Part I FINANCIAL INFORMATION [Item 1. Financial Statements (unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) Sachem Capital's unaudited financial statements detail its financial position and performance for Q3 2021 [Balance Sheets](index=4&type=section&id=Balance%20Sheets) Total assets grew to **$313.4 million** by September 30, 2021, fueled by mortgages receivable and equity from stock offerings Balance Sheet Highlights (in USD) | Account | Sep 30, 2021 (Unaudited) | Dec 31, 2020 (Audited) | Change (%) | | :--- | :--- | :--- | :--- | | **Total Assets** | **$313,351,751** | **$226,670,184** | **+38.2%** | | Mortgages Receivable | $219,963,291 | $155,616,300 | +41.4% | | Cash and cash equivalents | $19,242,316 | $19,408,028 | -0.9% | | **Total Liabilities** | **$154,593,669** | **$145,750,644** | **+6.1%** | | Notes payable (net) | $110,394,395 | $109,640,692 | +0.7% | | **Total Shareholders' Equity** | **$158,758,082** | **$80,919,540** | **+96.2%** | [Statements of Comprehensive Income](index=5&type=section&id=Statements%20of%20Comprehensive%20Income) Total revenue increased **62.5%** to **$20.9 million** for the nine months ended September 30, 2021, driving net income growth Income Statement Summary (Nine Months Ended Sep 30, in USD) | Metric | 2021 | 2020 | Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | $20,948,451 | $12,894,752 | +62.5% | | Interest income from loans | $15,307,692 | $9,640,387 | +58.8% | | Total operating costs | $11,915,593 | $6,250,875 | +90.6% | | Net Income | $9,032,858 | $6,643,877 | +36.0% | | Net income to common shareholders | $8,100,769 | $6,643,877 | +21.9% | | Diluted EPS | $0.32 | $0.30 | +6.7% | Income Statement Summary (Three Months Ended Sep 30, in USD) | Metric | 2021 | 2020 | Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | $8,522,376 | $4,271,808 | +99.5% | | Net Income | $4,300,615 | $2,138,784 | +101.1% | | Net income to common shareholders | $3,386,824 | $2,138,784 | +58.4% | | Diluted EPS | $0.12 | $0.10 | +20.0% | [Statements of Changes in Shareholders' Equity](index=6&type=section&id=Statements%20of%20Changes%20in%20Shareholders'%20Equity) Shareholders' equity significantly increased to **$158.8 million** by September 30, 2021, primarily from preferred and common stock offerings - For the nine months ended September 30, 2021, the company issued 1,903,000 shares of preferred stock for net proceeds of **$45.5 million** and 6,096,448 shares of common stock for net proceeds of **$30.9 million**[23](index=23&type=chunk) - Dividends paid during the first nine months of 2021 totaled **$6.1 million** for common stock and **$932,089** for preferred stock[23](index=23&type=chunk) [Statements of Cash Flows](index=8&type=section&id=Statements%20of%20Cash%20Flows) Net cash from operating activities was **$17.4 million**, while investing activities used **$84.9 million**, resulting in a slight cash decrease Cash Flow Summary (Nine Months Ended Sep 30, in USD) | Cash Flow Activity | 2021 | 2020 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $17,374,582 | $7,389,446 | | Net Cash used for Investing Activities | ($84,941,629) | ($41,361,462) | | Net Cash from Financing Activities | $67,401,335 | $20,514,152 | | **Net (Decrease) in Cash** | **($165,712)** | **($13,457,864)** | | Cash at End of Period | $19,242,316 | $5,384,073 | [Notes to Financial Statements](index=10&type=section&id=Notes%20to%20Financial%20Statements) The notes provide detailed context for the financial statements, covering accounting policies, fair value measurements, and specifics on assets, liabilities, and equity - The company specializes in short-term (one to three years), secured, non-banking "hard money" loans to real estate investors, primarily in **Connecticut**, secured by first mortgage liens[34](index=34&type=chunk) - The company elected to be taxed as a **Real Estate Investment Trust (REIT)** for federal income tax purposes starting with its 2017 tax return, requiring it to distribute at least **90%** of its taxable income annually[53](index=53&type=chunk) - The company's mortgage loan portfolio includes **157 loans** with future funding obligations totaling **$61,707,185** as of September 30, 2021[85](index=85&type=chunk) - The company's loan portfolio is geographically concentrated, with approximately **59.51%** in Connecticut, **21.09%** in Florida, and **10.69%** in New York[92](index=92&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses significant revenue and loan portfolio growth, strategic initiatives, and challenges, including financing strategy and REIT status [Review of the first Nine Months of 2021 and Outlook](index=26&type=section&id=Review%20of%20the%20first%20Nine%20Months%20of%202021%20and%20Outlook) Revenue grew **62.5%** and net income **21.9%** for the first nine months of 2021, driven by mortgage growth