| | |
Per Share
|
| |
Total
|
| ||||||
Public offering price
|
| | | $ | 4.00 | | | | | $ | 15,000,000 | | |
Underwriting discounts and commissions(1)
|
| | | $ | 0.28 | | | | | $ | 1,050,000 | | |
Proceeds to Sachem Capital (before expenses)
|
| | | $ | 3.72 | | | | | $ | 13,950,000 | | |
|
FBR
a B. Riley Financial Company
|
| |
Joseph Gunnar & Co.
|
|
| | | | | 1 | | | |
| | | | | 16 | | | |
| | | | | 39 | | | |
| | | | | 40 | | | |
| | | | | 41 | | | |
| | | | | 42 | | | |
| | | | | 43 | | | |
| | | | | 44 | | | |
| | | | | 45 | | | |
| | | | | 53 | | | |
| | | | | 68 | | | |
| | | | | 69 | | | |
| | | | | 72 | | | |
| | | | | 76 | | | |
| | | | | 77 | | | |
| | | | | 78 | | | |
| | | | | 83 | | | |
| | | | | 86 | | | |
| | | | | 87 | | | |
| | | | | 105 | | | |
| | | | | 108 | | | |
| | | | | 115 | | | |
| | | | | 115 | | | |
| | | | | 115 | | | |
| | | | | F-1 | | |
| | |
Six Months Ended
June 30, |
| |
Years Ended
December 31, |
| ||||||||||||||||||
| | |
2017
|
| |
2016
|
| |
2016
|
| |
2015
|
| ||||||||||||
| | |
(unaudited)
|
| |
(audited)
|
| ||||||||||||||||||
Interest income from loans
|
| | | $ | 2,260,759 | | | | | $ | 1,735,200 | | | | | $ | 3,648,427 | | | | | $ | 2,477,876 | | |
Total revenue
|
| | | $ | 2,822,796 | | | | | $ | 1,973,691 | | | | | $ | 4,133,495 | | | | | $ | 2,786,724 | | |
Total operating costs and expenses
|
| | | $ | 969,372 | | | | | $ | 421,340 | | | | | $ | 1,082,868 | | | | | $ | 479,821 | | |
Net income
|
| | | $ | 1,853,424 | | | | | $ | 1,552,351 | | | | | $ | 3,050,627 | | | | | $ | 2,306,903 | | |
Basic and diluted net income per share*
|
| | | $ | 0.14 | | | | | | | | | | | | | | | | | | | | |
Weighted average number of shares outstanding Basic and diluted
|
| | | | 11,103,237 | | | | | | | | | | | | | | | | | | | | |
| | |
As at
June 30, 2017 |
| |||||||||
| | |
(unaudited)
|
| |
(as adjusted)
|
| ||||||
Cash
|
| | | $ | 1,868,045 | | | | | $ | 15,293,045 | | |
Mortgages receivable
|
| | | $ | 47,807,245 | | | | | $ | 47,807,245 | | |
Total assets
|
| | | $ | 52,988,136 | | | | | $ | 66,413,316 | | |
Line of credit
|
| | | $ | 12,161,380 | | | | | $ | 12,161,380 | | |
Total liabilities
|
| | | $ | 13,984,738 | | | | | $ | 13,984,738 | | |
Shareholders’ equity
|
| | | $ | 39,003,398 | | | | | $ | 52,428,398 | | |
| | |
As at June 30,
|
| |
As at December 31,
|
| ||||||||||||||||||
| | |
2017
|
| |
2016
|
| |
2016
|
| |
2015
|
| ||||||||||||
| | |
(unaudited)
|
| |
(audited)
|
| ||||||||||||||||||
Residential mortgages
|
| | | $ | 33,321,877 | | | | | $ | 21,258,849 | | | | | $ | 21,343,927 | | | | | $ | 18,820,509 | | |
Commercial mortgages
|
| | | | 10,697,017 | | | | | | 6,263,296 | | | | | | 9,049,942 | | | | | | 5,712,566 | | |
Land mortgages
|
| | | | 3,527,587 | | | | | | 2,337,813 | | | | | | 3,149,602 | | | | | | 2,619,792 | | |
Mixed use
|
| | | | 260,764 | | | | | | 535,518 | | | | | | 207,139 | | | | | | 380,000 | | |
Total mortgages receivable
|
| | | $ | 47,807,245 | | | | | $ | 30,395,476 | | | | | $ | 33,750,610 | | | | | $ | 27,532,867 | | |
|
| | |
Amount
|
| |
Percentage
|
| ||||||
Funding loans
|
| | | $ | 13,175,000 | | | | | | 98.1% | | |
Working capital and general corporate purposes
|
| | | | 250,000 | | | | | | 1.9% | | |
| | | | $ | 13,425,000 | | | | | | 100.00% | | |
|
| | |
High
|
| |
Low
|
| ||||||
2017 | | | | | | | | | | | | | |
Fourth Quarter (through October 24)
|
| | | $ | 5.00 | | | | | $ | 3.95 | | |
Third Quarter
|
| | | $ | 5.02 | | | | | $ | 3.72 | | |
Second Quarter
|
| | | $ | 5.33 | | | | | $ | 4.54 | | |
First Quarter (from February 10)
|
| | | $ | 5.27 | | | | | $ | 4.70 | | |
|
Public offering price per share
|
| | | | | | | | | $ | 4.00 | | |
|
Net tangible book value per share outstanding as at June 30,
|
| | | $ | 3.49 | | | | | | | | |
|
Increase in historical net tangible book value per share outstanding attributable to new investors
|
| | | | 0.03 | | | | | | | | |
|
As adjusted net tangible book value per share outstanding after this offering
|
| | | | | | | | | | 3.52 | | |
|
