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Item 9A. Controls and Procedures

2026-03-13 compared with 2025-03-31 · 1095 added, 728 removed, 769 unchanged (70% of the section changed)

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Management, with the participation of our Principal Executive Officer and Principal Accounting Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) as of December 31, 2025 (the “Evaluation Date”).

Based on this evaluation, our Principal Executive Officer and Principal Accounting Officer concluded that our disclosure controls and procedures were not effective as of the Evaluation Date.

This conclusion was based on the identification of a material weakness in our internal control over financial reporting related to stock-based compensation, as described in Management’s Report on Internal Control over Financial Reporting below.

Specifically, the material weakness resulted from deficiencies in the design and operation of controls surrounding the authorization and accounting for equity awards, which could impact the reliability of financial reporting and the accuracy of disclosures included in our periodic SEC filings.

Management has initiated remediation efforts, including strengthening review procedures and implementing enhanced oversight of equity award approvals, which are ongoing as of the date of this Report.

Based on this evaluation, our Principal Executive Officer and Principal Accounting Officer concluded that, as of the Evaluation Date, our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act (i) are recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and (ii) are accumulated and communicated to our management, including our chief executive and interim chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

Management’s Annual Report on Internal Control Over Financial Reporting

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The COSO Framework summarizes each of the components of a company’s internal control system, including (i) the control environment, (ii) risk assessment, (iii) control activities, (iv) information and communication, and (v) monitoring.

Based on this evaluation, management identified a material weakness in our internal control over financial reporting relating to stock-based compensation.

Specifically, the Compensation Committee authorized a grant of restricted stock to an executive that exceeded the individual award limit prescribed by the Company’s 2016 Equity Compensation Plan.

Although the executive voluntarily forfeited the over-authorized shares upon discovery, management concluded that this deficiency demonstrated a failure in the design and operation of controls to ensure compliance with plan-based limits on equity compensation.

Additionally, controls were not designed or operating effectively to ensure that the amount of stock-based compensation expense recorded was appropriately calculated.

As a result, these control deficiencies could have resulted in a material misstatement in our financial statements that would not be prevented or detected on a timely basis.

Accordingly, management has concluded that our internal control over financial reporting was not effective as of December 31, 2024.

Management has initiated steps to remediate the material weakness, including strengthening procedures around the review and authorization of equity awards and implementing enhanced oversight to ensure compliance with the terms of the 2016 Equity Compensation Plan.

These efforts are ongoing as of the date of this report.

Based on this evaluation, management concluded that our internal control over financial reporting was effective as of December 31, 2025.

This Report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting.

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Other Information

Amendment of Bylaws

On March 25, 2025, the Board adopted and approved the Amended and Restated Bylaws of the Company (the “Amended and Restated Bylaws”), effective as of such date.

The Amended and Restated Bylaws, among other things:

● Adopt advance notice requirements for shareholders submitting a director nomination or shareholder proposal pursuant to the Amended and Restated Bylaws, including requiring certain information about such nomination or proposal and the nominating or proposing shareholder;

● Require shareholders seeking to take action by written consent in lieu of a shareholder meeting to request that the Board fix a record date for the purpose of determining the shareholders entitled to take such action;

● Specify the powers of the chair of a shareholder meeting to regulate conduct at such meeting and to adjourn the meeting;

● Require director candidates to make themselves available for interviews with members of the Board;

● Provide that special meetings of the Board may be held with less than 24 hours’ notice, if necessary or appropriate under the circumstances;

● Conform certain provisions of the Amended and Restated Bylaws to terms of the New York Business Corporation Law, including as related to quorum requirements, notices of shareholder meetings, and the maintenance of shareholder lists;

● Make various other updates, including ministerial and conforming changes and the elimination of obsolete provisions.

The foregoing does not purport to be complete and is qualified in its entirety by reference to the Amended and Restated Bylaws attached hereto as Exhibit 3.2 and incorporated herein by reference.

2025 Annual Meeting of Shareholders

The Company plans to hold its 2025 Annual Meeting of Shareholders (the “2025 Annual Meeting”) on July 9, 2025.

In accordance with the requirements set forth in the Amended and Restated Bylaws, a shareholder seeking to submit a proposal or to make a nomination for consideration by shareholders at the 2025 Annual Meeting without the inclusion of such proposal or nomination in our proxy materials must comply with the requirements set forth in our Amended and Restated Bylaws, including by delivering a notice of the shareholder’s proposal or nomination to the Secretary at the Company’s principal executive offices at 568 East Main Street, Branford, CT 06405.

Such notice must be received by the Secretary at such address no later than April 10, 2025.

In addition, to comply with the universal proxy rules, shareholders who intend to solicit proxies in support of director nominees other than the Company’s nominees must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act (including a statement that such shareholder intends to solicit the holders of shares representing at least 67% of the voting power of the Company’s shares entitled to vote on the election of directors in support of director nominees other than the Company’s nominees), which notice must be postmarked or transmitted electronically to the Company at its principal executive offices at 568 East Main Street, Branford, CT 06405 no later than May 12, 2025.

Because the expected date of the 2025 Annual Meeting is more than 30 days from the date of the anniversary of the Company’s 2024 Annual Meeting of Shareholders, we are informing shareholders of this change and the updated deadline for shareholders to submit proposals intended for inclusion in our proxy statement and form of proxy for consideration at the 2025 Annual Meeting in accordance with Rule 14a-8 under the Exchange Act.

Accordingly, to be timely, shareholders wishing to submit proposals intended to be considered for inclusion in our proxy and form of proxy statement relating to the 2025 Annual Meeting must ensure that proper notice is received by us at our offices no later than April 10, 2025, which we consider a reasonable time before we will begin printing and sending proxy materials.

(b) Insider Trading Arrangements

During the quarter ended December 31, 2025, none of our directors or officers adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement," as each term is defined in Item 408(a) of Regulation S-K.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

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Directors, Executive Officers and Corporate Governance.

The information required by Item 10 is hereby incorporated by reference from our definitive Proxy Statement relating to our 2025 Annual Meeting of Shareholders, to be filed with the Securities and Exchange Commission not later than 120 days following the end of our fiscal year.

Our directors are elected annually by our shareholders and serve for one-year terms until his/her successor is elected and qualified or until such director’s earlier death, resignation or removal.

The executive officers are appointed by and serve at the pleasure of the Board.

Our executive officers and directors, and their respective ages as of the March 12, 2026, are as follows:

Name Age Position

Villano 65 Chairman of the Board, Chief Executive Officer and President

56 Executive Vice President and Chief Financial Officer

Leslie Bernhard (1)(4)

Goldberg (2)(4)

_____________________

(1) Chair of the Compensation Committee (“Compensation Committee”).

(2) Chair of the Audit Committee (“Audit Committee”).

(3) Chair of the Nominating and Corporate Governance Committee (“Nominating and Corporate Governance Committee”).

(4) Member of the Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee.

Set forth below is a brief description of the background and business experience of our executive officers and directors:

Villano , one of our founders, is Chairman of the Board, Chief Executive Officer and President.

Villano was appointed as a director and Chairman of the Board, Co-Chief Executive Officer, Chief Financial Officer and Secretary in February 2017, immediately prior to our initial public offering.

In November 2019, upon the resignation of his brother, Jeffrey C.

Villano, he became our sole Chief Executive Officer and was appointed Treasurer in addition to his then current positions with the Company and resigned as Secretary.

Villano served as our Chief Financial Officer until August 2022 and as our Treasurer until July 2022.

He served as our Interim Chief Financial from May 2023 until June 2024.

Villano has been designated as our principal executive officer.

Villano is a certified public accountant and was engaged in the private practice of accounting and auditing for almost 30 years.

His responsibilities include overseeing all aspects of our business operations, including loan origination and servicing, investor relations, brand development and business development.

He is also responsible for all our accounting and financial matters.

Villano holds a bachelor’s degree in accounting from the University of Rhode Island in 1982.

We believe that Mr.

Villano’s experience in managing our business since its inception and his professional background as a certified public accountant make him an important part of our management team and make him a worthy candidate to serve on the Board and to lead the Board as Chairman.

Walraven serves as Executive Vice President and Chief Financial Officer, a position he has held since September 1, 2025.

He previously served as a director of the Company beginning in August 2024 and was appointed Interim Chief Financial Officer in December 2024.

In conjunction with his promotion to Executive Vice President and Chief Financial Officer, Mr.

Walraven resigned from the Board.

Walraven brings experience in public company accounting, corporate capital markets and background in the real estate industry.

Walraven is a co-founder and chief operating officer of Freehold Properties, Inc., a real estate investment trust (REIT) focused on specialty industrial and retail real estate, since its formation in May 2019.

In addition, he has served as an independent director and member of the audit committee of Broad Street Realty, Inc.

BRST), a real estate company that owns, operates, develops, and redevelops primarily essential grocery-anchored shopping centers and mixed-use properties, since September 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), a REIT specializing in healthcare properties.

From July 2007 to June 2014, Mr.

Walraven served as an assurance partner of BDO USA, LLP, an international accounting firm, and was appointed managing partner of BDO USA’s Memphis office in January 2013.

Walraven is formerly a certified public accountant (actively licensed 1996 to 2016) and graduated from Bob Jones University with a B.S.

in Financial Management and from Clemson University with an M.P.A.

in professional accountancy.

We believe Mr.

Walraven’s experience in public

company accounting, corporate capital markets and background in the real estate industry make him an important part of our management team.

Leslie Bernhard was appointed as a director in February 2017.

Bernhard brings extensive public company experience both as a member of C-level management and as a director of multiple corporations.

In February 2024, Ms.

Bernhard joined the board of directors of Sharplink Gaming Inc.

SBET), an online technology company.

In addition, since November 2023, she has been serving as the chairman of the board of Nexalin Technology, Inc.

NXL), a company that designs and develops medical devices that utilizes bioelectronic medical technology.

She served as an independent director of Milestone Scientific Inc.

(NYSE American:

MLSS), a developer and manufacturer of medical and dental devices, from May 2003 until January 4, 2023 and as the non-executive chairman of the Milestone board of directors from October 2009 through January 4, 2023.

She also served as interim chief executive officer of Milestone from October 2017 to December 2017.

From 2007 through September 2018, Ms.

Bernhard served as an independent director of Universal Power Group, Inc.

(NYSE American:

UPGI), a global supplier of power solutions, and as a consultant to Universal Power Group, Inc.

from September 2018 to December 2020.

Bernhard co-founded AdStar, Inc., an electronic ad intake service to the newspaper industry taking it public in 1999 (NASDAQ:

ADST), and served as its president, chief executive officer and executive director until 2012.

Bernhard holds a BS Degree in Education from St.

John’s University.

We believe that Ms.

Bernhard’s experience as an entrepreneur and her service as a director of other public corporations enable her to make important contributions to the Board.

Goldberg was appointed as a director in February 2017.

He has been a private accounting and business consultant since April 2012.

He has also held senior executive positions, including chief financial officer and chief operating officer, and served as a director of several public and private companies.

From March 2011 through June 2015, he served as a director of Sport Haley Holdings, Inc., a manufacturer and distributor of sportswear and furniture.

From January 2008 through March 2013, he served as a member of the board of directors of SED International Holdings, Inc.

SEDN), a distributor of consumer electronics.

From January 2008 through March 2012, he served as the chief financial officer of Clear Skies Solar, Inc., an installer of solar panels.

From January 2008 through June 2008, he served as the chief financial officer of Milestone Scientific, Inc.

(NYSE American:

MLSS), a developer and manufacturer of medical and dental devices.

From June 1999 through April 2005, Mr.

Goldberg was a partner with Tatum CFO Partners, LLP, which provided interim CFO staffing services for public and private companies.

Goldberg is an attorney and a certified public accountant and holds a B.B.A.

degree from the City College of New York, an M.B.A.

from the University of Chicago and J.D.

and LLM degrees from the New York University School of Law.

Goldberg was selected as a director because of his experience as the senior executive, operations and financial officer of several public companies and because of his background in accounting and law.

We believe that his background and experience provide the Board with a perspective on corporate finance matters.

Given his financial experience, the Board has also determined that Mr.

Goldberg qualifies as the Audit Committee financial expert, pursuant to Item 407(d)(5) of Regulation S-K promulgated by the SEC.

Prinz was appointed as a director in February 2017.

He is currently retired and, since 2016, has been a member of the board of directors of Current, Inc., a leading manufacturer of laminated products including sheeting, tubes, rods, spacers and standoffs, as well as electrical grade laminates, a variety of carbon fiber products and other industrial products, which are used in various industries including construction, recreation, energy exploration and defense.

From September 2022 to September 2023, Mr.

Prinz served as a consultant to Current, Inc.

Prior to that, from September 2001 to September 2022, he was the president and chief financial officer of Current, Inc., with which he was employed since 1976.

Prinz graduated from Bryant College with a B.A.

We believe that his background and experience make him well qualified to serve as a member of the Board.

Audit Committee

The Audit Committee, established in accordance with Section 3(a)(58)(A) of the Exchange Act, oversees our accounting and financial reporting processes, internal systems of accounting and financial controls, relationships with auditors and audits of financial statements.

Goldberg is the chair of the Audit Committee and qualifies as an “audit committee financial expert” pursuant to Item 407(d)(5) of Regulation S-K.