and strategic initiatives - The company's primary business objective is to grow its loan portfolio while protecting capital to provide attractive **risk-adjusted returns** to shareholders, primarily through dividends[115](index=115&type=chunk) - Strategic initiatives include focusing on **larger-value commercial loans**, driving operational excellence through automation, and developing relationships with larger wholesale brokers[115](index=115&type=chunk) - Challenges for the remainder of 2021 include increased competition, borrower expectations for better terms leading to **rate compression**, and increased operating expenses[122](index=122&type=chunk)[123](index=123&type=chunk)[125](index=125&type=chunk) - As of September 30, 2021, the company had unfunded commitments of **$61.7 million**, primarily due to an increase in construction loan originations in the Florida market[126](index=126&type=chunk) [Operational and Financial Overview](index=33&type=section&id=Operational%20and%20Financial%20Overview) The company's capital structure is balanced with **49.3% debt** and **50.7% equity**, facing portfolio yield compression and borrower concentration - The company's capital structure as of September 30, 2021, is approximately **49.3% debt** and **50.7% equity**[130](index=130&type=chunk) - At September 30, 2021, one borrower's outstanding loans represented **10.2%** of the mortgage loan portfolio, and a second borrower's obligations, on a fully funded basis, would represent approximately **10.0%**[130](index=130&type=chunk) - The yield on the mortgage loan portfolio was **11.92%** for the nine months ended September 30, 2021, down from **12.28%** for the same period in 2020, indicating interest rate compression[134](index=134&type=chunk) [Financing Strategy Overview](index=35&type=section&id=Financing%20Strategy%20Overview) The company's financing strategy leverages debt and equity, with **$144.6 million** in outstanding debt and a new **$200 million** repurchase facility - In June and July 2021, the company raised approximately **$45.5 million** in net proceeds from the sale of its Series A Preferred Stock[138](index=138&type=chunk) - Total outstanding debt at September 30, 2021, was approximately **$144.6 million**, including a **$30.1 million** credit line and **$114.5 million** in unsecured notes[140](index=140&type=chunk)[144](index=144&type=chunk) - On July 21, 2021, the company established a **$200 million** master repurchase financing facility with Churchill, allowing it to sell mortgage loans to raise capital at a rate based on **30-day LIBOR plus a spread of 3%-4%**[145](index=145&type=chunk) [Results of Operations](index=39&type=section&id=Results%20of%20Operations) Total revenue nearly doubled in Q3 2021 and grew **62.5%** for the nine-month period, driven by interest income despite rising costs Q3 2021 vs Q3 2020 Performance (in USD) | Metric | Q3 2021 | Q3 2020 | Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | ~$8.5M | ~$4.3M | +99.5% | | Interest Income | ~$6.1M | ~$3.5M | +75.5% | | Operating Costs | ~$4.2M | ~$2.1M | +97.9% | | Net Income to Common Shareholders | ~$3.4M | ~$2.1M | +58.4% | Nine Months 2021 vs 2020 Performance (in USD) | Metric | YTD 2021 | YTD 2020 | Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | ~$20.9M | ~$12.9M | +62.5% | | Interest Income | ~$15.3M | ~$9.6M | +58.8% | | Operating Costs | ~$11.9M | ~$6.3M | +90.6% | | Net Income to Common Shareholders | ~$8.1M | ~$6.6M | +21.9% | [Liquidity and Capital Resources](index=40&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity with **$75.3 million** in cash and equivalents, supported by significant asset and equity growth - Cash, cash equivalents, and investment securities totaled approximately **$75.3 million** at September 30, 2021[161](index=161&type=chunk) - Total assets increased by **38.2%** to **$313.4 million** at September 30, 2021, from **$226.7 million** at December 31, 2020[162](index=162&type=chunk) - Shareholders' equity increased by **$77.8 million**, primarily due to net proceeds from the Series A Preferred Stock offering (**~$45.5 million**) and common stock sales (**~$30.9 million**)[165](index=165&type=chunk) - Net cash provided by financing activities for the nine months ended September 30, 2021 was approximately **$67.5 million**, driven by stock issuances[168](index=168&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=44&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) As a smaller reporting company, Sachem Capital Corp is exempt from providing quantitative and qualitative market risk disclosures - As a **smaller reporting company**, Sachem Capital Corp is not required to provide the information required by Item 3[179](index=179&type=chunk) [Controls and Procedures](index=46&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded the company's disclosure controls and procedures were effective as of September 30, 2021, with no material changes - Management concluded that as of September 30, 2021, the company's disclosure controls and procedures are **effective**[181](index=181&type=chunk) - No changes in internal control over financial reporting occurred during the fiscal quarter that materially affected, or are reasonably likely to materially affect, these controls[182](index=182&type=chunk) Part II OTHER INFORMATION [Risk Factors](index=47&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant credit risk due to borrower concentration and liquidity risk from **$61.7 million** in unfunded commitments - At September 30, 2021, one borrower's loans represented **10.2%** of the mortgage portfolio. A second borrower's total funding obligations would represent approximately **10.0%** of the portfolio on a fully funded basis, creating significant borrower concentration risk[185](index=185&type=chunk) - The company had significant unfunded commitments of approximately **$61.7 million** as of September 30, 2021. Failure to meet these obligations could lead to legal claims and adversely impact the business[186](index=186&type=chunk) [Exhibits](index=48&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including corporate governance documents and key agreements - The report includes a comprehensive list of exhibits, such as the Certificate of Incorporation, bylaws, indentures for various note series, key employment agreements, the Master Repurchase Agreement with Churchill, and required CEO/CFO certifications[188](index=188&type=chunk)

Sachem Capital Corp. (NYSE:SACH) Q2 2021 Earnings Conference Call August 17, 2021 8:00 AM ET Company Participants David Waldman - Investor Relations John Villano - Chief Executive Officer & Chief Financial Officer Conference Call Participants Tyler Batory - Janney Christopher Nolan - Ladenburg Thalmann Brian Hollenden - Aegis Capital Operator Good morning, ladies and gentlemen, and welcome to the Sachem Capital Second Quarter 2021 Conference Call. At this time, all participants have been placed on a listen- ...

Revenue and Income - Revenue increased by 44.2% compared to the first half of 2020, driven by a 49.4% increase in interest income due to growth in lending activities [105]. - Net income rose by 4.6%, with earnings per share remaining unchanged at $0.10 [105]. - Total revenue for Q2 2021 was approximately $6.7 million, an increase of 56.0% from $4.3 million in Q2 2020, primarily driven by growth in lending operations [148]. - Interest income for Q2 2021 was approximately $4.7 million, up 43.4% from approximately $3.3 million in Q2 2020 [148]. - Net income for Q2 2021 was approximately $2.5 million, or $0.10 per share, compared to $2.3 million, or $0.10 per share in Q2 2020 [151]. - Total revenue for the six months ended June 30, 2021 was approximately $12.4 million, a 44.2% increase from $8.6 million in the same period of 2020 [152]. Assets and Liabilities - Total assets at June 30, 2021 were approximately $296.3 million, an increase of 30.7% from approximately $226.7 million at December 31, 2020 [159]. - Total liabilities at June 30, 2021 were approximately $150.0 million, a 2.9% increase from approximately $145.8 million at December 31, 2020 [160]. - Total shareholders' equity at June 30, 2021 was approximately $146.3 million, an increase of approximately $65.4 million from approximately $80.9 million at December 31, 2020 [161]. Cash Flow - Net cash provided by operating activities for the six months ended June 30, 2021 was approximately $6.1 million, compared to approximately $4.0 million for the same period in 2020 [163]. - Net cash used for investing activities for the six months ended June 30, 2021 was approximately $26.7 million, compared to approximately $15.7 million for the comparable 2020 period [164]. - Net cash provided by financing activities for the six months ended June 30, 2021, was approximately $63.4 million, a significant increase from $2.5 million in the comparable 2020 period [165]. - Anticipated cash requirements for operating needs are expected to be met by current cash balances and anticipated cash flows from operations for the next 12 months [167]. - Long-term cash needs will be funded through unused net proceeds from financing activities, operating cash flows, and proceeds from sales of real estate owned [168]. Capital Structure - The company's capital structure improved, with debt at 50.6% and equity at 49.4% as of June 30, 2021, compared to 63% debt and 37% equity at March 31, 2021 [120]. - As of June 30, 2021, the company's capital structure was approximately 50.6% debt and 49.4% equity, with total outstanding indebtedness of approximately $148.8 million [126][135]. - The company aims to maintain a modest amount of leverage for