Dilution per share to new investors
|
| | | | | | | | | $ | 0.48 | | |
| | |
As at June 30, 2017
|
| ||||||||||||
| | |
(Actual)
|
| |
(As Adjusted)
|
| | ||||||||
Line of credit
|
| | | $ | 12,161,380 | | | | | $ | 12,161,380(1) | | | | ||
Shareholders’ equity: | | | | | | | | | | | | | | | | |
Preferred shares, $0.001 par value, 5,000,000 shares authorized, no shares issued or outstanding
|
| | | $ | — | | | | | $ | — | | | | ||
Common shares, $0.001 par value, 50,000,000 shares authorized; 11,103,237 shares issued and outstanding actual and 14,853,237 shares issued and outstanding as adjusted
|
| | | | 11,103 | | | | | | 14,853 | | | | ||
Additional paid in capital
|
| | | | 37,980,133 | | | | | | 51,401,383 | | | | ||
Retained earnings
|
| | | | 1,012,162 | | | | | | 1,012,162 | | | | ||
Total shareholders’ equity
|
| | | | 39,003,398 | | | | | | 52,428,398 | | | | ||
Total capitalization
|
| | | $ | 51,164,778 | | | | | $ | 64,589,778 | | | | ||
|
| | |
Total
|
| |
Less than
1 year |
| |
1 – 3
years |
| |
3 – 5
years |
| |
More than
5 years |
| |||||||||||||||
Operating lease obligations
|
| | | $ | 14,706 | | | | | $ | 8,021 | | | | | $ | 6,685 | | | | | $ | — | | | | | $ | — | | |
Unfunded portions of outstanding construction loans
|
| | | | 3,307,371 | | | | | | 3,307,371 | | | | | | — | | | | | | — | | | | | | — | | |
Unfunded loan commitments
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Total contractual obligations
|
| | | $ | 3,322,077 | | | | | $ | 3,315,392 | | | | | $ | 6,685 | | | | | $ | — | | | | | $ | — | | |
|
Amount
|
| |
Number of
Loans |
| |
Aggregate
Principal Amount |
| ||||||
$100,000 or less
|
| | | | 125 | | | | | $ | 8,467,266 | | |
$100,001 to $250,000
|
| | | | 106 | | | | | | 16,611,050 | | |
$250,001 to $500,000
|
| | | | 36 | | | | | | 12,075,092 | | |
$500,001 to $1,000,000
|
| | | | 9 | | | | | | 6,253,786 | | |
Over $1,000,000
|
| | | | 4 | | | | | | 4,400,051 | | |
Total
|
| | | | 280 | | | | | $ | 47,807,245 | | |
|
| | |
Six Months Ended
June 30, |
| |
Year Ended
December 31, |
| ||||||||||||||||||
| | |
2017
|
| |
2016
|
| |
2016
|
| |
2015
|
| ||||||||||||
Loans originated
|
| | | $ | 23,237,925 | | | | | $ | 9,108,259 | | | | | $ | 21,580,103 | | | | | $ | 19,412,438 | | |
Loans repaid
|
| | | $ | 9,181,290 | | | | | $ | 6,353,148 | | | | | $ | 14,861,360 | | | | | $ | 5,812,116 | | |
Mortgage lending revenues
|
| | | $ | 2,647,988 | | | | | $ | 1,958,634 | | | | | $ | 4,017,651 | | | | | $ | 2,786,724 | | |
Mortgage lending expenses
|
| | | $ | 593,581 | | | | | $ | 396,597 | | | | | $ | 907,408 | | | | | $ | 472,095 | | |
Number of loans outstanding
|
| | | | 280 | | | | | | 193 | | | | | | 217 | | | | | | 180 | | |
Principal amount of loans earning
interest |
| | | $ | 47,807,245 | | | | | $ | 30,395,476 | | | | | $ | 33,750,610 | | | | | $ | 27,532,867 | | |
Average outstanding loan balance
|
| | | $ | 170,740 | | | | | $ | 157,490 | | | | | $ | 155,533 | | | | | $ | 152,960 | | |
Weighted average contractual interest
rate(1) |
| | | | 12.06% | | | | | | 11.91% | | | | | | 12.23% | | | | | | 11.76% | | |
Weighted average term to maturity (in months)(2)
|
| | | | 14 | | | | | | 19 | | | | | | 18 | | | | | | 20 | | |
Year of Origination
|
| |
Number of
Loans |
| |
Aggregate
Principal Amount |
| ||||||
2017
|
| | | | 110 | | | | | $ | 20,602,467 | | |
2016
|
| | | | 83 | | | | | $ | 13,139,882 | | |
2015
|
| | | | 53 | | | | | $ | 8,731,122 | | |
2014 and prior
|
| | | | 34 | | | | | $ | 5,333,774 | | |
| | | | | 280 | | | | | $ | 47,807,245 | | |
| | |
At June 30,
|
| |
At December 31,
|
| ||||||||||||||||||
| | |
2017
|
| |
2016
|
| |
2016
|
| |
2015
|
| ||||||||||||
Developer – Residential Mortgages
|
| | | $ | 33,321,877 | | | | | $ | 21,258,849 | | | | | $ | 21,343,927 | | | | | $ | 18,820,509 | | |
Developer – Commercial Mortgages
|
| | | | 10,697,017 | | | | | | 6,263,296 | | | | | | 9,049,942 | | | | | | 5,712,566 | | |
Land Mortgages
|
| | | | 3,527,587 | | | | | | 2,337,813 | | | | | | 3,149,602 | | | | | | 2,619,792 | | |
Mixed Use
|