Code of Ethics

We have adopted a code of ethics that applies to our directors, principal executive officer, principal financial officer and other persons performing similar functions.

The Code of Ethics is posted on our web site at www.sachemcapitalcorp.com .

We will also provide a copy of the Code of Ethics to any person without charge, upon written request addressed to our Corporate Secretary at our principal executive office located at 568 East Main Street, Branford, CT 06405.

In addition, we intend to post on our website all disclosures that are required by law or the NYSE

American LLC (the “NYSE American”) listing standards concerning any amendments to, or waivers from, any provision of our Code of Ethics.

Executive Compensation.

The information required by Item 11 is hereby incorporated by reference from our definitive Proxy Statement relating to our 2025 Annual Meeting of Shareholders, to be filed with the Securities and Exchange Commission not later than 120 days following the end of our fiscal year.

Our “named executive officers” as defined in Item 402(m)(2) of Regulation S-K (the “ Named Executive Officers ”) for the years ended December 31, 2025 and 2024 were John L.

Villano, our Chief Executive Officer and President , and Jeffery C.

Walraven, our Executive Vice President and Chief Financial Officer.

The following table sets forth information regarding the compensation earned by or awarded or paid to, as applicable, the Named Executive Officers for the years ended December 31, 2025 and 2024.

Name and Principal Position Year Salary

Villano 2025 $ 750,000 $ 675,000 $ 125,000 $ 94,589 (2)

Chairman of the Board, President, Chief Executive Officer and Director 2024 $ 750,000 $ 300,000 $ 506,712 $ 155,265 (3)

2025 $ 689,231 $ 50,000 $ 323,800 $ 25,122 (5)

Executive Vice President and Chief Financial Officer

$ 31,250 $ — $ — $ 42,500 (6)

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(1) Represents the grant date fair value of the restricted stock awards granted in 2025 and 2024.

In each case, the amounts were determined in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718 based on the closing price of our Common Shares on the date of grant.

The value ultimately realized by the Named Executive Officers upon vesting of the awards may or may not be equal to this determined amount.

(2) Represents (i) an auto allowance of $26,000 per annum, (ii) a one-time payment by the Company in the amount of $44,908 to cover the estimated tax liability for the restricted stock awards to Mr.

Villano that vested in 2025, (iii) dividends received by Mr.

Villano in 2025 on an aggregate of 230,814 unvested Common Shares totaling $23,081, and (iv) reimbursements for personal expenses incurred totaling $600 pursuant to the terms of Mr.

Villano’s employment agreement.

(3) Represents (i) an auto allowance of $26,000 per annum, (ii) a one-time payment by the Company in the amount of $123,729 to cover the estimated tax liability for the restricted stock awards to Mr.

Villano that vested in 2024, and (iii) reimbursements for insurance costs incurred totaling $5,536 pursuant to the terms of Mr.

Villano’s employment agreement.

(4) In December 2024, Jeffery C.

Walraven was appointed as our Interim Chief Financial Officer.

In connection with his appointment, the Company and Mr.

Walraven entered into a Letter Agreement, dated December 13, 2024, pursuant to which Mr.

Walraven received compensation at the rate of $62,500 per month.

Effective September 1, 2025, Mr.

Walraven was promoted to Executive Vice President and Chief Financial Officer.

At that time, the Company entered into an employment agreement with Mr.

Walraven as further discussed below.

This table includes all compensation to Mr.

Walraven in 2025 across his various titles.

(5) Represents dividends received by Mr.

Walraven in 2025 on an aggregate of 251,220 unvested Common Shares..

Walraven was appointed to the Board on August 21, 2024 and served in that capacity through December 12, 2024, earning $42,500 in director compensation.

Effective as of December 13, 2024, Mr.

Walraven was appointed as our Interim Chief Financial Officer at a monthly compensation rate of $62,500, earning $31,250 for the remainder of 2024.

Employment Agreements

Employment Agreement with John L.

In August 2016, in anticipation of our initial public offering, we entered into an employment agreement with John L.

The material terms of Mr.

Villano’s employment agreement are as follows:

Villano serves as our Chairman, Chief Executive Officer and President.

He also served as our Interim Chief Financial Officer until June 2024.

• The employment agreement has an initial term of five years commencing in February 2017 unless terminated earlier in accordance with his employment agreement.

The employment agreement is automatically extended for subsequent one year periods on each anniversary date unless either party provides written notice not to renew at least 180 days before the next anniversary date, in which case the agreement will terminate on the next anniversary date.

• In April 2022, Mr.

Villano’s base salary was increased to $750,000 per annum, effective retroactive as of January 1, 2022.

Villano is entitled to annual cash incentive compensation targeted at 50% of base salary, but in such amount as determined by the Compensation Committee of the Board (the "Compensation Committee") in its sole discretion.

Villano is entitled to a time-based equity award with a grant date value equal to his annual base salary.

as determined by the Compensation Committee in its sole discretion.

Villano has the right to participate in all retirement, pension, deferred compensation, insurance, and other benefit plans adopted and maintained by us for the benefit of employees and is entitled to additional compensation in an amount equal to the cost of any such benefit plan or program if he chooses not to participate.

Villano is indemnified to the full extent permitted by law against and for any claims, liabilities, losses, expenses and costs incurred that relate to any acts or omission taken in his capacity as an officer or director.

Villano is subject to a two-year non-competition covenant if his employment is terminated for “Cause” (as defined in his employment agreement).

• In the event any payment to Mr.

Villano is subject to an excise tax under the Code, he will receive an additional amount equal to the amount of the excise tax and any other taxes (whether in the nature of excise taxes or income taxes) in order to put Mr.

Villano in the same net after-tax position as if the payment were not subject to any excise tax.

Villano’s employment agreement provides that the Company may terminate his employment at any time with or without “Cause.” It also provides that his employment will terminate upon his death or disability.

The employment agreement provides that Mr.

Villano is not entitled to any severance if his employment is terminated by the Company for “Cause”.

Villano’s employment is terminated by the Company without “Cause,” due to Mr.

Villano’s death or disability or if Mr.

Villano resigns for “Good Reason” (as defined in the employment agreement, which includes a “change in control” of the Company), he is entitled to receive:

(i) his annual base salary effective at the time of termination, (ii) prorated incentive compensation for the year of termination based on the number of months worked in such year, (iii) a lump sum payment equal to 4 times the sum of (x) his annual base salary effective as of the date of termination and (y) the highest incentive compensation paid to Mr.

Villano during the most recent three calendar years prior to the date of termination;

(iv) any deferred compensation and accrued vacation pay;

(v) continuation for up to 12 months after termination of health and welfare and long-term disability benefits;

(vi) any other compensation or benefits as may be provided under any plans or programs of the Company and (vii) full accelerated vesting of any stock options held by Mr.

Letter Agreement and Employment Agreement with Jeffery C.

In December 2024, Jeffery C.

Walraven was appointed as our Interim Chief Financial Officer.

In connection with his appointment, the Company and Mr.

Walraven entered into a Letter Agreement, dated December 13, 2024, pursuant to which Mr.

Walraven received compensation at the rate of $62,500 per month.

Walraven provided service on a month-to-month basis and the Letter Agreement could be terminated by either party as of the end of any calendar month at any time by written notice to the other party no later than the 15th day of that month.

Effective September 1, 2025, the Company promoted Jeffery C.

Walraven to the position of Executive Vice President and Chief Financial Officer.

In connection with Mr.

Walraven's promotion, the Company and Mr.

entered into an Employment Agreement, effective as of September 1, 2025.

The material terms of Mr.

Walraven’s employment agreement are as follows:

Walraven serves as Executive Vice President and Chief Financial Officer.

• The employment agreement remains effective until terminated by either party in accordance with the terms of the employment agreement.

Walraven will receive an annual base salary of $600,000.

Walraven is entitled to annual cash incentive compensation targeted at 50% of base salary, but in such amount as determined by the Compensation Committee in its sole discretion.

Walraven is entitled to annual long-term equity incentive award with a target grant date fair value of $250,000.

The actual amount of the award, if any, is determined by the Compensation Committee in its sole discretion.

Walraven is entitled to discretionary incentive compensation upon the successful closing of certain capital transactions.

The determination of whether an incentive is earned, as well as the specific amount of any such payment, is determined by the Board or the Compensation Committee in their sole discretion.

Walraven has the right to participate in all retirement, pension, deferred compensation, insurance, and other benefit plans adopted and maintained by us for the benefit of employees.

Walraven is subject to a two-year non-competition covenant if his employment is terminated for “Cause” (as defined in his employment agreement).

Walraven’s employment agreement provides that the Company may terminate his employment at any time with or without “Cause” (as defined in the employment agreement).

It also provides that his employment will terminate upon his death or disability.

Regardless of the manner of termination, Mr.

Walraven is entitled to receive certain “Accrued Obligations” (as defined in the employment agreement).

The employment agreement provides that Mr.

Walraven is not entitled to any severance if his employment is terminated by the Company for “Cause”.

Walraven’s employment is terminated by the Company without “Cause,” or if Mr.

Walraven resigns for “Good Reason” (as defined in the employment agreement), he is entitled to:

(i) receive a lump sum payment equal to two times the sum of (a) his annual base salary and (b) the average annual bonus for the most recent three calendar years (or such shorter period as he was employed by the Company) prior to termination;

(ii) receive prorated incentive compensation for the year of termination based on the number of months worked in such year;

and (iii) continued payment by the Company of the employer-portion of his health insurance (COBRA) premiums at the active employee rate for up to 12 months (or until he becomes eligible for group medical benefits from another employer).

Executive Compensation Elements

The following describes the material terms of the elements of our executive compensation program during 2025.

Base Salaries

Base salaries for our Named Executive Officers are initially established through arm’s-length negotiations at the time of the executive officer’s hiring, taking into account such executive officer’s qualifications, experience, the scope of the executive officers’ responsibilities, and competitive market compensation paid by other companies for similar positions within the industry and geography.

Annual base salaries are intended to provide a fixed component of compensation to our Named Executive Officers, reflecting their skill sets, experience, roles, and responsibilities.

For the year ended December 31, 2024, Mr.

Villano was entitled to a “target bonus” of $375,000.

On March 10, 2025, the Compensation Committee awarded Mr.

Villano a bonus of $300,000 based on the Company’s performance for 2024, which was paid in one lump sum in 2025.

For the year ended December 31, 2025, Mr.

Villano and Mr.

Walraven were each entitled to a “target bonus” of $375,000 and $100,000, respectively.

On March 6, 2026, the Compensation Committee awarded Mr.

Villano and Mr.

Walraven a bonus of $375,000 and $100,000, respectively, based on the Company’s performance for 2025 which is payable in 2026.

Walraven's amount for 2025 was a pro rated amount of his annual target from the effective date of his employment agreement on September 1, 2025.

Equity Compensation

We maintained the Sachem Capital Corp.

2016 Equity Compensation Plan and now maintain the Sachem Capital Corp.

2025 Omnibus Incentive Plan, under which we may grant equity awards to our directors, employees (including our Named Executive Officers), and consultants.

In February 2023, Mr.

Villano received a grant of 130,890 shares of restricted stock.

Such restricted stock award vests in three equal installments on each of January 1, 2024, 2025 and 2026, subject to Mr.

Villano’s continued service with the Company on the vesting date;

provided that such restricted stock award will become fully vested if Mr.

Villano’s employment is terminated without “Cause” or due to resignation for “Good Reason”.

In March 2024, Mr.

Villano received a grant of 111,857 shares of restricted stock.

Such restricted stock award vests in three equal installments on each of January 1, 2025, 2026, and 2027, subject to Mr.

Villano’s continued service with the Company on the applicable vesting date;

provided that the restricted stock award will become fully vested become fully vested if Mr.

Villano’s employment is terminated without “Cause” or due to resignation for “Good Reason”.

In August 2025, Mr.

Villano received a grant of 112,613 shares of restricted stock.

Such restricted stock award vests in three equal installments on each of January 1, 2026, 2027, and 2028, subject to Mr.

Villano’s continued service with the Company on the applicable vesting date;

provided that the restricted stock award will become fully vested become fully vested if Mr.

Villano’s employment is terminated without “Cause” or due to resignation for “Good Reason”.

In March 2025, Mr.

Walraven received a grant of 20,000 shares of restricted stock.

Such restricted stock award vests in four equal installments on each of March 10, 2025, 2026, 2027, and 2028, subject to Mr.

Walraven’s continued service with the Company on the applicable vesting date;

provided that the restricted stock award will become fully vested become fully vested if Mr.

Walraven’s employment is terminated without “Cause” or due to resignation for “Good Reason”.

In September 2025, Mr.

Walraven received a grant of 236,220 shares of restricted stock.

Such restricted stock award cliff vests on September 3, 2028, subject to Mr.

Walraven’s continued service with the Company on the applicable vesting date;

provided that the restricted stock award will become fully vested become fully vested if Mr.

Walraven’s employment is terminated without “Cause” or due to resignation for “Good Reason”.

Retirement Plan

The Company maintains 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.

Employee Benefits and Perquisites

Our Named Executive Officers are eligible to participate in our health and welfare plans to the same extent as all full-time employees generally.

We also provide our Named Executive Officers with term life insurance and disability insurance at our expense as we do for all of our full-time employees.