financing its portfolio, having reduced its debt level from 63.0% to 50.6% of total capital [134]. Loan Portfolio - Mortgages receivable increased by 55.1%, amounting to $61.4 million compared to June 30, 2020 [105]. - The yield on the loan portfolio decreased to 11.72% as of June 30, 2021, down from 12.38% in the same period of 2020, indicating rate compression [114]. - The yield on the mortgage loan portfolio decreased from 12.38% in 2020 to 11.72% in the first half of 2021, indicating interest rate compression [128]. - The company experienced $58 million in loan payoffs during the first half of 2021, compared to $55 million for all of 2020, attributed to a stronger real estate market [127]. - Approximately 88.5% of the mortgage loans in the portfolio had a term of one year or less as of June 30, 2021, to mitigate risks associated with rising interest rates [129]. - The company had 130 loans with future funding obligations totaling $31.8 million as of June 30, 2021 [117]. Operating Expenses and Financial Performance - Operating expenses increased significantly due to a higher debt load and new personnel hires, impacting overall financial performance [116]. - Total operating costs and expenses for Q2 2021 were approximately $4.2 million, an increase of 105.1% from $2.0 million in Q2 2020, mainly due to higher interest expenses [149]. Future Plans and Strategies - The company plans to use its cash reserves to further increase the mortgage loan portfolio in the second half of 2021 [120]. - The company plans to expand its geographic footprint beyond New England, focusing on markets in Florida and Texas, while exploring partnerships with local lenders [123]. - The company remains focused on maintaining its REIT status by distributing at least 90% of taxable income to shareholders [103]. - The company intends to pay regular quarterly distributions to common shareholders of not less than 90% of REIT taxable income [169]. Financing Activities - The company completed a $200 million master repurchase financing facility with Churchill MRA Funding I LLC, allowing for flexible capital raising at a low cost [123]. - A $200 million master repurchase financing facility was consummated with Churchill MRA Funding I LLC to finance the expansion of the lending business [171]. - The company raised approximately $45.4 million from the sale of 1,903,000 shares of Series A Preferred Stock in June and July 2021 [133]. - The company sold 1,700,000 shares of Series A Preferred Stock for net proceeds of $40.6 million on June 29, 2021 [166]. - From July 1, 2021, to August 9, 2021, the company raised $8,014,203 in net proceeds from the sale of 1,582,717 common shares [173]. Contractual Obligations - Total contractual obligations as of June 30, 2021, amounted to $31,852,145, including unfunded loan commitments of $31,845,533 [176]. - The company has a margin loan account with Wells Fargo, with a balance of approximately $34.3 million at June 30, 2021, bearing interest at 1.5% [139]. - Seven mortgage loans were under enforcement or collection proceedings, representing approximately 0.5% of the aggregate mortgage loan portfolio as of June 30, 2021 [130].

Financial Data and Key Metrics Changes - The company achieved a 33% increase in quarterly revenue, reaching approximately $5.7 million compared to $4.3 million in the same period last year [8][22] - Interest income on the loan portfolio increased by 56% year-over-year [8][22] - Net income for the first quarter was approximately $2.2 million, maintaining the same per-share earnings of $0.10 as the previous year [25] - Total assets increased by $1.6 million from $226.7 million to $228.4 million [28] - Total liabilities decreased to $143.8 million from $145.8 million at the end of the previous year [29] - Shareholders' equity increased by approximately $3.7 million to $84.6 million [30] Business Line Data and Key Metrics Changes - Loan repayments in Q1 2021 were $30.5 million, while new loan fundings were $31.7 million, both record highs for any quarter in the company's history [9] - Origination fee income remained relatively flat, increasing by approximately 1% [22] - Late and processing fees increased by 17%, and other income rose by 61% [22] Market Data and Key Metrics Changes - Nationally, active listings decreased by 53%, and median list home prices increased by 17% year-over-year [12] - In Connecticut, days on market decreased between 43% and 52%, with median list prices increasing by 2% to 18% depending on the county [12] Company Strategy and Development Direction - The company aims to grow its loan portfolio while maintaining strict underwriting guidelines to protect capital and provide attractive risk-adjusted returns [12][33] - Expansion beyond Connecticut is a priority, with a focus on Florida and Texas, targeting larger value commercial