{"url_path":"/sec/sach/10-q/2026/item-1","section_key":"item-1","section_title":"Item 1 FINANCIAL STATEMENTS","topic":"sec","document":{"doc_type":"10-Q","doc_date":"2026-05-20","source_url":"https://www.sec.gov/Archives/edgar/data/1682220/0001682220-26-000038-index.html","accession_number":"0001682220-26-000038","cik":"0001682220","ticker":"SACH","issuer_name":"Sachem Capital Corp.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1682220/0001682220-26-000038-index.html","primary_entity_key":"0001682220","primary_entity_name":"Sachem Capital Corp."},"word_count":10365,"has_tables":true,"body_markdown":"Item 1.    FINANCIAL STATEMENTS\n\nSACHEM CAPITAL CORP.\n\nCONDENSED CONSOLIDATED BALANCE SHEETS\n\n(dollars in thousands, except share data)\n\nMarch 31, 2026December 31, 2025\n\n(unaudited)(audited)\n\nAssets\n\nCash and cash equivalents$11,565 $10,924 \n\nInvestment securities (at fair value)795 936 \n\nLoans held for investment (net of deferred loan fees of $2,225 and $2,230)\n353,610 375,188 \n\nAllowance for credit losses(12,401)(11,510)\n\nLoans held for investment, net 341,209 363,678 \n\nInterest and fees receivable (net of allowance of $922 and $2,598)\n4,808 4,116 \n\nDue from borrowers (net of allowance of $1,791 and $1,084)\n5,573 6,978 \n\nReal estate owned (net of impairment of $798 and $1,110)\n16,022 16,402 \n\nInvestments in limited liability companies35,235 39,132 \n\nInvestments in developmental real estate, net46,013 9,719 \n\nProperty and equipment, net3,088 3,160 \n\nOther assets8,961 5,002 \n\nTotal assets$473,269 $460,047 \n\nLiabilities and Shareholders’ Equity\n\nLiabilities:\n\nNotes payable (net of deferred financing costs of $1,562 and $1,905)\n$171,692 $171,349 \n\nSenior secured notes payable (net of deferred financing costs of $3,298 and $3,427)\n96,702 86,573 \n\nMortgage payable895 917 \n\nLines of credit29,000 19,000 \n\nAccounts payable and accrued liabilities4,011 3,255 \n\nAdvances from borrowers5,360 4,016 \n\nTotal liabilities307,660 285,110 \n\nCommitments and Contingencies - Note 14\n\nShareholders’ equity:\n\nPreferred shares - $0.001 par value; 5,000,000 shares authorized; 3,332,000 shares designated as Series A Preferred Stock; 2,312,758 shares of Series A Preferred Stock issued and outstanding at March 31, 2026 and December 31, 2025, respectively\n2 2 \n\nCommon Shares - $0.001 par value; 200,000,000 shares authorized; 47,955,647 and 47,684,955 issued and outstanding at March 31, 2026 and December 31, 2025, respectively\n48 48 \n\nAdditional paid-in capital258,172 257,905 \n\nCumulative net earnings35,749 41,826 \n\nCumulative dividends paid(128,362)(124,844)\n\nTotal shareholders’ equity165,609 174,937 \n\nTotal liabilities and shareholders’ equity$473,269 $460,047 \n\nThe accompanying notes, together with the notes to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, are an integral part of these financial statements.\n\n1\n\n[Table of Contents](#icea7daa2c6454fb393f7fb4d4b4ba8bc_7)\n\nSACHEM CAPITAL CORP.\n\nCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)\n\n(dollars in thousands, except share and per share data)\n\nThree Months Ended\n\nMarch 31,\n\n20262025\n\nInterest income from loans$8,754 $7,887 \n\nInterest income from limited liability company investments858 1,942 \n\nInterest expense and amortization of deferred financing costs(6,059)(6,094)\n\nNet interest income3,553 3,735 \n\nProvision for credit losses related to loans held for investment(5,372)(1,052)\n\nChange in valuation allowance related to loans held for sale— 4 \n\nNet interest (loss) income after provision for credit losses related to loans held for investment and changes in valuation allowance related to loans held for sale(1,819)2,687 \n\nOther income\n\n  Fee income from loans1,292 1,425 \n\n  Income from limited liability company investments105 110 \n\n  Other investment income3 6 \n\n  Loss on equity securities(140)(125)\n\n  Other income143 72 \n\nTotal other income1,403 1,488 \n\nOperating expenses\n\n  Compensation and employee benefits(2,138)(1,771)\n\n  General and administrative expenses(1,963)(1,355)\n\n  Transaction expenses(1,608)— \n\n  Recovery of impairment loss on real estate97 — \n\n  Gain on sale of investments in developmental real estate, real estate owned, and property and equipment, net196 — \n\n  Other expenses(245)(145)\n\nTotal operating expenses(5,661)(3,271)\n\nNet (loss) income(6,077)904 \n\nPreferred stock dividends(1,120)(1,117)\n\nNet loss attributable to common shareholders$(7,197)$(213)\n\nBasic and diluted loss per common share$(0.15)$0.00\n\nBasic and diluted weighted average number of common shares outstanding47,178,193 46,784,744 \n\nThe accompanying notes, together with the notes to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, are an integral part of these financial statements.\n\n2\n\n[Table of Contents](#icea7daa2c6454fb393f7fb4d4b4ba8bc_7)\n\nSACHEM CAPITAL CORP.\n\nCONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (unaudited)\n\n(dollars in thousands, except share data)\n\nFOR THE  THREE MONTHS ENDED MARCH 31, 2026\n\nPreferred SharesCommon SharesAdditional\nPaid in\nCapitalAccumulated\nOther\nComprehensive\nIncome (Loss)Cumulative\nNet EarningsCumulative\nDividends PaidTotals\n\nSharesAmountSharesAmount\n\nBalance, January 1, 20262,312,758$2 47,684,955$48 $257,905 $— $41,826 $(124,844)$174,937 \n\nStock-based compensation, less shares forfeited—— 270,692— 267 — — — 267 \n\nDividends paid on Series A Preferred Stock—— —— — — — (1,120)(1,120)\n\nDividends paid on Common Shares—— —— — — — (2,398)(2,398)\n\nNet loss—— —— — — (6,077)— (6,077)\n\nBalance, March 31, 20262,312,758$2 47,955,647$48 $258,172 $— $35,749 $(128,362)$165,609 \n\nFOR THE  THREE MONTHS ENDED MARCH 31, 2025\n\nPreferred SharesCommon SharesAdditional\nPaid in\nCapitalAccumulated\nOther\nComprehensive\nIncome (Loss)Cumulative\nNet EarningsCumulative\nDividends PaidTotals\n\nSharesAmountSharesAmount\n\nBalance, January 1, 20252,306,748$2 46,965,306$47 $256,956 $— $35,518 $(110,872)$181,651 \n\nStock-based compensation—— 344,833 — 264 — — — 264 \n\nDividends paid on Series A Preferred Stock—— —— — — — (1,117)(1,117)\n\nDividends paid on Common Shares—— —— — — — (2,363)(2,363)\n\nNet income—— —— — — 904 — 904 \n\nBalance, March 31, 20252,306,748$2 47,310,139$47 $257,220 $— $36,422 $(114,352)$179,339 \n\nThe accompanying notes, together with the notes to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, are an integral part of these financial statements.\n\n3\n\n[Table of Contents](#icea7daa2c6454fb393f7fb4d4b4ba8bc_7)\n\nSACHEM CAPITAL CORP.\n\nCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)\n\n(dollars in thousands)\n\nThree Months Ended\n\nMarch 31,\n\n20262025\n\nCASH FLOWS FROM OPERATING ACTIVITIES\n\nNet (loss) income$(6,077)$904 \n\nAdjustments to reconcile net (loss) income to net cash provided by operating activities:\n\nAmortization of deferred financing costs507 545 \n\nDepreciation and amortization expense89 92 \n\nStock-based compensation267 264 \n\nProvision for credit losses related to loans held for investment5,372 1,052 \n\nChange in valuation allowance related to loans held for sale— (4)\n\nRecovery of impairment loss on real estate owned(97)— \n\nGain on sale of real estate owned and property and equipment, net(196)— \n\nLoss on equity securities140 125 \n\nChange in deferred loan fees(5)275 \n\nChanges in operating assets and liabilities:\n\nInterest and fees receivable, net(668)(361)\n\nOther assets176 133 \n\nDue from borrowers, net(855)(254)\n\nAccounts payable and accrued liabilities 838 (1,612)\n\nAdvances from borrowers1,344 (968)\n\nNET CASH PROVIDED BY OPERATING ACTIVITIES835 191 \n\nCASH FLOWS FROM INVESTING ACTIVITIES\n\nPurchase of interests in limited liability companies(721)(4,223)\n\nProceeds from investments in limited liability companies4,618 4,230 \n\nProceeds from sale of real estate owned673 89 \n\nPurchase of property and equipment— (41)\n\nInvestments in developmental real estate(363)(742)\n\nPrincipal disbursements for loans(38,761)(41,308)\n\nPrincipal collections on loans18,050 47,742 \n\nNET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES(16,504)5,747 \n\nCASH FLOWS FROM FINANCING ACTIVITIES\n\nProceeds from lines of credit20,000 36,100 \n\nRepayments on lines of credit(10,000)(40,000)\n\nProceeds from repurchase agreements— 11,693 \n\nRepayments of repurchase agreements— (3,882)\n\nRepayment of mortgage payable(22)(21)\n\nDividends paid on common shares(2,398)(2,363)\n\nDividends paid on Series A Preferred Stock(1,120)(1,117)\n\nProceeds from issuance of Senior Secured Notes10,000 — \n\nPayments of deferred financing costs(150)— \n\nNET CASH PROVIDED BY FINANCING ACTIVITIES16,310 410 \n\nNET INCREASE IN CASH AND CASH EQUIVALENTS641 6,348 \n\nCASH AND CASH EQUIVALENTS – BEGINNING OF PERIOD10,924 18,066 \n\nCASH AND CASH EQUIVALENTS – END OF PERIOD$11,565 $24,414 \n\nThe accompanying notes, together with the notes to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, are an integral part of these financial statements.