Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2021 | Aug. 13, 2021 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Jun. 30, 2021 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q2 | |
Entity File Number | 001-37997 | |
Entity Registrant Name | SACHEM CAPITAL CORP. | |
Entity Incorporation, State or Country Code | NY | |
Entity Tax Identification Number | 81-3467779 | |
Entity Address, Address Line One | 698 Main Street, | |
Entity Address, City or Town | Branford | |
Entity Address, State or Province | CT | |
Entity Address, Postal Zip Code | 06405 | |
City Area Code | 203 | |
Local Phone Number | 433-4736 | |
Entity Current Reporting Status | Yes | |
Entity Central Index Key | 0001682220 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Trading Symbol | SACH | |
Entity Common Stock, Shares Outstanding | 28,315,930 | |
Entity Interactive Data Current | Yes | |
Title of 12(b) Security | Common Shares, par value $.001 per share | |
Security Exchange Name | NYSE |
BALANCE SHEETS
BALANCE SHEETS - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Assets: | ||
Cash and cash equivalents | $ 62,225,813 | $ 19,408,028 |
Investment securities | 44,502,267 | 37,293,703 |
Investment in partnership | 1,843,398 | |
Mortgages receivable | 172,793,975 | 155,616,300 |
Interest and fees receivable | 2,017,996 | 1,820,067 |
Other receivables | 131,175 | 67,307 |
Due from borrowers | 2,306,346 | 2,025,663 |
Prepaid expenses | 153,732 | 71,313 |
Property and equipment, net | 2,168,988 | 1,433,388 |
Real estate owned | 7,892,845 | 8,861,609 |
Other deposits | 192,646 | |
Deferred financing costs | 88,212 | 72,806 |
Total assets | 296,317,393 | 226,670,184 |
Liabilities: | ||
Notes payable (net of deferred financing costs of $4,383,186 and $4,866,058) | 110,143,564 | 109,640,692 |
Mortgage payable | 0 | 767,508 |
Line of credit | 34,276,418 | 28,055,648 |
Accrued dividends payable | 0 | 2,654,977 |
Accounts payable and accrued expenses | 315,708 | 372,662 |
Other loans | 0 | 257,845 |
Security deposits held | 13,416 | 13,416 |
Advances from borrowers | 2,987,231 | 1,830,539 |
Deferred revenue | 2,230,435 | 2,099,331 |
Notes payable | 42,918 | 54,682 |
Accrued interest | 18,299 | 3,344 |
Total liabilities | 150,027,989 | 145,750,644 |
Commitments and Contingencies | ||
Shareholders' equity: | ||
Preferred shares - $.001 par value; 5,000,000 shares authorized; 1,700,000 shares of Series A Preferred Stock issued and outstanding | 1,700 | 0 |
Common stock - $.001 par value; 100,000,000 shares authorized; 26,733,213 issued and outstanding | 26,733 | 22,125 |
Paid-in capital | 147,362,456 | 83,814,376 |
Accumulated other comprehensive loss | (137,802) | (25,992) |
Accumulated deficit | (963,683) | (2,890,969) |
Total shareholders' equity | 146,289,404 | 80,919,540 |
Total liabilities and shareholders' equity | $ 296,317,393 | $ 226,670,184 |
BALANCE SHEETS (Parenthetical)
BALANCE SHEETS (Parenthetical) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
BALANCE SHEETS | ||
Deferred financing costs | $ 4,383,186 | $ 4,866,058 |
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Preferred Stock, Shares Authorized | 5,000,000 | 5,000,000 |
Preferred Stock, Shares Issued | 1,700,000 | 1,700,000 |
Preferred Stock, Shares Outstanding | 1,700,000 | 1,700,000 |
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Common Stock, Shares Authorized | 100,000,000 | 100,000,000 |
Common Stock, Shares, Issued | 26,733,213 | 22,124,801 |
Common Stock, Shares, Outstanding | 26,733,213 | 22,124,801 |
STATEMENTS OF COMPREHENSIVE INC
STATEMENTS OF COMPREHENSIVE INCOME - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Revenue: | ||||
Interest income from loans | $ 4,682,295 | $ 3,265,677 | $ 9,213,528 | $ 6,167,083 |
Investment income | 180,120 | 33,162 | 422,811 | 130,678 |
Income from partnership investment | 36,868 | 0 | 54,241 | 0 |
Gain (loss) on sale of investment securities | 85,471 | (8,925) | (43,968) | 437,159 |
Origination fees | 831,893 | 647,499 | 1,349,321 | 1,158,555 |
Late and other fees | 61,970 | 21,099 | 97,899 | 35,880 |
Processing fees | 43,410 | 39,665 | 79,385 | 86,123 |
Rental income (loss), net | (9,398) | 29,456 | (5,214) | 40,184 |
Debt forgiveness | 257,845 | 0 | 257,845 | 0 |
Other income | 543,421 | 283,009 | 1,000,230 | 567,283 |
Total revenue | 6,713,895 | 4,310,642 | 12,426,078 | 8,622,945 |
Operating costs and expenses: | ||||
Interest and amortization of deferred financing costs | 2,505,234 | 1,152,302 | 4,969,989 | 2,302,255 |
Professional fees | 251,170 | 110,104 | 482,928 | 242,413 |
Compensation, fees and taxes | 812,143 | 388,075 | 1,404,230 | 732,569 |
Exchange fees | 12,465 | 0 | 24,795 | 7,272 |
Other expenses and taxes | 23,506 | 6,534 | 45,314 | 35,238 |
Depreciation | 21,263 | 14,688 | 40,865 | 30,971 |
General and administrative expenses | 248,308 | 127,460 | 407,916 | 267,674 |
Expense in connection with termination of credit facility | (257,845) | 0 | (257,845) | 0 |
Loss on sale of real estate | (14,962) | 0 | (17,096) | (4,460) |
Impairment loss | 294,000 | 245,000 | 319,000 | 495,000 |
Total operating costs and expenses | 4,183,051 | 2,044,163 | 7,712,133 | 4,117,852 |
Net income | 2,530,844 | 2,266,479 | 4,713,945 | 4,505,093 |
Other comprehensive (loss) gain | ||||
Unrealized (loss) gain on investment securities | (104,316) | 221,449 | (111,810) | 86,067 |
Comprehensive income | $ 2,426,528 | $ 2,487,928 | $ 4,602,135 | $ 4,591,160 |
Basic and diluted net income per common share outstanding: | ||||
Basic | $ 0.10 | $ 0.10 | $ 0.20 | $ 0.20 |
Diluted | $ 0.10 | $ 0.10 | $ 0.20 | $ 0.20 |
Weighted average number of common shares outstanding: | ||||
Basic | 24,851,010 | 22,117,301 | 23,503,679 | 22,117,301 |
Diluted | 24,857,897 | 22,117,301 | 23,507,685 | 22,117,301 |
STATEMENTS OF CHANGES IN SHAREH
STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) | Series A Preferred StockPreferred Stock | Series A Preferred StockAdditional Paid-in Capital | Series A Preferred Stock | Preferred Stock | Common Shares | Additional Paid-in Capital | Accumulated Other Comprehensive (Loss) Income | (Accumulated Deficit) Retained Earnings | Total |
Beginning balance at Dec. 31, 2019 | $ 22,117 | $ 83,856,308 | $ (50,878) | $ (1,266,729) | $ 82,560,818 | ||||
Beginning balance (in shares) at Dec. 31, 2019 | 22,117,301 | ||||||||
Issuance of common shares, net of expenses | (58,353) | (58,353) | |||||||
Stock based compensation | 8,214 | 8,214 | |||||||
Unrealized loss on marketable securities | 86,067 | 86,067 | |||||||
Dividends paid | (2,654,076) | (2,654,076) | |||||||
Net income | 4,505,093 | 4,505,093 | |||||||
Balance at Jun. 30, 2020 | $ 22,117 | 83,806,169 | 35,189 | 584,288 | 84,447,763 | ||||
Balance (in shares) at Jun. 30, 2020 | 22,117,301 | ||||||||
Beginning balance at Mar. 31, 2020 | $ 22,117 | 83,802,062 | (186,260) | (1,682,191) | 81,955,728 | ||||
Beginning balance (in shares) at Mar. 31, 2020 | 22,117,301 | ||||||||
Stock based compensation | 4,107 | 4,107 | |||||||
Unrealized loss on marketable securities | 221,449 | 221,449 | |||||||
Net income | 2,266,479 | 2,266,479 | |||||||
Balance at Jun. 30, 2020 | $ 22,117 | 83,806,169 | 35,189 | 584,288 | 84,447,763 | ||||
Balance (in shares) at Jun. 30, 2020 | 22,117,301 | ||||||||
Beginning balance at Dec. 31, 2020 | $ 22,125 | 83,814,376 | (25,992) | (2,890,969) | 80,919,540 | ||||
Beginning balance (in shares) at Dec. 31, 2020 | 22,124,801 | ||||||||
Issuance of common shares, net of expenses | $ 1,700 | $ 40,611,426 | $ 40,613,126 | $ 4,514 | 22,874,335 | 22,878,849 | |||
Issuance of common shares, net of expenses (in shares) | 1,700,000 | 4,513,731 | |||||||
Stock based compensation | $ 94 | 62,319 | 62,413 | ||||||
Stock based compensation (in shares) | 94,681 | ||||||||
Unrealized loss on marketable securities | (111,810) | (111,810) | |||||||
Dividends paid | (2,786,659) | (2,786,659) | |||||||
Net income | 4,713,945 | 4,713,945 | |||||||
Balance at Jun. 30, 2021 | $ 1,700 | $ 26,733 | 147,362,456 | (137,802) | (963,683) | 146,289,404 | |||
Balance (in shares) at Jun. 30, 2021 | 1,700,000 | 26,733,213 | |||||||
Beginning balance at Mar. 31, 2021 | $ 22,428 | 85,360,645 | (33,486) | (707,868) | 84,641,719 | ||||
Beginning balance (in shares) at Mar. 31, 2021 | 22,428,208 | ||||||||
Issuance of common shares, net of expenses | $ (1,700) | $ (40,611,426) | $ (40,613,126) | $ 4,211 | 21,332,173 | 21,336,384 | |||