Except for the benefits provided to Mr.

Villano under his employment agreement, we do not provide our Named Executive Officers with any other significant perquisites or other personal benefits.

Outstanding Equity Awards at Fiscal Year-End 2025

The following table sets forth information concerning outstanding equity awards to the Named Executive Officers as of December 31, 2025.

Name Grant Date Number of shares or units of

stock that have not vested

(#) Market value of shares or units of

stock that have not vested

Villano 02/17/23 43,630 (2)

03/19/24 74,571 (2)

08/11/25 112,613 (2)

Walraven 03/10/25 15,000 (3)

09/03/25 236,220 (4)

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(1) Calculated based on the closing price of our Common Shares of $1.04 per share on December 31, 2025.

(2) One-third of each restricted stock award vests on January 1st of the first three years following the grant date, subject to Mr.

Villano's continued service with the Company.

Unvested shares may not be transferred, sold, pledged, hypothecated or assigned, and are subject to forfeiture.

(3) One-fourth of this restricted stock award vests on March 10, 2025, 2026, 2027 and 2028, subject to Mr.

Walraven's continued service with the Company.

Unvested shares may not be transferred, sold, pledged, hypothecated or assigned, and are subject to forfeiture.

(4) This award has cliff vesting on September 3, 2028.

Compensation of Directors

The Board periodically reviews the type and form of compensation paid to our non-employee directors.

Based on this review, the Board makes adjustments to the non-employee director compensation program in an effort to provide competitive compensation to our non-employee directors.

For 2025, our Compensation Committee retained Farient Advisors, LLC (“Farient”) to provide it with information, recommendations, and other advice relating to director compensation.

Our non-employee director compensation plan, as amended on September 29, 2025 (the “Director Plan”), provides the following compensation for our non-employee directors effective October 1, 2025:

• each non-employee director receives cash compensation in the total amount of $150,000 (previously $90,000) per year, which amount is paid in equal quarterly installments of $37,500 (previously $22,500) on the first day of each calendar quarter (i.e., January 1, April 1, July 1, and October 1);

• each non-employee director may elect to receive up to 50% of any quarterly installment in the form of fully vested Common Shares based on the closing price of such shares on the last trading day immediately prior to the date on which the affected payment is to be made;

• the additional cash compensation payable to the chairperson of each of the Audit Committee, the Compensation Committee, and the Nominating and Corporate Governance Committee remain unchanged as follows:

• the chairperson of the Audit Committee receives an additional cash compensation of $7,500 per year, payable in equal quarterly installments of $1,875 on the first day of each calendar quarter (i.e., January 1, April 1, July 1, and October 1);

• the chairperson of the Compensation Committee receives an additional cash compensation of $5,000 per year, payable in equal quarterly installments of $1,250 on the first day of each calendar quarter (i.e., January 1, April 1, July 1, and October 1);

• the chairperson of the Nominating and Corporate Governance Committee receives an additional cash compensation of $2,500 per year, payable in equal quarterly installments of $625 on the first day of each calendar quarter (i.e., January 1, April 1, July 1, and October 1);

• the non-employee director serving on our Loan Approval Committee receives an additional cash compensation of $10,000 per year, payable in equal quarterly installments of $2,500 on the first day of each calendar quarter (i.e., January 1, April 1, July 1, and October 1).

Villano, an executive officer as well as a director, does not receive compensation in connection with his position as a member of the Board.

The following table provides compensation information for the year ended December 31, 2025 for each of the non-employee directors.

The table excludes Mr.

Villano, who is a Named Executive Officer of the company and did not receive any additional compensation for his service as a director in 2025.

The compensation received by Mr.

Villano during 2025 is set forth above under “Executive Compensation — 2025 Summary Compensation Table.”

Name Fees Earned or Paid

in Cash ($) (1)

Awards($) (2)

Compensation Total ($)

Leslie Bernhard $ 163,778 — — $ 163,778

Goldberg $ 122,478 43,800 — $ 166,278

Prinz $ 125,603 43,800 — $ 169,403

_____________________

(1) Prior to October 1, 2025, each non-employee director had the option to elect to receive an additional cash compensation of $20,000 payable in a lump sum or a grant of fully vested Common Shares with a grant date value of $20,000 based on the fair market value of our Common Shares on the date he or she is re-elected to serve on the Board .

Upon their re-election to the Board at our 2025 Annual Meeting of Shareholders, Ms.

Bernhard chose the cash option and Messrs.

Goldberg and Prinz chose the share option.

(2) Represents the grant date fair value of the restricted stock awards granted in 2025.

The value ultimately realized by the directors upon vesting of the awards may or may not be equal to this determined amount.

Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters

The information required by Item 12 is hereby incorporated by reference from our definitive Proxy Statement relating to our 2025 Annual Meeting of Shareholders, to be filed with the Securities and Exchange Commission not later than 120 days following the end of our fiscal year.

The following table, together with the accompanying footnotes, sets forth information, as of the March 10, 2026, regarding stock ownership of all persons known by us to own beneficially more than 5% of our outstanding Common Shares including our Named Executive Officers, all directors, and all directors and executive officers as a group:

Name of Beneficial Owner (1)

Number of Common

Shares Beneficially

Percentage of

Executive Officers and Directors

1,919,805 4.00 %

Leslie Bernhard (6)

All executive officers and directors as a group (5 persons)

2,676,503 5.58 %

_____________________

* Less than 1%.

(1) Unless otherwise provided, the address of each of the individuals above is c/o Sachem Capital Corp., 568 East Main Street, Branford, CT 06405.

(2) A person is deemed to be a beneficial owner of securities that can be acquired by such person within 60 days upon the exercise of options and warrants or conversion of convertible securities.

Each beneficial owner’s percentage ownership is determined by assuming that options, warrants and convertible securities that are held by such person (but not held by any other person) and that are exercisable or convertible within sixty (60) days have been exercised or converted.

Except as otherwise indicated, and subject to applicable community property and similar laws, each of the

persons named has sole voting and investment power with respect to the Common Shares shown as beneficially owned.

(3) All percentages are determined based on 47,967,172 Common Shares outstanding as of March 10, 2026.

(4) Includes 112,360 restricted Common Shares which are subject to vesting including:

(i) 74,823 shares vesting on January 1, 2027;

and (ii) 37,537 shares vesting on January 1, 2027.

Also includes 10,863 Common Shares owned by Mr.

Villano’s wife.

Villano disclaims ownership of the 10,863 Common Shares owned by his wife for the purposes of section 13(d) or 13(g) of the Exchange Act.

(5) Includes 246,220 restricted Common Shares which are subject to vesting including:

(i) 5,000 shares vesting on each March 10, 2027 and 2028;

and (ii) 236,220 shares cliff vesting on September 3, 2028.

(6) Includes 1,500 restricted Common Shares which are subject to vesting on September 7, 2026.

(7) Includes 11,500 restricted Common Shares which are subject to vesting including:

(i) 1,500 shares vesting on September 7, 2026;

and (ii) 5,000 shares vesting on each of March 10, 2027 and 2028.

Equity Compensation Plan Information

The following table gives information about shares of our common stock that may be issued under the Sachem Capital Corp.

2025 Omnibus Incentive Plan as of December 31, 2025:

Plan category Number of securities to be issued upon exercise issued upon exercise of outstanding options, warrants and rights

Weighted average exercise price of outstanding options, warrants and rights

Number of securities remaining available for future issuance under equity compensation plan (excluding securities referenced in column (a))

Equity compensation plans approved by security holders

— Not applicable

Total — Not applicable

Certain Relationships and Related Transactions and Director Independence.

The information required by Item 13 is hereby incorporated by reference from our definitive Proxy Statement relating to our 2025 Annual Meeting of Shareholders, to be filed with the Securities and Exchange Commission not later than 120 days following the end of our fiscal year.

Related Party Transactions

We have adopted a policy that prohibits any transaction between us and a related party unless the terms of that transaction are no less favorable to us than if we had entered into the same transaction with an unrelated party and the transaction is approved by our Audit Committee or other independent committee of the board of directors, in the case where it is inappropriate for our Audit Committee to review such a transaction due to a conflict of interest.

During the years ended December 31, 2025 and 2024, the daughter of our Chief Executive Officer was paid $0.2 million and $0.2 million, respectively, for internal audit and compliance services provided to us.

Director Independence

The current members of the Board are John L.

Villano, Leslie Bernhard, Arthur L.

Goldberg, and Brian A.

The Board has determined, in accordance with the NYSE American Company Guide (“NYSE Rules”), that:

Bernhard and Messrs.

Goldberg and Prinz are independent and represent a majority of its members;

Bernhard and Messrs.

Goldberg and Prinz, as the members of the Audit Committee, the Nominating and Corporate Governance Committee and Compensation Committee, are independent for such purposes.

In determining director independence, the Board applies the independence standards set by NYSE American.

In applying these standards, the Board considers all transactions with the independent directors and the impact of such transactions, if any, on any of the independent directors’ ability to continue to serve on the Board.

We have three standing committees:

an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee.

Members of each committee must also meet applicable independence tests of the NYSE American and SEC.

In connection with this determination, each director and executive officer completes a questionnaire which requires disclosure of, among other topics:

any transactions or relationships between any director or any member of his or her immediate family and the Company and its subsidiaries, affiliates, our independent registered public accounting

firm or any advisors to the Compensation Committee;

any transactions or relationships between any director or any member of his or her immediate family and members of the senior management of the Company or their affiliates;

and any charitable contributions to not-for-profit organizations for which our directors or immediate family members serve as executive officers.

The Board has determined that each of the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee is made up entirely of independent directors as defined under the NYSE Rules.

Principal Accounting Fees and Services

The information required by Item 14 is hereby incorporated by reference from our definitive Proxy Statement relating to our 2025 Annual Meeting of Shareholders, to be filed with the Securities and Exchange Commission not later than 120 days following the end of our fiscal year.

Effective November 18, 2024, our Audit Committee engaged Baker Tilly US, LLP ("Baker Tilly") to replace Hoberman & Lesser CPA’s, LLP (“Hoberman”) as our principal accounting firm.

The aggregate fees billed by our principal accounting firms for the years ended December 31, 2025 and 2024 are as follows:

Audit fees (1)

$ 540,126 $ 388,958

Audit-Related Fees — —

99,435 70,800

All other fees — —

Total fees $ 639,561 $ 459,758

_____________________

(1) Fees for services related to the audit of the Company’s consolidated financial statements, quarterly reviews of the Company’s unaudited interim consolidated financial statements, and consultation on significant accounting matters of $380,000 and $330,000, respectively, for 2025 and 2024, fees in connection with the Company’s registration statements and comfort letters for offerings in 2025 and 2024 of $130,000 and $41,500, respectively, and fees and expenses in 2025 and 2024 of $30,126 and $17,458, respectively.

(2) Fees associated with tax compliance, advice, and planning.

In 2025, the audit fees include audit and financial statement review fees from Baker Tilly.

These fees include fees for professional services rendered for the audit of our annual financial statements and the review of financial statements included in our reports on Form 10-Q or services that are normally provided in connection with statutory and regulatory filings and fees related to registration statements.

The tax fees include tax compliance, advice, and planning from Baker Tilly.

In 2024, the audit fees include aggregate audit and financial statement review fees from Baker Tilly and Hoberman.

The tax fees include tax compliance, advice, and planning from Baker Tilly.

Audit Committee Pre-Approval Policy

The Audit Committee charter provides that the Audit Committee will pre-approve audit services and non-audit services to be provided by our independent auditors before they are engaged to render these services.

The Audit Committee may consult with management in the decision-making process but may not delegate this authority to management.

The Audit Committee may delegate its authority to pre-approve services to one or more committee members, provided that the designees present the pre-approvals to the full committee at the next committee meeting.

All audit and non-audit services performed by the independent accountants must be pre-approved by the Audit Committee to assure that such services do not impair the auditors’ independence from us.

During the year ended December 31, 2025, the Audit Committee pre-approved 100% of the services provided by Baker Tilly.

Exhibits and Financial Statement Schedules

Financial Statements — See Index to Financial Statements on page F-1.

(a) 1 Financial Statements — See Index to Financial Statements on page F-1.

2 Financial Statement Schedules — See (c) below.

3 Exhibits — See (b) below.

Certain of the following exhibits were filed as Exhibits to the registration statement on Form S-11 , Registration No.

(b) Certain of the following exhibits were filed as Exhibits to the registration statement on Form S-11 , Registration No.

333-214323 and amendments thereto (the “Registration Statement”) filed by us under the Securities Act and are hereby incorporated by reference.

1 unchanged sentence

3.1 Certificate of Incorporation (1)

Certificate of Amendment to Certificate of Incorporation(1)

Certificate of Amendment to Certificate of Incorporation filed on October 7, 2019(2)

Certificate of Amendment to Certificate of Incorporation filed on June 25, 2021(9)

Certificate of Amendment to Certificate of Incorporation filed on July 19, 2022 (19)

Certificate of Amendment to Certificate of Incorporation filed on August 23, 2022 (20)

3.1(a) Certificate of Amendment to Certificate of Incorporation (1)

3.1(b) Certificate of Amendment to Certificate of Incorporation filed on October 7, 2019 (2)

3.1(c) Certificate of Amendment to Certificate of Incorporation filed on June 25, 2021 ( 7 )

3.1(d) Certificate of Amendment to Certificate of Incorporation filed on July 19, 2022 (1 7 )

3.1(e) Certificate of Amendment to Certificate of Incorporation filed on August 23, 2022 ( 11 )

Certificate of Amendment to Certificate of Incorporation filed on November 13 , 202 5 ( 26 )

3.2 Amended and Restated Bylaws, effective as of March 25.

1 unchanged sentence

Bank National Association, as Trustee ( 3 )

Third Supplemental Indenture between Sachem Capital Corp.