\n\n4\n\n[Table of Contents](#icea7daa2c6454fb393f7fb4d4b4ba8bc_7)\n\nSACHEM CAPITAL CORP.\n\nCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued) (unaudited)\n\n(dollars in thousands)\n\nThree months ended\n\nMarch 31,\n\n20262025\n\nSUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION\n\nCash paid during the period for interest$5,633 $5,760 \n\nReal estate acquired in connection with foreclosure of certain mortgages$— $410 \n\nLoans held for investment transferred to other assets$454 $— \n\nDevelopmental real estate acquired in restructuring of loan held for investment$35,948 $1,696 \n\nLoans originated from sale of real estate owned$— $30 \n\nThe accompanying notes, together with the notes to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, are an integral part of these financial statements.\n\n5\n\n[Table of Contents](#icea7daa2c6454fb393f7fb4d4b4ba8bc_7)\n\nSACHEM CAPITAL CORP.\n\nNOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS\n\nFOR THE THREE MONTHS ENDED MARCH 31, 2026\n\n1.    The Company\n\nSachem Capital Corp. (the “Company”), a New York corporation, specializes in originating, underwriting, funding, servicing and managing a portfolio of first mortgage loans. The Company operates its business as one segment. The Company offers short-term (i.e., one to three years), secured, non-bank loans to real estate owners and investors to fund their acquisition, renovation, development, rehabilitation or improvement of properties located primarily in the northeastern and southeastern sections of the United States. The properties securing the Company’s loans are generally classified as residential or commercial real estate and, typically, are held for resale or investment. Each loan is typically secured by a first mortgage lien on real estate and may also be secured with additional collateral, such as other real estate owned by the borrower or its principals, a pledge of the ownership interests in the borrower by the principals thereof, and/or personal guarantees by the principals of the borrower. The Company does not lend to owner occupants of residential real estate. The Company’s primary underwriting criteria is a conservative loan to value ratio. In addition, the Company may make opportunistic real estate purchases apart from its lending activities.\n\n2.    Significant Accounting Policies\n\nThe 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, 2025 included in the Company’s Annual Report on Form 10-K, filed with the U.S. Securities and Exchange Commission on March 13, 2026.\n\nUnaudited Condensed Consolidated Financial Statements\n\nThe 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, 2025 and the notes thereto included in the Company’s Annual Report on Form 10-K. The balance sheet information as of December 31, 2025 is derived from audited financial statements, but does not include all disclosures required by GAAP. Results of operations for the three months ended March 31, 2026, are not necessarily indicative of the operating results to be attained in the entire fiscal year or for any subsequent period.\n\nBasis of Presentation and Principles of Consolidation\n\nThe 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 credit losses and real estate owned.\n\nThe 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.\n\nVariable Interest Entities\n\nThe Company consolidates SN Holdings LLC (“SN Holdings”), a wholly owned subsidiary of the Company established for the sole purpose of acting as the borrower under the revolving credit facility with Needham Bank (as described in Note 9 below), and Sachem Capital Corporation Holdings, LLC (\"Holdings\"), an indirect, wholly-owned subsidiary of the Company, formed for the sole purpose of acting as the issuer of the $100 million Senior Secured Notes (defined below). SN Holdings and Holdings are variable interest entities (“VIEs”) under the guidance of Financial\n\n6\n\n[Table of Contents](#icea7daa2c6454fb393f7fb4d4b4ba8bc_7)\n\nSACHEM CAPITAL CORP.\n\nNOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS\n\nFOR THE THREE MONTHS ENDED MARCH 31, 2026\n\nAccounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810-10, Consolidation, as they were established with insufficient equity at risk and do not have independent operations apart from the Company. The Company has determined that it is the primary beneficiary of SN Holdings and Holdings because it has both (i) the power to direct the activities that most significantly impact their economic performance and (ii) the obligation to absorb losses or the right to receive benefits that could be significant to each entity, primarily through its role as the guarantor and through its ability to direct all operational and financing decisions.\n\nAs of March 31, 2026, SN Holdings had total assets of $93.0 million and total liabilities of $32.2 million, consisting primarily of collateralized mortgage loans and borrowings under the Needham Credit Facility (defined below). 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 Needham Credit Facility.\n\nAs of March 31, 2026, Holdings had total assets of $195.7 million and total liabilities of $100.5 million, consisting primarily of collateralized mortgage loans and indebtedness evidenced by the Senior 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.\n\n3.    Fair Value Measurement\n\nThe following table presents assets and liabilities measured at fair value on a recurring basis:\n\nFair Value Measurement\n\n(in thousands)March 31, 2026December 31, 2025\n\nLevel 1\n\nInvestment securities$795 $936 \n\nCertain assets are measured at fair value on a nonrecurring basis; that is, not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment.) The following table illustrates assets and liabilities measured at fair value on a nonrecurring basis:\n\nFair Value Measurement\n\n(in thousands)March 31, 2026December 31, 2025\n\nLevel 3\n\nIndividually evaluated loans, net of allowance for credit losses$81,911 $114,028 \n\nReal estate owned, net16,022 16,402 \n\n7\n\n[Table of Contents](#icea7daa2c6454fb393f7fb4d4b4ba8bc_7)\n\nSACHEM CAPITAL CORP.\n\nNOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS\n\nFOR THE THREE MONTHS ENDED MARCH 31, 2026\n\nThe following table presents the carrying amounts and fair values of financial instruments at March 31, 2026 and December 31, 2025:\n\nCarrying AmountFair Value Measurement\n\n(in thousands)March 31, 2026December 31, 2025March 31, 2026December 31, 2025\n\nLevel 1\n\nCash and cash equivalents$11,565 $10,924 $11,565 $10,924 \n\nNotes payable (listed) - fixed rate debt171,692 171,349 166,002 163,854 \n\nLevel 2\n\nLines of credit29,000 19,000 29,000 19,000 \n\nLevel 3\n\nLoans held for investment, net341,209 363,678 341,209 363,678 \n\nInterest and fees receivable and due from borrowers10,381 11,094 10,381 10,963 \n\nInvestments in limited liability companies35,235 39,132 35,235 39,132 \n\nAdvances from borrowers5,360 4,016 5,360 4,016 \n\nSenior secured notes payable96,702 86,573 99,233 89,277 \n\nMortgage payable895 917 895 917 \n\n4.    Loans and Allowance for Credit Losses\n\nLoans include loans held for investment that are accounted for at amortized cost net of allowance for credit losses. The classification for a loan is based on management’s strategy for the loan.\n\nLoans held for investment\n\nAs of March 31, 2026 and December 31, 2025, the Company had 108 and 115 loans held for investment, respectively.\n\nAs of March 31, 2026 and December 31, 2025, the Company had direct reserves on outstanding principal for loans held for investment of $7.0 million and $6.3 million, respectively.\n\nLoan portfolio\n\nAs of March 31, 2026 and December 31, 2025, loans held for investment on non-accrual status had an outstanding principal balance of $75.4 million and $117.6 million, respectively. The non-accrual loans are inclusive of loans pending foreclosure. The following table summarizes the Company’s loan portfolio by past due status:\n\nLoans held for investment\n\n(in thousands)Current30-59 days past due60-89 days past dueGreater than 90 daysTotal\n\nAs of March 31, 2026$259,192 $37,956 $1,360 $57,327 $355,835 \n\nAs of December 31, 2025$239,615 $20,218 $— $117,585 $377,418 \n\nThere are no greater than 90 days past due loans that are on accrual status as of March 31, 2026 and December 31, 2025. As of March 31, 2026 and December 31, 2025, there were loans greater than 90 days past due with gross principal balances of $37.3 million and $96.8 million, respectively, for which no specific allowance for credit losses was recorded. As of March 31, 2026 and December 31, 2025, there were loans greater than 90 days past due with gross principal balances of $20.0 million and $20.8 million, respectively, for which specific allowances were recorded.