Significant Accounting Policies |
6 Months Ended |
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Jun. 30, 2025 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies The significant accounting policies of the Company, unless further updated below, are consistent with those disclosed in Note 2 to the Company’s audited consolidated financial statements for the year ended December 31, 2024 included in the Company’s Annual Report on Form 10-K, filed with the U.S. Securities and Exchange Commission on March 31, 2025. Unaudited Condensed Consolidated Financial Statements The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles in the United States of America (“GAAP”) for complete financial statements. However, in the opinion of management, all normal and recurring adjustments considered necessary for a fair presentation have been included. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2024 and the notes thereto included in the Company’s Annual Report on Form 10-K. The balance sheet information as of December 31, 2024 is derived from audited financial statements, but does not include all disclosures required by GAAP. Results of operations for the three and six months ended June 30, 2025, are not necessarily indicative of the operating results to be attained in the entire fiscal year or for any subsequent period. Basis of Presentation and Principles of Consolidation The preparation of the unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Management bases the use of estimates on (a) various assumptions that consider prior reporting results, (b) projections regarding future operations and (c) general financial market and local and general economic conditions. Actual amounts could differ from those estimates. Significant estimates include the provisions for Current Expected Credit Losses ("CECL"), loans held for sale at fair value and real estate owned. The accompanying unaudited condensed consolidated financial statements of the Company include the accounts of all subsidiaries in which the Company has control over significant operating, financial and investing decisions of the entity. All intercompany accounts and transactions have been eliminated in consolidation. Variable Interest Entities On March 20, 2025, the Company formed SN Holdings LLC (“SN Holdings”), a wholly owned subsidiary of the Company, for the sole purpose of acting as the borrower under a new revolving credit facility with Needham Bank (the “2025 Needham Credit Facility”). Simultaneously with the execution of the2025 Needham Credit Facility, the Company terminated and repaid in full the outstanding balance under its previous credit facility with Needham Bank. SN Holdings is a variable interest entity (“VIE”) under the guidance of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810-10, Consolidation, as it was established with insufficient equity at risk and does not have independent operations apart from the Company. The Company has determined that it is the primary beneficiary of SN Holdings because it has both (i) the power to direct the activities that most significantly impact SN Holdings’ economic performance and (ii) the obligation to absorb losses or the right to receive benefits that could be significant to SN Holdings, primarily through its role as the guarantor of the 2025 Needham Credit Facility and through its ability to direct all operational and financing decisions. Accordingly, SN Holdings has been consolidated in the Company’s condensed consolidated financial statements. As of June 30, 2025, SN Holdings had total assets of $78.9 million and total liabilities of $28.4 million, consisting primarily of collateralized mortgage loans and borrowings under the 2025 Needham Credit Facility. The assets of SN Holdings can only be used to settle obligations of SN Holdings and are not available to the Company or its creditors, other than as permitted under the intercompany guaranty and lien release provisions of the 2025 Needham Credit Facility. On June 11, 2025, Sachem Capital Corporation Holdings, LLC ("Holdings"), an indirect, wholly-owned subsidiary of the Company, consummated a private placement of $100.0 million aggregate principal amount of Senior Secured Notes due June 11, 2030 (the "Secured Notes") to various institutional investors under a Note Purchase and Guaranty Agreement (the "Agreement"). See Note 11 - Secured Notes Payable. Holdings was formed for the sole purpose of acting as the issuer of the Secured Notes. Holdings is a variable interest entity (“VIE”) under the guidance of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810-10, Consolidation, as it was established with insufficient equity at risk and does not have independent operations apart from the Company. The Company has determined that it is the primary beneficiary of Holdings because it has both (i) the power to direct the activities that most significantly impact Holdings’ economic performance and (ii) the obligation to absorb losses or the right to receive benefits that could be significant to Holdings, primarily through its role as the guarantor of the Secured Notes and through its ability to direct all operational and financing decisions. Accordingly, Holdings has been consolidated in the Company’s condensed consolidated financial statements. As of June 30, 2025, Holdings had total assets of $217.6 million and total liabilities of $49.2 million, consisting primarily of collateralized mortgage loans and indebtedness evidenced by the Secured Notes. The assets of Holdings can only be used to settle obligations of Holdings and are not available to the Company or its creditors. Reclassifications Certain amounts included in the Company’s June 30, 2024 condensed consolidated financial statements have been reclassified to conform to the June 30, 2025 presentation. These reclassifications had no effect on net income for the three and six months ended June 30, 2024.
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