Re:      June 30, 2019 Quarter-End Results and Dividend Distribution

Financial results for the three months ended June 30, 2019 have been calculated, a snap-shot of which follows below, with comparative figures for the previous quarter quoted in brackets:

Net Income (3 months):                       $144,917                                     ($163,249)

Net Annualized Yield:                             5.74%                                         (6.60%)

Share Capital:                                 $10,126,590                               ($10,057,520)

Mortgage Loan Portfolio:                 $8,559,164   (38 loans)              ($9,642,330)         (44 loans)

Cash on-hand:                                   $2,248,841                                 ($1,083,504)

The net annualized yield earned for this past quarter of 5.74% was down from the 6.60% generated for the previous three months ended March 31, 2019 due entirely as a result of the amount of cash we found ourselves holding during the period.

During this past quarter alone we had 9 loans totaling $1,730,727 payout in full and another apply a principal reduction of $78,898, compared to 3 new loans totaling $507,000 and progress advances on 3 existing construction loans totaling $200,000 fund in the same period for a net increase to our cash position of $1,609,625.

Of the $2,248,841 cash on-hand at June 30, 2019, a total of $23,900 was committed on two existing construction loans earning standby fees averaging 4.95% on four existing partially funded construction loans.

Included in these 38 loans is the one classed as being impaired, as most recently reported in our March 31, 2019 quarter-end results and at our Annual Shareholders Meeting held May 29, 2019.

A total of twelve (12) redemption requests (6-full and 5-partial requests) totaling 61,223 Shares ($612,230) were received prior to the June 30, 2019 cutoff date making them eligible for redemption at the December 31, 2019 redemption date (compared to six (6) requests totaling 35,920 Shares ($359,200) at December 31, 2018 which were redeemed early in July of 2018).

To-date another 2 redemption requests totaling 20,628 ($206,280) have been received for the June 30, 2020 redemption date.

Of the $144,917 in net earnings being distributed this past quarter $59,280 (41%) was reinvested by Shareholders to purchase 5,928 additional shares of the Company.

At our recent Annual Shareholders meeting held May 29, 2019 a Shareholder had asked if it was possible for one Shareholder to purchase the shares of another redeeming Shareholder.

Our investigation into this matter has revealed this is permissible and in doing so accomplishes two things to everyone’s benefit:

  • allows all Shareholders, including Directors, the potential to increase their holdings in Sierra, a wish expressed by a number of our shareholders; and
  • maintains the capital base of Sierra for an indefinite period so we may continue to provide all of you, including ourselves as Directors, the best return possible on our collective investments.

The finer details of this option are being worked out and we expect to be in a position soon to advise all of you of the process so please stayed tuned for another notice in due course.

Sincerely,

On behalf of the Board of Directors of

Sierra Mortgage Fund Ltd.

Craig Williams

*Disclosure: This information does not constitute an offering to sell or a solicitation to buy securities referred to herein. The offering is made by Offering Memorandum only and all information herein is qualified in its entirety by the Offering Memorandum