\n\n8\n\n[Table of Contents](#icea7daa2c6454fb393f7fb4d4b4ba8bc_7)\n\nSACHEM CAPITAL CORP.\n\nNOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS\n\nFOR THE THREE MONTHS ENDED MARCH 31, 2026\n\nThe aggregate gross outstanding principal of loans in pending/pre-foreclosure as of March 31, 2026, and December 31, 2025, was $39.6 million and $37.5 million, respectively. As of March 31, 2026, and December 31, 2025, the Company had directly reserved against these loans in foreclosure in the amounts of $6.7 million and $4.2 million, respectively. Further, as of March 31, 2026 and December 31, 2025, the Company had direct reserves against non-performing loans held for investment that experienced declines in fair value of $0.3 million and $2.1 million, respectively.\n\nAs of March 31, 2026, the Company’s mortgage loan portfolio includes loans with stated interest rates ranging from 7.0% to 15.0%. The default interest rate is generally 18.0%, but could be more or less depending on state usury laws and other considerations deemed relevant by the Company.\n\nAs of March 31, 2026, no borrower exceeded 10% of the Company's outstanding mortgage loan portfolio. At December 31, 2025, the Company had one borrower representing 13.3% of the outstanding mortgage loan portfolio. These loans were included in our nonperforming loan portfolio at December 31, 2025.\n\nThe following table presents the Company’s loans held for investment by geographic location as of March 31, 2026 and December 31, 2025:\n\nMarch 31, 2026December 31, 2025\n\n(in thousands)Carrying Value% of PortfolioCarrying Value% of Portfolio\n\nNew England$154,922 43.5 %$163,049 43.2 %\n\nMid-Atlantic53,138 14.9 %40,483 10.7 %\n\nSouth144,330 40.6 %170,441 45.2 %\n\nWest3,445 1.0 %3,445 0.9 %\n\nTotal$355,835 100.0 %$377,418 100.0 %\n\nThe following tables present the carrying value of the Company’s loans held for investment based on credit quality indicators in assessing estimated credit losses and year of origination at the dates indicated:\n\nMarch 31, 2026\nYear Originated (1)\n\nFICO Score (2)(in thousands)\nCarrying\nValue20262025202420232022Prior\n\nUnder 500$142 $— $— $142 $— $— $— \n\n501-55035 — — — — — 35 \n\n551-600— — — — — — — \n\n601-65022,672 4,850 3,203 4,338 774 3,133 6,374 \n\n651-70078,481 — 19,392 3,561 10,799 9,042 35,687 \n\n701-750105,347 15,700 24,701 7,388 24,435 5,298 27,825 \n\n751-800143,947 2,158 42,580 18,648 46,900 13,724 19,937 \n\n801-8505,211 — — — — 5,211 — \n\nTotal$355,835 $22,708 $89,876 $34,077 $82,908 $36,408 $89,858 \n\n9\n\n[Table of Contents](#icea7daa2c6454fb393f7fb4d4b4ba8bc_7)\n\nSACHEM CAPITAL CORP.\n\nNOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS\n\nFOR THE THREE MONTHS ENDED MARCH 31, 2026\n\nDecember 31, 2025\nYear Originated (1)\n\nFICO Score (2)(in thousands)\nCarrying\nValue20252024202320222021Prior\n\nLoans held for investment:\n\nUnder 500$142 $— $142 $— $— $— $— \n\n501-55035 — — — — — 35 \n\n551-600— — — — — — — \n\n601-65017,665 2,914 4,250 1,025 3,102 — 6,374 \n\n651-70081,859 18,654 4,017 10,594 9,010 38,375 1,209 \n\n701-750125,603 24,082 7,226 23,721 5,299 64,348 927 \n\n751-800137,725 42,340 15,795 46,339 13,449 19,802 — \n\n801-85014,389 — — 1,700 12,689 — — \n\nTotal$377,418 $87,990 $31,430 $83,379 $43,549 $122,525 $8,545 \n\n_______________________________________________________________\n\n(1)Represents the year of origination or amendment where the loan was subject to a full re-underwriting.\n\n(2)The FICO Scores are calculated at the inception of the loan and are updated if the loan is modified or on an as needed basis.\n\nThe following table presents the amortized cost of collateral dependent loans:\n\nMarch 31, 2026December 31, 2025\n\n(in thousands)\n\nCollateral TypeCollateral Dependent LoansCollateral Dependent Loans\n\nResidential$41,291 $65,077 \n\nCommercial29,250 27,700 \n\nPre-Development Land12,832 12,832 \n\nMixed Use5,527 14,666 \n\nTotal$88,900 $120,275 \n\n10\n\n[Table of Contents](#icea7daa2c6454fb393f7fb4d4b4ba8bc_7)\n\nSACHEM CAPITAL CORP.\n\nNOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS\n\nFOR THE THREE MONTHS ENDED MARCH 31, 2026\n\nLoan modifications made to borrowers experiencing financial difficulty\n\nThe following tables present loan modifications during the periods indicated made to borrowers experiencing financial difficulty:\n\n(in thousands)Rolling twelve months ended March 31, 2026\n\nCarrying Value% of Total\nCarrying Value of\nLoans held for investment, netFinancial Effect\n\nPrincipal modification, with no term extension$5,776 1.7 %Unpaid interest/taxes/charges added to principal balance\n\nTerm extension$96,748 28.4 %\nA weighted average of 10.4 months were added to the life of the loans\n\n(in thousands)Rolling twelve months ended March 31, 2025\n\nCarrying Value% of Total\nCarrying Value of\nLoans held for investment, netFinancial Effect\n\nTerm extension$23,922 6.2 %\nA weighted average of 6.7 months were added to the life of the loans\n\nAs of March 31, 2026, the Company had commitments to lend additional amounts totaling approximately $4.5 million to borrowers experiencing financial difficulty. During the twelve months ended March 31, 2026, the Company modified the interest rate on twelve loans with an outstanding principal balance of $42.3 million. The change in the rate was due to taking the loan off default rate. As of March 31, 2025, the Company had committed to lend additional amounts totaling approximately $0.8 million to borrowers experiencing financial difficulty. Of the loans that were modified that experienced financial difficulties during the period ended March 31, 2025, one loan with an outstanding principal balance of $0.6 million experienced a rate decrease due to the modification. The change in the rate was taking the loan off default rate.\n\nThe following table presents the performance of loans that have been modified during the twelve-month period ended March 31, 2026 to borrowers experiencing financial difficulty. Of the loans that were modified during the twelve-month period ended March 31, 2026 to borrowers experiencing financial difficulty, four loans defaulted during the period.\n\n(in thousands)Current90-119 days past due120+ days past dueTotal\n\nPrincipal modification, with no term extension5,776 — — 5,776 \n\nTerm extension96,748 — — 96,748 \n\nThe following table presents the performance of loans that have been modified during the twelve-month period ended March 31, 2025 to borrowers experiencing financial difficulty. Of the loans that were modified during the twelve-month period ended March 31, 2025 to borrowers experiencing financial difficulty, no loans defaulted during the period.\n\n(in thousands)Current90-119 days past due120+ days past dueTotal\n\nTerm extension$23,922 $— $— $— \n\n11\n\n[Table of Contents](#icea7daa2c6454fb393f7fb4d4b4ba8bc_7)\n\nSACHEM CAPITAL CORP.\n\nNOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS\n\nFOR THE THREE MONTHS ENDED MARCH 31, 2026\n\nAllowance for credit losses\n\nThe following table presents the financial statement line items that are impacted by the allowance for credit losses for the three months ended March 31, 2026:\n\nBalance as of December 31, 2025Provision for (recovery of) credit\nlosses related to loansCharge-offsBalance as of\nMarch 31, 2026\n\n(in thousands)\n\nLoans held for investment$11,510 $4,771 $(3,880)$12,401 \n\nInterest and fees receivable2,598 (24)(1,652)922 \n\nDue from borrower1,084 707 — 1,791 \n\nUnfunded commitments670 (82)— 588 \n\nTotal allowance for credit losses$15,862 $5,372 $(5,532)$15,702 \n\nThe following table presents the financial statement line items that are impacted by the allowance for credit losses for the three months ended March 31, 2025:\n\nBalance as of December 31, 2024Provision for (recovery of) credit\nlosses related to loansCharge-offsBalance as of\nMarch 31, 2025\n\n(in thousands)\n\nLoans held for investment$18,470 $273 $(621)$18,122 \n\nInterest and fees receivable3,133 (152)— 2,981 \n\nDue from borrower1,135 991 (170)1,956 \n\nUnfunded commitments924 (60)— 864 \n\nTotal allowance for credit losses$23,662 $1,052 $(791)$23,923 \n\nThe following table presents activity in the allowance for credit losses by geographic location with respect to loans held for investment for the three months ended March 31, 2026:\n\nAllowance for credit losses as of December 31, 2025Provision for\n(recovery of) credit losses\nrelated to loansReclassification of loans held for sale to loans held for investmentCharge-offsAllowance for credit losses\nas of March 31,\n2026\n\n(in thousands)\n\nNew England$6,429 $170 $— $— $6,599 \n\nMid-Atlantic1,770 641 — — 2,411 \n\nSouth1,681 4,002 — (3,880)1,803 \n\nWest1,630 (42)— — 1,588 \n\nTotal$11,510 $4,771 $— $(3,880)$12,401 \n\n12\n\n[Table of Contents](#icea7daa2c6454fb393f7fb4d4b4ba8bc_7)\n\nSACHEM CAPITAL CORP.