Bank National Association, as Trustee (6)

Form of 7.75% Notes due 2025 (included as Exhibit A to Exhibit 4.2 above)

4.2 Specimen 7.75% Series A Cumulative Redeemable Preferred Stock Certificate.( 7 )

1 unchanged sentence

Bank National Association, as Trustee ( 4 )

Form of 6.00% Note due 2026 (attached as Exhibit A to Exhibit 4.5 above).

4.4 Form of 6.00% Note due 2026 (attached as Exhibit A to Exhibit 4.

4.5 Fifth Supplemental Indenture between Sachem Capital Corp.

Bank Trust Company, National Association, as Trustee ( 8 )

Form of 6.00% Note due 2027 (attached as Exhibit A to Exhibit 4.7 above)

4.6 Form of 6.00% Note due 2027 (attached as Exhibit A to Exhibit 4.

4.7 Sixth Supplemental Indenture between Sachem Capital Corp.

Bank Trust Company, National Association, as Trustee ( 20 )

Form of 7.125% Note due 2027 (attached as Exhibit A to Exhibit 4.9 above)

4.8 Form of 7.125% Note due 2027 (attached as Exhibit A to Exhibit 4.

4.9 Seventh Supplemental Indenture between Sachem Capital Corp.

Bank Trust Company, National Association, as Trustee ( 1 0)

Form of 8.00% Note due 2027 (attached as Exhibit A to Exhibit 4.11 above)

4.10 Form of 8.00% Note due 2027 (attached as Exhibit A to Exhibit 4.

4.11 Revolving Credit Note, dated March 20, 2025, in the principal amount of $50 million in favor of Needham Bank, as lender ( 18 )

4.12 N ote Purchase and Guaranty Agreement, Dated June 11, 2025 ( 21 )

De scription o f Common Shares*

Description of 7.75% Ser ies A Cumulative Redeemable Pre ferred Stock *

Description of 6.00% Note due 2026 *

De s cription of 6.00% Note due 2027 *

Description of 7.125% Note due 2027 *

Description of 8.00 % Note due 2027 *

10.1** Employment Agreement by and between John L.

Villano and Sachem Capital Corp.

Amendm ent to Employment Agreement by and between John L.

Villano and Sachem Capital Corp.

10.2 Sachem Capital Corp.

2016 Equity Compensation Plan (1)

Final Form of the Restrictive Stock Grant Agreement dated April 2021 under the Sachem Capital Corp.

2016 Equity Compensation Plan between Sachem Capital Corp.

10.3 Master Repurchase Agreement and Securities Contract, dated as of July 21, 2021, between Sachem Capital Corp.

3 unchanged sentences

Agreement and General Release, dated as of January 14, 2022, between Sachem Capital Corp.

Final Form of the Restrictive Stock Grant Agreement dated July 19, 2022 under the Sachem Capital Corp.

2016 Equity Compensation Plan between Sachem Capital Corp.

and each of Leslie Bernhard, Arthur Goldberg and Brian Prinz (18)

10.6 Credit and Security Agreement, dated as of March 20, 2025, among SN Holdings, LLC, as the borrower, Sachem Capital Corp., as the guarantor, the lenders party thereto and Needham Bank, as administrative agent ( 18 )

Fin al Form of the Restrictive Stock Grant Agreement dated February 17, 2023 under the Sachem Capital Corp.

Amendment No.

1 to the Credit and Security Agreement, dated as of J une 9 , 202 5 , among SN Holdings, LLC, as the borrower, Sachem Capital Corp., as the guarantor, the lenders party thereto and Needham Bank, as administrative agent ( 23 )

Amendm ent N o.

2 to the Credit and Security Agreement, dated as of January 2 1 , 202 6 , among SN Holdings, LLC, as the borrower, Sachem Capital Corp., as the guarantor, the lenders party thereto and Needham Bank, as administrative agent ( 27 )

Final Form of the Restrictive Stock Grant Agreement dated February 17, 2023 under the Sachem Capital Corp.

2016 Equity Compensation Plan between the Company and John L.

Villano ( 13 )

Final Form of the Restricted Stock Grant Agreement dated March 19, 2024 under the Sachem Capital Corp.

2016 Equity Compensation Plan between the Company and John L.

Villano ( 14 )

10.9 Cooperation Agreement, dated August 20, 2024, between Sachem Capital Corp.

3 unchanged sentences

and each of Leslie Bernhard, Arthur Goldberg and Brian Prinz ( 16 )

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) (26).

Final Form of the Restrictive Stock Grant Agreement dated March 10 , 202 5 under the Sachem Capital Corp.

2016 Equity Compensation Plan between Sachem Capital Corp.

and each of Arthur Goldberg, Brian Prinz and Jeffery Walraven*

and each of Arthur Goldberg , Brian Prinz and Jeff e r y C.

Walraven (1 9 )

10.12 S achem Capital Corp.

2025 Omnibus Incentive Plan (22)

10.13 Restricted Stock Award Agreement, dated August 11, 2025, under the Sachem Capital Corp.

2025 Omnibus Incentive Plan between Sachem Capital Corp.

Villano (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) (25 )

Employment Agreement by and between Jeff e r y C.

Walraven and Sachem Capital Corp.

effective as of September 1, 2025 (24)

Restricted Stock Award Agreement, dated September 3, 2025, under the Sachem Capital Corp.

2025 Omnibus Incentive Plan between Sachem Capital Corp.

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) (24)

14.1 Code of Ethics(7)

2 unchanged sentences

23.1 Consent of Baker Tilly US, LLP, dated March 12, 2026*

Consent of Hoberman & Lesser CPA’s, LLP, dated March 31, 2025*

31.1 Chief Executive Officer Certification as required under section 302 of the Sarbanes Oxley Act *

11 unchanged sentences

from the $1.4 million NHB Mortgage ( 1 2 )

XBRL Instance Document *

XBRL Taxonomy Extension Schema Document *

XBRL Taxonomy Extension Calculation Linkbase Document *

XBRL Taxonomy Extension Definition Linkbase Document *

XBRL Taxonomy Extension Label Linkbase Document *

XBRL Taxonomy Extension Presentation Linkbase Document *

101.INS XBRL Instance Document *

101.SCH XBRL Taxonomy Extension Schema Document *

101.CAL XBRL Taxonomy Extension Calculation Linkbase Document *

101.DEF XBRL Taxonomy Extension Definition Linkbase Document *

101.LAB XBRL Taxonomy Extension Label Linkbase Document *

PRE XBRL Taxonomy Extension Presentation Linkbase Document *

104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)*

__________________________

* Filed herewith.

4 unchanged sentences

(2) Previously filed as an exhibit to the Quarterly Report on Form 10-Q for the period ended September 30, 2019, and incorporated herein by reference.

Previously filed as an exhibit to the Current Report on Form 8-K on November 27, 2019, and incorporated herein by reference.

(3) Previously filed as an exhibit to the Current Report on Form 8-K on June 25, 2019 and incorporated herein by reference.

Intentionally omitted.

Previously filed as an exhibit to the Current Report on Form 8-K on September 9, 2020, and incorporated herein by reference.

Previously filed as an exhibit to the Annual Report on Form 10-K for the year ended December 31, 2016, and incorporated herein by reference.

Previously filed as an exhibit to the Current Report on Form 8-K on June 29, 2021, and incorporated herein by reference.

(4) Previously filed as an exhibit to the Current Report on Form 8-K on December 20, 2021 and incorporated herein by reference.

1 unchanged sentence

(6) Previously filed as an exhibit to the Current Report on Form 8-K on July 27, 2021 and incorporated herein by reference.

Intentionally omitted.

(7) Previously filed as an exhibit to the Current Report on Form 8-K on June 29, 2021 and incorporated herein by reference.

(8) Previously filed as an exhibit to the Current Report on Form 8-K on March 9, 2022 and incorporated herein by reference.

(9) Previously filed as an exhibit to the Annual Report on Form 10-K for the year ended December 31, 2021 and incorporated herein by reference.

Previously filed as an exhibit to the Current Report on Form 8-K on May 12, 2022, and incorporated herein by reference.

Previously filed as an exhibit to the Quarterly Report on Form 10-Q for the period ended March 31, 2022, and incorporated herein by reference.

Intentionally omitted.

Previously filed as an exhibit to the Quarterly Report on Form 10-Q for the period ended June 30, 2022, and incorporated herein by reference.

(10) Previously filed as an exhibit to the Current Report on Form 8-K on August 23, 2022 and incorporated herein by reference.

6 unchanged sentences

(17) Previously filed as an exhibit to the Current Report on Form 8-K on December 16, 2024 and incorporated herein by reference.

Previously filed as an exhibit to the Current Repoty on Form 8-K on March 27, 2025, and incorporated herein by reference.

No financial statement schedules are included because the information is either provided in the financial statements or is not required under the related instructions or is inapplicable and such schedules therefore have been omitted.

(18) Previously filed as an exhibit to the Current Report on Form 8-K on March 27, 2025 and incorporated herein by reference.

(19) Previously filed as an exhibit to the Annual Report on Form 10-K for the year ended December 31, 2024 and incorporated herein by reference.

(20) Previously filed as an exhibit to the Current Report on Form 8-K on May 12, 2022 and incorporated herein by reference.

(21) Previously filed as an exhibit to the Current Report on Form 8-K on June 16, 2025 and incorporated herein by reference.

(22) Previously filed as Appendix A to the Company's Definitive Proxy Statement on Schedule 14A on April 30, 2025 and incorporated herein by reference.

(23) Previously filed as an exhibit to the Quarterly Report on Form 10-Q for the period ended June 30, 2025 and incorporated herein by reference.

(24) Previously filed as an exhibit to the Current Report on Form 8-K on September 5, 2025 and incorporated herein by reference.

(25) Previously filed as an exhibit to the Quarterly Report on Form 10-Q for the period ended September 30, 2025 and incorporated herein by reference.

(26) Previously filed as an exhibit to the Current Report on Form 8-K on November 18, 2025 and incorporated herein by reference.

(27) Previously filed as an exhibit to the Current Report on Form 8-K on January 22, 2026 and incorporated herein by reference.

(28) Previously filed as an exhibit to the Current Report on Form 8-K on May 5, 2025 and incorporated herein by reference.

(c) No financial statement schedules are included because the information is either provided in the financial statements or is not required under the related instructions or is inapplicable and such schedules therefore have been omitted.

Form 10-K Summary

5 unchanged sentences

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated on March 12, 2026:

Chairman, Chief Executive Officer and President

(Principal Executive Officer)

Signature Title

Villano Chairman, Chief Executive Officer and President

Villano, CPA (Principal Executive Officer)

/s/ Jeffery C.

Interim Chief Financial Officer and Director

(Principal Accounting and Financial Officer)

/s/ Leslie Bernhard

Walraven Executive Vice President and Chief Financial Officer

Walraven (Principal Accounting and Financial Officer)

/s/ Leslie Bernhard Director

Leslie Bernhard

/s/ Arthur L.

Goldberg Director

Prinz Director

INDEX TO FINANCIAL STATEMENTS

1 unchanged sentence

Report of Independent Registered Public Accounting Firm (PCAOB ID 23 )

Report of Predecessor Auditor (PCAOB ID 694 )

Consolidated Financial Statements:

1 unchanged sentence

Consolidated Statements of Operations

Consolidated Statements of Comprehensive (Loss) Income

Consolidated Statements of Comprehensive Incom e (Loss)

Consolidated Statements of Changes in Shareholders’ Equity

4 unchanged sentences

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of Sachem Capital Corp.

(the “Company”) as of December 31, 2024, the related statements of operations, comprehensive loss, changes in shareholders’ equity, and cash flows, for the year ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024, and the results of its operations and its cash flows for the year ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

We have audited the accompanying consolidated balance sheets of Sachem Capital Corporation (the “Company”) as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income (loss), changes in shareholders’ equity and cash flows for the years then ended, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2025 and 2024, and the consolidated results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audit.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures to respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audit provides a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Allowance for Credit Losses

Critical Audit Matter Description

As described in Note 2, the Company records an allowance for credit losses in accordance with the current expected credit loss standard on the Company’s loan portfolio, including unfunded construction commitments, on a collective basis by assets with similar risk characteristics.

The Company utilizes a vintage loss-rate method for estimating current expected credit losses.

The vintage loss-rate method involves applying a loss rate to a pool of loans with similar risk characteristics to estimate the expected credit losses on that pool of loans.

In determining the allowance for credit losses, the Company considers various factors including (1) historical loss experience and unrealized forecasted losses in its portfolio, (2) loan specific losses for loans deemed collateral dependent based on excess amortized cost over the fair value of the underlying collateral, and (3) its current and future view of the macroeconomic environment.

