SCCG Sachem Capital Corp

 

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): December 10, 2024

 

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.)

 

568 East 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
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
8.00% notes due 2027	SCCG	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     ¨

 

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 5.02.

Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

 

Chief Financial Officer Resignation

 

On December 10, 2024, Nicholas M. Marcello, resigned from his position as Chief Financial Officer of Sachem Capital Corp. (the “Company”). Mr. Marcello’s resignation was not based on any disagreements with the Company’s accounting principles, practices or financial statement disclosures. Mr. Marcello agreed to remain available to the Company through December 31, 2024 to provide assistance to ensure a successful and seamless transition.

 

On December 13, 2024, the Company issued a press release announcing Mr. Marcello’s resignation. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K.

 

Interim Chief Financial Officer

 

Effective as of December 13, 2024, Jeffery C. Walraven, age 55, a member of the Board of Directors (the “Board”) and a member of the Audit, Compensation and Nominating and Corporate Governance Committees of the Board, was appointed Interim Chief Financial Officer of the Company, while the Board conducts a formal search process to identify and appoint a permanent Chief Financial Officer. Mr. Walraven’s biographical information is set forth in the Company’s Definitive Proxy Statement on Schedule 14A, filed with the Securities and Exchange Commission on August 28, 2024, and is incorporated by reference herein. Other than the Agreement, described below, there are no arrangements or understandings between Mr. Walraven and any other persons pursuant to which he was appointed as Interim Chief Financial Officer of the Company. There are no family relationships between Mr. Walraven and any of the Company’s other directors or executive officers, and Mr. Walraven is not a party to any transaction, or any proposed transaction, required to be disclosed pursuant to Item 404(a) of Regulation S-K.

 

In connection with Mr. Walraven’s appointment as Interim Chief Financial Officer, the Company and Mr. Walraven entered into a Letter Agreement, dated December 13, 2024 (the “Agreement”) pursuant to which Mr. Walraven will be compensated at the rate of $62,500 per month. Mr. Walraven’s appointment is on a month-to-month basis and can be terminated by either party as of the end of any calendar at any time by giving notice to the other no later than the 15^th day of that month. Mr. Walraven will be classified as an independent contractor rather than as an employee. He will continue to be a member of the Board but will not receive any compensation for his Board service so long as he is serving as Interim Chief Financial Officer. However, he has resigned as a member of the Audit, Compensation and Nominating and Corporate Governance Committees of the Board. The foregoing description of the Agreement is not complete and is qualified in its entirety by reference to the Agreement herewith as Exhibit 10.1 to this Current Report on Form 8-K, and such exhibit is incorporated herein by reference.

 

Item 9.01.

Financial Statements and Exhibits.

 

(d) Exhibits

 

Exhibit No.	Description
10.1	Letter Agreement, dated December 13, 2024, between the Company and Jeffery C. Walraven (a portion of the exhibit has been excluded from the exhibit because it both (i) is not material and (ii) is the type that the company treats as private or confidential).
99.1	Press Release, dated December 13, 2024.
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: December 16, 2024	By:	/s/ John L. Villano
		John L. Villano, CPA
		Chief Executive Officer

  

 

Exhibit Index

Exhibit No.	Description
10.1	Letter Agreement, dated December 13, 2024, between the Company and Jeffery C. Walraven (a portion of the exhibit has been excluded from the exhibit because it both (i) is not material and (ii) is the type that the company treats as private or confidential).
99.1	Press Release, dated December 13, 2024.

 

Exhibit 10.1

 

Sachem Capital Corp.

568 East Main Street

Branford, CT 06405

 

December 13, 2024

 

Jeffery C. Walraven

[*** Home Address]

 

Re:           Interim Chief Financial Officer Contract Terms

 

Dear Jeff:

 

Sachem Capital Corp. (the “Company”) is pleased to offer you a contract to serve as the Company’s Interim Chief Financial Officer (“Interim CFO”), effective as of December 13, 2024 (the “Start Date”).

