SACH Sachem Capital Corporation

Conference Call and Webcast to be Held at 8:00 AM EDT on Tuesday, May 14, 2019

Sachem Capital Corp. (NYSE American: SACH) today announced its financial results for the first quarter ended March 31, 2019. In addition, the Company announced that it will host a conference call on Tuesday, May 14, 2019 at 8:00 a.m. Eastern Daylight Time.

Financial highlights (Q1 2019 vs. Q1 2018):

• Revenue increased 23.2% to $3.3 million
• Net income increased 4.2% to $2.1 million
• Earnings per share of $0.13 (basic and diluted)

Balance sheet highlights (as of March 31, 2019):

• Mortgages receivable increased to $80.9 million, compared to $78.0 million as of December 31, 2018
• Total assets increased to $92.2 million, compared to $86.0 million as of December 31, 2018
• Shareholders’ equity increased to $57.1 million, compared to $52.8 million as of December 31, 2018

On April 1, 2019, the Company declared a dividend of $0.12 per common share, which was paid on April 18, 2019 to shareholders of record on April 11, 2019. The total amount of the dividend payment was approximately $2.1 million.

John Villano, CPA, co-chief executive officer and chief financial officer of Sachem Capital Corp., stated, “We are pleased with our results for the first quarter of 2019. Despite an uncertain economic environment and limited working capital to originate new loans, we recorded increases in revenue, net income, the size of our loan portfolio and shareholders’ equity. With the U.S. economy seeming to be back on sound footing, significant additional working capital as a result of sales of our common shares and continued strong demand for our mortgage loan products, we believe our prospects for continued growth for the balance of 2019 are good while maintaining our commitment to our strict underwriting criteria, extensive due diligence and conservative loan-to-value ratio. In addition, we continue to evaluate options that may provide us greater financial flexibility.”

Results of operations – three months ended March 31, 2019

Total revenue for the three months ended March 31, 2019 was approximately $3.35 million compared to approximately $2.72 million for the three months ended March 31, 2018, an increase of approximately $630,000, or 23.2%. Compared to the 2018 period, for the 2019 period interest income increased approximately $789,000, or 40.2%, to $2.75 million from $1.96 million and net origination fees increased approximately $16,000.

Total operating costs and expenses for three months ended March 31, 2019 were approximately $1.3 million compared to $744,000 for the three months ended March 31, 2018, an increase of approximately $547,000, reflecting an increase in lending operations and related increases in administrative expenses. Compared to the 2018 period, in the 2019 period interest expense and amortization of deferred financing costs expense increased approximately $398,000, compensation expenses increased approximately $139,000 and administrative expenses increased approximately $67,000.

Net income for the three months ended March 31, 2019 was approximately $2.1 million, or $0.13 per basic and diluted share, compared to $2.0 million, or $0.13 per basic and diluted share for the three months ended March 31, 2018.

Investor Conference Call

The Company will host a conference call on Tuesday, May 14, 2019 at 8:00 a.m., Eastern Daylight Time, to discuss the Company’s financial results for the first quarter ending March 31, 2019 as well as the Company’s corporate progress and other meaningful developments.

Interested parties can access the conference call by calling 877-407-8033 for U.S. callers, or +201-689-8033 for international callers. The call will be available on the Company’s website via webcast at https://www.sachemcapitalcorp.com. John Villano, Co-Chief Executive Officer and Chief Financial Officer will lead the conference call and other Sachem Capital executives will also be available to answer questions.

A webcast will also be archived on the Company’s website and a telephone replay of the call will be available approximately one hour following the call, through 8:00 a.m. on Tuesday, May 28, 2019, and can be accessed by calling: 877-481-4010 for U.S. callers or +919-882-2331 for international callers and entering conference ID: 49099.

About Sachem Capital Corp.