\n\nNOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS\n\nFOR THE THREE MONTHS ENDED MARCH 31, 2026\n\nThe following table presents activity in the allowance for credit losses by geographic location with respect to loans held for investment for the three months ended March 31, 2025:\n\nAllowance for credit losses as of\nDecember 31, 2024Provision for\n(recovery of) credit losses\nrelated to loansCharge-offsAllowance for credit losses\nas of March 31,\n2025\n\n(in thousands)\n\nNew England$12,844 $34 $— $12,878 \n\nMid-Atlantic1,857 7 — 1,864 \n\nSouth1,802 279 (621)1,460 \n\nWest1,967 (47)— 1,920 \n\nTotal$18,470 $273 $(621)$18,122 \n\nThe following table presents charge-offs on loan principal related to loans held for investment by fiscal year of origination for the three months ended March 31, 2026:\n\n20262025202420232022PriorTotal\n\n(in thousands)\n\nCurrent period charge-offs$— $— $— $— $— $3,880 $3,880 \n\nTotal$— $— $— $— $— $3,880 $3,880 \n\nThe following table presents charge-offs on loan principal related to loans held for investment by fiscal year of origination for the three months ended March 31, 2025\n\n20252024202320222021PriorTotal\n\n(in thousands)\n\nCurrent period charge-offs$— $134 $— $487 $— $— $621 \n\nTotal$— $134 $— $487 $— $— $621 \n\n5. Investment in Developmental Real Estate, Net\n\nAs of March 31, 2026 and December 31, 2025, investment in developmental real estate, net consisted of the following:\n\nAs of March 31, 2026As of December 31, 2025\n\n(in thousands)CostAccumulated DepreciationNet investmentCostAccumulated DepreciationNet investment\n\nLand and land improvements$8,552 $(23)$8,529 $8,392 $(15)$8,377 \n\nBuilding20,513 (13)20,500 1,346 (4)1,342 \n\nConstruction in progress16,984 — 16,984 — — — \n\nTotal$46,049 $(36)$46,013 $9,738 $(19)$9,719 \n\nDuring the three months ended March 31, 2026, the Company restructured the loan associated with its legacy Naples, Florida mortgage receivable. Prior to the restructuring, the Company had designated the loan as a mortgage loan held for investment and was carried at $39.8 million. Through the restructuring, the Company acquired 100% of the membership interests of the entity holding the condominium assets associated with this loan. The assets acquired include three completed condominium units and the construction in progress of four additional condominium units. The transaction\n\n13\n\n[Table of Contents](#icea7daa2c6454fb393f7fb4d4b4ba8bc_7)\n\nSACHEM CAPITAL CORP.\n\nNOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS\n\nFOR THE THREE MONTHS ENDED MARCH 31, 2026\n\nwas accounted for in accordance with ASC 310 (Receivables). Based on a discounted cash flow model, the fair value of the assets acquired was estimated to be $35.9 million, resulting in a credit loss of $3.9 million upon restructuring of the loan. The discounted cash flow model utilized a 10.2% discount rate which is an unobservable input.\n\nBuilding and land improvements that are placed in service are being depreciated using the straight-line method over their estimated useful lives of 40 years and 15 years, respectively. For the three months ended March 31, 2026 and 2025, depreciation and amortization related to the asset was de minimis and is presented in other expenses on the Company’s unaudited Condensed Consolidated Statements of Operations.\n\n6.    Real Estate Owned (“REO”)\n\nProperties acquired through foreclosure are included on the Company's unaudited Condensed Consolidated Balance Sheets as real estate owned. As of March 31, 2026 and December 31, 2025, real estate owned, net totaled $16.0 million and $16.4 million, respectively. During the three months ended March 31, 2026, the Company recorded a recovery of impairment loss on real estate owned of $0.1 million compared to an impairment loss of $1.1 million for the year ended December 31, 2025, which is considered a Level 3 non-recurring fair market value adjustment.\n\nThe following table presents the Company’s REO activity during the three months ended March 31, 2026 and March 31, 2025:\n\nMarch 31, 2026March 31, 2025\n\n(in thousands)\n\nReal estate owned at beginning of period$16,402 $18,574 \n\nPrincipal basis transferred to real estate owned— 410 \n\nProceeds from sale of real estate owned(673)(119)\n\nRecovery of impairment loss on real estate owned97 — \n\nGain on sale of real estate owned196 — \n\nReal estate owned at end of period$16,022 $18,865 \n\n7.   Property and Equipment, Net\n\nThe following tables represent the Company’s property and equipment, net as of March 31, 2026 and December 31, 2025:\n\nMarch 31, 2026December 31, 2025\n\n(in thousands)CostAccumulated DepreciationNet investmentCostAccumulated DepreciationNet investment\n\nBuilding$2,594 $(194)$2,400 $2,594 $(177)$2,417 \n\nLand255 — 255 255 — 255 \n\nFurniture and fixtures308 (202)106 308 (185)123 \n\nComputer hardware and software320 (285)35 320 (276)44 \n\nVehicles502 (210)292 502 (181)321 \n\nTotal property and equipment, net$3,979 $(891)$3,088 $3,979 $(819)$3,160 \n\n14\n\n[Table of Contents](#icea7daa2c6454fb393f7fb4d4b4ba8bc_7)\n\nSACHEM CAPITAL CORP.\n\nNOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS\n\nFOR THE THREE MONTHS ENDED MARCH 31, 2026\n\n8.   Other Assets\n\nAs of March 31, 2026 and December 31, 2025, other assets consisted of the following:\n\nMarch 31, 2026December 31, 2025\n\n(in thousands)\n\nPrepaid expenses$559 $612 \n\nOther receivables1,143 1,251 \n\nOther assets404 299 \n\nNotes receivable6,334 2,319 \n\nGoodwill391 391 \n\nIntangible asset – trade name130 130 \n\nTotal$8,961 $5,002 \n\n9.    Line of Credit and Mortgage Payable\n\nLine of Credit – Needham Bank\n\nThe Company has a Credit and Security Agreement (the “Credit Agreement”), with Needham Bank, a Massachusetts co-operative bank, as the administrative agent (“Needham”) for the lenders party thereto (the “Lenders”) with respect to a committed $50.0 million revolving credit facility (the “Needham Credit Facility”), subject to borrowing based limitations and facility covenant compliance. Under the Credit Agreement, the borrower is SN Holdings and the Company is the guarantor of all SN Holdings’ obligations under the Credit Agreement. SN Holdings, in its capacity as borrower, has granted Needham a lien on all its assets. SN Holdings is required to maintain assets equal to 2.0 times of the outstanding balance on the new credit facility. In addition, SN Holdings is required to collaterally assign to Needham mortgage loans having an outstanding principal balance in an amount no less than the greater of (i) $30.0 million and (ii) the aggregate principal outstanding principal balance on the facility. The Company, in its capacity as guarantor, has agreed to grant Needham a blanket lien on all its assets. However, Needham is required to release its lien at the Company’s request to facilitate other financings in accordance with the terms of the Credit Agreement.\n\nLoans under the Needham Credit Facility accrue interest at the greater of (i) the annual rate of interest equal to the “prime rate,” as published in the “Money Rates” column of The Wall Street Journal minus one-quarter of one percent (0.25%), and (ii) four and one-half percent (4.50%). All amounts borrowed under the Needham Credit Facility are secured by a first priority lien on virtually all of the Company’s assets. Assets excluded from the lien include real estate owned by the Company (other than real estate acquired pursuant to foreclosure). Prior to Amendment No.2 (defined below), the Needham Credit Facility was due to expire on March 2, 2026 and the Company had a right to extend the term for one year upon the consent of Needham and the Lenders, which consent could not be unreasonably withheld, and so long as it is not in default and satisfies certain other conditions. On January 21, 2026, the Company entered into Amendment No. 2 (“Amendment No. 2”) to the Credit Agreement. Amendment No. 2 extends the maturity date of the Needham Credit Facility from March 2, 2026 to March 2, 2028 and provides for an additional conditional one year extension to March 2, 2029. All other terms of the Credit Agreement remain unchanged.