 

Position

 

As Interim CFO, you will be responsible for performing such duties as are commensurate with such position at similarly situated companies, and such additional duties as may be reasonably assigned to you from time to time by either John L. Villano, the Company’s Chief Executive Officer (“CEO”), or the Company’s Board of Directors (the “Board”). At a minimum, your duties shall include overseeing, managing and supervising all the financial and accounting functions and affairs of the Company, the preparation of the Company’s financial statements, audited and unaudited, and compliance with the Company’s reporting obligations. At any given time, you will work in person at the Company’s Branford, Connecticut office, remotely from your Franklin, Tennessee office or any other location in the United States, as reasonably determined by either the CEO or the Board to properly execute your duties as Interim CFO.

 

During the term of this contract, you shall devote all necessary time and attention required to the business and affairs of the Company and to fulfill your obligations as the Interim CFO of the Company, shall comply with the lawful and reasonable directives given to you by the CEO and/or the Board, and shall discharge your duties in accordance with all laws and regulations governing the Company. As a Company contractor, you will be expected to abide by all Company rules and policies.

 

Term

 

The initial term of this contract shall be for a period of thirty (30) days and shall renew automatically on a month-to-month basis until either party hereto gives notice to the other party no later than the 15^th day of a calendar month that it is electing to terminate this contract as of the last day of that calendar month.

 

Board Service

 

It is understood and acknowledged that you will continue to serve as a member of the Board during the term of your contract with the Company but will not receive any future board compensation in respect of your Board service during such time as the contract is in place. Subsequent to the termination of the Contract, the in-place Board Compensation shall be restored on a go forward basis. In addition, by signing this contract you confirm that you have resigned as a member of the Board’s Audit, Compensation and Nominating committees effective as of the Start Date.

 

Compensation and Expense Reimbursement

 

Your contract will be paid at the fixed rate of $62,500 per month paid monthly in advance during the first business week of the month. For the month of December 2024, the payment will be prorated at 50%, payable during the week following the Start Date. For the month in which the contract is terminated, the monthly fee will be pro-rated based on the number of business days through the date of termination relative to the total number of business days in such month.

 

[***] This information has been excluded from the exhibit because it both (i) in not material and (ii) is the type that the company treats as private of confidential.

 

 

December 13, 2024

Page 2

 

You are authorized to incur reasonable and necessary expenses in carrying out your duties on behalf of the Company and shall be reimbursed for all such expenses (including, without limitation, for required travel) incurred during your contract in accordance with the Company’s expense reimbursement policy.

 

Except as otherwise set forth in the prior two paragraphs and the Indemnification paragraph below, you will not be entitled to any other payments in connection with the services to be rendered to the Company pursuant to this contract. Similarly, you will not be entitled to participate in any employee benefit programs maintained by or sponsored by the Company for its employees.

 

Status

 

For employment and tax purposes, you shall be deemed an independent contractor and not an employee. The Company will not withhold any amounts from payments due to you under this contract and you shall be responsible for paying all federal, state and local income and employment taxes with respect to amounts paid to you under this contract. The Company will report all amounts paid to you under this contract on the appropriate Form 1099.

 

Conflicts of Interest

 

During the term of this contract, you shall use your best efforts to promote and serve the interests of the Company and shall not engage in any activity which would conflict or interfere with the performance of your duties and responsibilities to the Company or any activities that could have material adverse consequences to the business or operations of the Company or be detrimental to the reputation of the Company.

 

Confidential Information and Non-Disclosure

 

You agree and understand that in your position with the Company, you will be exposed to and will receive information relating to the confidential affairs of the Company, including, without limitation, technical information, intellectual property, business and marketing plans, strategies, customer information, software, other information concerning the products, promotions, development, financing, expansion plans, business policies and practices of the Company and other forms of information considered by the Company to be confidential or in the nature of trade secrets (including, without limitation, ideas, research and development, know-how, formulas, technical data, designs, drawings, specifications, customer and supplier lists, pricing and cost information and business and marketing plans and proposals) (collectively, the “Confidential Information”).