Sachem Capital Corp. specializes in originating, underwriting, funding, servicing and managing a portfolio of first mortgage loans. It offers short term (i.e., three years or less) secured, non­banking loans (sometimes referred to as “hard money” loans) to real estate investors to fund their acquisition, renovation, development, rehabilitation or improvement of properties located primarily in Connecticut. The Company does not lend to owner occupants. The Company’s primary underwriting criteria is a conservative loan to value ratio. The properties securing the Company’s loans are generally classified as residential or commercial real estate and, typically, are held for resale or investment. Each loan is secured by a first mortgage lien on real estate. Each loan is also personally guaranteed by the principal(s) of the borrower, which guaranty may be collaterally secured by a pledge of the guarantor’s interest in the borrower. The Company also makes opportunistic real estate purchases apart from its lending activities. The Company believes that it qualifies as a real estate investment trust (REIT) for federal income tax purposes and has elected to be taxed as a REIT beginning with its 2017 tax year.

Forward Looking Statements

This press release may contain forward-looking statements. All statements other than statements of historical facts contained in this press release, including statements regarding our future results of operations and financial position, strategy and plans, and our expectations for future operations, are forward-looking statements. The words “anticipate,” “estimate,” “expect,” “project,” “plan,” “seek,” “intend,” “believe,” “may,” “might,” “will,” “should,” “could,” “likely,” “continue,” “design,” and the negative of such terms and other words and terms of similar expressions are intended to identify forward- looking statements.

We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, strategy, short-term and long-term business operations and objectives and financial needs. These forward-looking statements are subject to several risks, uncertainties and assumptions as described in our Annual Report on Form 10-K for 2018 filed with the U.S. Securities and Exchange Commission on March 29, 2019. Because of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this press release may not occur, and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.

You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. In addition, neither we nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. We disclaim any duty to update any of these forward-looking statements.

All forward-looking statements attributable to us are expressly qualified in their entirety by these cautionary statements as well as others made in this press release. You should evaluate all forward-looking statements made by us in the context of these risks and uncertainties.

