, medical benefits and $127,121 tax gross-up payments on perquisites. Mr. Shepro’s other compensation includes benefits paid in euros and, for purposes of the table, is converted into U.S. dollars based on the OANDA one-year average exchange rate ending on December 31, 2023 of 0.9247 euros to the U.S. dollar.

​

(7)

Ms. Esterman volunteered to temporarily modify her cash compensation effective November 1, 2023 by providing the Company with the option to replace up to 30% of her base salary with a grant of unrestricted Altisource common stock on a quarterly basis (the “Adjustment”). Beginning on the effective date of the Adjustment, the cash portion of Ms. Esterman’s base salary may be reduced by up to 30% at the election of the Compensation Committee of our Board of Directors (the “Reduced Amount”). At the end of each calendar quarter (each a “Period”), so long as the Adjustment is in place, the Compensation Committee will determine the portion of the Reduced Amount to be paid in Altisource common stock, with the remainder of the Reduced Amount (if any) to be paid in cash. To the extent that the Company opts to pay any portion of the Reduced Amount in Altisource common stock, such stock grant will occur on the last day of the applicable quarter and vest immediately, with the amount of common stock granted being determined based on the lower of the average closing stock price for such quarter and the closing stock price on the day immediately preceding the date of such grant. The amount of Ms. Esterman’s cash compensation reduction in 2023 was paid in Restricted Share Units in January 2024. To the extent the Company opts to pay a portion of the Reduced Amount in cash, such amount paid will be increased to include interest on such amount based on the average 3-month U.S. Treasury rate in effect for such Period in a manner to make Ms. Esterman whole with respect to such amount. Ms. Esterman may revoke the Adjustment upon written notice to our Board of Directors, upon which Ms. Esterman’s cash payment for her base salary will revert to the amount immediately preceding the Adjustment.

​

(8)

Mr. Ritts’ base salary is set in U.S. dollars and paid in euros. His base salary was converted to euros using an exchange rate of 0.83 euros to the U.S. dollar in accordance with his employment agreement. The number reported on the table above is the U.S. dollar base salary applicable for the period prior to conversion to euros.

​

(9)

Includes a travel allowance, $25,954 for housing allowance, $37,775 for medical benefits and $33,725 tax gross-up payments made on perquisites. Mr. Ritts’ other compensation includes benefits paid in euros and, for purposes of the table, is converted into U.S. dollars based on the OANDA one-year average exchange rate ending on December 31, 2023 of 0.9247 euros to the U.S. dollar.

​

Narrative Disclosure to Summary Compensation Table

For the year ended December 31, 2023, the compensation program for our Named Executive Officers consisted of base salary, annual incentive compensation, equity awards, other benefits, as well as certain relocation and foreign living allowances for our Luxembourg-based Named Executive Officers.

Base Salary

The Compensation Committee sets the base salary for our Chief Executive Officer and approves the base salaries for all other Named Executive Officers.

Base salaries are reviewed periodically, and adjustments may be made based on market information, internal review of the Named Executive Officer’s compensation in relation to other executives, individual performance and corporate performance. Salary levels are also considered upon relocation, promotion or change in job responsibility. In addition, base salaries of our Luxembourg-based Named Executive Officers may be subject to inflationary adjustments from time to time as required by applicable Luxembourg law.

Base salaries for our Named Executive Officers are set in U.S. dollars and paid in euros (other than for Ms. Esterman, who resides in the U.S.).

 

43

Annual Incentive Compensation

The Compensation Committee sets the target incentive compensation for our Chief Executive Officer and approves the target incentive compensation for all other Named Executive Officers. The annual incentives for our Named Executive Officers (and other employees eligible for an annual incentive) are subject to adjustment based on a variable bonus pool (the “Bonus Pool”), with the size of the pool being subject to change by an amount equal to 25% of any increase or decrease of Adjusted EBITDA calculated based on: (1) service revenue differences from budget multiplied by the budgeted Adjusted EBITDA margin multiplied by 12.5% and (2) Adjusted EBITDA differences from budget multiplied by 12.5%.

Target incentive compensation is reviewed periodically, and adjustments may be made based on market information, internal review of the Named Executive Officer’s compensation in relation to other executives and performance. In addition, the Chief Executive Officer’s target incentive compensation historically has been adjusted commensurate with inflationary salary indexation under Luxembourg law. The incentives are typically paid in a mix of cash and equity as approved by our Board of Directors.

For the year ended December 31, 2023, our Named Executive Officers had the following target annual bonus amounts, subject to adjustment based on changes to the Bonus Pool: Mr. Shepro—$1,391,208, Ms. Esterman—​$300,000, and Mr. Ritts—$246,000.