 

Confidential Information shall not include information that is generally known to the public or within the relevant trade or industry other than due to your disclosure or disclosure by a third party who is known by you to owe the Company an obligation of confidentiality with respect to such information. You agree that at all times during the term of this contract and thereafter, you shall not disclose such Confidential Information, either directly or indirectly, to any individual, corporation, partnership, limited liability company, association, trust or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof without the prior written consent of the Company and shall not use or attempt to use any such information in any manner other than as may be required in your capacity as the Interim CFO of the Company, unless required by law to disclose such information, in which case you shall provide the Company with written notice of such requirement as far in advance of such anticipated disclosure as possible. This confidentiality covenant has no temporal, geographical or territorial restriction. Upon termination of this contract for any reason, you shall promptly return to the Company all property, computers, tablets, keys, notes, memoranda, writings, lists, files, reports, customer lists, correspondence, tapes, disks, cards (including credit cards), surveys, maps, logs, machines, technical data and any other tangible product or document that has been produced by, received by or otherwise submitted to you during or prior to this contract, and any copies thereof in your (or reasonably capable of being reduced to your) possession.

 

Notwithstanding the foregoing or anything to the contrary herein, you shall be entitled to provide, without breaching your obligations to the Company and without prior notice to the Company, information to governmental or administrative authorities regarding possible violations of law or otherwise testify or participate in any investigation or proceeding by any governmental or administrative authorities, and for purpose of clarity, you are not prohibited from providing information voluntarily to the Securities and Exchange Commission pursuant to Section 21F of the Exchange Act.

 

 

December 13, 2024

Page 3

 

Indemnification

 

You shall be indemnified by the Company as provided in the Company’s Amended and Restated Bylaws, as amended, and Certification of Incorporation, as amended, and pursuant to applicable law. This indemnity shall not apply to your acts of willful misconduct or gross negligence. You shall continue to be covered under any directors’ and officers’ insurance that the Company maintains for its directors and other officers in the same manner and on the same basis as the Company’s directors and other officers.

 

Representations

 

By signing this letter you represent and warrant that you have the capacity and the full authority to accept the position of Interim CFO and perform the duties of the position without conflict with any other obligations and that you are not involved in any situation that might create, or appear to create, a conflict of interest with respect to your loyalty or duties to the Company. You specifically warrant that you are not subject to an employment or contract agreement or restrictive covenant preventing full performance of your contract duties to the Company.

 

Dispute Resolution

 

To ensure the rapid and economical resolution of disputes that may arise in connection with your contract with the Company, and in exchange for the mutual promises contained in this letter, you and the Company agree that any and all disputes, claims, or causes of action, in law or equity, including but not limited to statutory claims, arising from or relating to the enforcement, breach, performance, or interpretation of this agreement, your contract with the Company, or the termination of your contract, shall be resolved pursuant to the Federal Arbitration Act, 9 U.S.C. § 1-16.

 

Entire Agreement

 

This letter forms the complete and exclusive statement of your contract with the Company. It supersedes any other agreements or promises made to you by anyone, whether oral or written. Changes in your contract terms, other than those changes expressly reserved to the Company’s discretion in this letter, require a written modification signed by an authorized officer of the Company. If any provision of this offer letter agreement is determined to be invalid or unenforceable, in whole or in part, this determination shall not affect any other provision of this offer letter agreement and the provision in question shall be modified so as to be rendered enforceable in a manner consistent with the intent of the parties insofar as possible under applicable law. This letter may be delivered and executed via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions Act or other applicable law) or other transmission method and shall be deemed to have been duly and validly delivered and executed and be valid and effective for all purposes.