| | | | 260,764 | | | | | | 535,518 | | | | | | 207,139 | | | | | | 380,000 | | |
Total Mortgages Receivable
|
| | | $ | 47,807,245 | | | | | $ | 30,395,476 | | | | | $ | 33,750,610 | | | | | $ | 27,532,867 | | |
|
| | |
For the Six Months Ended June 30,
|
| |||||||||||||||||||||||||||||||||
| | |
2017*
|
| |
2016
|
| ||||||||||||||||||||||||||||||
| | |
# of Loans
|
| |
Interest earned
|
| |
%
|
| |
# of Loans
|
| |
Interest earned
|
| |
%
|
| ||||||||||||||||||
Residential
|
| | | | 229 | | | | | $ | 1,575,760 | | | | | | 69.7 | | | | | | 151 | | | | | $ | 1,213,613 | | | | | | 69.9 | | |
Commercial
|
| | | | 38 | | | | | | 505,852 | | | | | | 22.4 | | | | | | 28 | | | | | | 357,556 | | | | | | 20.6 | | |
Land Mortgages
|
| | | | 12 | | | | | | 166,816 | | | | | | 7.4 | | | | | | 9 | | | | | | 133,460 | | | | | | 7.7 | | |
Mixed Use
|
| | | | 3 | | | | | | 12,331 | | | | | | 0.5 | | | | | | 5 | | | | | | 30,571 | | | | | | 1.8 | | |
Total
|
| | | | 282 | | | | | $ | 2,260,759 | | | | | | 100.0 | | | | | | 193 | | | | | $ | 1,735,200 | | | | | | 100.0 | | |
|
| | |
For the Year Ended December 31,
|
| |||||||||||||||||||||||||||||||||
| | |
2016*
|
| |
2015
|
| ||||||||||||||||||||||||||||||
| | |
# of Loans
|
| |
Interest earned
|
| |
%
|
| |
# of Loans
|
| |
Interest earned
|
| |
%
|
| ||||||||||||||||||
Residential
|
| | | | 169 | | | | | $ | 2,307,270 | | | | | | 63.2 | | | | | | 129 | | | | | $ | 1,693,790 | | | | | | 72.4 | | |
Commercial
|
| | | | 34 | | | | | | 978,295 | | | | | | 26.8 | | | | | | 34 | | | | | | 514,114 | | | | | | 18.4 | | |
Land Mortgages
|
| | | | 11 | | | | | | 340,470 | | | | | | 9.3 | | | | | | 12 | | | | | | 235,773 | | | | | | 6.5 | | |
Mixed Use
|
| | | | 3 | | | | | | 22,392 | | | | | | 0.7 | | | | | | 5 | | | | | | 34,199 | | | | | | 2.7 | | |
Total
|
| | | | 217 | | | | | $ | 3,648,427 | | | | | | 100.0 | | | | | | 180 | | | | | $ | 2,477,876 | | | | | | 100.0 | | |
|
Sources of Capital:
|
| | |||||
Debt: | | | |||||
Line of credit
|
| | | $ | 12,161,380 | | |
Mortgage payable
|
| | | $ | 305,970 | | |
Total debt
|
| | | $ | 12,467,350 | | |
Other liabilities
|
| | | $ | 1,517,388 | | |
Total liabilities
|
| | | $ | 13,984,738 | | |
Capital (equity)
|
| | | | 39,003,398 | | |
Total sources of capital
|
| | | $ | 52,988,136 | | |
Assets: | | | |||||
Mortgages receivable
|
| | | $ | 47,807,245 | | |
Other assets
|
| | | | 5,180,891 | | |
Total assets
|
| | | $ | 52,988,136 | | |
|
Name
|
| |
Age
|
| |
Position
|
|
John L. Villano
|
| |
57
|
| | Chairman, Co-Chief Executive Officer, Chief Financial Officer and Secretary | |
Jeffrey C. Villano
|
| |
52
|
| | President, Co-Chief Executive Officer, Treasurer and Director | |
Leslie Bernhard(1)(2)
|
| |
73
|
| | Director | |
Arthur Goldberg(1)(3)
|
| |
78
|
| | Director | |
Brian Prinz(1)(4)
|
| |
64
|
| | Director | |
| | |
Before Offering
|
| |
After Offering
|
| ||||||||||||||||||
Name of Beneficial Owner(1)
|
| |
Number of Common
Shares Beneficially Owned(2) |
| |
Percentage of
Class(3) |
| |
Number of Common
Shares Beneficially Owned(2) |
| |
Percentage of
Class(4) |
| ||||||||||||
Executive Officers and Directors: | | | | | | | | | | | | | | | | | | | | | | | | | |
John L. Villano(5)
|
| | | | 1,400,875 | | | | | | 12.62% | | | | | | 1,400,875 | | | | | | 9.43% | | |
Jeffrey C. Villano(6)
|
| | | | 1,907,202 | | | | | | 17.18% | | | | | | 1,907,202 | | | | | | 12.84% | | |
Leslie Bernhard
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Arthur Goldberg
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Brian Prinz(7)
|
| | | | 411,394 | | | | | | 3.71% | | | | | | 411,394 | | | | | | 2.77% | | |
All officers and directors as a group (5 persons)
|
| | | | 3,478,770 | | | | | | 31.33% | | | | | | 3,478,770 | | | | | | 23.42% | | |
Greater Than 5% Shareholders | | | | | | | | | | | | | | | | | | | | | | | | | |
Resource Real Estate Diversified Income Fund(8)
|
| | | | 600,000 | | | | | | 5.4% | | | | | | 850,000 | | | | | | 5.72% | | |
Underwriter
|
| |
Number of
Shares |
| |||
FBR Capital Markets & Co.
