What changed in this filing

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Item 1. Financial Statements

2021-08-16 compared with 2021-05-14 · 162 added, 104 removed, 313 unchanged (46% of the section changed)

2 unchanged sentences

BALANCE SHEETS

March 31, 2021

June 30, 2021

December 31, 2020

27 unchanged sentences

5,000,000 shares authorized;

no shares issued

1,700,000 shares of Series A Preferred Stock issued and outstanding

Common stock - $ .001 par value;

11 unchanged sentences

Three Months Ended

Six Months Ended

Interest income from loans

1 unchanged sentence

Income from partnership investment

(Loss) gain on sale of investment securities

Gain (loss) on sale of investment securities

Origination fees

1 unchanged sentence

Processing fees

Rental income, net

Rental income (loss), net

Debt forgiveness

Total revenue

9 unchanged sentences

Total operating costs and expenses

Other comprehensive loss

Unrealized loss on investment securities

Other comprehensive (loss) gain

Unrealized (loss) gain on investment securities

Comprehensive income

4 unchanged sentences

STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

FOR THE THREE MONTHS ENDED MARCH 31, 2021

FOR THE THREE MONTHS ENDED JUNE 30, 2021

Preferred Stock

Comprehensive

Beginning balance, January 1, 2021

Beginning balance, April 1, 2021

Issuance of Series A Preferred Stock, net of expenses

Issuance of common shares, net of expenses

Stock based compensation

Unrealized loss on marketable securities

Dividends paid

( 2,786,659 )

Sale of common stock through ATM

Offering costs-ATM

( 2,786,659 )

Net income for the period ended June 30, 2021

Balance, June 30, 2021

FOR THE THREE MONTHS ENDED JUNE 30, 2020

Preferred Stock

Comprehensive

(Loss) Income

Deficit) Retained Earnings

Beginning balance, April 1, 2020

( 1,682,191 )

Stock based compensation

Unrealized loss on investment securities

Net income for the period ended March 31, 2021

Balance, March 31, 2021

FOR THE THREE MONTHS ENDED MARCH 31, 2020

Unrealized loss on marketable securities

Net income for the period ended June 30, 2020

Balance, June 30, 2020

The accompanying notes are an integral part of these financial statements.

FOR THE SIX MONTHS ENDED JUNE 30, 2021

Preferred Stock

Comprehensive

1 unchanged sentence

( 2,890,969 )

Offering costs-ATM

Issuance of Series A Preferred Stock, net of expenses

Issuance of common shares, net of expenses

Stock based compensation

Unrealized loss on investment securities

Unrealized loss on marketable securities

Dividends paid

1 unchanged sentence

( 2,786,659 )

Net income for the period ended March 31, 2020

Balance, March 31, 2020

Net income for the period ended June 30, 2021

Balance, June 30, 2021

FOR THE SIX MONTHS ENDED JUNE 30, 2020

Preferred Stock

Comprehensive

(Loss) Income

Deficit) Retained Earnings

Beginning balance, January 1, 2020

( 1,266,729 )

Issuance of common shares, net of expenses

Stock based compensation

Unrealized loss on marketable securities

Dividends paid

( 2,654,076 )

Net income for the period ended June 30, 2020

Balance, June 30, 2020

The accompanying notes are an integral part of these financial statements.

1 unchanged sentence

STATEMENTS OF CASH FLOW

Three Months Ended

Six Months Ended

CASH FLOWS FROM OPERATING ACTIVITIES

6 unchanged sentences

Loss on sale of real estate

Loss (gain) on sale of investment securities

Loss (gain) on sale of marketable securities

Debt forgiveness

Changes in operating assets and liabilities:

21 unchanged sentences

Acquisitions of and improvements to real estate owned

( 1,027,533 )

Purchase of property and equipment

Security deposits held

Principal disbursements for mortgages receivable

13 unchanged sentences

( 2,654,076 )

Costs in connection with issuance of common stock - ATM

Proceeds from issuance of common stock - ATM

NET CASH USED FOR FINANCING ACTIVITIES

( 1,780,312 )

( 2,721,479 )

NET DECREASE IN CASH AND CASH EQUIVALENTS

Financings costs incurred

Proceeds from other loans

Proceeds from issuance of common shares, net of expenses

Proceeds from issuance of Series A Preferred Stock, net of expenses

NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES

( 2,472,796 )

NET INCREASE(DECREASE) IN CASH AND CASH EQUIVALENTS

( 14,193,964 )

6 unchanged sentences

NOTES TO FINANCIAL STATEMENTS

MARCH 31, 2021

JUNE 30, 2021

Sachem Capital Corp.

24 unchanged sentences

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, as well as 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.

1 unchanged sentence

NOTES TO FINANCIAL STATEMENTS

MARCH 31, 2021

JUNE 30, 2021

Fair Value Measurements

19 unchanged sentences

Deferred Financing Costs

Costs incurred by the Company in connection with the public offering of its unsecured, unsubordinated notes, described in Note 6 - Notes Payable -- are being amortized over the term of the respective Notes.

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

2 unchanged sentences

The Company does not accrue interest income on mortgages receivable that are more than 90 days past due.

