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As Of Filer Filing For·On·As Docs:Size Issuer Filing Agent 10/03/22 AHP Servicing LLC 1-SA 6/30/22 1:128K GlobalOne Filings Inc/FA |
Document/Exhibit Description Pages Size 1: 1-SA Semi-Annual Report or Special Financial Report HTML 127K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 1-SA
☒ SEMIANNUAL REPORT PURSUANT TO REGULATION A
or
☐ SPECIAL FINANCIAL REPORT PURSUANT TO REGULATION A
For the fiscal semiannual period ended June 30, 2022
AHP SERVICING, LLC
(Exact name of issuer as specified in its charter)
Commission File Number: 024-10899
lState of Organization: Delaware
IRS EIN: 32-0536439
440 S. LaSalle Street, Suite 1110
(866) 247-8326
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Item 1: Management’s Discussion and Analysis of Financial Condition and Results of Operations
Operating Results
For the 6 months beginning January 1, 2022, and ending June 30, 2022, (the “Operating Period”), the Company generated $4,979,812 in revenue, which included $448,935 of servicing fee revenue and $287,610 of shared services revenue. At the end of the Operating Period, the Company had 43 servicing clients and 2,185 serviced assets. Operating losses over the Operating Period totaled $713,171 and were primarily driven by personnel expenses of $4,440,444 resulting from front loaded hiring to ensure there is capacity and expertise to manage future growth in the servicing portfolio.
In October 2020, the Company established a wholly-owned division of the Company, AHP Mortgage Direct (“Mortgage Direct”), that focuses on origination of first mortgages between $5,000 and $75,000. During the Operating Period, Mortgage Direct originated 41 loans which generated $51,083 in revenue, including revenues from loan originations and related fees.
During the Operating Period, the Company purchased 22 loans and REOs for a purchase price of $5,470,135. We will continue to use the remaining proceeds from the registration statement to make disciplined investments in additional mortgages as well as to fund operating expenses. As of June 30, 2022, the Company had assets totaling $55,790,851 – including mortgage loans and REOs held for sale of $44,538,337 and due from related parties of $9,075,616, and total liabilities of $25,979,751 – including notes payable of $23,086,019.
Liquidity and Capital Resources
Our registration statement on Form 1-A, pursuant to which we offered to sell up to $50,000,000 of Class A interests, was declared effective by the Securities and Exchange Commission on November 5, 2018. We subsequently increased the amount of the offering on May 4, 2021 up to $75,000,000. As of June 30, 2022, we have raised $60,159,160 in Class A interests.
During the Operating Period, the Company obtained forgiveness of its Paycheck Protection Program loan in the amount of $881,356 from Susser Bank, which was forgiven in January of 2022. The Company also owes a $500,000 Economic Impact Disaster Loan to the Small Business Administration and $22,586,019 to Keystone National Group, LLC. We may utilize debt financing to purchase additional non-performing mortgages and REOs.
Trend Information
During the Operating Period, the Company continued to be impacted because of the ongoing COVID-19 pandemic. While this had a negative impact on some aspects of our business (e.g., it was difficult to foreclose on residential mortgages while various federal, state, and local moratoriums were in place), the federal government’s response to the pandemic had many positive impacts as well.
Economic growth has meant more money flowing through the domestic economy and more opportunities for borrowers to find employment. This makes it easier to service our loans – and the loans we service for others – because borrowers now have a more meaningful opportunity to rework and/or pay off defaulted loans. Additionally, higher wages have made it less likely a borrower defaults on a loan and more likely we are able to resell, on behalf of ourselves and/or our partners, previously distressed loans as performing loans on the secondary market. Ultimately, more timely borrower payments result in more money we can distribute as part of our normal business operations, and less expense we incur in servicing these loans.
On the other hand, the United States is still experiencing elevated levels of new coronavirus cases and deaths which will likely continue to impact both borrowers and the Company’s core business operations. Additionally, the substantial influx of government aid to fight the pandemic and the resulting economic growth have led to a considerable increase in domestic inflation. It is possible that the current levels of inflation will continue to rise in the future. However, given the relative stability of the real estate market, we believe the industry and the Company are well-situated to survive fluctuations in inflation. We also believe that the Company is well-positioned to continue growing in the future, despite the possible entrance of new market participants which could impact our business – at least in the short to medium term.