SACHEM CAPITAL CORP. BALANCE SHEETS           March 31, 2019 December 31, 2018 Assets (Unaudited) (Audited) Assets: Cash $ - $ 99,310 Cash - restricted 1,069,393 59,549 Escrow deposits - 12,817 Mortgages receivable 80,878,265 78,011,653 Mortgages receivable, affiliate 869,627 879,457 Interest and fees receivable 1,691,605 1,397,038 Other receivables 130,000 155,000 Due from borrowers 787,264 695,218 Prepaid expenses 85,379 14,866 Property and equipment, net 1,327,336 1,180,107 Deposits on property and equipment 49,881 12,000 Real estate owned 4,912,263 2,943,438 Deferred financing costs 518,635 553,597   Total assets $ 92,319,646 $ 86,014,050     Liabilities and Shareholders' Equity Liabilities: Bank overdraft $ 117,781 $ - Line of credit 30,382,546 27,219,123 Mortgage payable 795,000 290,984 Notes payable 76,485 - Capital lease payable 12,808 - Accounts payable and accrued expenses 128,593 316,413 Security deposits held 7,800 7,800 Advances from borrowers 267,284 317,324 Due to shareholder 2,217,000 1,200,000 Deferred revenue 1,027,392 1,058,406 Dividend payable - 2,624,566 Accrued interest 196,120 176,619 Total liabilities 35,228,809 33,211,235   Commitments and Contingencies   Shareholders' equity: Preferred shares - $.001 par value; 5,000,000 shares authorized; no shares issued - - Common stock - $.001 par value; 50,000,000 shares authorized; 15,950,256 and 15,438,621 issued and outstanding 15,950 15,439 Paid-in capital 55,424,167 53,192,859 Retained earnings(accumulated deficit) 1,650,721 (405,483) Total shareholders' equity 57,090,837 52,802,815 Total liabilities and shareholders' equity $ 92,319,646 $ 86,014,050 STATEMENTS OF OPERATIONS   (unaudited)     Three Months Ended March 31,       2019 2018 Revenue: Interest income from loans $ 2,751,080 $ 1,962,373 Origination fees, net 364,717 348,548 Late and other fees 46,497 34,096 Processing fees 34,795 33,130 Rental income, net 25,649 43,756 Other income 117,140 294,747 Net gain on sale of real estate owned 7,149 -   Total revenue 3,347,027 2,716,650   Operating costs and expenses: Interest and amortization of deferred financing costs 621,048 222,956 Professional fees 88,114 116,322 Compensation, fees and taxes 384,227 245,575 Exchange fees 10,287 - Other expenses and taxes 14,193 34,480 Excise tax - 19,000 Depreciation 7,503 7,634 General and administrative expenses 165,456 98,033 Total operating costs and expenses 1,290,828 744,000   Net income $ 2,056,199 $ 1,972,650       Basic and diluted net income per common share outstanding: Basic $ 0.13 $ 0.13 Diluted $ 0.13 $ 0.13     Weighted average number of common shares outstanding: Basic 15,579,126 15,415,737 Diluted 15,579,126 15,415,737 STATEMENTS OF CASH FLOW   (unaudited) Three Months Ended March 31,       2019 2018 CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 2,056,199 $ 1,972,650 Adjustments to reconcile net income to net cash provided by operating activities: Amortization of deferred financing costs 47,076 14,558 Depreciation expense 7,503 7,634 Stock based compensation 4,103 - Impairment loss - - Gain on sale of real estate owned (7,149) - Changes in operating assets and liabilities: (Increase) decrease in: Escrow deposits 12,817 (64,141) Interest and fees receivable (649,157) (134,023) Other receivables 25,000 256,966 Due from borrowers (92,045) - Prepaid expenses (70,513) (28,253) Deposits (37,881) - (Decrease) increase in: Due to note purchaser - (723,478) Due to shareholder - - Accrued interest 19,501 (40,771) Accrued expenses (187,820) (231,740) Deferred revenue (31,014) 60,222 Advances from borrowers 69,438 213,522 Total adjustments (890,141) (669,504) NET CASH PROVIDED BY OPERATING ACTIVITIES 1,166,058 1,303,146   CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sale of real estate owned 124,808 - Acquisitions of and improvements to real estate owned (362,770) (11,000) Purchase of property and equipment (141,924) (1,987) Principal disbursements for mortgages receivable (12,827,043) ########### Principal collections on mortgages receivable 8,481,663 6,034,243 NET CASH USED FOR INVESTING ACTIVITIES (4,725,266) (4,324,528)   CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from notes sold to shareholder 1,017,000 - Proceeds from line of credit 19,740,078 13,288,435 Proceeds from bank overdraft 117,781 Repayment of line of credit (16,576,655) (8,982,583) Principal payments on mortgage payable (290,984) (2,532) Dividends paid (2,624,566) (1,618,653) Proceeds from mortgage payable 795,000 - Proceeds from notes payable 76,485 - Issuance of common stock-ATM 2,227,716 - Financing costs incurred (12,113) (55,000) NET CASH PROVIDED BY FINANCING ACTIVITIES 4,469,742 2,629,667   NET INCREASE (DECREASE) IN CASH AND RESTRICTED CASH 910,534 (391,715)   CASH AND RESTRICTED CASH- BEGINNING OF YEAR 158,859 954,223   CASH AND RESTRICTED CASH - END OF PERIOD $ 1,069,393 $ 562,508 SACHEM CAPITAL CORP. STATEMENTS OF CASH FLOW (Continued)       Three Months Ended March 31,       2019 2018  

SUPPLEMENTAL DISCLOSURES OF CASH FLOWS

INFORMATION

  Taxes paid $ - $ - Interest paid $ 573,670 $ 208,398     SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND FINANCING ACTIVITIES    

During the three months ended March 31, 2018 the Company incurred a mortgage funding payable in the amount of

$2,000,000 in connection with the acquisition of mortgages receivable.

 

Real estate acquired in connection with the foreclosure of certain mortgages, inclusive of interest

and other fees receivable, during the period ended March 31, 2019 amounted to $1,962,669.

 

During the three months ended March 31, 2019, the Company purchased equipment for $13,005 subject to a capital lease.

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Sachem Capital Corp.John L. Villano, Co-CEO & CFO(203) 433-4736

Investor & Media Contact:Crescendo Communications, LLCEmail: sach@crescendo-ir.comTel: (212) 671-1021