Management estimates the allowance for credit losses using relevant information, from internal and external sources, relating to past events, current conditions and reasonable and supportable forecasts.

The allowance for credit losses is maintained at a level sufficient to provide for expected credit losses over the life of the loans based on evaluating historical credit loss experience and to make adjustments to historical loss information for differences in the specific risk characteristics in the current loan portfolio.

We identified the allowance for credit losses as a critical audit matter as auditing the allowance for credit losses required significant auditor judgment as amounts determined by management rely on analysis that is highly subjective and includes significant estimation uncertainty.

How the Critical Audit Matter was Addressed in the Audit

The primary procedures we performed to address this critical audit matter included:

● Evaluated management’s allowance for credit losses methodology, including the vintage loss-rate method, and concluded it was appropriate and consistently applied.

● Tested the completeness and accuracy of key internal data sources and verified external data inputs used in the model.

● Assessed key assumptions such as segmentation by region and vintage, historical loss rates, and the lookback period by recalculating rates and performing sensitivity analysis.

● Evaluated qualitative adjustments by reviewing macroeconomic indicators and tested the consistency and supportability of applied basis point allocations.

Classification, Valuation, and Disclosure of Investments in Limited Liability Companies

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Valuation of Collateral Dependent Assets – Individually Evaluated Loans Held for Investment and Real Estate Owned Loans

Critical Audit Matter Description

As described in Notes 2 and 17, the Company has certain investments in limited liability companies, consisting of limited liability membership equity investments in real estate note-on-note mortgage investment vehicles, direct investments in real estate, and a direct investment in a real estate asset manager.

The Company accounts for its investments in limited liability companies based on the level of ownership, control, and influence in accordance with ASC 810, Consolidations , ASC 323, Equity Method and Joint Ventures, and ASC 321 , Investments in Equity Securities .

These investments require a detailed analysis of the type of investment on an investment-by-investment basis to determine the appropriate classification of the investment as to whether the investment should be reported using the cost basis, the equity method or whether the investment should be consolidated based on the accounting literature.

Management evaluated the operating agreements and concluded that the Company does not have control over the investees as defined in ASC 810, Consolidations .

Management further evaluated their investments in limited liability companies, and determined the Company does not have significant influence over the investees as defined in ASC 323, Equity Method and Joint Ventures.

As such, management elected to apply the measurement alternative in accordance with ASC 321, Investments in Equity Securities, and carry the investments at cost less impairment.

We identified management’s assessment of whether the operating agreements for investments in limited liability companies provide the Company with a controlling financial interest or significant influence as a critical audit matter due to the complexity of applying the accounting principles of ASC 810, ASC 323, and ASC 321 to the various operating agreements.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the assessment of whether the investments in limited liability companies provide the Company with a controlling financial interest or significant influence included the following, among others:

● Read and evaluated the terms of the various operating agreements and inquired of management to understand the legal entities involved, the rights and responsibilities of each party, and the related commercial terms.

● Evaluated management’s analysis of significant activities of the investee and which equity holders have the power to direct such activities.

We considered the purpose and design of the entity, the composition of the board of directors and other legal rights of the parties, including the significance of the decision-making rights of each party in assessing which party has the power to direct the activities that most significantly affect the performance of the investee, as well as the substance of the arrangements.

● Compared the rights of each party to underlying executed legal documents and discussed with management the purpose and design of the investee entity.

● Evaluated the Company’s conclusion that it does not have either a controlling financial interest or significant influence as a result of the terms of the limited liability operating agreements.

As discussed in Note 2 and Note 3 of the consolidated financial statements, the Company’s individually evaluated loans held for investment and real estate owned loans (collectively, “collateral dependent assets”) totaled $91.6 million and $16.4 million at December 31, 2025, respectively.

The valuation of the collateral dependent assets is management’s primary indicator of a potential credit loss or impairment as of the balance sheet date.

We identified the valuation of collateral dependent assets as a critical audit matter.

Management utilizes certain unobservable Level 3 inputs, such as independent appraisals of the underlying collateral, anticipated market value, property condition, location, and projected income potential to determine the valuation of the collateral dependent assets.

Management also evaluates events or changes in circumstances that may indicate that the carrying amount may not be recoverable.

The valuation is material to the financial statements and there is a high level of judgment and estimation uncertainty in determining the fair values.

How We Addressed the Matter in Our Audit

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

Our audit procedures related to this critical audit matter included the following, among others:

• Evaluating the appropriateness of management’s methodology, including whether qualitative considerations were appropriately designed to identify material adjustments not already incorporated in the valuation estimate and whether the methodology was applied consistently in accordance with the management’s policy;

• Testing the completeness and accuracy of data used by management in determining the valuation;

• Utilizing our internal real estate valuation specialists to assist us in evaluating the reasonableness of the significant market-based assumptions used by management to establish an estimate of the valuation of the collateral dependent assets.

/s/ Baker Tilly US, LLP

We have served as the Company’s auditor since 2024.

Philadelphia, Pennsylvania

March 12, 2026

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders

Sachem Capital Corp.

Opinion on the Financial Statements

We have audited the accompanying balance sheet of Sachem Capital Corp.

(the “Company”) as of December 31, 2023 and the related statements of comprehensive income, changes in shareholders’ equity, and cash flows for the year ended December 31, 2023, and the related notes (collectively referred to as the financial statements).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023, and the results of its operations and its cash flows for the year ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

Change in Accounting Principle

As discussed in Note 2 to the financial statements, the Company has changed its method of accounting for credit losses effective January 1, 2023, due to the adoption of Accounting Standards Update 2016-13 Financial Instruments – Credit Losses (FASB ASC 326):

Measurement of Credit Losses on Financial Instruments .

The Company adopted the new credit loss standard using the modified retrospective method such that prior period amounts are not adjusted and continue to be reported in accordance with previously applicable generally accepted accounting principles.

The adoption of the new credit loss standard and its subsequent application is also communicated as a critical audit matter below.

Basis of Opinion

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

MGI Worldwide is a network of independent audit, tax, accounting and consulting firms.

MGI Worldwide does not provide any services and its member firms are not an international partnership.

Each member firm is a separate entity and neither MGI Worldwide nor any member firm accepts responsibility for the activities, work, opinions or services of any other member firm.

For more information visit www.mgiworld.com/legal

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosures to which it relates.

Mortgages Receivable and Allowance for Credit Losses

As discussed in Note 2 to the financial statements, the Company estimates its allowance for credit losses (“ACL”) in accordance with Accounting Standards Update 2016-13, Financial Instruments – Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments (the “ASU”).

The Company adopted Accounting Standards Codification (“ASC”) Topic 326 as of January 1, 2023 as described in Note 2 to the financial statements.

The ASU requires credit losses on loans to be measured using an expected credit loss model (referred to as the current expected credit loss (CECL) model) which estimates credit losses over the expected life of the loan.

Estimates of expected credit losses are based on historical experience, adjusted for management’s evaluation of current conditions and reasonable and supportable forecasts.

The impact of adoption of this standard on January 1, 2023, was a $2.0 million increase to the allowance for credit losses, a $0.5 million increase to the allowance for unfunded commitments, and an increase of $2.5 million to cumulative net earnings for the cumulative effect adjustment recorded upon adoption.

The Company’s measurement of expected credit losses of loans on a pooled basis, when the loans share similar risk characteristics, is based on historical data that is adjusted, as necessary, for both internal and external qualitative factors where there are differences in the historical loss data of the Company and current or projected future conditions.

The Company currently pools its portfolio based on geographic locations.

Consideration of the relevant qualitative factors is used to bring the ACL to the level management believes is appropriate based on factors that are otherwise unaccounted for in the quantitative process.

The ACL also includes reserves for loans evaluated on an individual basis, such as certain loans identified for potential foreclosure proceedings for either non-performance or other similar criteria.

Management applies its judgment in the determination of the qualitative factors and establishes reserves on an individual basis to estimate the ACL.

Auditing the initial adoption of the relative qualitative factors used in the allowance for credit losses and the subsequent application of the qualitative factors was identified by us as a critical audit matter because of the significant auditor judgement applied and significant audit effort needed to evaluate the subjective and complex judgements made by management during adoption and subsequent application of the qualitative factor framework.

The primary procedures we performed, with the assistance of our valuation specialist, to address this critical audit matter included:

● Obtained an understanding of the Company ’ s process for establishing the ACL, including determination of the qualitative factors and reserve assumptions for loans evaluated on an individual basis.

● We tested the underlying data, including all historical information used in the Company ’ s model for establishing the ACL for completeness and accuracy, including recalculation of the analyses.

● We assessed all significant assumptions and subjective adjustments made by management to the vintage/historical information used in the model by analyzing the facts and circumstances provided by management for such adjustments.

● For loans evaluated on an individual basis, we obtained and evaluated valuations from the Company ’ s third-party valuation specialists, as well as obtained and evaluated other publicly available market data, and compared said values to the aggregate amounts owed by borrowers, for indication of loan losses;

We also evaluated managements significant judgments applied in determining whether indicators of impairment were present, with respect to the Company ’ s loan portfolio and the underlying collateral, by obtaining evidence to corroborate such judgments and searching for evidence contrary to such judgments, which included consideration of evidence obtained after the balance sheet date but before the issuance of this report.

We have served as the Company’s auditor from 2015 to 2024.

New York , New York

April 1, 2024

We have served as the Company’s auditor since 2024.

SACHEM CAPITAL CORP.

4 unchanged sentences

Loans held for investment (net of deferred loan fees of $ 2,230 and $ 1,950 )

375,188 375,041

Allowance for credit losses ( 11,510 ) ( 18,470 )

1 unchanged sentence

Loans held for sale (net of valuation allowance of $ — and $ 4,880 )

Interest and fees receivable, net

Due from borrowers, net

Real estate owned, net

Interest and fees receivable (net of allowance of $ 2,598 and $ 3,133 )

Due from borrowers (net of allowance of $ 1,084 and $ 1,135 )

Real estate owned (net of impairment of $ 1,110 and $ 465 )

16,402 18,574

Investments in limited liability companies 39,132 53,942

Investments in rental real estate, net

Investments in developmental real estate, net 9,719 14,032

Property and equipment, net 3,160 3,222

Other assets 5,002 6,164

Total assets $ 460,047 $ 491,976

Liabilities and Shareholders' Equity

Notes payable (net of deferred financing costs of $ 1,905 and $ 3,713 )

$ 171,349 $ 226,526

Senior secured notes payable (net of deferred financing costs of $ 3,427 and $ — )

Repurchase agreements — 33,708

1 unchanged sentence

Lines of credit 19,000 40,000

Accrued dividends payable

Accounts payable and accrued liabilities 3,255 4,377

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5,000,000 shares authorized;

2,903,000 shares designated as Series A Preferred Stock;

2,306,748 and 2,029,923 shares of Series A Preferred Stock issued and outstanding at December 31, 2024 and December 31, 2023, respectively

3,332,000 and 2,903,000 shares designated as Series A Preferred Stock at December 31, 2025 and 2024, respectively;

2,312,758 and 2,306,748 shares of Series A Preferred Stock issued and outstanding at December 31, 2025 and 2024, respectively

Common stock - $ 0.001 par value;

200,000,000 shares authorized;

46,965,306 and 46,765,483 issued and outstanding at December 31, 2024 and December 31, 2023, respectively

47,684,955 and 46,965,306 issued and outstanding at December 31, 2025 and 2024, respectively

Additional paid-in capital 257,905 256,956

Accumulated other comprehensive income

Cumulative net earnings 41,826 35,518

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Interest income from loans $ 32,222 $ 43,154

Interest income from limited liability company investments 4,838 5,127

Interest expense and amortization of deferred financing costs ( 25,390 ) ( 27,798 )

Net interest income 11,670 20,483

Provision for credit losses related to loans held for investment ( 3,280 ) ( 26,928 )

Gain (loss) on sale of loans 121 ( 21,973 )

Change in valuation allowance related to loans held for sale 1,014 ( 4,880 )

Net interest income (loss) after provision for credit losses related to loans held for investment, gain (loss) on sale of loans, and changes in valuation allowance related to loans held for sale 9,525 ( 33,298 )

Fee income from loans 5,978 8,594

1 unchanged sentence

Other investment income 141 391

Total revenues

Gain on investment securities 1,566 178

Other income 1,726 122

Total other income 9,878 9,397

Operating expenses

Interest and amortization of deferred financing costs

Compensation and employee benefits ( 7,661 ) ( 6,824 )

General and administrative expenses ( 6,482 ) ( 6,841 )

Provision for credit losses related to available-for-sale debt securities

Provision for credit losses related to loans held for investment

Change in valuation allowance related to loans held for sale

Impairment loss on real estate owned ( 1,060 ) ( 492 )

(Gain) loss on sale of real estate owned and property and equipment, net

Gain on sale of investments in developmental real estate, real estate owned, and property and equipment, net 4,055 439

Other expenses ( 1,947 ) ( 1,952 )

Total operating expenses ( 13,095 ) ( 15,670 )

Operating (loss) income before other (loss) income

Other (loss) income

Gain on equity securities

Loss on sale of loans

Total other (loss) income, net

Net (loss) income

Preferred stock dividend

Net (loss) income attributable to common shareholders

Basic (loss) earnings per Common Share

Diluted (loss) earnings per Common Share

Basic weighted average Common Shares outstanding

Diluted weighted average Common Shares outstanding

Net income (loss) 6,308 ( 39,571 )

Preferred stock dividends ( 4,472 ) ( 4,304 )

Net income (loss) attributable to common shareholders 1,836 ( 43,875 )

Basic and diluted earnings (losses) per Common Share $ 0.04 $ ( 0.93 )

Basic and diluted weighted average Common Shares outstanding 46,893,413 47,413,012

The accompanying notes are an integral part of these consolidated financial statements.