\n\nAll outstanding revolving loans and accrued but unpaid interest is due and payable on the expiration date. The Company may terminate the Needham Credit Facility at any time without premium or penalty by delivering written notice to Needham at least ten (10) days prior to the proposed date of termination. The Needham Credit Facility is subject to other terms and conditions, including representations and warranties, covenants and agreements typically found in these types of financing arrangements, including a covenant that requires the Company to maintain: (A) a ratio of Adjusted EBITDA (as defined in the Credit Agreement) to Debt Service (as defined in the Credit Agreement) of not less than 1.40 to 1.0, tested on a trailing-twelve-month basis at the end of each fiscal quarter; (B) a sum of cash, cash equivalents and availability under the facility equal to or greater than $10.0 million; and (C) an asset coverage ratio of at least 150%.\n\nAs of March 31, 2026 and December 31, 2025, the total outstanding principal balance on the Needham Credit Facility was $29.0 million and $19.0 million, respectively, with an interest rate of 6.50% and 6.50%, respectively.\n\n15\n\n[Table of Contents](#icea7daa2c6454fb393f7fb4d4b4ba8bc_7)\n\nSACHEM CAPITAL CORP.\n\nNOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS\n\nFOR THE THREE MONTHS ENDED MARCH 31, 2026\n\nAs of March 31, 2026 and December 31, 2025, the Company was in compliance with all debt covenants.\n\nMortgage Payable\n\nOn February 28, 2023, the Company entered into an adjustable-rate mortgage loan with New Haven Bank in the original principal amount of $1.7 million (the \"NHB Mortgage\"). The NHB Mortgage accrues interest at an initial rate of 5.75% per annum for the first 60 months. The interest rate will be adjusted on each of March 1, 2028, and March 1, 2033, to the then published 5-year Federal Home Loan Bank of Boston Classic Advance Rate, plus 1.75%. Beginning on April 1, 2023, and through March 1, 2038, principal and interest will be due and payable on a monthly basis. All payments under the loan are amortized based on a 20-year amortization schedule. Over the next five years, the Company is scheduled to make principal payments ranging from $47,000 to $59,000 annually, with the remaining balance due thereafter. The unpaid principal amount of the loan and all accrued and unpaid interest are due and payable in full on March 1, 2038. The loan is a non-recourse obligation, secured by a first mortgage lien on the property located at 568 East Main Street, Branford, Connecticut.\n\nAs of March 31, 2026 and December 31, 2025, the total outstanding principal balance on the NHB Mortgage was $0.9 million and $0.9 million, respectively.\n\n10.    Unsecured Notes Payable\n\nAt March 31, 2026, the Company had an aggregate of $171.7 million of unsecured, unsubordinated notes payable outstanding, net of $1.6 million of deferred financing costs (collectively, the “Notes”). At March 31, 2026, the Company had four series of Notes outstanding:\n\n(i)Notes having an aggregate principal amount of $51.8 million bearing interest at 6.0% per annum and maturing December 30, 2026 (the “December 2026 Notes”);\n\n(ii)Notes having an aggregate principal amount of $51.7 million bearing interest at 6.0% per annum and maturing March 30, 2027 (the “March 2027 Notes”);\n\n(iii)Notes having an aggregate principal amount of $29.7 million bearing interest at 7.125% per annum and maturing June 30, 2027 (the “June 2027 Notes”); and\n\n(iv)Notes having an aggregate principal amount of $40.1 million bearing interest at 8.00% per annum and maturing September 30, 2027 (the “September 2027 Notes”).\n\nThe Notes were sold in underwritten public offerings, were issued in denomination of $25.00 each and are listed on the NYSE American and trade under the symbols “SCCD,” “SCCE,” “SCCF” and “SCCG,” respectively. All the Notes were issued at par. Interest on the Notes is payable quarterly on each March 30, June 30, September 30 and December 30 that they are outstanding. So long as the Notes are outstanding, the Company is prohibited from making distributions in excess of 90% of its taxable income, incurring any additional 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 incurrence of such indebtedness or the application of the net proceeds, as the case may be. The Company was in compliance with all debt covenants as of March 31, 2026. The Company may redeem the Notes, in whole or in part, without premium or penalty, at any time after their second anniversary of issuance upon at least 30 days prior written notice to the holders of the Notes. The redemption price will be equal to the outstanding principal amount of the Notes redeemed plus the accrued but unpaid interest thereon up to, but not including the date of redemption. Currently, all the Notes are callable at any time.\n\n16\n\n[Table of Contents](#icea7daa2c6454fb393f7fb4d4b4ba8bc_7)\n\nSACHEM CAPITAL CORP.\n\nNOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS\n\nFOR THE THREE MONTHS ENDED MARCH 31, 2026\n\nThe following table presents the future principal payments on the Notes payable as of March 31, 2026:\n\nYears ending December 31,Amount\n\n(in thousands)\n\n2026 (nine months remaining)$51,750 \n\n2027121,504 \n\nTotal principal payments173,254 \n\nDeferred financing costs(1,562)\n\nTotal notes payable, net of deferred financing costs$171,692 \n\nThe following table presents the estimated amortization of the deferred financing costs as of March 31, 2026:\n\nYears ending December 31,Amount\n\n(in thousands)\n\n2026 (nine months remaining)$1,067 \n\n2027495 \n\nTotal deferred costs$1,562 \n\n11.    Senior Secured Notes Payable\n\nOn June 11, 2025, 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 \"Senior Secured Notes\") to various institutional investors under a Note Purchase and Guaranty Agreement (the \"Senior Secured Note Purchase Agreement\"). An initial draw of $50.0 million was made at closing, an additional draw of $40.0 million was made in September 2025, and the remaining $10.0 million was drawn in March 2026. The Senior Secured Notes bear interest at a fixed rate of 9.875% per annum, with interest only payable quarterly on the 1st day of March, June, September and December, and include a commitment fee of 1.0% on the undrawn portion of the Senior Secured Notes. The Company paid an approximately $1.5 million original issue discount on the $100.0 million aggregate principal amount which is part of the $3.6 million of deferred financing costs recorded related to the Senior Secured Notes. The deferred financing costs will be amortized over the five year term of the Senior Secured Notes using the effective interest method and amortization by year is as follows: 2026 - $481,000, 2027 - $718,000, 2028 - $804,000, 2029 - $894,000, and 2030 - $401,000.\n\nThe Senior Secured Notes allow optional prepayment subject to a declining make-whole amount during the first three years, a declining prepayment premium in the fourth year, and then no make-whole payment or prepayment premium after the fourth year through maturity. Upon a change of control, holders of the Senior Secured Notes have the right to prepayment, if accepted, at 101% of the outstanding principal. The Senior Secured Note Purchase Agreement contains affirmative and negative covenants customary for similar secured debt instruments, including minimum asset coverage ratio; leverage and liquidity requirements; restrictions on additional indebtedness, asset sales, and distributions under certain conditions; and maintenance of REIT status by the Company. The Company was in compliance with all debt covenants as of March 31, 2026 and December 31, 2025.\n\nThe Senior Secured Note Purchase Agreement includes customary events for similar secured debt instruments. Payment of the amounts due on the Senior Secured Notes is fully and unconditionally guaranteed by the Company and Sachem Capital Corporation Intermediate, LLC, a wholly-owned subsidiary of the Company.\n\n17\n\n[Table of Contents](#icea7daa2c6454fb393f7fb4d4b4ba8bc_7)\n\nSACHEM CAPITAL CORP.\n\nNOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS\n\nFOR THE THREE MONTHS ENDED MARCH 31, 2026\n\n12.   Accounts Payable and Accrued Liabilities\n\nThe table below presents the Company's accounts payable and accrued liabilities as of March 31, 2026 and December 31, 2025:\n\nMarch 31, 2026December 31, 2025\n\n(in thousands)\n\nAccounts payable and accrued expenses$2,470 $1,551 \n\nAllowance for credit losses on unfunded commitments587 669 \n\nAccrued interest954 1,035 \n\nTotal$4,011 $3,255 \n\n13.   