|
| | | | 1,781,250 | | |
Joseph Gunnar & Co., LLC.
|
| | | | 1,781,250 | | |
The Benchmark Company, LLC
|
| | | | 187,500 | | |
Total | | | | | 3,750,000 | | |
|
| | |
Per Share
|
| |
Total Without
Over-Allotment Option |
| |
Total With
Over-Allotment Option |
| |||||||||
Public offering price
|
| | | $ | 4.00 | | | | | $ | 15,000,000 | | | | | $ | 17,250,000 | | |
Underwriting discount (7%)
|
| | | | 0.28 | | | | | | 1,050,000 | | | | | | 1,207,500 | | |
Proceeds, before expense, to us
|
| | | $ | 3.72 | | | | | $ | 13,950,000 | | | | | $ | 16,042,500 | | |
Non-accountable expense allowance (1%)(1)
|
| | | $ | 0.04 | | | | | $ | 150,000 | | | | | $ | 150,000 | | |
| Financial Statements: | | | | |
| | | | ||
| | | | ||
| | | | ||
| | | | ||
| | | |
| | | | ||
| Financial Statements: | | | ||
| | | | ||
| | | | ||
| | | | ||
| | | | ||
| | | |
| | |
June 30, 2017
(unaudited) |
| |
December 31, 2016
(audited) |
| ||||||
Assets | | | | ||||||||||
Assets: | | | | ||||||||||
Cash
|
| | | $ | 1,868,045 | | | | | $ | 1,561,863 | | |
Escrow deposits
|
| | | | 311,950 | | | | | | — | | |
Mortgages receivable
|
| | | | 47,807,245 | | | | | | 32,521,588 | | |
Mortgages receivable, affiliate
|
| | | | — | | | | | | 1,229,022 | | |
Interest and fees receivable
|
| | | | 567,644 | | | | | | 478,928 | | |
Other receivables
|
| | | | 173,945 | | | | | | 182,842 | | |
Due from borrowers
|
| | | | 190,565 | | | | | | 81,911 | | |
Prepaid expenses
|
| | | | 72,432 | | | | | | — | | |
Property and equipment, net
|
| | | | 500,663 | | | | | | 397,448 | | |
Real estate owned
|
| | | | 1,287,126 | | | | | | 1,222,454 | | |
Pre-offering costs
|
| | | | 77,960 | | | | | | 625,890 | | |
Deposits on property
|
| | | | 5,000 | | | | | | — | | |
Deferred financing costs
|
| | | | 125,561 | | | | | | 67,475 | | |
Total assets
|
| | | $ | 52,988,136 | | | | | $ | 38,369,421 | | |
Liabilities and Shareholders’/Members’ Equity | | | | ||||||||||
Liabilities: | | | | ||||||||||
Line of credit
|
| | | $ | 12,161,380 | | | | | $ | 8,113,943 | | |
Mortgage payable
|
| | | | 305,970 | | | | | | 310,000 | | |
Accrued expenses
|
| | | | 227,324 | | | | | | 196,086 | | |
Security deposit held
|
| | | | 2,550 | | | | | | 800 | | |
Advances from borrowers
|
| | | | 541,333 | | | | | | 291,875 | | |
Due to shareholders/member
|
| | | | 14,928 | | | | | | 656,296 | | |
Deferred revenue
|
| | | | 692,102 | | | | | | 290,456 | | |
Accrued interest
|
| | | | 39,151 | | | | | | 24,350 | | |
Total liabilities
|
| | | | 13,984,738 | | | | | | 9,883,806 | | |
Shareholders’/members’ equity: | | | | ||||||||||
Preferred shares – $.001 par value; 5,000,000 shares authorized; no shares issued
|
| | | | — | | | | | | — | | |
Common stock – $.001 par value; 50,000,000 authorized; 11,103,237 issued and outstanding
|
| | | | 11,103 | | | | | | — | | |
Additional paid-in capital
|
| | | | 37,980,133 | | | | | | — | | |
Members’ equity
|
| | | | — | | | | | | 28,485,615 | | |
Retained earnings
|
| | | | 1,012,162 | | | | | | — | | |
Total shareholders’/members’ equity
|
| | | | 39,003,398 | | | | | | 28,485,615 | | |
Total liabilities and shareholders’/members’ equity
|
| | | $ | 52,988,136 | | | | | $ | 38,369,421 | | |
|
| | |
Three Months Ended June 30,
|
| |
Six Months Ended June 30,
|
| ||||||||||||||||||
| | |
2017
|
| |
2016
|
| |
2017
|
| |
2016
|
| ||||||||||||
Revenue: | | | | | | ||||||||||||||||||||
Interest income from loans
|
| | | $ | 1,223,919 | | | | | $ | 931,715 | | | | | $ | 2,260,759 | | | | | $ | 1,735,200 | | |
Origination fees, net
|
| | | | 169,939 | | | | | | 66,320 | | | | | | 267,400 | | | | | | 95,143 | | |
Late and other fees
|
| | | | 35,472 | | | | | | 68,051 | | | | | | 65,454 | | | | | | 101,306 | | |
Processing fees
|
| | | | 29,450 | | | | | | 14,250 | | | | | | 54,375 | | | | | | 26,985 | | |
Rental income, net
|
| | | | 21,845 | | | | | | 4,579 | | | | | | 49,228 | | | | | | 4,579 | | |
Other income