loans [18][34] - The company is exploring various financing alternatives to lower its cost of capital [41] Management's Comments on Operating Environment and Future Outlook - The management expressed optimism about the economic climate in the Northeast and the favorable competitive landscape due to restrictive lending criteria from traditional lenders [16][17] - The company believes its quick turnaround and flexibility with borrowers provide a competitive advantage [17] - Despite challenges from COVID-19, the company remains confident in its long-term growth prospects [26] Other Important Information - The company raised approximately $56 million of unsecured unsubordinated notes in 2020, which has provided liquidity for growth [13] - A dividend of $0.12 per share was declared and paid to shareholders [36] - The company has a low interest line of credit with Wells Fargo, secured by its portfolio of short-term securities [14] Q&A Session Summary Question: What is the target leverage ratio for the second half of 2021? - The company currently has $200 million in assets versus $100 million in debt, maintaining a conservative approach to growth and avoiding over-leveraging [45][46] Question: Should the evaluation of ways to lower the cost of capital be expected in the second half of the year? - The company is in the process of evaluating opportunities and expects to make an announcement in approximately 45 days [49] Question: Can you provide an update on the expansion in Florida and Texas? - The company has approximately $15 million to $20 million in Florida, focusing on the Cape Coral area, and is cautiously exploring opportunities in Austin [53][55]

Part I FINANCIAL INFORMATION [Financial Statements (unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20%28unaudited%29) For the first quarter ended March 31, 2021, Sachem Capital Corp. reported total assets of $228.4 million, a slight increase from year-end 2020, with total revenue growing to $5.7 million from $4.3 million year-over-year, driven by higher interest income, while net income remained flat at $2.2 million, or $0.10 per share, due to a significant increase in interest and operating expenses, and cash flow from operations was $2.8 million, while investing activities used $2.1 million [Balance Sheets](index=4&type=section&id=Balance%20Sheets) As of March 31, 2021, total assets increased slightly to $228.4 million from $226.7 million at December 31, 2020, primarily driven by an increase in mortgages receivable to $156.8 million, while total liabilities decreased to $143.8 million, mainly due to the payment of accrued dividends, and shareholders' equity grew to $84.6 million from $80.9 million Balance Sheet Highlights (unaudited) | Account | March 31, 2021 | December 31, 2020 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $18,345,654 | $19,408,028 | | Mortgages receivable | $156,771,704 | $155,616,300 | | Total assets | $228,432,452 | $226,670,184 | | **Liabilities & Equity** | | | | Notes payable (net) | $109,884,797 | $109,640,692 | | Line of credit | $28,160,988 | $28,055,648 | | Total liabilities | $143,790,733 | $145,750,644 | | Total shareholders' equity | $84,641,719 | $80,919,540 | [Statements of Comprehensive Income](index=5&type=section&id=Statements%20of%20Comprehensive%20Income) For the three months ended March 31, 2021, total revenue increased by 32.5% to $5.7 million, compared to $4.3 million in the same period of 2020, primarily due to a 56.2% rise in interest income from loans, but net income slightly decreased to $2.18 million from $2.24 million, as operating costs, particularly interest expenses, rose by 70.2%, while basic and diluted EPS remained unchanged at $0.10 Q1 2021 vs Q1 2020 Income Statement (unaudited) | Metric | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :--- | :--- | :--- | | Total revenue | $5,712,181 | $4,312,302 | | Interest income from loans | $4,531,232 | $2,901,406 | | Total operating costs and expenses | $3,529,080 | $2,073,688 | | Interest and amortization | $2,464,755 | $1,149,953 | | Net income | $2,183,101 | $2,238,614 | | Basic and Diluted EPS | $0.10 | $0.10 | [Statements of Changes in Shareholders' Equity](index=6&type=section&id=Statements%20of%20Changes%20in%20Shareholders%27%20Equity) Shareholders' equity increased from $80.9 million at the beginning of the year to $84.6 million as of March 31, 2021, driven by $2.2 million in net income and $1.5 million from the sale of common stock through an at-the-market (ATM) offering - The company sold 303,407 common shares through its ATM program, raising approximately **$1.54 million** in capital during Q1 2021[18](index=18&type=chunk) - Net income of **$2.18 million** for the period contributed to the increase in total shareholders' equity[18](index=18&type=chunk) [Statements of Cash