Issuance of common shares, net of expenses (in shares) | 1,700,000 | 4,210,324 | |||||||
Stock based compensation | $ 94 | 58,212 | 58,306 | ||||||
Stock based compensation (in shares) | 94,681 | ||||||||
Unrealized loss on marketable securities | (104,316) | (104,316) | |||||||
Dividends paid | (2,786,659) | (2,786,659) | |||||||
Net income | 2,530,844 | 2,530,844 | |||||||
Balance at Jun. 30, 2021 | $ 1,700 | $ 26,733 | $ 147,362,456 | $ (137,802) | $ (963,683) | $ 146,289,404 | |||
Balance (in shares) at Jun. 30, 2021 | 1,700,000 | 26,733,213 |
STATEMENTS OF CASH FLOW
STATEMENTS OF CASH FLOW - USD ($) | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income | $ 4,713,945 | $ 4,505,093 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Amortization of deferred financing costs and bond discount | 502,872 | 235,913 |
Write-off of deferred financing costs | 72,806 | 0 |
Depreciation expense | 40,865 | 30,971 |
Stock based compensation | 62,319 | 8,214 |
Impairment loss | 319,000 | 495,000 |
Loss on sale of real estate | (17,096) | (4,460) |
Loss (gain) on sale of marketable securities | 43,968 | (437,159) |
Debt forgiveness | (257,845) | 0 |
(Increase) decrease in: | ||
Interest and fees receivable | (197,929) | (186,094) |
Other receivables | (63,868) | 25,000 |
Due from borrowers | (280,683) | (597,776) |
Prepaid expenses | (82,419) | (48,441) |
Deposits on property and equipment | 0 | 71,680 |
(Decrease) increase in: | ||
Accrued interest | 14,955 | (144) |
Accounts payable and accrued expenses | (56,954) | 51,836 |
Deferred revenue | 131,104 | (346,855) |
Advances from borrowers | 1,156,692 | 163,933 |
Total adjustments | 1,421,979 | (529,462) |
NET CASH PROVIDED BY OPERATING ACTIVITIES | 6,135,924 | 3,975,631 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchase of investment securities | (85,471,393) | (17,428,603) |
Proceeds from the sale of investment securities | 78,107,144 | 17,940,198 |
Purchase of interest in investment partnership | (1,843,398) | 0 |
Proceeds from sale of real estate owned | 919,014 | 1,762,775 |
Acquisitions of and improvements to real estate owned | (286,346) | (1,027,533) |
Purchase of property and equipment | (776,465) | (62,567) |
Security deposits held | 0 | 5,616 |
Principal disbursements for mortgages receivable | (75,190,172) | (42,303,747) |
Principal collections on mortgages receivable | 58,012,498 | 25,417,062 |
Costs in connection with investment activities | (192,646) | 0 |
NET CASH USED FOR INVESTING ACTIVITIES | (26,721,764) | (15,696,799) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from line of credit | 6,220,770 | 0 |
Repayment of mortgage payable | (767,508) | (8,181) |
Principal payments on notes payable | (11,764) | (10,031) |
Dividends paid | (5,441,636) | (2,654,076) |
Financing costs incurred | (88,212) | (58,353) |
Proceeds from other loans | 0 | 257,845 |
Proceeds from issuance of common shares, net of expenses | 22,878,849 | 0 |
Proceeds from issuance of Series A Preferred Stock, net of expenses | 40,613,126 | 0 |
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES | 63,403,625 | (2,472,796) |
NET INCREASE(DECREASE) IN CASH AND CASH EQUIVALENTS | 42,817,785 | (14,193,964) |
CASH AND CASH EQUIVALENTS- BEGINNING OF YEAR | 19,408,028 | 18,841,937 |
CASH AND CASH EQUIVALENTS - END OF PERIOD | 62,225,813 | 4,647,973 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION | ||
Interest paid | $ 4,479,800 | $ 2,066,341 |
The Company
The Company | 6 Months Ended |
Jun. 30, 2021 | |
The Company | |
The Company | 1. The Company Sachem Capital Corp. (the “Company”), a New York corporation, specializes in originating, underwriting, funding, servicing and managing a portfolio of first mortgage loans. The Company offers short term ( i.e. one |
Significant Accounting Policies
Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2021 | |
Significant Accounting Policies | |
Significant Accounting Policies | 2. Significant Accounting Policies Unaudited Financial Statements The accompanying unaudited financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements. However, in the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The accompanying unaudited financial statements should be read in conjunction with the Company’s audited financial statements for the year ended December 31, 2020 and the notes thereto included in the Company’s Annual Report on Form 10-K. Results of operations for the interim periods are not necessarily indicative of the operating results to be attained in the entire fiscal year. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management will base the use of estimates on (a) various assumptions that consider its experience, (b) the Company’s projections regarding future operations and (c) general financial market and local and general economic conditions. Actual amounts could differ from those estimates. Cash and Cash Equivalents The Company considers all demand deposits, cashier’s checks, money market accounts and certificates of deposit with an original maturity of three months or less to be cash equivalents. The Company maintains its cash and cash equivalents at various financial institutions. The combined account balances typically exceed the Federal Deposit Insurance Corporation insurance coverage, and, as a result, there is a concentration of credit risk related to amounts on deposit. The Company does not believe that the risk is significant. Allowance for Loan Loss The Company reviews each loan on a quarterly basis and evaluates the borrower’s ability to pay the monthly interest, the borrower’s likelihood of executing the original exit strategy and the loan-to-value (LTV) ratio. Based on the analysis, management determines if any provisions for impairment of loans should be made and whether any loan loss reserves are required. Fair Value Measurements The framework for measuring fair value provides a fair value hierarchy that prioritizes inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy under FASB ASC 820 are described as follows: Level 1 Level 2 ● quoted prices for similar assets or liabilities in active markets; ● quoted prices for identical or similar assets or liabilities in inactive markets; ● inputs other than quoted prices that are observable for the asset or liability; and ● inputs that are derived principally from or corroborated by observable market data by correlation or other means. If the asset or liability has a specified (i.e., Level 3 Property and Equipment Land and building acquired in December 2016 to serve as the Company’s office facilities is stated at cost. The building is being depreciated using the straight-line method over its estimated useful life of 40 years. Expenditures for repairs and maintenance are charged to expense as incurred. Impairment of long-lived assets The Company continually monitors events or changes in circumstances that could indicate carrying amounts of long-lived assets may not be recoverable. When such events or changes in circumstances occur, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the undiscounted cash flows is less than the carrying amount of these assets, the Company recognizes an impairment loss based on the excess of the carrying amount over the fair market value of the assets. Deferred Financing Costs Costs incurred by the Company in connection with public offerings of its unsecured, unsubordinated notes, described in Note 6 - Notes Payable -- are being amortized over the term of the respective Notes. Revenue Recognition Interest income from the Company’s loan portfolio is earned over the loan period and is calculated using the simple interest method on principal amounts outstanding. Generally, the Company's loans provide for interest to be paid monthly in arrears. The Company does not accrue interest income on mortgages receivable that are more than 90 days past due. Interest income not accrued at June 30, 2021 and collected prior to the issuance of these financial statements is included in June 30, 2021 income. Origination fee revenue, generally 2%- 5% of the original loan principal amount, is collected at loan funding and is recognized ratably over the contractual life of the loan in accordance with ASC 310. Income Taxes The Company believes it qualifies as a Real Estate Investment Trust (REIT) for federal income tax purposes and made the election to be taxed as a REIT