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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
May 6, 2022
SACHEM CAPITAL
CORP.
(Exact name of Registrant as specified in its charter)
New
York |
|
001-37997 |
|
81-3467779 |
(State or
other jurisdiction
of incorporation) |
|
(Commission
File Number) |
|
(IRS
Employer
Identification No.) |
698 Main
Street,
Branford,
Connecticut |
|
06405 |
(Address of
Principal Executive Office) |
|
(Zip
Code) |
Registrant's
telephone number, including area code (203)
433-4736
(Former Name
or Former Address, if Changed Since Last Report) |
Check the appropriate box below if the Form 8-K filing is
intended to simultaneously satisfy the filing obligation of the
registrant under any of the following provisions:
|
¨ |
Written communications pursuant to
Rule 425 under the Securities Act (17 CFR 230.425) |
|
¨ |
Soliciting material pursuant to
Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
|
¨ |
Pre-commencement communications
pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b)) |
|
¨ |
Pre-commencement communications
pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c)) |
Securities
registered pursuant to Section 12(b) of the
Act:
Title of
each class |
Ticker
symbol(s) |
Name of each
exchange on which registered |
Common Shares, par
value $.001 per share |
SACH |
NYSE American
LLC |
7.125% Notes due
2024 |
SCCB |
NYSE American
LLC |
6.875% Notes due
2024 |
SACC |
NYSE American
LLC |
7.75% Notes due 2025 |
SCCC |
NYSE American LLC |
6.00% Notes due 2026 |
SCCD |
NYSE American LLC |
6.00% Notes due 2027 |
SCCE |
NYSE American LLC |
7.125% Notes due 2027 |
SCCF |
NYSE American LLC |
7.75% Series A Cumulative Redeemable Preferred Stock, Liquidation
Preference $25.00 per share |
SACHPRA |
NYSE American LLC |
Indicate by check mark whether the registrant is an emerging growth
company as defined in Rule 405 of the Securities Act of 1933
(§230.405 of this chapter) or Rule 12b-2 of the Securities
Exchange Act of 1934 (§240.12b-2 of this chapter)
Emerging growth company x
If an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period
for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the
Exchange Act.
Item
1.01. |
Entry
into a Material Definitive Agreement. |
On May 6, 2022, Sachem Capital Corp. (the “Company”) entered into an
underwriting agreement (the “Underwriting Agreement”) with
Ladenburg Thalmann & Co. Inc., as representative of the several
underwriters named therein (the “Underwriters”), pursuant to
which the Company agreed to sell to the Underwriters $27,500,000
aggregate principal amount of 7.125% notes due 2027 (the
“Firm Notes”). In
addition, the Company granted the Underwriters a thirty-day option
to purchase up to an additional $4,125,000 aggregate principal
amount of the 7.125% notes due 2027 to cover underwriter
overallotments (the “Additional Notes” and, together
with the Firm Notes, the “Notes”). The Notes were offered
to the public at a purchase price equal to 100% of their principal
amount. The Underwriters purchased the Notes at a 3.25% discount.
The Notes were offered pursuant a prospectus supplement, dated May
6, 2022 (the “Prospectus
Supplement”), to the Company’s shelf registration statement
on Form S-3 (Registration No. 333-262859) (the “Registration Statement”)
declared effective by the Securities and Exchange Commission on
February 25, 2022 (the “Offering”). The Underwriting
Agreement contains customary representations, warranties and
covenants of the Company, customary conditions to closing,
customary indemnification obligations of the Company and the
Underwriters, including for liabilities under the Securities Act of
1933, as amended, and customary termination provisions. The
representations, warranties and covenants contained in the
Underwriting Agreement were made only for purposes of such
agreement and as of specific dates, were solely for the benefit of
the parties to such agreement and may be subject to limitations
agreed upon by the contracting parties. Ladenburg Thalmann &
Co. Inc. (NYSE American: LTS), Janney Montgomery Scott LLC,
InspereX LLC and William Blair & Company, LLC acted as joint
book-running managers for the Offering.
On May 11, 2022, the Company consummated the Offering. The
estimated net proceeds of the Offering to the Company from the sale
of the Firm Notes are approximately $26.3 million after payment of
underwriting discounts and commissions and estimated offering
expenses payable by the Company.
The Notes are unsecured, unsubordinated obligations of the Company
and rank equally in right of payment with all the Company’s
existing and future senior unsecured and unsubordinated
indebtedness. The Notes are effectively subordinated in right of
payment to all of the Company’s existing and future secured
indebtedness (including indebtedness that is initially unsecured to
which the Company subsequently grants a security interest) and
structurally subordinated to all existing and future indebtedness
of the Company’s subsidiaries.
The Notes bear interest at the rate of 7.125% per annum beginning
on May 11, 2022, which will be payable quarterly in arrears on
March 30, June 30, September 30 and December 30 of each year the
Notes are outstanding. The first interest payment date will be
September 30, 2022. The unpaid principal balance of the Notes and
all accrued but unpaid interest thereon is payable in full on June
30, 2027.
The Company may, at its option, at any time and from time to time,
on or after May 11, 2024, redeem the Notes, in whole or in part, at
a redemption price equal to 100% of the outstanding principal
amount thereof plus accrued and unpaid interest to, but excluding,
the date fixed for redemption. On and after any redemption date,
interest will cease to accrue on the redeemed Notes.