|
| | | | 79,433 | | | | | | 10,478 | | | | | | 125,580 | | | | | | 10,478 | | |
Gain on sale of real estate
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Total revenue
|
| | | | 1,560,058 | | | | | | 1,095,393 | | | | | | 2,822,796 | | | | | | 1,973,691 | | |
Operating costs and expenses: | | | | | | ||||||||||||||||||||
Interest and amortization of deferred financing costs
|
| | | | 170,639 | | | | | | 119,482 | | | | | | 286,909 | | | | | | 221,692 | | |
Compensation to manager
|
| | | | — | | | | | | 91,061 | | | | | | 35,847 | | | | | | 152,517 | | |
Professional fees
|
| | | | 48,403 | | | | | | — | | | | | | 132,142 | | | | | | 24,743 | | |
Compensation, fees and taxes
|
| | | | 164,986 | | | | | | 15,567 | | | | | | 270,825 | | | | | | 22,388 | | |
Exchange fees
|
| | | | 37,665 | | | | | | — | | | | | | 37,665 | | | | |||||
Depreciation
|
| | | | 7,734 | | | | | | — | | | | | | 12,890 | | | | | | — | | |
General and administrative expenses
|
| | | | 131,754 | | | | | | — | | | | | | 177,341 | | | | | | — | | |
Loss on sale of real estate
|
| | | | 42,231 | | | | | | — | | | | | | 15,753 | | | | | | | | |
Total operating costs and expenses
|
| | | | 603,412 | | | | | | 226,110 | | | | | | 969,372 | | | | | | 421,340 | | |
Net income
|
| | | $ | 956,646 | | | | | $ | 869,283 | | | | | $ | 1,853,424 | | | | | $ | 1,552,351 | | |
Basic and diluted net income per common share outstanding:
|
| | | | | ||||||||||||||||||||
Basic
|
| | | $ | 0.09 | | | | | $ | — | | | | | $ | 0.14* | | | | | $ | — | | |
Diluted
|
| | | $ | 0.09 | | | | | $ | — | | | | | $ | 0.14* | | | | | $ | — | | |
Weighted average number of common shares outstanding:
|
| | | | | ||||||||||||||||||||
Basic
|
| | | | 11,103,237 | | | | | | — | | | | | | 11,103,237 | | | | | | — | | |
Diluted
|
| | | | 11,103,237 | | | | | | — | | | | | | 11,103,237 | | | | | | — | | |
|
| | |
Six Months Ended June 30, 2017
(unaudited) |
| |||||||||||||||||||||||||||
| | |
Common
Shares |
| |
Amount
|
| |
Additional
Paid in Capital |
| |
Retained
Earnings |
| |
Predecessor’s
Members’ Equity |
| |||||||||||||||
Beginning balance, January 1, 2017
|
| | | | 2,220,000 | | | | | $ | 2,220 | | | | | $ | (2,220) | | | | | | | | | | | $ | 28,485,615 | | |
Member contributions
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | 653,646 | | |
Member distributions
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | (2,460,125) | | |
Net income for the period January 1, 2017 – February 8, 2017
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | 286,100 | | |
Conversion of members’ equity into common stock
|
| | | | 6,283,237 | | | | | | 6,283 | | | | | | 26,958,953 | | | | | | | | | | | | (26,965,236) | | |
Initial public offering
|
| | | | 2,600,000 | | | | | | 2,600 | | | | | | 11,023,400 | | | | | ||||||||||
Dividends paid
|
| | | | | | | | | | | | | | | | | | | | | $ | (555,162) | | | | | | | | |
Net income for the period February 9, 2017 – June 30, 2017
|
| | | | | | | | | | | | | | | | | | | | | | 1,567,324 | | | | | | | | |
Balance, June 30, 2017
|
| | | | 11,103,237 | | | | | $ | 11,103 | | | | | $ | 37,980,133 | | | | | $ | 1,012,162 | | | | | $ | — | | |
|
| | |
Six Months Ended June 30,
|
| |||||||||
| | |
2017
|
| |
2016
|
| ||||||
CASH FLOWS FROM OPERATING ACTIVITIES | | | | ||||||||||
Net income
|
| | | $ | 1,853,424 | | | | | $ | 1,552,351 | | |
Adjustments to reconcile net income to net cash provided by operating activities:
|
| | | ||||||||||
Amortization of deferred financing costs
|
| | | | 29,117 | | | | | | 24,556 | | |
Depreciation expense
|
| | | | 12,890 | | | | | | — | | |
Loss on sale of real estate
|
| | | | 15,753 | | | | | | — | | |
Adjustment to loss for sale of collateral
|
| | | | (42,231) | | | | |||||
Changes in operating assets and liabilities:
|
| | | ||||||||||
(Increase) decrease in:
|
| | | ||||||||||
Escrow deposit
|
| | | | | | | | | | — | | |
Interest and fees receivable
|