when it filed its 2017 federal income tax return. As a REIT, the Company is required to distribute at least 90% of its taxable income to its shareholders on an annual basis. The Company’s qualification as a REIT depends on its ability to meet on a continuing basis, through actual investment and operating results, various complex requirements under the Internal Revenue Code of 1986, as amended, relating to, among other things, the sources of its income, the composition and values of its assets, its compliance with the distribution requirements applicable to REITs and the diversity of ownership of its outstanding common shares. So long as it qualifies as a REIT, the Company, generally, will not be subject to U.S. federal income tax on its taxable income distributed to its shareholders. However, if it fails to qualify as a REIT in any taxable year and does not qualify for certain statutory relief provisions, it will be subject to U.S. federal income tax at regular corporate rates and may also be subject to various penalties and may be precluded from re-electing REIT status for the four taxable years following the year during in which it lost its REIT qualification. The Company follows the provisions of FASB ASC Topic 740-10 “Accounting for Uncertainty in Income Taxes”, which prescribes a recognition threshold and measurement attribute for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return and disclosure required. Under this standard, an entity may only recognize or continue to recognize tax positions that meet a “more likely than not” threshold. The Company recognizes interest and penalties, if any, related to unrecognized tax benefits in interest expense. The Company has determined that there are no uncertain tax positions requiring accrual or disclosure in the accompanying financial statements as of June 30, 2021. Earnings Per Share Basic and diluted earnings per share are calculated in accordance with ASC 260 “Earnings Per Share”. Under ASC 260, basic earnings per share is computed by dividing income available to common shareholders by the weighted-average number of common shares outstanding for the period. The computation of diluted earnings per share is similar to basic earnings per share, except that the denominator is increased to include the potential dilution from the exercise of stock options and warrants for common shares using the treasury stock method. The numerator in calculating both basic and diluted earnings per common share for each period is the reported net income. Recent Accounting Pronouncements Management does not believe that any other recently issued, but not yet effected, accounting standards if currently adopted would have a material effect on the Company’s financial statements. |
Fair Value Measurement
Fair Value Measurement | 6 Months Ended |
Jun. 30, 2021 | |
Fair Value Measurement | |
Fair Value Measurement | 3. Fair Value Measurement The asset or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair market value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs. The following table sets forth by Level, within the fair value hierarchy, the Company’s assets at fair value as of June 30, 2021: Level 1 Level 2 Level 3 Total Stocks and ETFs $ 3,145,774 $ — $ — $ 3,145,774 Fixed and Preferred Securities 41,314,792 — — 41,314,792 Mutual Funds 41,701 — — 41,701 Total Investments $ 44,502,267 — — $ 44,502,267 Real Estate Owned $ 7,892,845 $ 7,892,845 Following is a description of the methodologies used for assets measured at fair value: Stocks and ETFs: Fixed and Preferred Securities: Mutual funds Real estate owned |
Mortgages Receivable
Mortgages Receivable | 6 Months Ended |
Jun. 30, 2021 | |
Mortgages Receivable | |
Mortgages Receivable | 4. Mortgages Receivable Mortgages Receivable The Company offers short-term secured, non-bank loans to real estate owners and investors (also known as “hard money” loans) to fund their acquisition, renovation, development, rehabilitation or improvement of properties located primarily in Connecticut. The loans are secured by first mortgage liens on one or more properties owned by the borrower or related parties. In addition, each loan is personally guaranteed by the borrower or its principals, which guarantees may be collaterally secured as well. The loans are for a term of one to three years . The loans are initially recorded and carried thereafter, in the financial statements, at cost. Most of the loans provide for monthly payments of interest only (in arrears) during the term of the loan and a “balloon” payment of the principal on the maturity date. For the six-month periods ended June 30 , 2021 and 2020, the aggregate amounts of loans funded by the Company were $75,190,172 and $42,303,747 , respectively, offset by principal repayments of $58,012,498 and $25,417,062 , respectively. At June 30 , 2021, the Company’s portfolio included loans with outstanding principal balances up to approximately $9.8 million, with stated interest rates ranging from 5.0% to 13.0% and a default interest rate for non-payment of 18% . At June 30 , 2021, no single borrower had loans outstanding representing more than 10% of the total balance of the loans outstanding. The Company will extend the term of a loan if, at the time of the extension, the loan and the borrower satisfy the Company’s underwriting requirements at the time of the extension. The Company treats a loan extension as a new loan. Credit Risk Credit risk profile based on loan activity as of June 30, 2021 and December 31, 2020: Total Outstanding Mortgages Receivable Residential Commercial Land Mixed Use Mortgages June 30, 2021 $ 104,918,519 $ 46,809,361 $ 11,900,941 $ 9,165,154 $ 172,793,975 December 31, 2020 $ 112,240,129 $ 33,548,683 $ 6,111,670 $ 3,715,818 $ 155,616,300 The following are the maturities of mortgages receivable as of June 30: 2021 $ 67,900,778 2022 92,695,010 2023 11,787,347 2024 and thereafter 410,840 $ 172,793,975 At June 30, 2021, of the 477 mortgage loans in the Company’s portfolio, 12 were the subject of foreclosure proceedings. The aggregate outstanding balances due on these loans as of June 30, 2021, including unpaid principal, accrued but unpaid interest and borrower fees, was approximately $2.63 million. In the case of each of these loans, the Company believes the value of the collateral exceeds the total amount due. |
Real Estate Owned
Real Estate Owned | 6 Months Ended |
Jun. 30, 2021 | |
Real Estate Owned | |
Real Estate Owned | 5. Real Estate Owned Property purchased for rental or acquired through foreclosure are included on the balance sheet as real estate owned. As of June 30, 2021, and December 31, 2020, real estate owned totaled $7,892,845 and $8,861,609, respectively, with no valuation allowance. As of June 30, 2021, real estate owned included $986,975 of real estate held for rental and $6,905,870 of real estate held for sale. In the first six-months of 2021, the Company recorded an impairment loss of $319,000 compared to an impairment loss of $495,000 in the first six-months of 2020. For the three-months ended June 30, 2021 and 2020, the impairment loss was $294,000 and $245,000, respectively. Properties Held for Sale On April 30, 2021, the Company sold a property classified as real estate held for sale, receiving approximately $280,000 in gross proceeds. A loss of $14,962 was recognized on the sale. |
Notes Payable and Line of Credi
Notes Payable and Line of Credit | 6 Months Ended |
Jun. 30, 2021 | |
Notes Payable and Line of Credit | |