Fee Income from Loans\n\nThe table below presents the Company's fee income from loans for the three months ended March 31, 2026 and 2025:\n\nThree Months Ended\n\nMarch 31,\n\n20262025\n\n(in thousands)\n\nOrigination and modification fees $658 $780 \n\nExtension fees259 278 \n\nLate and other fees 164 79 \n\nProcessing fees22 21 \n\nConstruction servicing fees74 137 \n\nLegal fees39 63 \n\nOther fees76 67 \n\nTotal$1,292 $1,425 \n\n14.   Commitments and Contingencies\n\nUnfunded Commitments\n\nAt March 31, 2026, the Company had future funding obligations on loans held for investment totaling $33.1 million and obligations relating to investments in limited liability companies totaling $0.7 million, which can be drawn by the borrowers when the conditions relating thereto have been satisfied. The unfunded commitments will be funded from loan payoffs and additional drawdowns under existing and future credit facilities and proceeds from sale of debt and equity securities. The Company’s unfunded commitments are subject to allowances under the scope of current expected credit losses (\"CECL\"). See Note 4 – Loans and Allowance for Credit Losses — for further details.\n\nLitigation\n\nThe Company is subject to various pending and threatened legal proceedings or other matters arising out of the normal conduct of business in which claims for monetary damages are asserted. As of the date of this report, management, after consultation with legal counsel, does not anticipate that the aggregate ultimate liability arising out of such pending or threatened matters will be material to the Company’s consolidated financial position. On at least a quarterly basis, the Company assesses its liabilities and contingencies in connection with such matters. For those matters where it is probable that the Company will incur losses and the amounts of the losses can be reasonably estimated, the Company records an expense and corresponding liability in its consolidated financial statements. To the extent such matters could result in exposure in excess of that liability, the amount of such excess is not currently estimable. The range of losses for matters where an exposure is not currently estimable or considered probable is not believed to be material in the aggregate. This is based on information currently available to the Company and involves elements of judgment and significant uncertainties.\n\n18\n\n[Table of Contents](#icea7daa2c6454fb393f7fb4d4b4ba8bc_7)\n\nSACHEM CAPITAL CORP.\n\nNOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS\n\nFOR THE THREE MONTHS ENDED MARCH 31, 2026\n\nWhile the Company does not believe that the outcome of pending or threatened litigation or other matters will be material to the Company’s consolidated financial position, it cannot rule out the possibility that such outcomes will be material to the consolidated results of operations for a particular reporting period in the future. In addition, regardless of the ultimate outcome of any such legal proceeding, inquiry or investigation, any such matter could cause the Company to incur additional expenses, which could be significant, and possibly material, to the Company’s results of operations in any future period.\n\nOn April 6, 2026, Oppenheimer & Co. Inc. filed a complaint against the Company and Sachem Capital Corporation Holdings, LLC in the United States District Court for the Southern District of New York, asserting claims for breach of contract and quantum meruit relating to a May 2024 engagement letter. The complaint seeks damages of not less than approximately $1.8 million, plus interest, costs, disbursements and attorneys’ fees. The matter is in its preliminary stages. The Company intends to vigorously defend against the claims.\n\nOther\n\nIn the normal course of its business, the Company is named as a party-defendant in connection with tax foreclosure proceedings against properties on which it holds a first mortgage lien. The Company actively monitors these actions and, in all cases, believes there remains sufficient value in the subject property to assure that no loan impairment exists. At March 31, 2026 and December 31, 2025, there was one such property with an unpaid principal balance of $0.3 million.\n\n15.   Related Party Transactions\n\nIn the ordinary course of business, the Company may originate, fund, manage and service loans to shareholders. The underwriting process on these loans adheres to prevailing Company policy. The terms of such loans, including the interest rate, income, origination fees, and other closing costs are the same as those applicable to loans made to unrelated third parties in the portfolio. As of March 31, 2026, and December 31, 2025, loans to known shareholders totaled $18.0 million and $17.2 million, respectively, which is included in loans held for investment, net in the Company’s accompanying Condensed Consolidated Balance Sheets. Of these amounts, $18.0 million and $17.2 million, respectively, were loaned to a joint-venture entity fifty percent owned in aggregate by the Company’s Senior Vice President of Asset Management and Vice President of Asset Management. All such loans are performing. Interest income earned on all related party loans for the three months ended March 31, 2026 and 2025 totaled $0.3 million and $0.3 million, respectively.\n\nIn December 2021, the Company hired the daughter of its chief executive officer to perform certain internal audit and compliance services. For the three months ended March 31, 2026 and 2025, she received compensation of $0.1 million and $0.1 million, respectively.\n\n16.   Stock-Based Compensation and Employee Benefits\n\nStock-Based Compensation\n\nOn July 9, 2025, the Company adopted the 2025 Omnibus Incentive Plan (the \"2025 Plan\"), which replaced the 2016 Equity Compensation Plan. The purpose of the 2025 Plan is to align the interests of the Company’s officers, other employees, advisors and consultants or any subsidiary, if any, with those of the Company’s shareholders and to afford an incentive to such officers, employees, consultants and advisors to continue as such, to increase their efforts on the Company’s behalf and to promote the success of the Company’s business. The maximum number of the Company's common shares, par value $0.001 per share (the \"Common Shares\") reserved for grant of awards under the 2025 Plan is 2,936,762. The number of securities remaining available for future issuance under the 2025 Plan as of March 31, 2026 was 2,271,230.\n\nDuring the three months ended March 31, 2026, the Company granted an aggregate of 282,217 restricted Common Shares, net of shares surrendered to cover taxes, under the 2025 Plan with a grant date fair value of $0.3 million. During the three months ended March 31, 2025, the Company granted an aggregate of 767,668 restricted Common Shares, of which a grant of 420,168 shares was rescinded immediately after the grant, with a grant date fair value of $0.9 million.\n\n19\n\n[Table of Contents](#icea7daa2c6454fb393f7fb4d4b4ba8bc_7)\n\nSACHEM CAPITAL CORP.\n\nNOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS\n\nFOR THE THREE MONTHS ENDED MARCH 31, 2026\n\nStock-based compensation for the three months ended March 31, 2026 and 2025 was $0.3 million and $0.3 million, respectively. As of March 31, 2026, there was unrecognized stock-based compensation expense of $0.8 million.\n\nEmployee Benefits\n\nOn April 16, 2018, the Company’s Board of Directors approved the adoption of the Sachem Capital Corp. 401(k) Profit Sharing Plan (the “401(k) Plan”). All employees, who meet the participation criteria, are eligible to participate in the 401(k) Plan. Under the terms of the 401(k) Plan, the Company is obligated to contribute 3% of a participant’s compensation to the 401(k) Plan on behalf of an employee-participant. For the three months ended March 31, 2026 and 2025, the 401(k) Plan expense was $43,934 and $24,293, respectively, which is included within compensation and employee benefits in the accompanying unaudited Condensed Consolidated Statements of Operations.\n\n17.   