| | | | (88,716) | | | | | | (105,543) | | |
Other receivables
|
| | | | 8,897 | | | | | | (34,759) | | |
Due from borrowers
|
| | | | (108,654) | | | | |||||
Prepaid expenses
|
| | | | (72,432) | | | | | | — | | |
Deposits on property
|
| | | | (5,000) | | | | |||||
(Decrease) increase in:
|
| | | ||||||||||
Due to member
|
| | | | (656,296) | | | | | | 163,441 | | |
Due to shareholder
|
| | | | 14,928 | | | | |||||
Accrued interest
|
| | | | 14,800 | | | | | | (14,411) | | |
Accrued expenses
|
| | | | 31,236 | | | | | | — | | |
Deferred revenue
|
| | | | 401,646 | | | | | | (645) | | |
Advances from borrowers
|
| | | | 249,458 | | | | | | 90,344 | | |
Due from borrowers
|
| | | | | | | | | | (49,607) | | |
Total adjustments
|
| | | | (194,604) | | | | | | 73,376 | | |
NET CASH PROVIDED BY OPERATING ACTIVITIES
|
| | | | 1,658,820 | | | | | | 1,625,727 | | |
CASH FLOWS FROM INVESTING ACTIVITIES | | | | ||||||||||
Proceeds from sale of real estate owned
|
| | | | 90,123 | | | | | | 229,141 | | |
Acquisitions of and improvements to real estate owned
|
| | | | (62,055) | | | | | | (560,861) | | |
Escrow deposit
|
| | | | (311,950) | | | | | | (259,000) | | |
Purchase of furniture and equipment
|
| | | | (116,105) | | | | | | — | | |
Security deposit
|
| | | | 1,750 | | | | | | — | | |
Principal disbursements for mortgages receivable
|
| | | | (23,237,925) | | | | | | (9,108,259) | | |
Principal collections on mortgages receivable
|
| | | | 9,181,290 | | | | | | 6,353,148 | | |
NET CASH USED FOR INVESTING ACTIVITIES
|
| | | | (14,454,872) | | | | | | (3,345,831) | | |
CASH FLOWS FROM FINANCING ACTIVITIES | | | | ||||||||||
Proceeds from line of credit
|
| | | | 16,545,766 | | | | | | 4,175,000 | | |
Repayment of line of credit
|
| | | | (12,498,329) | | | | | | (2,900,000) | | |
Principal payments on mortgage payable
|
| | | | (4,030) | | | | | | — | | |
Dividends Paid
|
| | | | (555,162) | | | | |||||
Proceeds from IPO
|
| | | | 13,000,000 | | | | | | — | | |
Pre-offering costs incurred
|
| | | | (1,492,330) | | | | | | (124,750) | | |
Financing costs incurred
|
| | | | (87,202) | | | | | | (65,050) | | |
Member contributions
|
| | | | 653,646 | | | | | | 2,516,714 | | |
Member distributions
|
| | | | (2,460,125) | | | | | | (2,243,290) | | |
NET CASH PROVIDED BY FINANCING ACTIVITIES
|
| | | | 13,102,234 | | | | | | 1,358,624 | | |
NET INCREASE (DECREASE) IN CASH
|
| | | | 306,182 | | | | | | (361,480) | | |
CASH – BEGINNING OF PERIOD
|
| | | | 1,561,863 | | | | | | 1,834,082 | | |
CASH – END OF PERIOD
|
| | | $ | 1,868,045 | | | | | $ | 1,472,602 | | |
SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION | | | | ||||||||||
Interest paid
|
| | | $ | 242,991 | | | | | $ | 211,547 | | |
|
Performing Loans
|
| |
Residential
|
| |
Commercial
|
| |
Land
|
| |
Mixed Use
|
| |
Total
Outstanding Mortgages |
| |||||||||||||||
June 30, 2017
|
| | | $ | 33,321,877 | | | | | $ | 10,697,017 | | | | | $ | 3,527,587 | | | | | $ | 260,764 | | | | | $ | 47,807,245 | | |
|
2017
|
| | | $ | 10,264,013 | | |
|
2018
|
| | | | 21,634,186 | | |
|
2019
|
| | | | 7,389,127 | | |
|
2020
|
| | | | 8,519,919 | | |
|
Total
|
| | | $ | 47,807,245 | | |
|
|
Year ending December 31,
|
| | 2017 | | | | $ | 8,933 | | |
| | | | 2018 | | | | | 10,176 | | |
| | | | 2019 | | | | | 10,645 | | |
| | | | 2020 | | | | | 11,136 | | |
| | | | 2021 | | | | | 11,650 | | |
| | | | Thereafter | | | | | 253,430 | | |
| | | | | | | | $ | 305,970 | | |
|
December 31,
|
| | |||||
2018
|
| | | $ | 471,492 | | |
2019
|
| | | | 135,010 | | |
2020
|
| | | | 85,600 | | |
Total
|
| | | $ | 692,102 | | |
|
| | |
December 31,
|
| |||||||||
| | |
2016
|
| |
2015
|
| ||||||
Assets | | | | ||||||||||
Cash
|
| | | $ | 1,561,863 | | | | | $ | 1,834,082 | | |
Mortgages receivable
|
| | | | 32,521,588 | | | | | | 26,017,867 | | |
Mortgages receivable, affiliate
|
| | | | 1,229,022 | | | | | | 1,515,000 | | |
Interest and fees receivable
|