Notes Payable and Line of Credit | 6. Notes Payable and Line of Credit At June 30, 2021, the Company had an aggregate of $110,143,564 of unsecured, unsubordinated notes payable outstanding, net of $4,383,186 of deferred financing costs (collectively, the “Notes”). The Notes are divided into three series: (i) Notes having an aggregate principal amount of $23,663,000 bearing interest at 7.125% per annum and maturing June 30, 2024 (“the June 2024 Notes”); (ii) Notes having an aggregate principal amount of $34,500,000 bearing interest at 6.875% per annum and maturing December 30, 2024 (the “December 2024 Notes”); and (iii) Notes having an aggregate principal amount of $56,363,750 bearing interest at 7.75% per annum and maturing December 30, 2024 (the “2025 Notes”). The Notes were sold in underwritten public offerings, were issued in denomination of $25.00 each and are listed on the NYSE American and trade under the symbol “SCCB”, “SACC” and “SCCC”, respectively. All the notes were issued at par except for the last tranche of the 2025 Notes, in the original principal amount of $28 million, which were issued at $24.75 each. Interest on the Notes is payable quarterly on each March 30, June 30, September 30 and December 30 that they are outstanding. So long as the Notes are outstanding, the Company is prohibited from making distributions in excess of 90% of its taxable income, incurring any additional indebtedness or purchasing any shares of its capital stock unless it has an “Asset Coverage Ratio” of at least 150% after giving effect to the payment of such dividend, the incurrence of such indebtedness or the application of the net proceeds, as the case may be. The Company may redeem the Notes, in whole or in part, without premium or penalty, at any time after their second anniversary of issuance upon at least 30 days prior written notice to the holders of the Notes. The redemption price will be equal to the outstanding principal amount of the Notes redeemed plus the accrued but unpaid interest thereon up to, but not including the date of redemption. The June 2024 Notes are currently callable, the December 2024 Notes will be callable at any time after November 7, 2021 and the 2025 Notes will be callable at any time after September 4, 2022. Wells Fargo Margin Line of Credit At June 30, 2021, the Company had a total outstanding balance of $34,276,418 under the margin loan account from Wells Fargo, which is secured by the Company’s portfolio of short-term securities. The credit line bears interest at a rate equal to 1.75% below the prime rate (1.5% at June 30, 2021). |
Other Income
Other Income | 6 Months Ended |
Jun. 30, 2021 | |
Other Income | |
Other Income | 7. Other income For the three and six-month periods ended June 30, 2021 and 2020, other income consists of the following: Three Months Six Months ended June 30, ended June 30, 2021 2020 2021 2020 Income on borrower charges $ 251,387 $ 72,083 $ 335,878 $ 158,532 Lender, modification and extension fees 234,163 145,529 540,305 277,803 In-house legal fees 54,500 51,200 111,800 102,350 Other income 3,371 14,197 12,247 28,598 Total $ 543,421 $ 283,009 $ 1,000,230 $ 567,283 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2021 | |
Commitments and Contingencies | |
Commitments and Contingencies | 8. Commitments and Contingencies Origination Fees Loan origination fees consist of points, generally 2%-5% of the original loan principal. These payments are amortized over the life of the loan for financial statement purposes. Original maturities of deferred revenue are as follows as of: June 30, 2021 $ 1,349,433 2022 853,530 2023 27,069 2024 403 Total $ 2,230,435 In instances in which mortgages are repaid before their maturity date, the balance of any unamortized deferred revenue is recognized in full at the time of repayment. Unfunded Commitments Most loans are funded in full at closing. However, where all or a portion of the loan proceeds are to be used to fund the costs of renovating or constructing improvements on the property, only a portion of the loan may be funded at closing. At June 30, 2021, the Company’s mortgage loan portfolio included 130 loans with future funding obligations, in the aggregate principal amount of $31,845,533. Advances under these loans are funded against requests supported by all required documentation (including lien waivers) as and when needed to pay contractors and other costs of construction. Other In the normal course of its business, the Company is named as a party-defendant because it is a mortgagee having interests in real properties that are being foreclosed upon, usually because the owner failed to pay property taxes. The Company actively monitors these actions and, in all cases, believes there remains sufficient value in the subject property to assure that no loan impairment exists. At June 30, 2021, there were 7 such properties, representing approximately $834,000 in mortgages receivable. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2021 | |
Related Party Transactions | |
Related Party Transactions | 9. Related Party Transactions In the ordinary course of business, the Company may originate, fund, manage and service loans to shareholders. The underwriting process on these loans is consistent with Company policy. The terms of such loans, including the interest rate, income, origination fees and other closing costs are the same as those applicable to loans made to unrelated third parties in the portfolio. As of June 30, 2021, and 2020, loans to known shareholders totaled $10,153,291 and $6,141,356, respectively. Interest income earned on these loans for the six months ended June 30, 2021 and 2020 totaled $416,965 and $344,385, respectively, and for the three months ended June 30, 2021 and 2020 totaled $246,006 and $168,414, respectively. For the six-month periods ended June 30, 2021 and 2020, the wife of the Company’s chief executive officer was paid $56,385 and $50,000, respectively, for accounting and financial reporting services provided to the Company. For the three months ended June 30, 2021 and 2020, the corresponding amounts were $28,206 and $25,000, respectively. |
Concentration of Credit Risk
Concentration of Credit Risk | 6 Months Ended |
Jun. 30, 2021 | |
Concentration of Credit Risk | |
Concentration of Credit Risk | 10. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash, cash equivalents and mortgage loans. The Company maintains its cash and cash equivalents with various financial institutions. Accounts at the financial institution are insured by the Federal Deposit Insurance Corporation up to $250,000. The Company is potentially subject to concentration of credit risk in its investment securities. Currently, all of its investment securities, which include common stocks, preferred stock, corporate bonds and mutual funds, are held at Wells Fargo Advisors. Wells Fargo Advisors is a member of the Securities Investor Protection Corporation (SIPC). SIPC protects clients against the custodial risk of a member investment firm becoming insolvent by replacing missing securities and cash up to $500,000, including up to $250,000 in cash, per client in accordance with SIPC rules. The Company makes loans that are secured by first mortgage liens on real property located primarily (approximately 66.75%) in Connecticut. This concentration of credit risk may be affected by changes in economic or other conditions of the geographic area. Credit risks associated with the Company’s mortgage loan portfolio and related interest receivable are described in Note 4 - Mortgages Receivable. |
Equity Offerings
Equity Offerings | 6 Months Ended |
Jun. 30, 2021 | |
Equity Offerings | |
Equity Offerings | 11. Equity Offerings On April 9, 2021, the Company filed a prospectus supplement to its Form S-3 Registration Statement covering the sale of up to $43,636,250 of its common shares in an at-the-market offering. During the six-month period ended June 30, 2021, the Company sold an aggregate of 4,513,731 common shares and realized net proceeds of $22,878,849 . On June 23, 2021, the Company entered into an underwriting agreement with respect to a firm commitment underwritten public offering of up to 1,955,000 shares (including 255,000 shares to cover overallotments) of the Company’s 7.75% Series A Cumulative Redeemable Preferred Stock, par value $0.001 per share (the “Series A Preferred Stock”), at a public offering price of $25.00 per share, equal to the liquidation preference (the “Series A Offering”). The Series A Offering was made pursuant to a prospectus supplement, dated June 23, 2021, to the Company’s shelf registration statement on Form S-3 declared effective by the U.S. Securities and Exchange Commission (the “SEC”) on June 17, 2021, and the base prospectus included in such registration statement. On June 29, 2021, the Company consummated the sale of 1,700,000 shares of Series A Preferred Stock for an aggregate purchase price of $42.5 million. Another 203,000 shares were sold on July 2, 2021 after the underwriters exercised their over-allotment option. Total gross proceeds from the offering were $47.6 million and net proceeds from the sale, after paying underwriting discounts and commissions and other offering expenses, were approximately $45.4 million (See Notes 14 and 15.) |