Flow](index=7&type=section&id=Statements%20of%20Cash%20Flow) For the first quarter of 2021, net cash provided by operating activities was $2.8 million, an increase from $1.7 million in Q1 2020, while net cash used for investing activities was significantly lower at $2.1 million compared to $16.2 million in the prior-year period, reflecting a better balance between loan disbursements ($31.7 million) and collections ($30.5 million), and financing activities used $1.8 million, resulting in a net decrease in cash of $1.1 million Cash Flow Summary (unaudited) | Cash Flow Activity | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $2,789,056 | $1,727,381 | | Net Cash Used for Investing Activities | ($2,071,118) | ($16,221,817) | | Net Cash Used for Financing Activities | ($1,780,312) | ($2,721,479) | | Net Decrease in Cash | ($1,062,374) | ($17,215,915) | | Cash and Cash Equivalents - End of Period | $18,345,654 | $1,626,022 | [Notes to Financial Statements (unaudited)](index=8&type=section&id=Notes%20to%20Financial%20Statements%20%28unaudited%29) The notes detail the company's business as a 'hard money' lender, its accounting policies including its REIT status, and specifics on its financial accounts, with key details including a mortgage portfolio of $156.8 million with interest rates from 5.0% to 13.0%, and outstanding debt of $109.9 million in unsecured notes, and the company also disclosed its response to COVID-19, which included a temporary forbearance program and stricter lending criteria in 2020, which have since been normalized, with subsequent events including further ATM stock sales and executive compensation changes - The company specializes in short-term (one to three years), secured, non-banking loans ('hard money' loans) to real estate investors, primarily in Connecticut[23](index=23&type=chunk) - The company believes it qualifies as a Real Estate Investment Trust (REIT) and elected this status for its 2017 tax return, requiring it to distribute at least **90%** of its taxable income annually[38](index=38&type=chunk) Mortgage Loan Portfolio Details (as of March 31, 2021) | Metric | Value | | :--- | :--- | | Total Outstanding Principal | $156,771,704 | | Number of Loans | 479 | | Stated Interest Rate Range | 5.0% to 13.0% | | Loans in Foreclosure | 12 | | Aggregate Balance in Foreclosure | ~$2.6 million | Outstanding Notes Payable (as of March 31, 2021) | Series | Principal Amount | Interest Rate | Maturity Date | | :--- | :--- | :--- | :--- | | June 2024 Notes | $23,663,000 | 7.125% | June 30, 2024 | | December 2024 Notes | $34,500,000 | 6.875% | December 30, 2024 | | 2025 Notes | $56,363,750 | 7.75% | December 30, 2024 (Note: Text says 2025 Notes but maturity is Dec 30, 2024) | - In response to COVID-19 in early 2020, the company implemented a temporary forbearance program and a moratorium on new loan funding, which were canceled by the third quarter of 2020 as economic conditions stabilized[77](index=77&type=chunk) - Subsequent to quarter-end, between April 1 and May 4, 2021, the company sold **2,045,336** common shares in ATM offerings, realizing net proceeds of **$10.5 million**[74](index=74&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the 32.5% Q1 revenue growth to expanded lending activities, but a 70.2% increase in operating costs, mainly from interest on increased debt, caused a slight dip in net income, with the primary challenge being deploying its $54.7 million in cash and investments efficiently to grow the loan portfolio and offset interest expenses, and the company faces increased competition and yield compression but aims to counter this by funding larger loans and expanding geographically, while its capital structure is 63% debt, primarily fixed-rate notes, which provides operational flexibility, and the company continues to operate as a REIT - Compared to Q1 2020, revenue increased **32.5%**, but net income decreased **2.5%** due to a **70.2%** increase in operating costs, primarily interest expense from higher debt levels[84](index=84&type=chunk) - The company's primary objective is to grow its loan portfolio by focusing on larger-value commercial loans and expanding its geographic footprint beyond Connecticut, with an emphasis on Florida and Texas[85](index=85&type=chunk)[99](index=99&type=chunk) - The company faces challenges from increased competition from private equity and hedge funds, leading to borrower-friendly terms and yield compression. The portfolio yield was **11.73%** in Q1 2021, down from **12.16%** in Q1 2020[90](index=90&type=chunk)[91](index=91&type=chunk)[103](index=103&type=chunk) - As of March 31, 2021, the company's capital structure was **63.0%** debt and **37.0%** equity. The weighted average interest rate on its **$114.5 million** of unsecured notes is **7.36%**[96](index=96&type=chunk)[101](index=101&type=chunk) [Results of Operations](index=31&type=section&id=Results%20of%20Operations) Comparing Q1 2021 to Q1 2020, total revenue rose by $1.4 million (32.5%), driven by a $1.6 million increase in interest income, while total operating costs increased by approximately $1.4 million (70.2%), with interest and amortization of deferred financing costs accounting for the entire increase, leading to net income remaining flat at $2.2 million for both periods Q1 2021 vs Q1 2020 Performance | Metric | Q1 2021 | Q1 2020 | Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | ~$5.7M | ~$4.3M | +32.5% | | - Interest Income | ~$4.5M | ~$2.9M | +56.2% | | Total Operating Costs | ~$3.5M | ~$2.1M | +70.2% | | - Interest & Amortization | ~$2.5M | ~$1.1M | +114.3% | | Net Income | ~$2.2M | ~$2.2M | ~0% | [Liquidity and Capital Resources](index=31&type=section&id=Liquidity%20and%20Capital%20Resources) At March 31, 2021, the company held $54.7 million in cash, cash equivalents, and investment securities, with total assets growing by $1.8 million during the quarter to $228.4 million, while total liabilities decreased by $2.0 million to $143.8 million, and shareholders' equity increased by $3.7 million to $84.6 million, bolstered by stock sales and net income, and the company believes current cash and anticipated cash flows are sufficient to fund operations for the next 12 months - Cash, cash equivalents, and investment securities totaled approximately **$54.7 million** at March 31, 2021[124](index=124&type=chunk) - Shareholders' equity increased by **$3.7 million** in Q1 2021, primarily due to **$1.5 million** from stock sales and **$2.2 million** in net income[128](index=128&type=chunk) - Net cash from operating activities was **$2.8 million**, while investing activities used **$2.1 million** and financing activities used **$1.8 million**[129](index=129&type=chunk)[130](index=130&type=chunk)[131](index=131&type=chunk) [Contractual Obligations](index=37&type=section&id=Contractual%20Obligations) As of March 31, 2021, the company had total contractual obligations of $23.5 million, with the vast majority, $23.49 million, consisting of unfunded loan commitments due within one year, and a minor portion, approximately $8,000, relating to operating lease obligations Contractual Obligations as of March 31, 2021 | Obligation Type | Total | Less than 1 year | 1 – 3 years | | :--- | :--- | :--- | :--- | | Operating lease obligation | $8,031 | $2,888 | $5,143 | | Unfunded loan commitments | $23,489,412 | $23,489,412 | $0 | | **Total** | **$23,497,443** | **$23,492,300** | **$5,143** | [Quantitative and Qualitative Disclosures about Market Risk](index=37&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company is a smaller reporting company and, as such, is not required to provide the information for this item - As a smaller reporting company, Sachem Capital Corp. is not required to provide quantitative and qualitative disclosures about market risk[143](index=143&type=chunk) [Controls and Procedures](index=37&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures as of March 31, 2021, and concluded they were effective, with no material changes to the company's internal control over financial reporting during the quarter - Management concluded that as of March 31, 2021, the company's disclosure controls and procedures are effective[144](index=144&type=chunk) - No changes in internal control over financial reporting occurred during the fiscal quarter that materially affected, or are reasonably likely to materially affect, internal controls[145](index=145&type=chunk) Part II OTHER INFORMATION [Exhibits](index=38&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including documents related to corporate governance, debt indentures, employment agreements, and required certifications under the Sarbanes-Oxley Act, as well as XBRL interactive data files - The exhibits include the CEO and CFO certifications required under Section 302 and 906 of the Sarbanes-Oxley Act[148](index=148&type=chunk) - Key filed documents include indentures for the company's various note series (**7.125%** due 2024, **6.875%** due 2024, **7.75%** due 2025) and employment agreements for executive officers[148](index=148&type=chunk) [Signatures](index=41&type=section&id=SIGNATURES) The report is duly signed and authorized on May 14, 2021, by John L. Villano, in his capacity as President, Chief Executive Officer, and Chief Financial Officer - The Form 10-Q was signed on May 14, 2021, by John L. Villano, President, CEO, and CFO[156](index=156&type=chunk)

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ⌧ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2020 or ◻ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-37997 SACHEM CAPITAL CORP. (Exact name of registrant as specified in its charter) New York 81-3467779 State or othe ...

Mortgage Loan Portfolio - As of September 30, 2020, the yield on the mortgage loan portfolio was 12.28%, down from 12.66% for the same period in 2019[109]. - The company had 480 mortgage loans receivable, with 18 loans restructured under a forbearance program totaling an outstanding principal balance of $5.1 million and $146,000 in deferred interest[93]. - The company initiated a forbearance program in Q2 2020, deferring approximately $200,000 of interest on 23 loans with an aggregate principal amount of $6.5 million[97]. - The loan-to-value ratio for new loans was temporarily reduced to 50% during the pandemic but was increased back to 70% as of July 1, 2020[98]. - The company expanded its loan portfolio in Florida from less than $1 million to $9.7 million by September 30, 2020[101]. - Approximately 78.1% of the mortgage loans in the portfolio had a term of one year or less as of September 30, 2020[111]. Financial Performance - Total revenue for Q3 2020 was approximately $4.3 million, representing an increase of approximately $900,000 or 26.4% compared to Q3 2019[128]. - Interest income for Q3 2020 was approximately $3.5 million, up from approximately $2.4 million in Q3 2019, while net origination fees decreased to approximately $393,000 from $497,000[128]. - Total operating costs and expenses for Q3 2020 were approximately $2.1 million, an increase of approximately $800,000 or 61.5% compared to Q3 2019, primarily due to increased interest expense[129]. - Net income for Q3 2020 was approximately $2.055 million, or $0.10 per share, compared to $2.139 million, or $0.10 per share for Q3 2019[132]. - For the nine months ended September 30, 2020, total revenue was approximately $12.9 million, an increase of approximately $3.1 million or 32% compared to the same period in 2019[133]. - Net income for the nine months ended September 30, 2020 was approximately $6.7 million, or $0.30 per share, compared to approximately $5.3 million, or $0.30 per share for the same period in 2019[138]. Cash and Investments - The company had approximately $33.1 million in cash and investments as of September 30, 2020, a decrease from $34.8 million at December 31, 2019[139]. - Net cash provided by operating activities for the nine months ended September 30, 2020 was approximately $7.4 million, a slight increase from $7.3 million in the same period of 2019[140]. - Net cash used for investing activities increased significantly to approximately $41.4 million in 2020 from $14.5 million in 2019, primarily due to higher principal disbursements for mortgages receivable[141]. - Net cash provided by financing activities rose to approximately $20.5 million in 2020 compared to $18.1 million in 2019, driven by proceeds from the Wells Fargo line of credit and the sale of fixed rate notes[142]. - The company anticipates that current cash and investment balances, along with projected cash flows from operations, will be sufficient to fund operations for the next 12 months[143]. - Long-term cash needs will be funded through proceeds from the sale of debt and/or equity securities, cash on hand, investments, and operating cash flows[144]. Debt and Capital Structure - The company’s indebtedness was approximately 50.4% of total capital at September 30, 2020, with expectations for this percentage to increase[114]. - As of September 30, 2020, the company's capital structure consisted of 49.6% equity and 50.4% debt, with total indebtedness of approximately $85.6 million[115]. - The company issued an additional $14 million of September 2025 Notes in October 2020, increasing its overall debt[115]. - In October 2020, the company sold an additional $14 million aggregate principal amount of September 2025 Notes, with an option for underwriters to purchase an additional $2.1 million[147]. - The company is not involved in any off-balance sheet transactions that could affect liquidity or capital resource availability[149]. Dividends and Shareholder Distributions - The company intends to pay regular quarterly distributions to common shareholders amounting to not less than 90% of its REIT taxable income[146]. - A dividend of $0.12 per share, totaling approximately $2.65 million, was paid to shareholders on November 4, 2020[148]. Market Competition - The company faced increased competition from private equity funds and hedge funds, although competition decreased due to COVID-19[104]. - The average yield on the portfolio is expected to continue compressing due to increased competition and borrower demands[105]. - The company is focusing on expanding its geographic footprint beyond Connecticut to Florida and Texas, while also funding larger loans[107]. Obligations - As of September 30, 2020, total contractual obligations amounted to approximately $13.35 million, including operating lease obligations and unfunded construction loans[151].

Sachem Capital Corp (NYSE:SACH) Q2 2020 Earnings Conference Call August 11, 2020 8:00 AM ET Company Participants David Waldman - IR John Villano - CEO and CFO Conference Call Participants Rommel Dionisio - Aegis Capital Jim Altschul - Aviation Advisors Operator Good day, ladies and gentlemen, and welcome to the Sachem Capital Second Quarter 2020 Conference Call. All lines have been placed on a listen-only mode, and the floor will be open for your questions and comments following the presentation. At this ti ...

Table of Contents ◻ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________________________________________ to Commission File Number: 001-37997 SACHEM CAPITAL CORP. UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ⌧ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2020 or (203) 433-4736 (Exact name of registrant a ...

Start Time: 08:00 January 1, 0000 8:54 AM ET Sachem Capital Corp. (NYSE:SACH) Q1 2020 Earnings Conference Call May 12, 2020, 08:00 AM ET Company Participants John Villano - Chairman, CEO, CFO, President and Treasurer David Waldman - IR Conference Call Participants Ben Zucker - Aegis Capital Christopher Nolan - Ladenburg Thalmann Jim Altschul - Aviation Advisory Services Paul Drees - Market Edge Operator Good day, ladies and gentlemen, and welcome to your Sachem Capital First Quarter Conference Call. All lin ...