Although we have no way of knowing if these trends will continue in the future, we believe that the balance of the evidence shows favorable operating conditions for the Company moving forward.
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Item 2: Other Information
On May 6, 2022, the Company appointed Majed Qminacci to be the Chief Financial Officer, replacing Charles Halko who is no longer employed by the Company. After the Operating Period covered by this Report, on September 1, 2022, Ilan Sussan has since taken over the position of Chief Financial Officer.
Also in May of 2022, Eric Seabrook was replaced as President of the Company by Laurice Srichinda.
After the Operating Period covered by this report, Robert Camerota was replaced as Vice President by Laurice Srichinda on August 2, 2022.
Item 3: Financial Statements
AHP Servicing LLC
Balance Sheet
As of June 30, 2022
| Total | ||||
| ASSETS | ||||
| Current Assets | ||||
| Bank Accounts | ||||
| 5/3rd Operating Acct - 0543 | $ | 445,630.44 | ||
| 5/3rd Bus Mon Market Acct 4273 | 1,459.02 | |||
| 5/3rd PI Collection Acct - 3556 | 36,854.08 | |||
| 5/3rd Escrow Advances Acct - 6824 | 330.80 | |||
| NexBank 1860 | 20,946.31 | |||
| 5/3rd Corporate Advances Acct - 0052 | 1,019.22 | |||
| 5/3rd Advances Acct - 7771 | 1,571.43 | |||
| NPB DDA - 2941 | 47,528.00 | |||
| Total Bank Accounts | 555,339.30 | |||
| Accounts Receivable | ||||
| AHP Other Rec | (10,956.52 | ) | ||
| Accounts Receivable | 425,224.07 | |||
| Accounts Receivable Fund | 10,852.59 | |||
| Accounts Receivable Servic | 809,818.71 | |||
| Escrow Advance Receivables | 0.00 | |||
| Corporate Advance Receivables | 0.00 | |||
| Total Accounts Receivable | 1,245,895.37 | |||
| AR AHP 2015A+ | 0.00 | |||
| I/C Note - AHP Capital | 15,000.00 | |||
| Total Accounts Receivable | 1,249,938.85 | |||
| Other Current Assets | ||||
| Prepaid Expense | 98,761.74 | |||
| Undeposited Funds | 0.00 | |||
| Investments in Affiliates | 4,000.00 | |||
| Due from Related Parties | (47,000.00 | ) | ||
| Due from preREO | 1,255,909.44 | |||
| Due from AHP Title | 908,316.14 | |||
| Due from ATS | 1,079,122.93 | |||
| Due From AHP 75 | 614,202.51 | |||
| Due from AHPC | 2,093,004.09 | |||
| Due From DC | 12,875.82 | |||
| 2015A+ LT LOC | 3,159,185.43 | |||
| Total Due from Related Parties | 9,075,616.36 | |||
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| Loans Held for Sale | $ | 63,750.00 | ||
| Loans Held for Sale - FV | 0.00 | |||
| Bid Deposit on Asset Purch | (786,100.00 | ) | ||
| Security Deposit | 53,848.25 | |||
| Uncategorized Asset | (581.50 | ) | ||
| Total Other Current Assets | 8,509,294.85 | |||
| Total Current Assets | 10,314,573.00 | |||
| Fixed Assets | ||||
| Capitalized Technology Costs | 113,809.00 | |||
| Computers | 276,222.67 | |||
| Office Equipment | 94,528.62 | |||
| Accumulated Depreciation | (491,802.31 | ) | ||
| Software | 334,995.25 | |||
| Lease Improvements and Repairs | 24,663.29 | |||
| Total Fixed Assets | 352,416.52 | |||
| Other Assets | ||||
| Deferred offering costs | 0.00 | |||
| Deferred Start Up Costs | 0.00 | |||
| ROU Asset | 744,615.33 | |||
| Accumulated Amortization of ROU Assets | (95,341.18 | ) | ||
| Total ROU Asset | 649,274.15 | |||
| EFT OFFSET | 0.00 | |||
| Loan Purchases | 28,494,717.14 | |||