Partnership Investment
Partnership Investment | 6 Months Ended |
Jun. 30, 2021 | |
Partnership Investment | |
Partnership Investment | 12. Partnership Investment On February 22, 2021, the Company committed to $3 million in an investment partnership, or approximately a 7.6% ownership interest in the partnership as of the commitment date. The partnership is a commercial real estate finance company with a focus on providing debt capital solutions to local and regional commercial real estate owners in the Northeastern United States. As of June 30, 2021, the Company’s outstanding investment totaled approximately |
Special Purpose Acquisition Cor
Special Purpose Acquisition Corporation | 6 Months Ended |
Jun. 30, 2021 | |
Special Purpose Acquisition Corporation | |
Special Purpose Acquisition Corporation | 13. Special Purpose Acquisition Corporation On March 24, 2021, the Company loaned $25,000 to its wholly-owned subsidiary, Sachem Sponsor LLC. Sachem Sponsor used those funs to purchase |
Series A Preferred Stock
Series A Preferred Stock | 6 Months Ended |
Jun. 30, 2021 | |
Series A Preferred Stock | |
Series A Preferred Stock | 14. Series A Preferred Stock On June 25, 2021, the Company filed a Certificate of Amendment with the Department of State of the State of New York to designate 1,955,000 shares of the Company’s authorized preferred shares, par value $0.001 per share, as shares of Series A Preferred Stock with the powers, designations, preferences and other rights as set forth therein (the “Certificate of Amendment”). The Certificate of Amendment provides that the Company will pay quarterly cumulative dividends on the Series A Preferred Stock, in arrears, on the 30th day of each of September, December, March and June from, and including, the date of original issuance of the Series A Preferred Stock at 7.75% of the $25.00 per share liquidation preference per annum (equivalent to $1.9375 per annum per share). The Series A Preferred Stock will not be redeemable before June 29, 2026, except upon the occurrence of a Change of Control (as defined in the Certificate of Amendment). On or after June 29, 2026, the Company may, at its option, redeem any or all of the shares of the Series A Preferred Stock at $25.00 per share plus any accumulated and unpaid dividends to, but not including, the redemption date. Also, upon the occurrence of a Change of Control, the Company may, at its option, redeem any or all of the shares of Series A Preferred Stock within 120 days after the first date on which such Change of Control occurred at $25.00 per share plus any accumulated and unpaid dividends to, but not including, the redemption date. The Series A Preferred Stock has no stated maturity, is not subject to any sinking fund or mandatory redemption and will remain outstanding indefinitely unless repurchased or redeemed by the Company or converted into common shares in connection with a Change of Control by the holders of Series A Preferred Stock. Upon the occurrence of a Change of Control, each holder of Series A Preferred Stock will have the right (subject to the Company’s election to redeem the Series A Preferred Stock in whole or in part, as described above, prior to the Change of Control Conversion Date (as defined in the Certificate of Amendment) to convert some or all of the Series A Preferred Stock held by such holder on the Change of Control Conversion Date into a number of the common shares per share of Series A Preferred Stock determined by formula, in each case, on the terms and subject to the conditions described in the Certificate of Amendment, including provisions for the receipt, under specified circumstances, of alternative consideration as described in the Certificate of Amendment. Except under limited circumstances, holders of the Series A Preferred Stock generally do not have any voting rights. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2021 | |
Subsequent Events | |
Subsequent Events | 15. Subsequent Events On July 1, 2021, the Underwriters partially exercised their overallotment option to purchase an additional 203,000 shares of Series A Preferred Stock, which was consummated on July 2, 2021, raising an additional approximately $5.1 million in gross proceeds and additional approximately $4.9 million in net proceeds (after deducting underwriting discounts and commissions and offering expenses). The aggregate net proceeds from the Series A Offering, including the proceeds from the Overallotment Option exercise was approximately $45.4 million. On July 21, 2021, the Company consummated a $200 million master repurchase financing facility (“Facility”) with Churchill MRA Funding I LLC (“Churchill”), a subsidiary of Churchill Real Estate, a vertically integrated real estate finance company based in New York, New York. Under the terms of the Facility between the Company and Churchill, the Company has the right, but not the obligation, to sell mortgage loans to Churchill, and Churchill has the right, but not the obligation, to purchase those loans. The cost of capital under the Facility is equal to the sum of (a) the greater of (i) 0.25% and (ii) the 30-day LIBOR plus (b) 3%-4%, depending on the aggregate principal amount of the mortgage loans held by Churchill at that time. The Company intends to use the proceeds from the Facility to finance the continued expansion of its lending business and for general corporate purposes. On July 14, 2021, Sachem Acquisition Corp. filed a registration statement on Form S-1 registering the sale of 5,750,000 units at $10.00 per unit, or $57,500,000 in the aggregate. Each unit consists of one share of Class A common stock and one-half of a warrant to purchase one share of Class A common stock. The registration statement is currently under SEC review. (See Note 13.) On July 30, 2021, the Company sold a property classified as real estate held for sale at June 30, 2021 receiving $180,491 in net proceeds. The Company had previously recorded an impairment loss of $62,000. From July 1, 2021 through August 9, 2021, the Company sold 1,582,717 of its common shares in an at-the-market offering which raised $8,014,203 in net proceeds. (See Note 11.) |
COVID-19
COVID-19 | 6 Months Ended |
Jun. 30, 2021 | |
COVID-19 | |
COVID-19 | 16. COVID-19 The COVID-19 pandemic has resulted in a widespread health crisis that has adversely affected the economies and financial markets worldwide and has materially and adversely affected many businesses. In response to the onset of the COVID-19 pandemic and the restrictions imposed by various states, including the State of Connecticut, to prevent, or at least reduce the risk of the spread of the virus, at the end of the first quarter of 2020 the Company adopted certain temporary programs, policies and guidelines designed primarily to preserve its liquidity, help its borrowers and protect its employees. In particular, the Company adopted a “forbearance” program to help borrowers that were unable to meet their financial obligations due to COVID-19. In addition, to preserve its capital, the Company imposed a moratorium on funding new loans other than from proceeds generated from pay-offs of existing loans. Finally, the Company imposed stricter lending criteria on new loans. By the beginning of the third quarter of 2020, it appeared that economic conditions had stabilized to the point that the Company was able to cancel the forbearance program, restart its lending operations and return to its normal underwriting criteria. Over the course of 2020 and into early 2021, the U.S. Congress has authorized over $4.0 trillion of stimulus payments to small businesses and individuals adversely impacted by COVID-19. In addition, the Federal Reserve Board has maintained its accommodative monetary policy. Finally, since December 2020, the U.S. Food and Drug Administration (“FDA”) has issued emergency use authorizations for three COVID-19 vaccines. As of July 24, 2021, approximately 342 million doses of vaccines have been administered in the United States and over 163 million (or 49.7 percent) of people in the United States are fully vaccinated. In Connecticut, approximately 4.6 million doses of vaccines have been administered and over 2.2 million (or 62.9 percent) of the state's population are fully vaccinated. As a result, many states have issued new orders relaxing or even eliminating many of the restrictions on social gatherings and