SACHEM CAPITAL CORP.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in thousands, except share and per share data)

Net (loss) income

Other comprehensive (loss) income:

Net income (loss) $ 6,308 $ ( 39,571 )

Other comprehensive income (loss):

Unrealized holding gains on available for sale (“AFS”) securities — —

1 unchanged sentence

Reclassification of losses from unrealized to provision for credit losses — —

Other comprehensive (loss) income

Comprehensive (loss) income, net

Other comprehensive income (loss) — ( 316 )

Comprehensive income (loss), net 6,308 ( 39,887 )

Preferred stock dividend ( 4,472 ) ( 4,304 )

Total comprehensive (loss) income attributable to common shareholders

Total comprehensive income (loss) attributable to common shareholders $ 1,836 $ ( 44,191 )

The accompanying notes are an integral part of these consolidated financial statements.

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FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

Preferred Shares

Common Shares

Preferred Shares Common Shares Additional

Capital Accumulated

Comprehensive

Income (Loss)

Dividends Paid

Income (Loss) Cumulative

Net Earnings Cumulative

Dividends Paid Totals

Shares Amount Shares Amount

Balance, January 1, 2024 2,029,923 $ 2 46,765,483 $ 47 $ 249,826 $ 316 $ 75,089 $ ( 95,204 ) $ 230,076

Cumulative effect of adoption of new accounting principle (ASU 2016-13)

Issuance of Series A Preferred Stock, net of expenses 276,825 — — — 5,706 — — — 5,706

Issuance of Common Shares, net of expenses — — 568,711 1 2,049 — — — 2,050

Stock buyback

Repurchase of Common Shares — — ( 581,745 ) ( 1 ) ( 1,488 ) — — — ( 1,489 )

Stock-based compensation — — 212,857 — 863 — — — 863

Reclassification of losses from unrealized to provision for credit losses

Unrealized holding gains on AFS securities

Reclassification adjustment for gains/losses realized in net loss — — — — — ( 316 ) — — ( 316 )

Dividends paid on Series A Preferred Stock — — — — — — — ( 4,304 ) ( 4,304 )

Dividends paid on Common Shares — — — — — — — ( 11,364 ) ( 11,364 )

Dividends declared on Common Shares

Net loss — — — — — — ( 39,571 ) — ( 39,571 )

Balance, December 31, 2024 2,306,748 $ 2 46,965,306 $ 47 $ 256,956 $ — $ 35,518 $ ( 110,872 ) $ 181,651

Issuance of Series A Preferred Stock, net of expenses 6,010 — — — 109 — — — 109

Issuance of Common Shares, net of expenses

Stock buyback

Stock-based compensation, less shares forfeited — — 719,649 1 840 — — — 841

Reclassification adjustment for gains / losses realized in net loss

Dividends paid on Series A Preferred Stock — — — — — — — ( 4,472 ) ( 4,472 )

Dividends paid on Common Shares — — — — — — — ( 9,500 ) ( 9,500 )

Net income — — — — — — 6,308 — 6,308

Balance, December 31, 2025 2,312,758 $ 2 47,684,955 $ 48 $ 257,905 $ — $ 41,826 $ ( 124,844 ) $ 174,937

4 unchanged sentences

CASH FLOWS FROM OPERATING ACTIVITIES

Net (loss) income

Adjustments to reconcile net (loss) income to net cash provided by operating activities:

Net income (loss) $ 6,308 $ ( 39,571 )

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Amortization of deferred financing costs 2,202 2,456

Depreciation expense 525 372

Write-off of other assets - pre-offering costs

Stock-based compensation 840 863

Provision for credit losses related to available-for-sale debt securities

Provision for credit losses related to loans held for investment 3,280 26,928

Change in valuation allowance related to loans held for sale ( 1,014 ) 4,880

Loss on sale of Loans

(Gain) loss on sale of loans ( 121 ) 21,973

Impairment loss on real estate owned 1,060 492

(Gain) loss on sale of real estate owned and property and equipment, net

(Gain) on equity securities

Gain on sale of investments in developmental real estate, real estate owned, and property and equipment, net ( 4,055 ) ( 439 )

Gain on extinguishment of debt ( 140 ) —

Gain on investment securities ( 1,566 ) ( 178 )

Deferred loan fees revenue 280 ( 2,697 )

1 unchanged sentence

Interest and fees receivable, net ( 191 ) 2,476

Other assets ( 766 ) 2,676

Due from borrowers, net ( 3,681 ) ( 1,431 )

1 unchanged sentence

Advances from borrowers ( 31 ) ( 6,951 )

Total adjustments and operating changes

NET CASH PROVIDED BY OPERATING ACTIVITIES 2,662 12,890

6 unchanged sentences

Acquisitions of and improvements to real estate owned — ( 510 )

Proceeds from sale of property and equipment

Proceeds from sale of investments in developmental real estate and property and equipment 19,874 9

Purchase of property and equipment ( 162 ) ( 77 )

2 unchanged sentences

Principal collections on loans 140,162 190,971

NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES

NET CASH PROVIDED BY INVESTING ACTIVITIES 29,350 79,910

CASH FLOWS FROM FINANCING ACTIVITIES

3 unchanged sentences

Repayments of repurchase agreements ( 45,401 ) ( 11,808 )

(Repayment of) proceeds from mortgage payable

Repayment of mortgage payable ( 85 ) ( 79 )

Dividends paid on Common Shares ( 9,500 ) ( 16,508 )

Dividends paid on Series A Preferred Stock ( 4,472 ) ( 4,304 )

Proceeds from issuance of Senior Secured Notes 90,000 —

Payment of deferred financing costs ( 3,653 ) —

Proceeds from issuance of common shares, net of expenses — 2,049

2 unchanged sentences

Repayment of notes payable ( 56,845 ) ( 58,163 )

NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

NET CASH USED IN FINANCING ACTIVITIES ( 39,154 ) ( 87,332 )

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS ( 7,142 ) 5,468

CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD 18,066 12,598

6 unchanged sentences

Cash paid during the period for interest $ 22,677 $ 25,300

Cash paid during the period for income tax $ 63 $ 115

Real estate acquired in connection with foreclosure of certain mortgages $ 22,141 $ 28,639

Loans held for investment from sale of real estate owned

Loans transferred from held to investment to held for sale

Loans held for sale transferred to loans held for investment $ 15,850 $ —

Loans held for investment transferred to held for sale $ — $ 15,850

Developmental real estate acquired in settlement of loan held for investment $ 1,696 $ —

Developmental real estate transferred from real estate owned $ 6,160 $ —

Loans originated from sale of real estate owned $ 840 $ 989

The accompanying notes are an integral part of these consolidated financial statements.

4 unchanged sentences

The Company operates its business as one segment.

The Company offers short-term ( i.e.

, one to three years ), secured, non-bank loans (sometimes referred to as “hard money” 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 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 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.

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.

7 unchanged sentences

In addition to other factors and metrics, the CODM utilizes net income as a key determinant of the amount of dividends to be distributed to the Company's stockholders.

As the Company’s operations comprise of a single reporting segment, the segment assets are reflected on the accompanying consolidated balance sheet as “total assets” and the significant segment expenses are listed on the accompanying consolidated statement of operations.

As the Company’s operations comprise of a single reporting segment, the segment assets are reflected on the accompanying Consolidated Balance Sheets as “total assets” and the significant segment expenses are listed on the accompanying Consolidated Statements of Operations.

Significant Accounting Policies

10 unchanged sentences

Actual amounts could differ from those estimates.

Significant estimates include the provisions for current expected credit losses, loans held for sale at fair value, and real estate owned.

Significant estimates include the provisions for current expected credit losses, loans held for sale, and real estate owned.

Concentration of Credit Risks

Financial instruments that may subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, loans and related receivables.

Concentration of credit risk relating to loans and related receivables are managed by the Company through robust portfolio monitoring and performing due diligence prior to origination or acquisition, when and where available and appropriate.

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash, cash equivalents, investments in securities, investments in limited liability companies, and mortgage loans.

SACHEM CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company maintains its cash and cash equivalents with various financial institutions.

Accounts at the financial institution are insured by the Federal Deposit Insurance Corporation ("FDIC") up to $250,000 per depositor.

The Company maintains bank deposits in amounts that may exceed federally insured limits.

The Company has not experienced any losses in such accounts.

Concentrations of credit risk related to the loans' geographical location and property type may be affected by changes in economic or other conditions of the particular geographic area or particular asset type that collateralize the Company’s mortgage loans.

For further details see Note 4 – Loans and Allowances for Credit Losses.

Credit risks associated with the Company’s mortgage loan portfolio and related interest receivable are described in Note 4 – Loans and Allowance for Credit Losses.

Variable Interest Entities ("VIEs")

VIEs are entities that, by design, either (i) lack sufficient equity to permit the entity to finance its activities without additional subordinated financial support from other parties;

or (ii) have equity investors that do not have the ability to make significant decisions relating to the entity’s operations through voting rights, or do not have the obligation to absorb the expected losses, or do not have the right to receive the residual returns of the entity.

The entity that is the primary beneficiary is required to consolidate the VIE.

An entity is deemed to be the primary beneficiary of a VIE if the entity has both (i) the power to direct the activities that most significantly impact the VIE’s economic performance and (ii) the right to receive benefits from the VIE or the obligation to absorb losses of the VIE that could be significant to the VIE.

In determining whether the Company is the primary beneficiary of a VIE, both qualitative and quantitative factors are considered regarding the nature, size and form of its involvement with the VIE, such as its role establishing the VIE and ongoing rights and responsibilities, the design of the VIE, its economic interests, servicing fees and servicing responsibilities, and other factors.

The Company performs ongoing reassessments to evaluate whether changes in the entity’s capital structure or changes in the nature of its involvement with the entity result in a change to the VIE designation or a change to its consolidation conclusion.

On March 20, 2025, the Company formed SN Holdings LLC (“SN Holdings”), a wholly owned subsidiary of the Company, for the sole purpose of acting as the borrower under a new revolving credit facility with Needham Bank.

Simultaneously with the execution of the Credit Agreement (defined below), the Company terminated and repaid in full the outstanding balance under its previous credit facility with Needham Bank.

SN Holdings is a VIE under the guidance of FASB ASC 810-10, Consolidation, as it was established with insufficient equity at risk and does not have independent operations apart from the Company.

The Company has determined that it is the primary beneficiary of SN Holdings because it has both (i) the power to direct the activities that most significantly impact SN Holdings’ economic performance and (ii) the obligation to absorb losses or the right to receive benefits that could be significant to SN Holdings, primarily through its role as the guarantor of the Needham Credit Facility (defined below) and through its ability to direct all operational and financing decisions.

Accordingly, SN Holdings has been consolidated in the Company’s consolidated financial statements.

As of December 31, 2025, SN Holdings had total assets of $ 88.4 million, consisting primarily of collateralized mortgage loans, and total liabilities of $ 21.0 million, consisting primarily of borrowings under the Needham Credit Facility.

The assets of SN Holdings can only be used to settle obligations of SN Holdings and are not available to the Company or its creditors, other than as permitted under the intercompany guaranty and lien release provisions of the Needham Credit Facility.

On June 11, 2025, Sachem Capital Corporation Holdings, LLC ("Holdings"), an indirect, wholly-owned subsidiary of the Company, consummated a private placement of $ 100.0 million aggregate principal amount of Senior Secured Notes due June 11, 2030 (the "Senior Secured Notes") to various institutional investors under a Note Purchase and Guaranty Agreement (the "Agreement").

See Note 11 - Secured Notes Payable.

Holdings was formed for the sole purpose of acting as the issuer of the Senior Secured Notes.

Holdings is a VIE under the guidance of FASB ASC 810-10 (Consolidation) as it was established with insufficient equity at risk and does not have independent operations apart from the Company.

The Company has determined that it is the primary beneficiary of Holdings because it has both (i) the power to direct the activities that most significantly impact

SACHEM CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Holdings’ economic performance and (ii) the obligation to absorb losses or the right to receive benefits that could be significant to Holdings, primarily through its role as the guarantor of the Senior Secured Notes and through its ability to direct all operational and financing decisions.

Accordingly, Holdings has been consolidated in the Company’s consolidated financial statements.

As of December 31, 2025, Holdings had total assets of $ 201.8 million, consisting primarily of collateralized mortgage loans, and total liabilities of $ 93.2 million, consisting primarily of 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.

Cash and Cash Equivalents

2 unchanged sentences

Debt investments are classified as available-for-sale and realized gains and losses are recorded using the specific identification method.

Changes in fair value, excluding credit losses and impairments, are recorded in other comprehensive (loss) income.

Changes in fair value, excluding credit losses and impairments, are recorded in other comprehensive income (loss).