| | | | 478,928 | | | | | | 265,492 | | |
Other receivables
|
| | | | 182,842 | | | | | | 17,500 | | |
Due from borrowers
|
| | | | 81,911 | | | | | | 60,499 | | |
Land and building
|
| | | | 397,448 | | | | | | — | | |
Real estate owned
|
| | | | 1,222,454 | | | | | | 1,001,054 | | |
Pre-offering costs
|
| | | | 625,890 | | | | | | 45,000 | | |
Deferred financing costs
|
| | | | 67,475 | | | | | | 38,992 | | |
Total assets
|
| | | $ | 38,369,421 | | | | | $ | 30,795,486 | | |
Liabilities and Members’ Equity | | | | ||||||||||
Liabilities | | | | ||||||||||
Line of credit
|
| | | $ | 8,113,943 | | | | | $ | 6,000,000 | | |
Mortgage payable
|
| | | | 310,000 | | | | | | — | | |
Accrued expenses
|
| | | | 196,086 | | | | | | — | | |
Security deposit held
|
| | | | 800 | | | | | | — | | |
Advances from borrowers
|
| | | | 291,875 | | | | | | 107,714 | | |
Due to member
|
| | | | 656,296 | | | | | | 230,409 | | |
Deferred revenue
|
| | | | 290,456 | | | | | | 190,017 | | |
Accrued interest
|
| | | | 24,350 | | | | | | 37,829 | | |
Total liabilities
|
| | | | 9,883,806 | | | | | | 6,565,969 | | |
Members’ equity
|
| | | | 28,485,615 | | | | | | 24,229,517 | | |
Total liabilities and members’ equity
|
| | | $ | 38,369,421 | | | | | $ | 30,795,486 | | |
|
| | |
Years Ended
December 31, |
| |||||||||
| | |
2016
|
| |
2015
|
| ||||||
Revenue | | | | ||||||||||
Interest income from loans
|
| | | $ | 3,648,427 | | | | | $ | 2,477,876 | | |
Origination fees, net
|
| | | | 197,378 | | | | | | 108,385 | | |
Late and other fees
|
| | | | 105,911 | | | | | | 144,813 | | |
Processing fees
|
| | | | 65,935 | | | | | | 55,650 | | |
Rental income, net
|
| | | | 68,417 | | | | | | — | | |
Other income
|
| | | | 47,427 | | | | | | — | | |
Total revenue
|
| | | | 4,133,495 | | | | | | 2,786,724 | | |
Operating costs and expenses: | | | | ||||||||||
Interest and amortization of deferred financing costs
|
| | | | 505,135 | | | | | | 221,698 | | |
Compensation to manager
|
| | | | 350,229 | | | | | | 210,407 | | |
Professional fees
|
| | | | 87,493 | | | | | | 2,250 | | |
Other fees and taxes
|
| | | | 34,662 | | | | | | 5,093 | | |
Loss on sale of real estate, net
|
| | | | 87,967 | | | | | | 5,476 | | |
Bank fees
|
| | | | 17,382 | | | | | | 34,897 | | |
Total operating costs and expenses
|
| | | | 1,082,868 | | | | | | 479,821 | | |
NET INCOME
|
| | | $ | 3,050,627 | | | | | $ | 2,306,903 | | |
|
| | |
Years Ended
December 31, |
| |||||||||
| | |
2016
|
| |
2015
|
| ||||||
MEMBERS’ EQUITY, BEGINNING OF YEAR
|
| | | $ | 24,229,517 | | | | | $ | 16,104,075 | | |
NET INCOME
|
| | | | 3,050,627 | | | | | | 2,306,903 | | |
Members’ Contributions
|
| | | | 5,084,730 | | | | | | 7,214,754 | | |
Members’ Distributions
|
| | | | (3,879,259) | | | | | | (1,396,215) | | |
MEMBERS’ EQUITY, END OF YEAR
|
| | | $ | 28,485,615 | | | | | $ | 24,229,517 | | |
|
| | |
Years Ended
December 31, |
| |||||||||
| | |
2016
|
| |
2015
|
| ||||||
CASH FLOWS FROM OPERATING ACTIVITIES | | | | ||||||||||
Net income
|
| | | $ | 3,050,627 | | | | | $ | 2,306,903 | | |
Adjustments to reconcile net income to net cash provided by operating activities:
|
| | | ||||||||||
Amortization of deferred financing costs
|
| | | | 47,676 | | | | | | 26,916 | | |
Loss on sale of real estate
|
| | | | 87,967 | | | | | | 5,476 | | |
Impairment loss
|
| | | | — | | | | | | — | | |
Changes in operating assets and liabilities:
|
| | | ||||||||||
(Increase) decrease in:
|
| | | ||||||||||
Interest and fees receivable
|
| | | | (213,438) | | | | | | (207,098) | | |
Other receivables
|
| | | | (72,374) | | | | | | (17,500) | | |
(Decrease) increase in:
|
| | | ||||||||||
Due to member
|
| | | | 421,592 | | | | | | 135,929 | | |
Accrued interest
|
| | | | (13,479) | | | | | | 24,548 | | |
Accrued expenses
|
| | | | 196,086 | | | | | | — | | |
Deferred revenue
|
| | | | 25,484 | | | | | | 71,299 | | |
Advances from borrowers
|
| | | | 167,044 | | | | | | 29,724 | | |