| Cap Expenses - Legal | 1,564,037.93 | |||
| Cap Expenses - Taxes | 1,369,296.68 | |||
| Cap Expenses - Repairs & | 269,637.15 | |||
| Cap Expenses - LN Servic | 0.00 | |||
| Cap Expenses - Recording | 11,486.41 | |||
| Principal payments | (939,519.82 | ) | ||
| Cap Expenses - Utilities | 2,645.06 | |||
| Cap Expenses -Due Dillig | 66,238.73 | |||
| Cap Expenses -Title Repo | 70,943.38 | |||
| Cap Expenses - Misc | (16,229.59 | ) | ||
| Document Management | 77.98 | |||
| Total Loan Purchases | 30,893,331.05 | |||
| REO Purchases | 11,805,867.82 | |||
| Maintenance | 1,820.40 | |||
| Total REO Purchases | 11,807,688.22 | |||
| Commercial Business Loans | 1,639,132.19 | |||
| Commercial Loans Advances | 0.00 | |||
| REO Loans | 0.00 | |||
| REO Principal Payments | (6,631.91 | ) | ||
| Total REO Loans | (6,631.91 | ) | ||
| PRE REO Loans | 153,165.07 | |||
| PRE REO Principal Payments | (12,097.14 | ) | ||
| Total PRE REO Loans | 141,067.93 | |||
| Total Commercial Business Loans | 1,773,568.21 | |||
| Total Other Assets | 45,123,861.63 | |||
| TOTAL ASSETS | $ | 55,790,851.15 |
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| LIABILITIES AND EQUITY | ||||
| Liabilities | ||||
| Current Liabilities | ||||
| Accounts Payable | ||||
| Accounts Payable | $ | 735,519.63 | ||
| Total Accounts Payable | 735,519.63 | |||
| Credit Cards | ||||
| Credit Cards | ||||
| 53 Bank-3773 | 2,752.35 | |||
| 24 Amex 21002 | 105,516.71 | |||
| Total Credit Cards | 108,269.06 | |||
| Total Credit Cards | 108,269.06 | |||
| Other Current Liabilities | ||||
| Due to/from Related Party | 0.00 | |||
| Accrued Expense | (1,902.88 | ) | ||
| Accrued Payroll | 298,580.73 | |||
| Accrued Interest | 230,996.68 | |||
| Accrued Rent | 30,478.32 | |||
| Accrued Distributions | 0.00 | |||
| Accrued Redemptions | 0.00 | |||
| Deposits/Earnest Money | 0.00 | |||
| Due to Investors | 823,733.89 | |||
| Accrued Tax Services | 1,955.00 | |||
| Warehouse Line - NexBank | 0.00 | |||
| Warehouse Line - Northpointe | 0.00 | |||
| Other Current Liabilities | 0.00 | |||
| Escrow Liability - Mortgage Direct | 0.00 | |||
| Suspense Payable | 0.00 | |||
| Total Other Current Liabilities | 1,383,841.74 | |||
| Total Current Liabilities | 2,227,630.43 | |||
| Long-Term Liabilities | ||||
| Notes Payable | 500,000.00 | |||
| Line of Credit | 22,586,019.16 | |||
| Lease Liabilities | 666,101.78 | |||
| Total Long-Term Liabilities | 23,752,120.94 | |||
| Total Liabilities | 25,979,751.37 | |||
| Equity | ||||
| Member Contri -J Newbery | 0.00 | |||
| Members Equity | (8,396,724.84 | ) | ||
| Investor Capital - Class A | 56,184,102.19 | |||
| Investor Reinvestments - Class A | 3,975,058.21 | |||
| Investor Returns - Class A | (10,974,785.18 | ) | ||
| Investor Redemptions - Class A | (10,125,383.48 | ) | ||
| Investor Buyback - Class A | (137,996.20 | ) | ||
| Net Income | (713,170.92 | ) | ||
| Total Equity | 29,811,099.78 | |||
| TOTAL LIABILITIES AND EQUITY | $ | 55,790,851.15 | ||
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AHP Servicing LLC
Profit and Loss
January - June, 2022
| Total | ||||
| Income | ||||
| Servicing Revenue | ||||
| Monthly Servicing Fees | ||||
| MSFees - Current | $ | 94,585.18 | ||
| MSFees - 31 to 90 DPD | 21,652.50 | |||
| MSFees - 90+ | 293,410.50 | |||