Interest income not accrued at March 31, 2021 and collected prior to the issuance of these financial statements is included in March 31, 2021 income.

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.

1 unchanged sentence

NOTES TO FINANCIAL STATEMENTS

MARCH 31, 2021

JUNE 30, 2021

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.

8 unchanged sentences

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 March 31, 2021.

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

4 unchanged sentences

Recent Accounting Pronouncements

In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes.” This ASU modifies ASC 740 to remove certain exceptions and adds guidance to reduce complexity in certain areas.

For companies that file with the U.S.

Securities and Exchange Commission (“SEC”), the standard is effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years.

The adoption of this guidance did not have a material impact on the Company’s financial statements.

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.

SACHEM CAPITAL CORP.

NOTES TO FINANCIAL STATEMENTS

MARCH 31, 2021

Fair Value Measurement

1 unchanged sentence

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 March 31, 2021:

The following table sets forth by Level, within the fair value hierarchy, the Company’s assets at fair value as of June 30, 2021:

Stocks and ETFs

Fixed and Preferred Securities

Total Investments

Real Estate Owned

SACHEM CAPITAL CORP.

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2021

Following is a description of the methodologies used for assets measured at fair value:

1 unchanged sentence

Valued at the closing price reported in the active market in which the individual securities are traded.

Fixed and Preferred Securities:

Valued at the closing price reported in the active market on which such securities are traded.

Mutual funds :

Valued at the daily closing price reported by the fund.

Mutual funds held by the Company are open-end mutual funds that are registered with the SEC.

Mutual funds held by the Company are open-end mutual funds that are registered with the U.S.

Securities and Exchange Commission (SEC).

These funds are required to publish their daily net asset values and to transact at that price.

10 unchanged sentences

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 quarters ended March 31, 2021 and 2020, the aggregate amounts of loans funded by the Company were $ 31,661,577 and $ 28,675,048 , respectively, offset by principal repayments of $ 30,506,173 and $ 11,758,497 , respectively.

At March 31, 2021, the Company’s portfolio included loans with outstanding principal balances up to approximately $ 10.8 million, with stated interest rates ranging from 5.0 % to 13.0 % and a default interest rate for non-payment of 18 % .

At March 31, 2021, no single borrower had loans outstanding representing more than 10 % of the total balance of the loans outstanding.

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.

SACHEM CAPITAL CORP.

NOTES TO FINANCIAL STATEMENTS

MARCH 31, 2021

Credit risk profile based on loan activity as of March 31, 2021 and December 31, 2020:

Credit risk profile based on loan activity as of June 30, 2021 and December 31, 2020:

Mortgages Receivable

March 31, 2021

June 30, 2021

December 31, 2020

The following are the maturities of mortgages receivable as of March 31:

SACHEM CAPITAL CORP.

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2021

The following are the maturities of mortgages receivable as of June 30:

2024 and thereafter

At March 31, 2021, of the 479 mortgage loans in the Company’s portfolio, 12 were the subject of foreclosure proceedings.

The aggregate outstanding balances due on these loans as of March 31, 2021, including unpaid principal, accrued but unpaid interest and borrower fees, was approximately $ 2.6 million.

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.

1 unchanged sentence

Property purchased for rental or acquired through foreclosure are included on the balance sheet as real estate owned.

As of March 31, 2021, and December 31, 2020, real estate owned totaled $ 8,624,044 and $ 8,861,609 , respectively, with no valuation allowance.

As of March 31, 2021, real estate owned included $ 1,381,687 of real estate held for rental and $ 7,242,357 of real estate held for sale.

In the first quarter of 2021, the Company recorded an impairment loss of $ 25,000 compared to an impairment loss of $ 250,000 in the first quarter of 2020.

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 January 15, 2021, the Company sold a property classified as real estate held for sale, receiving approximately $ 371,000 in gross proceeds.

The Company recognized a loss of $ 2,134 on the 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 Credit

At March 31, 2021, the Company had an aggregate of $ 109,884,797 of unsecured, unsubordinated notes payable outstanding, net of $ 4,641,953 of deferred financing costs (collectively, the “Notes”).

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:

4 unchanged sentences

NOTES TO FINANCIAL STATEMENTS

MARCH 31, 2021

JUNE 30, 2021

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.

4 unchanged sentences

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 will be callable any time after June 30, 2021, 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.

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 March 31, 2021, the Company had a total outstanding balance of $ 28,160,988 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 March 31, 2021).

For the three months ended March 31, 2021 and 2020, other income consists of the following:

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).

For the three and six-month periods ended June 30, 2021 and 2020, other income consists of the following:

ended June 30,

Income on borrower charges

9 unchanged sentences

NOTES TO FINANCIAL STATEMENTS

MARCH 31, 2021

JUNE 30, 2021

Unfunded Commitments

At March 31, 2021, the Company had future funding obligations totaling $ 23,489,412 , which can be drawn by the borrowers when the conditions relating thereto have been satisfied.

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.

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 March 31, 2021, there were five such properties, representing approximately $ 453,000 in mortgages receivable.