Total adjustments
|
| | | | 646,558 | | | | | | 69,294 | | |
NET CASH PROVIDED BY OPERATING ACTIVITIES
|
| | | | 3,697,185 | | | | | | 2,376,197 | | |
CASH FLOWS FROM INVESTING ACTIVITIES | | | | ||||||||||
Proceeds from sale of real estate owned
|
| | | | 1,059,629 | | | | | | 421,822 | | |
Acquisitions of and improvements to real estate owned
|
| | | | (886,009) | | | | | | — | | |
Purchase of land and building
|
| | | | (397,448) | | | | | | — | | |
Security deposit
|
| | | | 800 | | | | | | — | | |
Principal disbursements for mortgages receivable
|
| | | | (21,580,103) | | | | | | (19,412,438) | | |
Principal collections on mortgages receivable
|
| | | | 14,861,360 | | | | | | 5,812,116 | | |
NET CASH USED FOR INVESTING ACTIVITIES
|
| | | | (6,941,771) | | | | | | (13,178,500) | | |
CASH FLOWS FROM FINANCING ACTIVITIES | | | | ||||||||||
Proceeds from line of credit
|
| | | | 7,475,000 | | | | | | 6,000,000 | | |
Repayment of line of credit
|
| | | | (5,361,057) | | | | | | (5,000,000) | | |
Proceeds from mortgage
|
| | | | 310,000 | | | | | | — | | |
Pre-offering costs incurred
|
| | | | (580,890) | | | | | | (45,000) | | |
Financing costs incurred
|
| | | | (76,159) | | | | | | (12,075) | | |
Member contributions
|
| | | | 5,084,732 | | | | | | 7,214,754 | | |
Member distributions
|
| | | | (3,879,259) | | | | | | (1,396,215) | | |
NET CASH PROVIDED BY FINANCING ACTIVITIES
|
| | | | 2,972,367 | | | | | | 6,761,464 | | |
NET DECREASE IN CASH
|
| | | | (272,219) | | | | | | (4,040,839) | | |
CASH – BEGINNING OF YEAR
|
| | | | 1,834,082 | | | | | | 5,874,921 | | |
CASH – END OF YEAR
|
| | | $ | 1,561,863 | | | | | $ | 1,834,082 | | |
SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION
|
| | | ||||||||||
Interest paid
|
| | | $ | 470,821 | | | | | $ | 170,234 | | |
|
Performing Loans
|
| |
Residential
|
| |
Commercial
|
| |
Land
|
| |
Mixed Use
|
| |
Total
Outstanding Mortgages |
| |||||||||||||||
December 31, 2016
|
| | | $ | 21,343,927 | | | | | $ | 9,049,942 | | | | | $ | 3,149,602 | | | | | $ | 207,139 | | | | | $ | 33,750,610 | | |
December 31, 2015
|
| | | $ | 18,820,509 | | | | | $ | 5,712,566 | | | | | $ | 2,619,792 | | | | | $ | 380,000 | | | | | $ | 27,532,867 | | |
|
2017
|
| | | $ | 13,328,863 | | |
|
2018
|
| | | | 10,704,193 | | |
|
2019
|
| | | | 8,096,976 | | |
|
2020
|
| | | | 1,620,578 | | |
|
Total
|
| | | $ | 33,750,610 | | |
|
|
Year ending December 31,
|
| | 2017 | | | | $ | 96,480 | | |
| | | | 2018 | | | | | 96,480 | | |
| | | | 2019 | | | | | 55,270 | | |
| | | | Total | | | | $ | 248,230 | | |
|
|
Year ending December 31,
|
| | 2017 | | | | $ | 9,228 | | |
| | | | 2018 | | | | | 9,228 | | |
| | | | 2019 | | | | | 9,228 | | |
| | | | 2020 | | | | | 9,228 | | |
| | | | 2021 | | | | | 9,228 | | |
| | | | Thereafter | | | | | 263,860 | | |
| | | | | | | | $ | 310,000 | | |
|
| | |
Deferred
Revenue, Beginning |
| |
Gross
Origination Fee Income |
| |
Amortization
of Deferred Revenue |
| |
Deferred
Revenue Ending |
| ||||||||||||
Manager’s Share
|
| | | | | | | | | $ | 636,260 | | | | | | | | | | | | | | |
Company’s Share
|
| | | $ | 190,017 | | | | | | 187,748 | | | | | $ | 162,264 | | | | | $ | 215,501 | | |
Total
|
| | | $ | 190,017 | | | | | $ | 824,008 | | | | | $ | 162,264 | | | | | $ | 215,501 | | |
|
| | |
Deferred
Revenue, Beginning |
| |
Gross
Origination Fee Income |
| |
Amortization
of Deferred Revenue |
| |
Deferred
Revenue Ending |
| ||||||||||||
Manager’s Share
|
| | | | | | | | | $ | 541,600 | | | | | | | | | | | | | | |
Company’s Share
|
| | | $ | 118,718 | | | | | | 179,684 | | | | | $ | 108,385 | | | | | $ | 190,017 | | |
Total
|
| | | $ | 118,718 | | | | | $ | 721,284 | | | | | $ | 108,385 | | | | | $ | 190,017 | | |
|
December 31,
|
| | |||||
2017
|
| | | $ | 124,800 | | |
2018
|
| | | | 62,491 | | |
2019
|
| | | | 28,210 | | |
Total
|
| | | $ | 215,501 | | |
|
|
FBR
a B. Riley Financial Company
|
| |
Joseph Gunnar & Co.
|
|