businesses that were intended to stem the spread of the virus. The combination of these factors – stimulus, monetary easing and vaccination roll-out, appears to be having a positive impact on general economic conditions. In addition, interest rates remain low and markets are liquid. As a result, real estate values have stabilized and the Company has not experienced any significant increase in defaults. Notwithstanding the foregoing, there are still concerns regarding mutations of the virus that might not be susceptible to the existing vaccines and there is still a significant portion of the worldwide population, including in the U.S., that is not vaccinated. If continuing concerns relating to the COVID-19 pandemic limit our ability to have meetings with potential borrowers, or our borrower’s ability to source materials and services to complete construction in process, the Company’s business and operations could be adversely impacted. The extent to which COVID-19 impacts the Company’s business and operations will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among others. If the disruptions posed by COVID-19 or other matters of global concern continue for an extensive period of time, the Company’s business, operations and financial condition may be materially adversely affected. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2021 | |
Significant Accounting Policies | |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management will base the use of estimates on (a) various assumptions that consider its experience, (b) the Company’s projections regarding future operations and (c) general financial market and local and general economic conditions. Actual amounts could differ from those estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all demand deposits, cashier’s checks, money market accounts and certificates of deposit with an original maturity of three months or less to be cash equivalents. The Company maintains its cash and cash equivalents at various financial institutions. The combined account balances typically exceed the Federal Deposit Insurance Corporation insurance coverage, and, as a result, there is a concentration of credit risk related to amounts on deposit. The Company does not believe that the risk is significant. |
Allowance for Loan Loss | Allowance for Loan Loss The Company reviews each loan on a quarterly basis and evaluates the borrower’s ability to pay the monthly interest, the borrower’s likelihood of executing the original exit strategy and the loan-to-value (LTV) ratio. Based on the analysis, management determines if any provisions for impairment of loans should be made and whether any loan loss reserves are required. |
Fair Value Measurements | Fair Value Measurements The framework for measuring fair value provides a fair value hierarchy that prioritizes inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy under FASB ASC 820 are described as follows: Level 1 Level 2 ● quoted prices for similar assets or liabilities in active markets; ● quoted prices for identical or similar assets or liabilities in inactive markets; ● inputs other than quoted prices that are observable for the asset or liability; and ● inputs that are derived principally from or corroborated by observable market data by correlation or other means. If the asset or liability has a specified (i.e., Level 3 |
Property and Equipment | Property and Equipment Land and building acquired in December 2016 to serve as the Company’s office facilities is stated at cost. The building is being depreciated using the straight-line method over its estimated useful life of 40 years. Expenditures for repairs and maintenance are charged to expense as incurred. |
Impairment of long-lived assets | Impairment of long-lived assets The Company continually monitors events or changes in circumstances that could indicate carrying amounts of long-lived assets may not be recoverable. When such events or changes in circumstances occur, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the undiscounted cash flows is less than the carrying amount of these assets, the Company recognizes an impairment loss based on the excess of the carrying amount over the fair market value of the assets. |
Deferred Financing Costs | Deferred Financing Costs Costs incurred by the Company in connection with public offerings of its unsecured, unsubordinated notes, described in Note 6 - Notes Payable -- are being amortized over the term of the respective Notes. |
Revenue Recognition | Revenue Recognition Interest income from the Company’s loan portfolio is earned over the loan period and is calculated using the simple interest method on principal amounts outstanding. Generally, the Company's loans provide for interest to be paid monthly in arrears. The Company does not accrue interest income on mortgages receivable that are more than 90 days past due. Interest income not accrued at June 30, 2021 and collected prior to the issuance of these financial statements is included in June 30, 2021 income. Origination fee revenue, generally 2%- 5% of the original loan principal amount, is collected at loan funding and is recognized ratably over the contractual life of the loan in accordance with ASC 310. |
Income Taxes | Income Taxes The Company believes it qualifies as a Real Estate Investment Trust (REIT) for federal income tax purposes and made the election to be taxed as a REIT when it filed its 2017 federal income tax return. As a REIT, the Company is required to distribute at least 90% of its taxable income to its shareholders on an annual basis. The Company’s qualification as a REIT depends on its ability to meet on a continuing basis, through actual investment and operating results, various complex requirements under the Internal Revenue Code of 1986, as amended, relating to, among other things, the sources of its income, the composition and values of its assets, its compliance with the distribution requirements applicable to REITs and the diversity of ownership of its outstanding common shares. So long as it qualifies as a REIT, the Company, generally, will not be subject to U.S. federal income tax on its taxable income distributed to its shareholders. However, if it fails to qualify as a REIT in any taxable year and does not qualify for certain statutory relief provisions, it will be subject to U.S. federal income tax at regular corporate rates and may also be subject to various penalties and may be precluded from re-electing REIT status for the four taxable years following the year during in which it lost its REIT qualification. The Company follows the provisions of FASB ASC Topic 740-10 “Accounting for Uncertainty in Income Taxes”, which prescribes a recognition threshold and measurement attribute for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return and disclosure required. Under this standard, an entity may only recognize or continue to recognize tax positions that meet a “more likely than not” threshold. The Company recognizes interest and penalties, if any, related to unrecognized tax benefits in interest expense. The Company has determined that there are no uncertain tax positions requiring accrual or disclosure in the accompanying financial statements as of June 30, 2021. |
Earnings Per Share | Earnings Per Share Basic and diluted earnings per share are calculated in accordance with ASC 260 “Earnings Per Share”. Under ASC 260, basic earnings per share is computed by dividing income available to common shareholders by the weighted-average number of common shares outstanding for the period. The computation of diluted earnings per share is similar to basic earnings per share, except that the denominator is increased to include the potential dilution from the exercise of stock options and warrants for common shares using the treasury stock method. The numerator in calculating both basic and diluted earnings per common share for each period is the reported net income. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Management does not believe that any other recently issued, but not yet effected, accounting standards if currently adopted would have a material effect on the Company’s financial statements. |