Equity\n\nSeries A Preferred Stock\n\nThe Company has designated 3,332,000 shares of its authorized preferred shares, par value $0.001 per share, as shares of Series A Preferred Stock (the “Series A Preferred Stock”) with the powers, designations, preferences and other rights as set forth in an Amended and Restated Certificate of Designation (the “Series A Designation Certificate”). The Series A Designation Certificate provides that the Company will pay quarterly cumulative dividends on the Series A Preferred Stock, in arrears, on the 30th day of each of March, June, September and December, and including, the date of original issuance of the Series A Preferred Stock until redeemed at 7.75% of the $25.00 per share liquidation preference per annum (equivalent to $1.9375 per annum per share). The Series A Preferred Stock is not redeemable before June 29, 2026, except upon the occurrence of a Change of Control (as defined in the Series A Designation Certificate). On or after June 29, 2026, the Company may, at its option, redeem any or all of the shares of the Series A Preferred Stock at $25.00 per share plus any accumulated and unpaid dividends to, but not including the redemption date. Upon the occurrence of a Change of Control, the Company may, at its option, redeem any or all of the shares of Series A Preferred Stock within 120 days after the first date on which such Change of Control occurred at $25.00 per share plus any accumulated and unpaid dividends to, but not including, the redemption date. The Series A Preferred Stock has no stated maturity, is not subject to any sinking fund or mandatory redemption and will remain outstanding indefinitely unless repurchased or redeemed by the Company or converted into Common Shares in connection with a Change of Control by the holders of the Series A Preferred Stock. Upon the occurrence of a Change of Control, each holder of Series A Preferred Stock will have the right (subject to the Company’s election to redeem the Series A Preferred Stock in whole or in part, as described above, prior to the Change of Control Conversion Date as defined in the Series A Designation Certificate) to convert some or all of the Series A Preferred Stock held by such holder on the Change of Control Conversion Date into a number of the Common Shares determined by formula, in each case, on the terms and subject to the conditions described in the Series A Designation Certificate, including provisions for the receipt, under specified circumstances, of alternative consideration as described in the Series A Designation Certificate. Except under limited circumstances, holders of the Series A Preferred Stock generally do not have any voting rights. The Company has reserved 83,300,000 Common Shares for issuance upon conversion of the Series A Preferred Stock.\n\nAt-The-Market Offerings\n\nOn November 11, 2025, the Company filed a prospectus supplement to its Form S-3 Registration Statement covering the sale of up to $18.45 million of its Series A Preferred Stock in an ATM offering (the \"ATM Offering\"). There were no sales under the ATM Offering during the three months ended March 31, 2026. During the year ended December 31, 2025, the Company sold no Common Shares and sold an aggregate of 6,010 shares of Series A Preferred Stock having an aggregate liquidation preference of $0.1 million, realizing gross proceeds of $0.1 million (representing a discount of 25.5% from the liquidation preference). The Company’s issuance costs for Series A Preferred Stock shares sold during the year ended December 31, 2025 were de minimis. At March 31, 2026, $18.3 million of Series A Preferred Stock were available for future sale under the New ATM Offering.\n\nRepurchase Plan\n\nEffective on October 10, 2024, the Board adopted a Repurchase Plan (the “Repurchase Plan”). Under the Repurchase Plan, the Company may repurchase up to an aggregate of 5,802,959 of Common Shares and share repurchases\n\n20\n\n[Table of Contents](#icea7daa2c6454fb393f7fb4d4b4ba8bc_7)\n\nSACHEM CAPITAL CORP.\n\nNOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS\n\nFOR THE THREE MONTHS ENDED MARCH 31, 2026\n\nwill be made from time to time on the open market at prevailing market prices in accordance with applicable federal securities laws, including Rule 10b-18 of the Exchange Act.\n\nDuring the three months ended March 31, 2026 and the year ended December 31, 2025, the Company did not repurchase any Common Shares.\n\n18.   Earnings (Losses) Per Share\n\nBasic and diluted earnings (losses) per share are calculated in accordance with FASB ASC 260 (Earnings Per Share). Under FASB ASC 260, basic earnings per share is computed by dividing net income (loss) available to the common shareholders by the weighted-average number of Common Shares outstanding for the period. The computation of diluted earnings (losses) per share is similar to basic earnings (losses) per share, except that the denominator is increased to include the potential dilution from the Company's unvested restricted stock awards that contain non-forfeitable rights to dividends so therefore deemed to participating securities for Common Shares using the treasury stock method. The numerator in calculating both basic and diluted earnings (losses) per Common Share for each period is the reported net income (loss) available to common shareholders.\n\nFor the three months ended March 31, 2026, the Company had basic and diluted weighted average Common Shares outstanding of 47,178,193, resulting in basic and diluted loss per Common Share of $0.15. For the three months ended March 31, 2025, the Company had basic and diluted weighted average Common Shares outstanding of 46,784,744 resulting in basic and diluted loss per Common Share of $0.00.\n\n19.   Limited Liability Company (“LLC”) Investments\n\nThe following table presents the carrying value of each investment reflected on the Company's unaudited Condensed Consolidated Balance Sheets as of March 31, 2026 and December 31, 2025:\n\nMarch 31, 2026December 31, 2025\n\nInvestmentCarrying\nValueOwnership PercentageCarrying\nValueOwnership Percentage\n\n(in thousands)(in thousands)\n\nShem Creek Capital Fund V LLC$774 7.6%$867 7.6%\n\nShem Creek Capital Fund VI LLC1,506 9.9%3,071 9.9%\n\nShem Creek Capital Fund VII LLC4,326 13.0%3,605 13.0%\n\nShem Creek Sachem V LLC1,643 49.0%1,736 49.0%\n\nShem Creek Sachem VI LLC10,561 44.6%13,403 45.5%\n\nShem Creek Sachem 100 LLC8,925 67.7%8,950 67.6%\n\nShem Creek Capital LLC5,000 20.0%5,000 20.0%\n\nTotal Shem LLC Investments$32,735 $36,632 \n\nCordo CLT Investors LLC$2,500 7.2%$2,500 7.2%\n\nTotal investments in LLC’s$35,235 $39,132 \n\nShem Creek (“Shem”)\n\nFor the three months ended March 31, 2026, the Shem LLC investments generated $0.9 million of interest income and $0.1 million of other income. For the three months ended March 31, 2025, the Shem LLC investments generated $1.9 million of interest income and $0.1 million of other income.\n\nAt March 31, 2026, the Company had unfunded commitments totaling $0.7 million to the Shem LLC entities.\n\n21\n\n[Table of Contents](#icea7daa2c6454fb393f7fb4d4b4ba8bc_7)\n\nSACHEM CAPITAL CORP.\n\nNOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS\n\nFOR THE THREE MONTHS ENDED MARCH 31, 2026\n\nCordo CLT Investors LLC\n\nIn September 2024, the Company, through its wholly owned subsidiary Urbane Capital, LLC, acquired a member's interest in Cordo CLT Investors LLC for a one time contribution of $2.5 million. As of March 31, 2026 and December 31, 2025, the Company held 7.2% of total common member equity. This entity was formed for the sole purpose of developing a commercial multifamily property in Charlotte, North Carolina. The Company anticipates the project construction to be completed by the end of 2026, with monetization of the Company's investment in the first half of 2028 upon rent stabilization of the project.\n\n20.   Income Taxes\n\nTo qualify as a REIT for federal income tax purposes, at least 90% of taxable income (excluding 100% of net capital gains) must be distributed to stockholders. REITs that do not distribute a certain amount of taxable income in the current year are also subject to a 4% federal excise tax. Undistributed net income for federal income tax purposes differs from undistributed net income for GAAP purposes primarily due to the recognition of straight-line rent revenue, determining the basis of acquired assets, recording of impairments, the useful life and depreciation and amortization methods for real property and the provision for loan losses for financial reporting purposes versus bad debt expense for federal income tax purposes.\n\nFor the three months ended March 31, 2026, the Company’s taxable REIT subsidiary (\"TRS\") recognized a de minimis provision for federal and state income tax, which would be presented in other expenses on the Company’s unaudited Condensed Consolidated Statements of Operations.