The table below includes the performance metrics for the annual incentive compensation for the year ended December 31, 2023:

For the 2023 service year, the Bonus Pool achievement was originally 69.9%; however, our Board of Directors exercised its discretion and reduced the Bonus Pool to 42% of target due to Company performance.

The table below summarizes the equity award received by each Named Executive Officer as an annual incentive.

Our Board of Directors also determined that the 2023 annual incentive compensation earned by our Named Executive Officers would be paid entirely in RSUs (as opposed to mix of cash and equity). Historically, the cash portion of the annual incentive compensation was paid immediately. The RSUs which were substituted for the cash portion of the 2023 annual incentive compensation will vest on the first anniversary of the grant date, with the remainder of the RSUs vesting equally on the first and second anniversaries of the grant date. As a result, 80% of the 2023 annual incentive compensation will vest on the first anniversary of the grant date, with the remainder vesting on the second anniversary of the grant date, subject to continued employment. The table below summarizes the RSU equity to be received as part of the 2023 annual incentive compensation, which is included in the Summary Compensation Table for 2023. The number of RSUs awarded was determined by dividing the value of actual incentive earned by the Named Executive Officer by the average closing price of ASPS common stock for the 30 trading days preceding the February 20, 2024 grant date.

 

44

(1)

Mr. Shepro voluntarily reduced his earned incentive by $209,270 or 41.1% from an earned incentive of $509,270 to a paid incentive of $300,000. The reduced amount was repurposed to increase the Bonus Pool available to certain other employees. As a result, the amount actually received by Mr. Shepro’s equates to an Overall Attainment Percentage of 21.6%.

​

2023 Long-Term Incentive Plan Awards

In March 2023, the Compensation Committee approved the 2023 Long-Term Incentive Plan equity awards (“LTIP”) for our Named Executive Officers. The awards are comprised equally of time-based restricted stock units (“RSUs”) and performance and market-based RSUs.

The time-based RSUs will vest in three equal annual increments on each of the first three anniversaries of the grant date, subject to employment status and other conditions as set forth in the applicable award agreements.

The award of performance and market-based RSUs will be determined in a two-step process. In the first step, RSUs vest based on the degree of the Company’s achievement of pre-established goals tied to the Company’s 2023, 2024 and 2025 adjusted earnings per share (a non-GAAP measure). Based on the Company’s level of performance versus the adjusted earnings per share goals, the RSUs will have the opportunity to vest between zero percent (0%) and up to one hundred fifty percent (150%) of the initial target levels (the “Initial Award Size”). In the second step, the Initial Award Size may be modified based on Altisource’s Total Shareholder Return (“TSR”) versus the return of the Russell 2000 Index during the applicable performance period (2023-2025), resulting in final earned RSUs equal to zero percent (0%) and up to two hundred twenty-five percent (225%) of the Initial Award Size.

Any earned performance and market-based RSUs will vest, subject to continued employment, entirely on the third anniversary of the grant.

As illustrated in the graphic below, adjusted EPS (earnings per share) and relative TSR results determine the portion of performance and market-based RSUs earned.

The 2023 LTIP equity awards are designed to incent the achievement of adjusted earnings per share goals and stock-price appreciation over a multi-year period, supporting a long-term focus and further aligning executive compensation with shareholder interests and market practice, as well as supporting the retention of our executives.

The 2023 LTIP equity awards were approved for our Named Executive Officers, as follows:

Amendment of EPS goal for 2021, 2022 and 2023 LTIP awards

In 2023, the Compensation Committee elected to exercise its discretion to revise the 2023 adjusted EPS goal for each of the 2021, 2022 and 2023 LTIP awards. This change factors in the adjustment of the average number of

 

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shares outstanding in calculating the LTIP adjusted EPS target for each award to include: (1) the 5,590,277 shares of common stock sold pursuant to the underwritten public offering closed on September 12, 2023; and (2) the common stock subject to Existing Warrants held by our lenders (as adjusted as a result of our partial repayment of the Term Loans). Based on the targets approved by the Compensation Committee, the level of achievement for 2023 on the adjusted EPS goal was 67.3%. The achievement for the 2021 LTIP awards was reduced by 50% by applying the TSR against the Russell 3000 stock market index metric of the award. The achievement for the 2022 and 2023 LTIP awards will be modified by the performance of the TSR against the Russell 2000 for the applicable three-year performance period.

Outstanding Equity Awards at Fiscal Year-End

The table below contains outstanding equity awards at the end of 2023; details regarding the vesting terms of each such award are described in the notes to the table below.

 

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