Fair value is calculated based on publicly available market information or other estimates determined by management.

5 unchanged sentences

Marketable equity investments with readily determinable fair values are measured at fair value and are classified as trading securities with changes in value recorded in net income.

For the year ended December 31, 2025, the Company recognized gains on investment securities totaling $ 1.6 million, consisting of $ 0.8 million in realized gains and $ 0.8 million in unrealized holding gains.

For the year ended December 31, 2024, the Company recognized gains on investment securities totaling $ 0.2 million, consisting of $ 1.4 million in realized gains and $ 1.6 million in unrealized holding losses.

Investment in Limited Liability Companies (“LLCs”)

The Company accounts for its investments in limited liability companies based on the level of ownership, control, and influence in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 323 (Investments – Equity Method and Joint Ventures) and FASB ASC 810 (Consolidation).

The Company accounts for its investments in limited liability companies based on the level of ownership, control, and influence in accordance with FASB ASC 323 (Investments – Equity Method and Joint Ventures) and FASB ASC 810 (Consolidation).

Investments in LLCs are classified into the following categories based on the Company’s level of influence and control:

Fair Value Method (FASB ASC 321) – Passive Investments (Less than 20% Ownership, No Significant Influence)

o Investments in LLCs where the Company does not exercise significant influence are accounted for under FASB ASC 321 (Investments – Equity Securities) and recorded at fair value, with changes in fair value recognized in earnings.

o If fair value is not readily determinable, the Company applies the measurement alternative, recording the investment at cost less impairment, adjusted for observable price changes.

Fair Value Method (FASB ASC 321) – Passive Investments (Less than 20% Ownership, No Significant

◦ Investments in LLCs where the Company does not exercise significant influence are accounted for under FASB ASC 321 (Investments – Equity Securities) and recorded at fair value, with changes in fair value recognized in earnings.

◦ If fair value is not readily determinable, the Company applies the measurement alternative, recording the investment at cost less impairment, adjusted for observable price changes.

SACHEM CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Equity Method (FASB ASC 323) – Significant Influence (20% – 50% Ownership)

o The Company applies the equity method of accounting for investments where it has significant influence over the operating and financial policies of the LLC.

o Under the equity method, the Company recognizes its proportionate share of the LLC’s net income or loss in earnings and adjusts the carrying amount of the investment accordingly.

o Distributions received from equity method investments are recorded as a reduction of the investment unless they represent a return on investment, in which case they are recognized as income.

o The investment is assessed for impairment whenever events or circumstances indicate that the carrying amount may not be recoverable.

◦ The Company applies the equity method of accounting for investments where it has significant influence over the operating and financial policies of the LLC.

◦ Under the equity method, the Company recognizes its proportionate share of the LLC’s net income or loss in earnings and adjusts the carrying amount of the investment accordingly.

◦ Distributions received from equity method investments are recorded as a reduction of the investment unless they represent a return on investment, in which case they are recognized as income.

◦ The investment is assessed for impairment whenever events or circumstances indicate that the carrying amount may not be recoverable.

Consolidation (FASB ASC 810) – Variable Interest Entities (“VIEs”) or Controlling Interest

o Voting Interest Model:

◦ Voting Interest Model:

The Company holds greater than 50% of the voting interests and has the power to direct the significant activities of the LLC.

o Variable Interest Entity (VIE) Model:

If the LLC qualifies as a Variable Interest Entity, the Company consolidates the LLC when it is deemed to be the primary beneficiary of the VIE.

◦ Variable Interest Entity (VIE) Model:

If the LLC qualifies as a VIE, the Company consolidates the LLC when it is deemed to be the primary beneficiary of the VIE.

In accordance with FASB ASC 810, the Company evaluates whether:

The LLC is a VIE (i.e., lacks sufficient equity to finance its operations without additional support or the equity holders do not have the power to direct significant activities);

SACHEM CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company has both:

The power to direct the activities of the VIE that most significantly affect its economic performance, and the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant.

When both conditions are met, the Company consolidates the VIE in its financial statements, including the entity’s assets, liabilities, and operations.

Noncontrolling interests in consolidated LLCs, if any, are presented separately within the financial statements.

When both conditions are met, the Company consolidates the VIE in its consolidated financial statements, including the entity’s assets, liabilities, and operations.

Noncontrolling interests in consolidated LLCs, if any, are presented separately within the consolidated financial statements.

The Company reassesses its conclusions about VIE status and primary beneficiary determination on an ongoing basis, particularly when events occur that may change the underlying structure or governance of the investee.

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Loans held for investment

Loans that are originated and serviced by the Company, that management has the intent and ability to hold for the foreseeable future are reporting at their outstanding balances, net of an allowance for credit losses and unamortized deferred fees.

Loans that are originated and serviced by the Company, that management has the intent and ability to hold for the foreseeable future, are reported at their outstanding balances, net of an allowance for credit losses and unamortized deferred fees.

The net amount of nonrefundable loan origination fees and certain direct costs associated with the lending process are deferred and amortized to fee income over the contractual lives of the loans using the interest method which reflects a constant yield.

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If the fair value of a loan is determined to be less than its amortized cost, a non-recurring fair value adjustment will be recorded through a valuation allowance.

When a loan is transferred into the held for sale category, any previously recorded allowance for credit losses is reversed in the provision for credit losses related to loans and the loan is recorded at its amortized cost basis.

When a loan held for investment is transferred into the held for sale category, any previously recorded allowance for credit losses is reversed in the provision for credit losses related to loans and the loan is recorded at its amortized cost basis.

If the amortized cost basis exceeds the loan’s fair value at the date of transfer, a valuation allowance equal to the difference between amortized cost basis and fair value is recorded.

SACHEM CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Non-accrual loans

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The Company monitors the performance of all loans, including loans modified to borrowers experiencing financial difficulty and considers loans that are 90 days past due to be in payment default.

SACHEM CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Transfer of Financial Assets

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Transfers of agreements that meet the sale criteria under FASB ASC 860 (Transfers and Servicing) are derecognized from the Consolidated Balance Sheets at the time of transfer.

If the transfer of loans does not meet the sale criteria or participating interest criteria under FASB ASC 860, the transfer is accounted for as a secured borrowing and the loan is not de-recognized and a participating liability is recorded in the Consolidated Balance Sheets.

If the transfer of loans does not meet the sale criteria or participating interest criteria under FASB ASC 860, the transfer is accounted for as a secured borrowing and the loan is not derecognized and a participating liability is recorded in the Consolidated Balance Sheets.

Allowance for Credit Losses

The Company adopted the current expected credit loss (“CECL”) standard effective January 1, 2023 in accordance with Accounting Standard Update (“ASU”) No.

The initial CECL allowance adjustment of $ 2.5 million was recorded effective January 1, 2023 as a cumulative-effect of change in accounting principle through a direct charge to cumulative net earnings on the consolidated statements of shareholders’ equity.

Subsequent changes to the CECL allowance will be recognized in the consolidated statements of operations in “Provision for credit losses related to loans held for investment”.

The Company records an Allowance for credit losses on the consolidated balance sheets with respect to its loan portfolio, including unfunded construction commitments, on a collective basis by assets with similar risk characteristics.

This methodology, known as the “estimated expected lifetime losses,” replaces the “probable incurred loss impairment” methodology.

The Company records an allowance for credit losses under ASC 326, Financial Instruments—Credit Losses (“CECL”) on the Consolidated Balance Sheets with respect to its loan portfolio, including unfunded construction commitments, on a collective basis by assets with similar risk characteristics.

In addition, interest and fees receivable and amounts included in due from borrowers, other than reimbursements, which include origination, modification and other fees receivable, are also analyzed for credit losses in accordance with CECL standard, as they represent a financial asset that is subject to credit risk.

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Fair value of collateral is reduced by estimated cost to sell if the collateral is expected to be sold.

The aggregate gross outstanding principal of loans in pending/pre-foreclosure as of December 31, 2024, and December 31, 2023, was $ 52.1 million and $ 63.7 million, respectively.

As of December 31, 2024, and December 31, 2023, the Company had directly reserved against these loans in foreclosure in the amounts of $ 6.1 million and $ 5.1 million, respectively.

Further, the Company had direct reserves against non-performing loans held for investment that experienced declines in fair value of $ 7.3 million and $ 0 , respectively.

As of December 31, 2024, the aggregate outstanding principal amount of non-performing loans held for investment with direct allowances was $ 57.8 million.

Such allowances are presented net in “Loans held for investment, net” and “Loans held for sale, net” on the consolidated balance sheets included in the accompanying consolidated financial statements based on their respective classification.

Such allowances are presented net in “Allowance for credit losses” and “Loans held for sale, net” on the Consolidated Balance Sheets included in the accompanying consolidated financial statements based on their respective classification.

The CECL standard requires an entity to consider historical loss experience, current conditions, and a reasonable and supportable forecast of the economic environment.

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While management utilizes the best information available to make its evaluations, changes in macroeconomic conditions, interest rate environments, or both, may significantly impact the assumptions and inputs used in determining the allowance for credit losses.

The Company’s charge-off policy is determined by a review of each delinquent loan.

The Company has an accounting policy to not place loans on nonaccrual status unless they are more than 90 days delinquent.

Accrual of interest income is generally resumed when the delinquent contractual principal and interest is paid in full or when a portion of the delinquent payments are made, and the ongoing required contractual payments have been made for an appropriate period.

SACHEM CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Company’s charge-off policy is determined by a review of each delinquent loan.

The Company has an accounting policy to not place loans on nonaccrual status unless they are more than 90 days delinquent.

In the year ended December 31, 2024, the Company updated its methodology for estimating the CECL factors on its portfolio of financial assets related to loans.

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See Note 4 – Loans and Allowance for Credit Losses - for further details.

Interest and Fees Receivable, Net

Interest and fees receivable includes interest accrued between payment dates on loans and fees charged to borrowers in accordance with the loan agreement.

These amounts are reported at their outstanding balances, net of an allowance for credit losses.

Due From Borrowers, Net

Due from borrowers includes amounts paid on behalf of borrowers, such as insurance and property taxes, for which we are due reimbursement from borrowers in accordance with the loan agreement.

These amounts are reported at their outstanding balances, net of an allowance for credit losses.

Fair Value Measurements

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The three levels of the fair value hierarchy under FASB ASC 820 are described as follows:

Level 1 Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Company can access.

Level 2 Inputs to the valuation methodology include:

Level 1 Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the reporting entity has the ability to access at the measurement date.

Level 2 Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly:

• quoted prices for similar assets or liabilities in active markets;

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• inputs that are derived principally from or corroborated by observable market data by correlation to other means.

SACHEM CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

If the asset or liability has a specified (i.e., contractual) term, the Level 2 input must be observable for substantially the full term of the asset or liability.

Level 3 Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

Property and Equipment

Land and building acquired in 2021 to serve as the Company’s corporate headquarters is stated at cost.

Renovation of the building was completed in the first quarter of 2023 and the Company relocated its operations to the building in March 2023.

Property and Equipment, Net

Land and building were acquired in 2022 to serve as the Company’s corporate headquarters.

The land is carried at cost.

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The building is being depreciated using the straight-line method over its estimated useful life of 40 years.

The building was placed in service during the three months ended March 31, 2023.

Further, furniture and fixtures, computer hardware and software, and vehicles are stated at cost less accumulated depreciation.

Furniture and fixtures, computer hardware and software, and vehicles are stated at cost less accumulated depreciation.

Depreciation is computed by the straight-line method over the estimated useful lives of the assets.

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Vehicles are depreciated using an estimated useful life of five years .

SACHEM CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following tables represent the Company’s property and equipment, net:

Year ended December 31, 2024

Accumulated Depreciation

Property and Equipment, Net

(in thousands)

Furniture and fixtures

Computer hardware and software

Total property and equipment, net

Year ended December 31, 2023

Accumulated Depreciation

Property and Equipment, Net

(in thousands)

Furniture and fixtures

Computer hardware and software

Total property and equipment, net

Investment in Rental Real Estate

Real estate is carried at cost, net of accumulated depreciation and amortization.

Investment in Developmental Real Estate, Net

Developmental real estate is carried at cost, net of accumulated depreciation and amortization.

Betterments, major renewals and certain costs directly related to the improvement and leasing of real estate are capitalized.

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If the cost of the redeveloped property, including the net book value of the existing property, exceeds the estimated fair value of the redeveloped property, the excess is charged to expense.

Depreciation is recognized on a straight-line basis over the estimated useful lives of these assets which range from 7 to 40 years .

Depreciation is recognized on a straight-line basis over the estimated useful lives of these assets which range from seven to 40 years.

Tenant allowances are amortized on a straight-line basis over the lives of the related leases, which approximate the useful lives of the assets.

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Estimates of future cash flows are based on a number of factors including the historical operating results, known trends, and market/economic conditions that may affect the property.

The determined and allocated fair values to the real estate acquired will affect the amount of depreciation and amortization we record over the respective estimated useful lives or term of the lease.

SACHEM CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

On June 23, 2023, the Company entered into a purchase and sale contract (the “Westport Purchase Agreement”) to acquire a commercial office building in Westport, CT (the “Westport Asset”) for $ 10.6 million.

The transaction was completed on August 31, 2023.