 

 

December 13, 2024

Page 4

 

We look forward to your favorable reply and to a productive and enjoyable contract relationship.

 

Sincerely,

 

/s/ John L. Villano

John L. Villano, CPA

Chairman & Chief Executive Officer
Agreed and Accepted:
/s/ Jeffery C. Walraven
Jeffery C. Walraven

  

 

Exhibit 99.1

 

 

 

 

Sachem Capital Corp. Announces Chief Financial Officer Transition

 

Appoints Jeffrey C. Walraven Interim Chief Financial Officer

 

BRANFORD, CT, December 13, 2024 (GLOBE NEWSWIRE) – Sachem Capital Corp. (NYSE: SACH) (the “Company”), a mortgage REIT that specializes in originating, underwriting, funding, servicing, and managing a portfolio of loans secured by first mortgages on real property, announced today that it is appointing board of directors’ member and audit committee member Jeffrey C. Walraven, Interim Chief Financial Officer. Nicholas Marcello, the Company’s Chief Financial Officer, informed the Company that he was resigning to pursue a non-REIT industry opportunity. Mr. Marcello will remain available through December 31, 2024 to provide assistance to ensure a successful and seamless transition. The Company confirms that there are no disagreements with Mr. Marcello regarding the accuracy of the Company's financial reporting or accounting practices. The Company will begin its search for a new Chief Financial Officer immediately. Mr. Walraven will remain a member of the Company’s board of directors, but will resign as a member of the Audit, Compensation and the Nominating and Corporate Governance committees effective immediately.

 

“Over the past few years, we have significantly strengthened our finance and accounting teams, and we believe our audit committee co-chair, with extensive financial and mortgage REIT experience, will serve the Company well during the search for a permanent replacement,” stated John L. Villano, President and Chief Executive Officer of Sachem Capital. “Nick has been an important part of the Company’s evolution since he joined Sachem more than four years ago, helping to scale the Company, improve its financial and capital markets strategies while leading the effort to develop a strong financial team. On behalf of the board of directors and personally, I want to wish Nick great success in his new endeavor.”

 

Mr. Marcello said, “I am proud of all that we have accomplished during my time with the Company, and I can’t thank them enough for the opportunity they’ve provided me. Sachem has an incredibly talented team and I’m grateful to have worked alongside each of them to help the Company work towards its strategic and financial goals.”

 

Mr. Walraven has extensive experience with private and public real estate companies working on matters including capital markets, accounting and finance. Mr. Walraven has served as the Chief Operating Officer, a director and co-founder of Freehold Properties, Inc., a REIT that historically financed cannabis-related real estate, since its formation in May 2019, and has since transitioned its portfolio acquisition focus in 2024 to capital finance of premium vineyard real estate.

 

He has also served as an independent director and member of the audit committee of Broad Street Realty, Inc. (OTCQX: BRST), a real estate company that owns, operates, develops, and redevelops primarily essential grocery-anchored shopping centers and mixed-use properties, since 2023. From January 2014 to May 2019, Mr. Walraven served as Executive Vice President and Chief Financial Officer of MedEquities Realty Trust, Inc. (formerly, NYSE: MRT), an internally managed healthcare REIT that was initially funded privately in July 2014, completed an initial public offering on the New York Stock Exchange in September 2016 and was subsequently sold to Omega Healthcare Investors, Inc. in May 2019.

 

From 2006 to 2013, Mr. Walraven held several positions with BDO USA, LLP, most recently as an assurance managing partner of the Memphis office, where his primary responsibilities included providing core and peripheral assurance services and business operational and tax consulting services. Mr. Walraven has over 20 years of public accounting experience, serving many public REIT clients since 1999. Mr. Walraven worked extensively with publicly traded companies on all aspects of compliance with Securities and Exchange Act filings, including quarterly, annual and special reports, and compliance relating to acquisitions, dispositions and securities offerings. Mr. Walraven has had signing engagement partner responsibility for numerous public and private securities offerings by REITs and other clients, including initial public offerings, secondary offerings and private placements.