Unaudited Financial Statements | Unaudited Financial Statements The accompanying unaudited financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements. However, in the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The accompanying unaudited financial statements should be read in conjunction with the Company’s audited financial statements for the year ended December 31, 2020 and the notes thereto included in the Company’s Annual Report on Form 10-K. Results of operations for the interim periods are not necessarily indicative of the operating results to be attained in the entire fiscal year. |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Fair Value Measurement | |
Summary of company's assets at fair value | The following table sets forth by Level, within the fair value hierarchy, the Company’s assets at fair value as of June 30, 2021: Level 1 Level 2 Level 3 Total Stocks and ETFs $ 3,145,774 $ — $ — $ 3,145,774 Fixed and Preferred Securities 41,314,792 — — 41,314,792 Mutual Funds 41,701 — — 41,701 Total Investments $ 44,502,267 — — $ 44,502,267 Real Estate Owned $ 7,892,845 $ 7,892,845 |
Mortgages Receivable (Tables)
Mortgages Receivable (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Mortgages Receivable | |
Schedule of credit risk profile | Credit risk profile based on loan activity as of June 30, 2021 and December 31, 2020: Total Outstanding Mortgages Receivable Residential Commercial Land Mixed Use Mortgages June 30, 2021 $ 104,918,519 $ 46,809,361 $ 11,900,941 $ 9,165,154 $ 172,793,975 December 31, 2020 $ 112,240,129 $ 33,548,683 $ 6,111,670 $ 3,715,818 $ 155,616,300 |
Schedule of maturities of mortgage loans receivable | The following are the maturities of mortgages receivable as of June 30: 2021 $ 67,900,778 2022 92,695,010 2023 11,787,347 2024 and thereafter 410,840 $ 172,793,975 |
Other Income (Tables)
Other Income (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Other Income | |
Schedule of other income | For the three and six-month periods ended June 30, 2021 and 2020, other income consists of the following: Three Months Six Months ended June 30, ended June 30, 2021 2020 2021 2020 Income on borrower charges $ 251,387 $ 72,083 $ 335,878 $ 158,532 Lender, modification and extension fees 234,163 145,529 540,305 277,803 In-house legal fees 54,500 51,200 111,800 102,350 Other income 3,371 14,197 12,247 28,598 Total $ 543,421 $ 283,009 $ 1,000,230 $ 567,283 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Commitments and Contingencies | |
Schedule of original maturities of deferred revenue | Original maturities of deferred revenue are as follows as of: June 30, 2021 $ 1,349,433 2022 853,530 2023 27,069 2024 403 Total $ 2,230,435 |
The Company (Details)
The Company (Details) | 6 Months Ended |
Jun. 30, 2021 | |
Minimum | |
Debt term (in years) | 1 year |
Maximum | |
Debt term (in years) | 3 years |
Significant Accounting Polici_3
Significant Accounting Policies (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Gain (Loss) on Extinguishment of Debt | $ 257,845 | $ 0 | $ 257,845 | $ 0 |
Land and Building [Member] | ||||
Property, Plant and Equipment, Useful Life | 40 years | |||
Minimum | ||||
Origination fee revenue as a percentage of original loan principal amount | 2.00% | |||
Maximum | ||||
Origination fee revenue as a percentage of original loan principal amount | 5.00% |
Fair Value Measurement (Details
Fair Value Measurement (Details) | Jun. 30, 2021USD ($) |
Fair Value Measurement | |
Stocks and ETF's | $ 3,145,774 |
Fixed and Preferred Securities | 41,314,792 |
Mutual Funds | 41,701 |
Total Investments | 44,502,267 |
Real Estate Owned | 7,892,845 |
Level 1 | |
Fair Value Measurement | |
Stocks and ETF's | 3,145,774 |
Fixed and Preferred Securities | 41,314,792 |
Mutual Funds | 41,701 |
Total Investments | 44,502,267 |
Level 2 | |
Fair Value Measurement | |
Stocks and ETF's | 0 |
Fixed and Preferred Securities | 0 |
Mutual Funds | 0 |
Total Investments | 0 |
Level 3 | |
Fair Value Measurement | |
Stocks and ETF's | 0 |
Fixed and Preferred Securities | 0 |
Mutual Funds | 0 |
Total Investments | 0 |
Real Estate Owned | $ 7,892,845 |
Mortgages Receivable (Details)
Mortgages Receivable (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate | $ 172,793,975 | $ 155,616,300 |
Land [Member] | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate | 11,900,941 | 6,111,670 |
Residential Mortgage [Member] | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate | 104,918,519 | 112,240,129 |
Commercial Loan [Member] | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate | 46,809,361 | 33,548,683 |
Mixed Use [Member] | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate | $ 9,165,154 | $ 3,715,818 |
Mortgages Receivable - Maturiti
Mortgages Receivable - Maturities of mortgage loans (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Mortgages Receivable | ||
2021 | $ 67,900,778 | |
2022 | 92,695,010 | |
2023 | 11,787,347 | |
2024 and thereafter | 410,840 | |
Total | $ 172,793,975 | $ 155,616,300 |
Mortgages Receivable - Addition
Mortgages Receivable - Additional information (Details) | 6 Months Ended | ||
Jun. 30, 2021USD ($)loan | Jun. 30, 2020USD ($) | Dec. 31, 2020USD ($) | |
Mortgage Loans on Real Estate, Default Interest Rate | 18.00% | ||
Payments to Acquire Mortgage Receivable | $ 75,190,172 | $ 42,303,747 | |
Proceeds from Collection of Mortgages Receivable | 58,012,498 | 25,417,062 | |
Mortgages receivable | $ 172,793,975 | $ 155,616,300 | |
Mortgage loan portfolio number of loans | loan | 477 | ||
Mortgage loan portfolio number of loans in process of foreclosure | loan | 12 | ||
Mortgage Concentration Risk [Member] | Revenue Benchmark | |||
Threshold Used For Calculating Concentration Of Risk | 10.00% | ||
Mortgages [Member] | |||
Payments to Acquire Mortgage Receivable | $ 75,190,172 | $ 42,303,747 | |
Minimum | |||
Debt term (in years) | 1 year | ||
Interest rate (as a percent) | 5.00% | ||
Maximum | |||
Debt term (in years) | 3 years | ||
Mortgage Loans on Real Estate, Face Amount of Mortgages | $ 9,800,000 | ||
Interest rate (as a percent) | 13.00% | ||
Twelve Mortgage Loans [Member] | |||
Mortgages receivable | $ 2,630,000 |
Real Estate Owned - Additional
Real Estate Owned - Additional information (Details) - USD ($) | Apr. 30, 2021 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 |
Real Estate Owned | ||||||
Real Estate Investment Property, at Cost | $ 7,892,845 | $ 7,892,845 | $ 8,861,609 | |||
Rental Properties | 986,975 | 986,975 | ||||
Real Estate Held-for-sale | 6,905,870 | 6,905,870 | ||||
Loss on sale of real estate | $ (14,962) | |||||
Proceeds from sale of real estate owned | $ 280,000 | 919,014 | $ 1,762,775 | |||
Impairment loss on real estate owned | $ 294,000 | $ 245,000 | $ 319,000 | $ 495,000 |
Notes Payable and Line of Cre_2
Notes Payable and Line of Credit (Details) | Jun. 30, 2021USD ($)$ / shares | Jun. 30, 2021USD ($)$ / shares | Dec. 31, 2020USD ($) |
Number of unsecured unsubordinated notes | 3 | ||
Threshold percentage of taxable income to prohibit distribution | 90.00% | ||
Threshold asset coverage ratio | 150.00% | ||
Period of written notice to redeem notes without premium or penalty | 30 days | ||
Debt Issuance Costs, Net | $ 4,383,186 | $ 4,383,186 | $ 4,866,058 |
Long-term Line of Credit | 34,276,418 | 34,276,418 | $ 28,055,648 |
Notes | |||
Aggregate amount outstanding | 110,143,564 | 110,143,564 | |
Debt Issuance Costs, Net | 4,383,186 | 4,383,186 | |
June 2024 Notes | |||
Aggregate amount outstanding | $ 23,663,000 | $ 23,663,000 | |
Interest rate | 7.125% | 7.125% | |
Notes issued denomination | $ / shares | $ 25 | $ 25 | |
December 2024 Notes | |||
Aggregate amount outstanding | $ 34,500,000 | $ 34,500,000 | |
Interest rate | 6.875% | 6.875% | |
December 2025 Notes | |||
Aggregate amount outstanding | $ 56,363,750 | $ 56,363,750 | |
Original principal amount | $ 28,000,000 | $ 28,000,000 | |
Interest rate | 7.75% | 7.75% | |
Notes issued denomination | $ / shares | $ 24.75 | $ 24.75 | |
Credit line from Wells Fargo | |||
Long-term Line of Credit | $ 34,276,418 | $ 34,276,418 | |
Interest rate (as a percent) | 1.50% | 1.75% |
Other Income (Details)
Other Income (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Other Income | ||||
Income from borrower charges | $ 251,387 | $ 72,083 | $ 335,878 | $ 158,532 |
Lender, modification and extension fees | 234,163 | 145,529 | 540,305 | 277,803 |
In-house legal fees | 54,500 | 51,200 | 111,800 | 102,350 |
Other income | 3,371 | 14,197 | 12,247 | 28,598 |
Total | $ 543,421 | $ 283,009 | $ 1,000,230 | $ 567,283 |