| MSFees - FCL | 37,817.50 | |||
| MSFees - BK | 9,210.00 | |||
| Total Monthly Servicing Fees | 456,675.68 | |||
| Admin Fees | ||||
| Loan Boarding | 1,515.00 | |||
| Loan Deboarding | 2,500.00 | |||
| Late Fee Share | 11,584.43 | |||
| Charge Off Fees | 1,230.00 | |||
| Miscellaneous Revenue | 16,514.29 | |||
| Total Admin Fees | 33,343.72 | |||
| Resolution Fees | 31,932.65 | |||
| Modification Fees | 56,639.12 | |||
| Total Resolution Fees | 88,571.77 | |||
| Total Servicing Revenue | 578,591.17 | |||
| Subservicing Expense | (129,655.97 | ) | ||
| Asset Management Fee | 51,000.00 | |||
| Shared Services Income | 287,610.00 | |||
| Income - AHP Lease/ Rent | 2,216.67 | |||
| Origination Fee | 38,829.94 | |||
| Origination Fee Expense | 2,607.69 | |||
| Warehouse Fee | (2,250.00 | ) | ||
| Bank Processing Fee | (11,890.00 | ) | ||
| Loans Interest Income | 1,559.60 | |||
| Income - HS Interest | 719,332.15 | |||
| Commercial Loan Interests | ||||
| REO Loan Interest | 37,099.34 | |||
| PRE REO Loan Interest | 92,546.90 | |||
| Total Commercial Loan Interests | 129,646.24 | |||
| Income - HS Other | 109,621.03 | |||
| Refunds | 24,610.69 | |||
| Income - AHPS Sales Proceeds | 14,537,097.36 | |||
| Gain on LHFS | 21,319.14 | |||
| Gain/Loss on Disposition - REO | 1,579,712.43 | |||
| Total Income | $ | 17,939,958.14 | ||
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| Cost of Goods Sold | ||||
| Cost of Goods Sold | ||||
| Expenses on Assets Sold | $ | 717,661.00 | ||
| Acquisition Costs-Assets Sold | 11,958,992.38 | |||
| Total Cost of Goods Sold | 12,676,653.38 | |||
| Total Cost of Goods Sold | 12,676,653.38 | |||
| Gross Profit | 5,263,304.76 | |||
| Expenses | ||||
| Outsourced Services | 44,600.00 | |||
| Facilities Expense | ||||
| Depr & Amort Expense | 63,494.57 | |||
| Office Expense | 4,639.81 | |||
| Office Supplies | 18,438.31 | |||
| Postage - Other | 30,782.91 | |||
| Rent or Lease Expense | 133,837.08 | |||
| Lease - Co-Location | 22,670.06 | |||
| Rent - Utilities | 8,454.95 | |||
| Rent - Op. Esc., Other | 6,794.91 | |||
| Total Facilities Expense | 289,112.60 | |||
| Information Technology | 4,538.37 | |||
| Software & Technology | 253,240.38 | |||
| Telephone & Data Expense | 61,868.48 | |||
| Servicing System Expense | 315,060.83 | |||
| IT Consulting Expenses | 7,950.00 | |||
| Total Information Technology | 642,658.06 | |||
| License Expense | 1,101.00 | |||
| Licensing | 80,927.75 | |||
| Surety Bonds | 63,977.92 | |||
| Total License Expense | 146,006.67 | |||
| Operational Expense | ||||
| Tax & Insurance Contracts | 5,839.00 | |||
| Printing and Reproduction | 8,708.50 | |||
| Other Business Expenses | 808.70 | |||
| Other Servicing Expense | 34,214.43 | |||
| Credit Reporting Expenses | 22,616.36 | |||
| Mortgage Origination Expense | 18,148.00 | |||
| Total Operational Expense | 90,334.99 | |||
| Other Expenses | ||||
| Bank Service Charges | 2,235.59 | |||
| Bank Service Charges Oth | 32,705.07 | |||
| Dues and Subscriptions | 1,051.38 | |||
| Insurance Expense | 21,352.77 | |||
| Other Miscellaneous Expense | 5,386.32 | |||
| Total Other Expenses | $ | 62,731.13 |
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| Personnel Expense | ||||
| Salaries & Wages | $ | 13,886.88 | ||
| AHPS - Salaries | 3,064,908.55 | |||