The Notes are subject to: (i) defeasance by the Company.
“Defeasance” means that, by depositing with a trustee an amount of
cash and/or government securities sufficient to pay all principal
and interest if any, on the Notes when due and satisfying any
additional conditions required under the Indenture (defined below),
the Company will be deemed to have been discharged from its
obligations under the Notes; and (ii) a covenant that prohibits the
Company from paying any dividends or making any distributions in
excess of 90% of its taxable income, incurring any indebtedness or
purchasing any shares of its capital stock unless it has an “Asset
Coverage Ratio” of at least 150% after giving effect to the payment
of such dividend, the making of such distribution or the incurrence
of such indebtedness. “Asset Coverage Ratio” means the ratio
(expressed as a percentage) of the value of the Company’s total
assets bears to the aggregate amount of its indebtedness.
The Notes have been approved for listing on the NYSE American LLC
with a trading symbol of “SCCF” and are expected to begin trading
on or about May 12, 2022.
In connection with the Offering, the Company and U.S. Bank Trust
Company, National Association (as successor in interest to U.S.
Bank, N.A.), as trustee, entered into a Sixth Supplemental
Indenture, dated May 11, 2022 (the “Indenture”). The Indenture
provides for the form and terms of the Notes and the issuance of
the Notes as a new series of securities of the Company. The
Indenture also contains events of default and cure provisions.
The foregoing descriptions of the Underwriting Agreement, Indenture
and the Notes do not purport to be complete and are qualified in
their entirety by reference to the full text of such documents,
copies of which are attached to this Current Report on Form 8-K as
Exhibits 1.1, 4.1 and 4.2, respectively, and incorporated herein by
reference and into the Company’s Prospectus Supplement and the
related base prospectus, which forms a part of the Registration
Statement.
Attached as Exhibit 5.1 to this Current Report on Form 8-K and
incorporated herein by reference is a copy of the opinion of
Kurzman Eisenberg Corbin & Lever, LLP relating to the validity
of the Notes (the “Legal
Opinion”). The Legal Opinion is also filed with reference
to, and is hereby incorporated by reference into, the Prospectus
Supplement and the related base prospectus, which forms a part of
the Registration Statement.
Item
2.03. |
Creation
of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant. |
The information regarding the Notes and the Indenture set forth in
Item 1.01 above is incorporated herein by reference.
On May 5, 2022, the Company issued a press releases announcing the
commencement of the Offering.
On May 6, 2022, the Company issued a press releases announcing the
pricing of the Offering.
On May 11, 2022, the Company issued a press release announcing the
closing of the Offering.
Copies of the foregoing press releases are attached to this Current
Report on Form 8-K as Exhibits 99.1, 99.2 and 99.3,
respectively.
|
Item
9.01. |
Financial
Statements and Exhibits. |
(d) Exhibits
Exhibit
No.
|
Description
|
1.1 |
Underwriting
Agreement, dated as of May 11, 2022, by and between the Company and
Ladenburg Thalmann & Co. Inc., as representative of the several
underwriters named therein. |
|
|
4.1 |
Sixth
Supplemental Indenture, dated May 11, 2022, between the Company and
U.S. Bank Trust Company, National Association, as
Trustee. |
|
|
4.2 |
Form of
7.125% Note due June 30, 2027 (included as Exhibit A to Exhibit 4.1
above). |
|
|
5.1 |
Opinion of
Kurzman Eisenburg Corbin & Level, LLP. |
|
|
23.1 |
Consent of
Kurzman Eisenberg Corbin & Lever, LLP to the filing of Exhibit
5.1 herewith (included in Exhibit 5.1). |
|
|
99.1 |
Press
Release, dated May 5, 2022. |
|
|
99.2 |
Press
Release, dated May 6, 2022. |
|
|
99.3 |
Press Release
dated May 11, 2022. |
|
|
104 |
Cover Page Interactive Data File (embedded within the Inline XBRL
document).
|
* * * * *
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
|
Sachem
Capital Corp. |
|
|
|
|
|
Dated:
May 11, 2022 |
By: |
/s/
John L. Villano |
|
|
|
John
L. Villano, CPA |
|
|
|
Chief
Executive Officer and |
|
|
|
Chief
Executive Officer |
|
Exhibit Index
Exhibit
No.
|
Description
|
1.1 |
Underwriting
Agreement, dated as of May 11, 2022, by and between the Company and
Ladenburg Thalmann & Co. Inc., as representative of the several
underwriters named therein. |
|
|
4.1 |
Sixth
Supplemental Indenture, dated May 11, 2022, between the Company and
U.S. Bank Trust Company, National Association, as
Trustee. |
|
|
4.2 |
Form
of 7.125% Note due June 30, 2027 (included as Exhibit A to Exhibit
4.1 above). |
|
|
5.1 |
Opinion
of Kurzman Eisenburg Corbin & Level, LLP. |
|
|
23.1 |
Consent
of Kurzman Eisenberg Corbin & Lever, LLP to the filing of
Exhibit 5.1 herewith (included in Exhibit 5.1). |
|
|
99.1 |
Press
Release, dated May 5, 2022. |
|
|
99.2 |
Press
Release, dated May 6, 2022. |
|
|
99.3 |
Press
Release dated May 11, 2022. |
|
|
104 |
Cover Page Interactive Data File (embedded within the Inline XBRL
document).
|
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