Commitments and Contingencies -
Commitments and Contingencies - Original maturities of deferred revenue (Details) - Deferred Lease Revenue [Member] | Jun. 30, 2021USD ($) |
Other Commitments [Line Items] | |
2021 | $ 1,349,433 |
2022 | 853,530 |
2023 | 27,069 |
2024 | 403 |
Total | $ 2,230,435 |
Commitments and Contingencies_2
Commitments and Contingencies - Additional Information (Details) | 6 Months Ended |
Jun. 30, 2021USD ($)property | |
Number of Mortgage Properties | property | 7 |
Mortgages receivable | $ 834,000 |
Unfunded Loan Commitment [Member] | |
Other Commitment | $ 31,845,533 |
Minimum | |
Loan Origination Fees On Original Loan Principal, Percentage | 2.00% |
Maximum | |
Loan Origination Fees On Original Loan Principal, Percentage | 5.00% |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Shareholders [Member] | ||||
Related Party Transaction [Line Items] | ||||
Loans and Leases Receivable, Related Parties | $ 10,153,291 | $ 6,141,356 | $ 10,153,291 | $ 6,141,356 |
Interest Income, Related Party | 246,006 | 168,414 | 416,965 | 344,385 |
Wife of Executive Officer [Member] | Accounting and Financial Services [Member] | ||||
Related Party Transaction [Line Items] | ||||
Related Party Transaction, Expenses from Transactions with Related Party | $ 28,206 | $ 25,000 | $ 56,385 | $ 50,000 |
Concentration of Credit Risk (D
Concentration of Credit Risk (Details) - Credit Concentration Risk [Member] | 6 Months Ended |
Jun. 30, 2021USD ($) | |
Concentration Risk [Line Items] | |
Cash and cash equivalents insured by the Federal Deposit Insurance Corporation | $ 250,000 |
Concentration risk, description | SIPC protects clients against the custodial risk of a member investment firm becoming insolvent by replacing missing securities and cash up to $500,000, including up to $250,000 in cash, per client in accordance with SIPC rules. |
First Mortgage Liens On Real Property | |
Concentration Risk [Line Items] | |
Threshold Used For Calculating Concentration Of Risk | 66.75% |
Equity Offerings (Details)
Equity Offerings (Details) - USD ($) | Jul. 02, 2021 | Jun. 29, 2021 | Jun. 25, 2021 | Jun. 23, 2021 | Apr. 09, 2021 | Aug. 09, 2021 | Jun. 30, 2021 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 |
Proceeds from issuance of common shares, net of expenses | $ 22,878,849 | $ 0 | ||||||||
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | $ 0.001 | |||||||
Sales of stock | $ 21,336,384 | $ 22,878,849 | (58,353) | |||||||
Proceeds from issuance of preferred stock, gross | $ 40,613,126 | $ 0 | ||||||||
Subsequent Events | ||||||||||
Sale of common stock | 1,582,717 | |||||||||
Proceeds from issuance of common shares, net of expenses | $ 8,014,203 | |||||||||
Common Shares | ||||||||||
Sale of common stock | 4,210,324 | 4,513,731 | ||||||||
Sales of stock | $ 4,211 | $ 4,514 | ||||||||
Common stock issued under prospectus supplement dated October 31, 2019 | ||||||||||
Sale of common stock | 4,513,731 | |||||||||
Proceeds from issuance of common shares, net of expenses | $ 22,878,849 | |||||||||
ATM | Common stock issued under prospectus supplement dated April 9, 2021 | ||||||||||
Authorized amount to be issued | $ 43,636,250 | |||||||||
Series A Preferred Stock | ||||||||||
Sale of common stock | 1,700,000 | |||||||||
Dividend rate | 7.75% | 7.75% | ||||||||
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | ||||||||
Share Price | $ 25 | $ 25 | ||||||||
Sales of stock | $ 42,500,000 | $ (40,613,126) | $ 40,613,126 | |||||||
Proceeds from issuance of preferred stock, gross | $ 47,600,000 | |||||||||
Proceeds from issuance of preferred stock, net | 45,400,000 | |||||||||
Series A Preferred Stock | Subsequent Events | ||||||||||
Proceeds from issuance of preferred stock, net | $ 45,400,000 | |||||||||
Series A Preferred Stock | Maximum | ||||||||||
Sale of common stock | 1,955,000 | |||||||||
Series A Preferred Stock | Over-Allotment Option | ||||||||||
Sale of common stock | 203,000 | 255,000 | ||||||||
Series A Preferred Stock | Over-Allotment Option | Subsequent Events | ||||||||||
Sale of common stock | 203,000 | |||||||||
Proceeds from issuance of preferred stock, gross | $ 5,100,000 | |||||||||
Proceeds from issuance of preferred stock, net | $ 4,900,000 |
Partnership Investment (Details
Partnership Investment (Details) - USD ($) | Feb. 22, 2021 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 |
Partnership Investment | |||||
Investment in partnership committed | $ 3,000,000 | ||||
Ownership interest in the partnership | 7.60% | ||||
Outstanding investment | $ 1,843,398 | $ 1,843,398 | |||
Income from partnership investment | $ 36,868 | $ 0 | $ 54,241 | $ 0 |
Special Purpose Acquisition C_2
Special Purpose Acquisition Corporation (Details) - USD ($) | Mar. 24, 2021 | Jun. 30, 2021 |
Registration and legal fees | $ 190,000 | |
Sachem Sponsor LLC | ||
Loan to related party | $ 25,000 | |
Common Class B | Sachem Sponsor LLC | ||
Sale of common stock | 1,437,500 |
Series A Preferred Stock (Detai
Series A Preferred Stock (Details) - $ / shares | Jun. 25, 2021 | Jun. 23, 2021 | Jun. 30, 2021 | Dec. 31, 2020 |
Preferred Stock, Shares Authorized | 5,000,000 | 5,000,000 | ||
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | ||
Series A Preferred Stock | ||||
Preferred Stock, Shares Authorized | 1,955,000 | |||
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | ||
Dividend rate | 7.75% | 7.75% | ||
Share Price | $ 25 | $ 25 | ||
Liquidation preference per annum | 1.9375 | |||
Preferred Stock, Redemption Price Per Share | $ 25 | |||
Redemption period for preference stock | 120 days |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Events - USD ($) | Jul. 14, 2021 | Jul. 21, 2021 |
Master Repurchase agreement | ||
Subsequent Event [Line Items] | ||
Repurchase face amount | $ 200,000,000 | |
Cost of capital | 0.25% | |
Class A Common Stock | ||
Subsequent Event [Line Items] | ||
Sale of Stock unit | 5,750,000 | |
Sale of Stock, Price Per share | $ 10 | |
Sale of Stock,aggregate | $ 57,500,000 | |
Maximum | Master Repurchase agreement | ||
Subsequent Event [Line Items] | ||
Cost of capital | 4.00% | |
Minimum | Master Repurchase agreement | ||
Subsequent Event [Line Items] | ||
Cost of capital | 3.00% |
Subsequent Events - Equity offe
Subsequent Events - Equity offering (Details) - USD ($) | Jul. 02, 2021 | Jun. 29, 2021 | Jun. 23, 2021 | Aug. 09, 2021 | Jun. 30, 2021 | Jun. 30, 2020 |
Subsequent Event [Line Items] | ||||||
Proceeds from issuance of preferred stock, gross | $ 40,613,126 | $ 0 | ||||
Proceeds from issuance of common shares, net of expenses | $ 22,878,849 | $ 0 | ||||
Series A Preferred Stock | ||||||
Subsequent Event [Line Items] | ||||||
Sale of common stock | 1,700,000 | |||||
Proceeds from issuance of preferred stock, gross | $ 47,600,000 | |||||
Proceeds from issuance of preferred stock, net | $ 45,400,000 | |||||
Over-Allotment Option | Series A Preferred Stock | ||||||
Subsequent Event [Line Items] | ||||||
Sale of common stock | 203,000 | 255,000 | ||||
Subsequent Events | ||||||
Subsequent Event [Line Items] | ||||||
Sale of common stock | 1,582,717 | |||||
Proceeds from issuance of common shares, net of expenses | $ 8,014,203 | |||||
Subsequent Events | Series A Preferred Stock | ||||||
Subsequent Event [Line Items] | ||||||
Proceeds from issuance of preferred stock, net | $ 45,400,000 | |||||
Subsequent Events | Over-Allotment Option | Series A Preferred Stock | ||||||
Subsequent Event [Line Items] | ||||||
Sale of common stock | 203,000 | |||||
Proceeds from issuance of preferred stock, gross | $ 5,100,000 | |||||
Proceeds from issuance of preferred stock, net | $ 4,900,000 |
Subsequent Events - Sale of pro
Subsequent Events - Sale of property (Details) - USD ($) | Jul. 30, 2021 | Apr. 30, 2021 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 |
Subsequent Event [Line Items] | ||||||
Proceeds from sale of real estate owned | $ 280,000 | $ 919,014 | $ 1,762,775 | |||
Impairment loss on real estate owned | $ 294,000 | $ 245,000 | $ 319,000 | $ 495,000 | ||
Subsequent Events | ||||||
Subsequent Event [Line Items] | ||||||
Proceeds from sale of real estate owned | $ 180,491 | |||||
Impairment loss on real estate owned | $ 62,000 |
COVID-19 (Details)
COVID-19 (Details) $ in Trillions | 6 Months Ended |
Jun. 30, 2021USD ($) | |
COVID-19 | |
Stimulus payments to small businesses and individuals adversely impacted by COVID-19 | $ 4 |