Sachem Capital(US:SACH)2020-08-10 18:02Financial Position - As of June 30, 2020, the company had approximately $35 million in liquid assets and funded about $15 million in new mortgages within the first seven weeks of the year [91]. - The total indebtedness of the company at June 30, 2020, was approximately $59 million, including two series of notes totaling approximately $58.2 million [106]. - Cash and investments totaled approximately $20.6 million at June 30, 2020, down from $34.8 million at December 31, 2019 [133]. - The company anticipates that current cash balances and anticipated cash flows from operations will be sufficient to fund operations for the next 12 months [139]. - Total contractual obligations as of June 30, 2020, amount to $8,192,357, including $9,530 for operating lease obligations and $8,182,827 for unfunded construction loans [146]. - The operating lease obligation is broken down into $2,672 due within one year and $6,858 due within 1-3 years [146]. - The company has no off-balance sheet transactions or arrangements that could affect liquidity or capital resources [144]. - There are no unfunded loan commitments reported as of June 30, 2020 [145]. Mortgage Portfolio - The company has 477 mortgages receivable, with 23 COVID-19 forbearance requests totaling $6.5 million and approximately $200,000 in deferred interest [92]. - Approximately 44% of the mortgage loans in the company's portfolio had a term of one year or less as of June 30, 2020 [101]. - As of June 30, 2020, 13 mortgage loans were subject to enforcement or collection proceedings, totaling approximately $3.6 million, which is about 3.2% of the aggregate mortgage loan portfolio [102]. - The company revised its loan-to-value ratio policy, initially reducing it to 50% during the pandemic, but reverted back to 70% for new loan fundings as of July 2020 [99]. Revenue and Income - Total revenue for Q2 2020 was approximately $4.3 million, an increase of 41% from $3.1 million in Q2 2019 [119]. - Net income for Q2 2020 was approximately $2.3 million, or $0.10 per share, compared to $1.1 million, or $0.06 per share in Q2 2019 [124]. - Total revenue for the six months ended June 30, 2020 was approximately $8.6 million, a 34% increase from $6.4 million in the same period of 2019 [125]. - Net income for the six months ended June 30, 2020 was approximately $4.5 million, or $0.20 per share, compared to $3.2 million, or $0.19 per share in the same period of 2019 [132]. Operating Costs - Total operating costs and expenses for Q2 2020 were approximately $2.0 million, a 6% increase from $1.9 million in Q2 2019 [121]. - Total operating costs and expenses for the six months ended June 30, 2020 were approximately $4.1 million, an increase of 28% from $3.2 million in the same period of 2019 [127]. Future Plans and Strategy - The company plans to expand its geographic footprint beyond Connecticut to Florida and Texas, and is looking to fund larger loans than in the past [98]. - The company expects interest rate compression to continue due to increased competition and borrower demands, impacting its net income [100]. - The company is required to distribute at least 90% of its taxable income to maintain its REIT status, which may impact its capital structure and growth strategy [90]. Dividends and Distributions - The company intends to pay regular quarterly distributions to common shareholders amounting to no less than 90% of its REIT taxable income [141]. - A dividend of $0.12 per share was declared on July 21, 2020, totaling $2,654,076, payable on August 7, 2020 [142]. Employment and Management - The company entered into an employment agreement with Peter J. Cuozzo as Executive Vice President-Chief Operating Officer, with a base salary of $250,000 per year [143]. Market Risk - The company is not required to provide quantitative and qualitative disclosures about market risk as a smaller reporting company [149].