| AHP Mortgage Direct- Salaries | 618,497.47 | |||
| Payroll Tax Expense | 192,552.25 | |||
| AHPS Health Insurance | 207,438.74 | |||
| Mortgage Direct Health Insurance | 61,455.70 | |||
| Employee Benefits | (57,731.90 | ) | ||
| Employer 401K Expense | 35,000.00 | |||
| Payroll Fees | 61,932.95 | |||
| Recruitment | 153,152.05 | |||
| Training, Meetings & Seminars | 46,651.43 | |||
| Temp Personnel Expenses | 42,700.36 | |||
| Total Personnel Expense | 4,440,444.48 | |||
| Professional Fees | 3,618.00 | |||
| Legal Expense | 53,808.42 | |||
| Legal and Profe Exp Other | 11,934.05 | |||
| Total Legal Expense | 65,742.47 | |||
| Other Professional Fees | 34,041.34 | |||
| Consulting Fees | 12,926.40 | |||
| Accounting Expenses | 122,449.69 | |||
| Marketing Expenses | 60,373.80 | |||
| Total Professional Fees | 299,151.70 | |||
| Travel & Entertainment | 1,615.93 | |||
| Travel Expense | 7,340.28 | |||
| Meals and Entertainment | 36,342.00 | |||
| Travel - Other | 110,301.22 | |||
| Total Travel & Entertainment | 155,599.43 | |||
| Uncategorized Expense | 1,042.68 | |||
| Total Expenses | 6,171,681.74 | |||
| Net Operating Income | (908,376.98 | ) | ||
| Other Income | ||||
| Interest Income | 404,985.82 | |||
| Other Income | 162,059.70 | |||
| Gain on Debt Forgiveness | 889,928.09 | |||
| Total Other Income | 1,456,973.61 | |||
| Other Expenses | ||||
| LOC Interest Expense | 1,259,976.78 | |||
| Warehouse Line Int Expense | 1,790.77 | |||
| Total LOC Interest Expense | 1,261,767.55 | |||
| Total Other Expenses | 1,261,767.55 | |||
| Net Other Income | 195,206.06 | |||
| Net Income | $ | (713,170.92 | ) |
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Item 4: Exhibits
| Exhibit 1A-2A | Certificate of Formation of Company* |
| Exhibit 1A-2B |
Third Amended and Restated Limited Liability Company Agreement* |
| Exhibit 1A-2C |
First Amended and Restated Authorizing Resolution of the Company* |
| Exhibit 1A-6A | Servicing Agreement between Company and American Homeowner Preservation 2015A+, LLC* |
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Signatures
Pursuant to the requirements of Regulation A, the issuer has duly caused this Semi-Annual Report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Chicago, State of Illinois, on September 30, 2022.
| AHP SERVICING, LLC | |
| By: /s/ Jorge Newbery | |
| Jorge Newbery, Chief Executive Officer |
Pursuant to the requirements of Regulation A, this Semiannual Report has been signed below by the following persons on behalf of the issuer and in the capacities and on the dates indicated.
/s/ Ilan Sussan
Ilan Sussan, Chief Financial Officer
/s/ Jorge Newbery
Jorge Newbery, Chief Executive Officer
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| This ‘1-SA’ Filing | Date | Other Filings | ||
|---|---|---|---|---|
 | ||||
| Filed as of: | 10/3/22 | |||
| Filed on: | 9/30/22 | |||
| 9/1/22 | ||||
| 8/2/22 | ||||
| For Period end: | 6/30/22 | |||
| 5/6/22 | 1-K | |||
| 1/1/22 | ||||
| 5/4/21 | 253G2 | |||
| 11/5/18 | QUALIF | |||
| List all Filings | ||||
As Of Filer Filing For·On·As Docs:Size Issuer Filing Agent 10/05/18 AHP Servicing LLC 1-A/A 4:819K GlobalOne Filings Inc/FA 9/17/18 AHP Servicing LLC 1-A 5:855K GlobalOne Filings Inc/FA 7/26/18 AHP Servicing LLC DOS¶ 9/17/18 18:1.8M GlobalOne Filings Inc/FA |