 

 

 

 

Mr. Walraven holds a Bachelor’s degree in Financial Management from Bob Jones University and a Masters of Professional Accountancy from Clemson University. Additionally, Mr. Walraven previously held his CPA license in multiple states.

 

About Sachem Capital Corp

 

Sachem Capital Corp. is a mortgage REIT that specializes in originating, underwriting, funding, servicing, and managing a portfolio of loans secured by first mortgages on real property. It offers short-term (i.e., three years or less) secured, nonbanking loans to real estate investors to fund their acquisition, renovation, development, rehabilitation, or improvement of properties. The Company’s primary underwriting criteria is a conservative loan to value ratio. The properties securing the 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 and is personally guaranteed by the principal(s) of the borrower. The Company also makes opportunistic real estate purchases apart from its lending activities.

 

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. Such forward-looking statements are subject to several risks, uncertainties and assumptions as described in the Annual Report on Form 10-K for 2023 filed with the U.S. Securities and Exchange Commission (the “SEC”) on April 1, 2024 and the Quarterly Report on Form 10-Q for the quarter ended June 30, 2024 filed with the SEC on August 14, 2024. Because of these risks, uncertainties and assumptions, any forward-looking events and circumstances discussed in this press release may not occur. You should not rely upon forward-looking statements as predictions of future events. Neither the Company nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. The Company disclaims any duty to update any of these forward-looking statements. All forward-looking statements attributable to the Company 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 the Company in the context of these risks and uncertainties.

 

Investor & Media Contact:

 

Email: investors@sachemcapitalcorp.com

 

 

 

v3.24.4

Cover	Dec. 10, 2024
Document Information [Line Items]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Dec. 10, 2024
Entity File Number	001-37997
Entity Registrant Name	SACHEM CAPITAL CORP.
Entity Central Index Key	0001682220
Entity Tax Identification Number	81-3467779
Entity Incorporation, State or Country Code	NY
Entity Address, Address Line One	568 East Main Street
Entity Address, City or Town	Branford
Entity Address, State or Province	CT
Entity Address, Postal Zip Code	06405
City Area Code	203
Local Phone Number	433-4736
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false
Common Stock [Member]
Document Information [Line Items]
Title of 12(b) Security	Common Shares, par value $.001 per share
Trading Symbol	SACH
Security Exchange Name	NYSEAMER
6.875% Notes Due 2024 [Member]
Document Information [Line Items]
Title of 12(b) Security	6.875% Notes due 2024
Trading Symbol	SACC
Security Exchange Name	NYSEAMER
7.75% notes due 2025 [Member]
Document Information [Line Items]
Title of 12(b) Security	7.75% notes due 2025
Trading Symbol	SCCC
Security Exchange Name	NYSEAMER
6.00% notes due 2026 [Member]
Document Information [Line Items]
Title of 12(b) Security	6.00% notes due 2026
Trading Symbol	SCCD
Security Exchange Name	NYSEAMER
6.00% notes due 2027 [Member]
Document Information [Line Items]
Title of 12(b) Security	6.00% notes due 2027
Trading Symbol	SCCE
Security Exchange Name	NYSEAMER
7.125% notes due 2027 [Member]
Document Information [Line Items]
Title of 12(b) Security	7.125% notes due 2027
Trading Symbol	SCCF
Security Exchange Name	NYSEAMER
8.00% notes due 2027 [Member]
Document Information [Line Items]
Title of 12(b) Security	8.00% notes due 2027
Trading Symbol	SCCG
Security Exchange Name	NYSEAMER
Series A Preferred Stock [Member]
Document Information [Line Items]
Title of 12(b) Security	7.75% Series A Cumulative Redeemable Preferred Stock, Liquidation Preference $25.00 per share
Trading Symbol	SACHPRA
Security Exchange Name	NYSEAMER

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