At June 30, 2021, there were 7 such properties, representing approximately $ 834,000 in mortgages receivable.

Related Party Transactions

2 unchanged sentences

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 March 31, 2021, and 2020, loans to known shareholders totaled $ 10,589,641 and $ 5,922,692 , respectively, and interest income earned on these loans totaled $ 231,609 and $ 180,107 , respectively.

For the three-month periods ended March 31, 2021 and 2020, the wife of the Company’s chief executive officer was paid $ 28,206 and $ 25,000 , respectively, for accounting and financial reporting services provided to the Company.

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

2 unchanged sentences

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.

1 unchanged sentence

Credit risks associated with the Company’s mortgage loan portfolio and related interest receivable are described in Note 4 - Mortgages Receivable.

SACHEM CAPITAL CORP.

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2021

Equity Offerings

During the three-month period ended March 31, 2021, the Company sold 303,407 Common Shares in an at-the-market offering.

Net proceeds to the Company from the sale of these shares were $ 1,542,465 .

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

1 unchanged sentence

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 March 31, 2021, the Company’s outstanding investment totaled approximately $ 1.8 million.

As of June 30, 2021, the Company’s outstanding investment totaled approximately $ 1.8 million.

The Company’s withdrawal from the partnership may only be granted by the manager.

As of March 31, 2021, the Company earned approximately $ 17 ,000 on the investment.

As of June 30, 2021, the Company earned approximately $ 54 ,000 on the investment.

The Company uses the cost method of accounting to account for this investment.

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 1,437,500 shares of Class B common stock of Sachem Acquisition Corp., a newly organized blank check company formed under the laws of Maryland in February 2021 for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses.

As of June 30, 2021, the Company had incurred approximately $ 190,000 of costs related to the the preparation and filing of the registration statement, including legal fees, accounting fees and filing fees as well organizational costs and an expense advance to the underwriter.

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).

SACHEM CAPITAL CORP.

NOTES TO FINANCIAL STATEMENTS

MARCH 31, 2021

JUNE 30, 2021

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

On April 9, 2021, the Company filed a Prospectus Supplement to its Form S-3 Registration Statement (File No.

333-236097) covering the sale of up to $ 43,636,250 of its Common Shares in an at-the-market offering.

In connection therewith, the Company also entered into an At Market Issuance Sales Agreement with Ladenburg Thalmann & Co.

and Janney Montgomery Scott LLC to act as its sales agents in connection with sales of Common Shares pursuant to that Prospectus Supplement.

During the period from April 1, 2021 to May 4, 2021, the Company sold 2,045,336 Common Shares in two at the market offerings realizing net proceeds of $ 10,535,405 .

In April 2021, the Compensation Committee of the Board of Directors of the Company (the “Committee”) approved the following 2021 compensation packages for its Chief Executive Officer, John L.

Villano, and Chief Operating Officer, Peter J.

With respect to Mr.

● A base salary of $ 500,000 (compared to $ 360,000 in 2020);

● A “targeted” annual bonus of $ 250,000 , the exact amount to be determined by the Committee in its sole discretion, and payable on or before March 31, 2022;

● A time-based equity award of $ 500,000 payable in restricted Common Shares;

● A one-time cash bonus of $ 250,000 , of which $ 125,000 is immediately payable and $ 62,500 is payable on each of July 1 and October 1, 2021, subject to Mr.

Villano’s continued employment by the Company.

With respect to Mr.

● A base salary of $ 250,000 (same as 2020);

● A cash bonus of $ 25,000 , payable immediately in one lump sum;

● A time-based equity award of $ 25,000 payable in restricted Common Shares.

The Company issued (i) 89,928 restricted Common Shares to Mr.

Villano based on the closing price of $ 5.56 per share on April 8, 2021 (the grant date) and (ii) 4,753 restricted Common Shares to Mr.

Cuozzo based on the closing price of $ 5.26 per share on April 12, 2021 (the grant date).

The shares were issued pursuant to the Company’s 2016 Equity Compensation Plan and are subject to restrictions on transfer and forfeiture of any unvested shares in the event of a voluntary resignation as an employee of the Company without “Good Reason” or of a termination of employment with the Company for “Cause,” as such terms are defined in their respective employment agreements with the Company.

The restrictions on transfer and the forfeiture provisions will lapse with respect to one-third of the shares on each of January 1, 2022, 2023 and 2024.

Each of Messrs.

Villano and Cuozzo has the right to vote and receive dividends with respect to all the shares granted to him.

On April 30, 2021, the Company sold a property classified as real estate held for sale at March 31, 2021.

Net proceeds from the sale were $ 280,449 .

No loss will be recognized on this sale.

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.)

SACHEM CAPITAL CORP.

NOTES TO FINANCIAL STATEMENTS

MARCH 31, 2021

JUNE 30, 2021

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.

9 unchanged sentences

Food and Drug Administration (“FDA”) has issued emergency use authorizations for three COVID-19 vaccines.

As of May 6, 2021, approximately 250 million doses of vaccines have been administered in the United States and over 100 million people in the United States are fully vaccinated.

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.

7 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements