Sachem Capital(SACH) - 2023 Q4 - Annual Report

Financial Performance - Total revenue increased by 25.5%, while net income attributable to common shareholders decreased by 29.7%, resulting in a decrease of approximately $0.18 per share in earnings per common share [259]. - Total revenue for the year ended December 31, 2023, was approximately$ 65.6 million, an increase of approximately $13.3 million or 25.5% compared to 2022 [300]. - Interest income for 2023 was approximately$ 49.3 million, representing an increase of approximately $6.7 million or 15.6% from 2022 [300]. - Total operating costs and expenses for 2023 were approximately$ 49.7 million, an increase of approximately $18.3 million or 58.5% compared to 2022 [301]. - Net income for 2023 attributable to common shareholders was approximately$ 12.1 million, a decrease of approximately $5.1 million or 29.7% from 2022 [302]. - Adjusted earnings for 2023 were approximately$ 11.3 million, compared to approximately $20.2 million for 2022 [306]. - Net cash provided by operating activities in 2023 was approximately$ 21.9 million, an increase from approximately $13.1 million in 2022 [310]. - Net cash used for investing activities in 2023 was approximately$ 72.5 million, a decrease from approximately $159.5 million in 2022 [313]. - Net cash provided by financing activities for 2023 was approximately$ 39.5 million, a decrease from $128.2 million in 2022 [314]. Capital Structure and Debt - As of December 31, 2023, the capital structure was 60.4% debt and 39.6% equity, compared to 59.3% debt and 40.7% equity at the end of 2022 [259]. - The weighted average cost of debt capital was 7.22% as of December 31, 2023, compared to 7.07% in 2022 [262]. - The company expects to maintain its current level of debt to prudently grow the business and satisfy the requirement to distribute 90% of taxable income [276]. - The outstanding balance under the Needham Credit Facility was approximately$ 35.0 million, accruing interest at an effective rate of 8.25% per annum [289]. - The company has a $200 million master repurchase financing facility with Churchill, with an outstanding amount of approximately$ 26.5 million accruing interest at an effective rate of 9.47% per annum [277][285]. - As of December 31, 2023, total outstanding indebtedness was approximately $377.7 million, with debt representing about 60.4% of total capital, up from 59.3% in 2022 [276][277]. Investments and Assets - The company funded approximately$ 204.9 million in mortgage loans, including loan modifications and construction draws [259]. - The yield on the mortgage loan portfolio was 12.6% for 2023, up from 11.5% in 2022 [262]. - At December 31, 2023, the mortgage loan portfolio included 112 loans with future funding obligations totaling $97.9 million, down from 177 loans totaling approximately$ 114.6 million at the end of 2022 [271]. - Total assets at December 31, 2023, were approximately $625.5 million, an increase of approximately$ 59.8 million or 10.6% from 2022 [307]. - Total liabilities at December 31, 2023, were approximately $395.5 million, an increase of approximately$ 47.5 million or 13.7% from 2022 [308]. - Total shareholders' equity at December 31, 2023, was approximately $230.1 million, an increase of approximately$ 12.4 million or 5.7% from 2022 [309]. Capital Raising and Dividends - The company raised approximately $23.0 million in additional capital through the sale of Common Shares and Series A Preferred Stock [259]. - The company raised approximately$ 505.9 million in gross proceeds through public offerings of equity and debt securities by December 31, 2023 [274]. - The company raised approximately $20.9 million from the sale of 5,475,891 Common Shares and$ 2.6 million from Series A Preferred Stock during the year ended December 31, 2023 [290][291]. - A dividend of $0.11 per share was paid on January 10, 2024, totaling approximately$ 5.1 million [318]. - The company plans to pay regular quarterly distributions to Common Shareholders of not less than 90% of REIT taxable income [316]. Future Outlook and Obligations - Anticipated cash requirements for the next 12 months include funding of loans, dividend payments, and operating expenses, with current cash balances and anticipated cash flows deemed sufficient [314]. - Long-term cash needs will include principal and interest payments on outstanding indebtedness and preferred stock dividends, funded by unused net proceeds and operating cash flows [315]. - The company is subject to an Asset Coverage Ratio requirement of at least 150% for various financial activities, including dividend payments and incurring additional debt [279][284]. - The tenant in the Westport Asset increased lease occupancy from approximately 33% to 50% [320]. - As of December 31, 2023, total contractual obligations amounted to approximately $101.8 million, including unfunded construction loans of$ 97.9 million [325]. Miscellaneous - The company believes it has qualified as a REIT since its IPO and is required to distribute at least 90% of its taxable income to maintain this status [293][294]. - No adjustments were required in the consolidated financial statements based on subsequent events evaluated through March 28, 2024 [322].