\n\nThe table below presents the effects of temporary differences that gave rise to significant portions of deferred tax assets and liabilities as of March 31, 2026:\n\nMarch 31, 2026\n\nDeferred Tax Assets:\n\nNet Operating Loss Carryforwards$964 \n\nInvestment in LLCs165\n\nBasis in REO Assets206\n\nTotal Gross Deferred Tax Assets1,335 \n\nLess: Valuation Allowance(1,227)\n\nNet Deferred Tax Assets108\n\nDeferred Tax Liabilities:\n\nDepreciation(67)\n\nPrepaid Expenses(13)\n\nAmortization(28)\n\nTotal Deferred Tax Liabilities(108)\n\nTotal Deferred Tax Assets/(Liabilities)$— \n\nAt March 31, 2026, the Company’s TRS had federal net operating loss carryforwards of approximately $4.3 million. These losses were generated after 2017 and therefore may be carried forward indefinitely but may be used to offset only 80% of taxable income in any given year.\n\nThe Company evaluates the realizability of deferred tax assets based on available evidence, including the history of taxable income and projected future taxable income of the TRS.\n\n22\n\n[Table of Contents](#icea7daa2c6454fb393f7fb4d4b4ba8bc_7)\n\nSACHEM CAPITAL CORP.\n\nNOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS\n\nFOR THE THREE MONTHS ENDED MARCH 31, 2026\n\nBecause the TRS has generated cumulative losses in recent years and uncertainty exists regarding the timing of future taxable income, management concluded that it is more likely than not that the deferred tax assets will not be realized. Accordingly, the Company recorded a valuation allowance against substantially all deferred tax assets at March 31, 2026.\n\nThe income tax provision for the Company differs from the amount computed from applying the statutory federal income tax rate to income before income taxes due to non-taxable REIT income and other permanent differences including the non-deductibility of acquisition costs of business combinations for federal income tax reporting.\n\nThe Company has determined that there are no uncertain tax positions requiring accrual or disclosure in the accompanying unaudited condensed consolidated financial statements as of March 31, 2026.\n\n21.   Subsequent Events\n\nThe Company evaluated subsequent events from April 1, 2026 until the condensed consolidated financial statements were available to be issued. Based on the evaluation, no adjustments were required in the accompanying unaudited condensed consolidated financial statements.\n\nContribution Agreement with Industrial Realty Group Global, LLC\n\nOn May 17, 2026, the Company entered into a Contribution Agreement (the “Contribution Agreement”) with Industrial Realty Group Global, LLC, a Delaware limited liability company (“IRG Global”). The Contribution Agreement and the transactions contemplated thereby (the “Transaction”) were unanimously approved by the Board of Directors of the Company.\n\nPursuant to the Contribution Agreement, IRG Global will contribute to IRG Realty Operating Partnership, L.P., a Delaware limited partnership to be formed as a subsidiary of the Company prior to the Closing (as defined below) (the “Operating Partnership”), 100% of the outstanding membership interests of IRG Master Holdings, LLC, a Delaware limited liability company (“IRG Master Holdings”), in exchange for (i) a number of common units of limited partnership interest in the Operating Partnership (“OP Units”) equal to the Transferee Consideration Units (as defined below) and (ii) a number of shares of Class B common stock of the Company (the “Class B Common Stock”) equal to the Transferee Consideration Units. IRG Master Holdings, together with its subsidiaries, owns and operates a portfolio of industrial real estate assets.\n\nPrior to the closing of the Transaction (the “Closing”), which is expected to be by the end of 2026, the Company will complete a series of pre-closing reorganization steps, including (i) forming the Operating Partnership and contributing all or substantially all of its assets thereto, (ii) redomesticating from the State of New York to the State of Delaware, (iii) effecting a 20-to-1 reverse stock split of all issued and outstanding Common Shares, following which such shares will be redesignated as Class A common stock of the Company (the “Class A Shares”), (iv) authorizing a new class of Class B Common Stock (the “Class B Shares”), (v) adjusting the conversion and anti-dilution rights applicable to the issued and outstanding preferred stock of the Company in accordance with the applicable certificate of designations to reflect the reverse stock split, and (vi) changing its corporate name to “IRG Realty Trust, Inc.”\n\nThe number of OP Units and Class B Shares to be issued to IRG Global at the Closing (the “Transferee Consideration Units”) will be calculated based on a formula set forth in the Contribution Agreement, subject to downward adjustment based on the aggregate shortfall in replacement value for any dispositions of IRG Master Holdings’ properties occurring during the Interim Period (as defined in the Contribution Agreement), other than dispositions with an aggregate shortfall of less than $3.0 million. The calculation of the Transferee Consideration Units was based on an assumed implied gross asset value of the IRG Global portfolio to be contributed of approximately $2.9 billion, with a net asset value of approximately $1.5 billion after approximately $1.4 billion of debt, and a deemed exchange value of the Company’s Common Shares at a price of $2.00 per share. Immediately following the Closing, IRG Global is expected to hold approximately 94.1% of the outstanding OP Units, with the Company retaining the remaining approximately 5.9% of the outstanding OP Units. Subject to certain restrictions, a holder of OP Units may require the Operating Partnership to exchange all or a portion of such holder’s OP Units for cash or, at the option of the Company, Class A Shares on a one-for-one basis, subject to the ownership, transfer, REIT qualification and other limitations set forth in the Operating Partnership Agreement (as defined below).\n\n23\n\n[Table of Contents](#icea7daa2c6454fb393f7fb4d4b4ba8bc_7)\n\nSACHEM CAPITAL CORP.\n\nNOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS\n\nFOR THE THREE MONTHS ENDED MARCH 31, 2026\n\nThe parties to the Contribution Agreement made representations and warranties customary for transactions of this type. The representations and warranties made under the Contribution Agreement do not survive the Closing. In addition, the parties made covenants customary for transactions of this type, including, among others, covenants providing for the conduct of each party’s business during the period between signing and Closing, including restrictions on specified actions without the other party’s consent, subject to customary exceptions. The Contribution Agreement may be terminated by either party under certain circumstances, including if the Closing has not occurred by April 30, 2027, subject to IRG Global’s one-time right to extend such date by up to 45 days in certain circumstances related to a pending arbitration matter, among other circumstances.\n\nAt the Closing, the parties will execute and deliver or file, as applicable, among other things, the following (forms of which are included as exhibits to the Contribution Agreement): (i) a Tax Protection Agreement, pursuant to which the Company and the Operating Partnership will agree to certain restrictions on the disposition of the contributed properties and the maintenance of minimum liability allocations for the benefit of IRG Global and certain other protected unitholders; (ii) a Registration Rights Agreement, providing IRG Global with certain registration rights with respect to the Class A Shares issuable upon exchange of the OP Units, including shelf registration and underwritten demand rights, piggyback registration rights and block trade rights, in each case subject to a six-month lock-up period following the Closing; (iii) an Amended and Restated Limited Partnership Agreement of the Operating Partnership (the “Operating Partnership Agreement”); (iv) an Amended and Restated Certificate of Incorporation of the Company; (v) Amended and Restated Bylaws of the Company; and (vi) a Property Management Agreement related to the management of the properties contributed by IRG Global and its affiliates following the Closing. The Contribution Agreement also provides that, prior to the Closing, the parties will use commercially reasonable efforts to negotiate, finalize and, effective as of the Closing, execute a strategic services agreement with respect to the provision of certain services by IRG Global or one or more of its affiliates to the Company or one or more of its subsidiaries.\n\nAdditional information regarding the Contribution Agreement and the Transaction is included in the Company’s Current Report on Form 8-K filed with the SEC on May 18, 2026.\n\n24\n\n[Table of Contents](#icea7daa2c6454fb393f7fb4d4b4ba8bc_7)"}