In connection with this transaction, which was accounted for as an asset acquisition, the Company allocated the purchase price and acquisition-related costs to the tangible and intangible assets acquired based on fair value.

In addition, the Company recorded a lease liability stemming from below-market rental rates.

Total consideration, including capitalized acquisition-related costs, was $ 10.7 million.

See Note 5 – Investment in Rental Real Estate, net for further details surrounding the above acquisition as of December 31, 2024.

Real Estate Owned (“REO”)

The determined and allocated fair values to the real estate acquired will affect the amount of depreciation and amortization the Company records over the respective estimated useful lives or term of the lease.

Real Estate Owned, Net (“REO”)

REO acquired through foreclosure is initially measured at fair value and is thereafter subject to an ongoing impairment analysis.

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Any impairment losses or recoveries are included in the Consolidated Statements of Operations.

SACHEM CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Impairment of Long-Lived Assets

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If the undiscounted cash flow is less than the carrying amount of these assets, the Company recognizes an impairment loss based on the excess of the carrying amount over the fair value of the assets.

Goodwill is tested for impairment annually as of the balance sheet date or more frequently if events or changes in circumstances indicate potential impairment.

Goodwill at December 31, 2024 represents the excess of the consideration paid over the fair value of net assets acquired from Urbane New Haven, LLC in October 2022.

In testing goodwill for impairment, the Company adheres to FASB ASC 350 (Intangibles—Goodwill and Other), which permits a qualitative assessment of whether it is more likely than not that the fair value of a reporting unit is less than its carrying value including goodwill.

If the qualitative assessment determines that it is not more likely than not that the fair value of a reporting unit is less than its carrying value including goodwill, then no impairment is determined to exist for the reporting unit.

However, if the qualitative assessment determines that it is more likely than not that the fair value of the reporting unit is less than its carrying value including goodwill, or the Company chooses not to perform the qualitative assessment, then it compares the fair value of that reporting unit with its carrying value, including goodwill.

As of December 31, 2024 and December 31, 2023, goodwill was $ 0.4 million, respectively, which is presented in Other assets on the Company’s consolidated balance sheets.

As of and during the years ended December 31, 2024, and 2023, there was no impairment to goodwill.

Deferred Financing Costs

Costs incurred in connection with the Company’s revolving credit facilities, described in Note 9 – Lines of Credit, Mortgage Payable Churchill Facility – are amortized over the term of the applicable facility using the straight-line method, which approximates the effective interest.

Costs incurred by the Company in connection with the issuance of unsecured, unsubordinated notes, described in Note 9 – Unsecured Notes Payable – are being amortized over the term of the respective unsecured, unsubordinated notes using the effective interest method.

SACHEM CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Costs incurred by the Company in connection with the issuance of unsecured, unsubordinated notes, described in Note 10 – Unsecured Notes Payable, and the senior secured notes payable, described in Note 11 - Senior Secured Notes Payable, are being amortized over the term of the respective unsecured, unsubordinated notes using the effective interest method.

Revenue Recognition

Interest income from the Company’s loan portfolio is earned over the loan period and is calculated using the simple interest method on principal amounts outstanding.

Interest income from the Company’s loan portfolio is recognized under FASB ASC 310 (Receivables)and is earned over the loan period and is calculated using the simple interest method on principal amounts outstanding.

Generally, the Company’s loans provide for interest to be paid monthly in arrears.

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Origination, modification, extension, and construction servicing fee revenue, generally 1 % – 3 % of either the original loan principal or the modified loan balance, is collected at loan funding and is recognized ratably over the contractual life of the loan in accordance with FASB ASC 310 (Receivables).

Interest Reserves

The Company utilizes interest reserves on certain loans which are applied to future interest payments.

Debt Obligations

The Company’s debt obligations are carried at amortized cost and are reported net of any debt issuance costs, discounts and premiums.

Debt issuance costs, discounts and premiums are amortized to interest expense over the life of the instrument using the effective interest method.

Unamortized debt issuance costs, discounts and premiums are written off to net losses on debt extinguishment in the consolidated statements of operations when the Company prepays borrowings prior to maturity.

Advances from Borrowers

The Company utilizes advances from borrowers as interest reserves on certain loans which are applied to future interest payments.

Such reserves are established at the time of loan origination.

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The Company’s standard accounting policies for interest income recognition are applied to all loans, including those with interest reserves.

SACHEM CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Interest expense, in accordance with the Company’s financing agreements, is recorded on an accrual basis.

General and administrative expenses, including professional fees, are expensed as incurred.

Stock-Based Compensation

Equity-classified stock awards granted to executive officers, non-employee directors, and employees are measured based on the closing price of the Company's Common Shares on the grant date and recognized on a straight-line basis over the requisite service period of the awards for restricted stock awards.

The Company believes it qualifies as a real estate investment trust (“REIT”) for federal income tax purposes and operates accordingly.

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federal income tax at regular corporate rates and may also be subject to various penalties and may be precluded from re-electing REIT status for the four taxable years following the year during in which it lost its REIT qualification.

Other than taxes incurred by the Company’s taxable REIT subsidiary (“TRS”), the Company does not expect to incur any corporate federal income tax liability outside of the TRS, as it believes it has maintained its qualification as a REIT.

Other than taxes incurred by the Company’s taxable REIT subsidiary (“TRS”), Sachem Opportunities Corp., the Company does not expect to incur any corporate federal income tax liability outside of the TRS, as it believes it has maintained its qualification as a REIT.

The Company has elected, and may elect in the future, to treat certain of its existing or newly created corporate subsidiaries as TRSs.

In general, a TRS may hold assets that the Company cannot hold directly and generally may engage in any real estate or non-real estate related business.

The TRSs generate income, resulting in federal and state income tax liability for these entities.

During the year ended December 31, 2024, the Company’s TRSs recognized provisions for federal and state income tax of $ 0.2 million, which is represented in Other expenses on the Company’s consolidated statements of operations.

During the year ended December 31, 2023, there were no recognized provisions for federal income tax nor state tax.

SACHEM CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The 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.

FASB ASC Sub-Topic 740-10 “Accounting for Uncertainty in Income Taxes” prescribes a recognition threshold and measurement attribute for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return and disclosure required.

TRSs generate income, resulting in federal and state income tax liability for these entities.

Accordingly, the Company includes a provision for federal, state and local income taxes in our consolidated financial statements, when applicable.

The One Big Beautiful Bill Act, which passed on July 4, 2025, contains legislation increasing the percentage limit under the REIT asset test applicable to TRSs from 20% to 25%.

This change applies to taxable years beginning after December 31, 2025.

The Company accounts for deferred income taxes using the asset and liability method and recognize deferred tax assets and liabilities for the expected future tax consequences of events that have been included in its consolidated financial statements or tax returns.

Under this method, the Company determines deferred tax assets and liabilities based on the differences between the financial reporting and tax basis of assets and liabilities using the tax rates in effect for the year in which the differences are expected to reverse.

Any increase or decrease in the deferred tax liability that results from a change in circumstances and that causes a change in management's judgment about expected future tax consequences of events, is included in the income tax provision for the period in which such change occurs.

Deferred tax assets also reflect net operating loss and tax credit carryforwards.

A valuation allowance is provided if the Company believes it is more likely than not that all or some portion of a deferred tax asset will not be realized.

Any increase or decrease in the valuation allowance that results from a change in circumstances and that causes a change in management's judgment about the realizability of the related deferred tax asset, is included in the income tax provision for the period in which such change occurs.

FASB ASC 740-10 (Accounting for Uncertainty in Income Taxes) prescribes a recognition threshold and measurement attribute for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return and disclosure required.

Under this standard, an entity may only recognize or continue to recognize tax positions that meet a “more likely than not” threshold.

The Company recognizes interest and penalties, if any, related to unrecognized tax benefits in interest expense.

The Company has determined that there are no uncertain tax positions requiring accrual or disclosure in the accompanying consolidated financial statements as of December 31, 2024 and 2023.

(Losses) Earnings Per Share

Basic and diluted (losses) earnings per share are calculated in accordance with FASB ASC 260 (Earnings Per Share).

SACHEM CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Earnings (Losses) Per Share

Basic 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 income available to common shareholders by the weighted-average number of common shares, $ 0.001 par value per share, (“Common Shares”) outstanding for the period.

The computation of diluted (losses) earnings per share is similar to basic (losses) earnings per share, except that the denominator is increased to include the potential dilution from our unvested restricted stock awards, that contain non-forfeitable rights to dividends so therefore deemed to participating, for Common Shares using the treasury stock method.

The numerator in calculating both basic and diluted (losses) earnings per common share for each period is the reported net (loss) income.

For the year ended December 31, 2024 , the Company had basic and diluted weighted average shares of 47,413,012 outstanding, resulting in basic and diluted loss per share of $ 0.93 .

As the Company incurred a net loss attributable to common shareholders for the year ended December 31, 2024 all restricted shares would be deemed antidilutive.

For the year ended December 31, 2023, the Company had basic and diluted weighted average shares of 44,244,988 outstanding, resulting in basic and diluted earnings per share of $ 0.27 .

While the Company had net income attributable to common shareholders for the year ended December 31, 2023, the Company did not adjust the dilutive share calculation based on even if the Company assumed all 222,836 shares of unvested restricted stock at December 31, 2023 were deemed dilutive under the treasury method, the resulting diluted earnings per share would remain unchanged at $ 0.27 .

Recent Accounting Pronouncements

In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (FASB ASC 280):

Improvements to Reportable Segment Disclosures” (“ASU 2023-07”).

ASU 2023-07 intends to improve reportable segment disclosure requirements, enhance interim disclosure requirements and provides new segment disclosure requirements for entities with a single reportable segment.

ASU 2023-07 is effective for fiscal years beginning after December 15, 2023 and for interim periods within fiscal years beginning after December 15, 2024.

ASU 2023-07 applies retrospectively to all prior periods presented.

This update did not have a material impact on the Company’s consolidated financial statements.

See Note 1 – The Company for further information.

In November 2024, the FASB issued ASU 2024-03, “Income Statement – Reporting Comprehensive Income (FASB ASC 220-40):

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, 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).

Recent Accounting Pronouncements Pending Adoption

In November 2024, the FASB issued Accounting Standards Update ("ASU") 2024-03, “ Income Statement – Reporting Comprehensive Income (FASB ASC 220-40):

Expense Disaggregation Disclosures ” (“ASU 2024-03”).

ASU 2024-03 requires additional disclosure in the notes to the financial statements of specified information about certain costs and expenses.

The ASU is effective in reporting periods beginning after December 15, 2026, and interim periods within annual periods beginning December 15, 2027, on a prospective or retrospective basis.

The ASU is effective in reporting periods beginning after December 15, 2026, and interim periods within annual periods beginning after December 15, 2027, on a prospective or retrospective basis.

Early adoption is permitted, and the Company is currently assessing the impact upon adoption of this standard on the consolidated financial statements.

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Reclassifications

Certain amounts included in the Company’s December 31, 2023 consolidated financial statements have been reclassified to conform to the December 31, 2024 presentation.

These reclassifications had no effect on the year ended December 31, 2023 net income.

SACHEM CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Certain amounts included in the Company’s December 31, 2024 consolidated statement of operations have been reclassified to conform to the December 31, 2025 presentation.

These reclassifications had no effect on the year ended December 31, 2024 net loss.

Fair Value Measurement

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The Company groups its assets and liabilities measured at fair value in three hierarchy levels, based on the observability and transparency of the inputs.

The fair value hierarchy is as follows:

Level 1 - Inputs that represent quoted prices for identical instruments in active markets.

Level 2 - Inputs that represent quoted prices in markets that are not active, or inputs that are observable either directly or indirectly, for substantially the full term of the asset or liability.

Level 3 - Inputs that are largely unobservable, as little or no market data exists for the instrument being valued.

A description of the valuation methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below.

The following tables illustrate the assets and liabilities measured at fair value on a recurring basis and reported on the Consolidated Balance Sheets:

December 31, 2024

(in thousands)

Stocks and ETF’s

Debt securities

Preferred/Fixed rate cap securities

Loans held for sale, net

December 31, 2023

(in thousands)

Stocks and ETF’s

Debt securities

Preferred/Fixed rate cap securities

Loans held for sale, net

Certain financial assets and financial liabilities are measured at fair value on a nonrecurring basis;

that is, the instruments are not measured at fair value on an ongoing basis, but are subject to fair value adjustments in certain circumstances (for example, upon their acquisition or when there is evidence of impairment).

The following table illustrates financial instruments measured at fair value on a nonrecurring basis:

December 31, 2024

(in thousands)

Individually evaluated loans, net of allowance for credit losses

Real estate owned, net

December 31, 2023

(in thousands)

Individually evaluated loans, net of allowance for credit losses

Real estate owned, net

The following table presents assets and liabilities measured at fair value on a recurring basis:

Fair Value Measurement

(in thousands) December 31, 2025 December 31, 2024

Investment securities $ 936 $ 1,517

SACHEM CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Carrying amounts and fair values of financial instruments that are not carried at fair value at December 31, 2024 and December 31, 2023 in the Consolidated Balance Sheets are as follows:

Carrying Amount

Certain assets are measured at fair value on a nonrecurring basis;

that is, not measured at fair value on an on going basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment.) The following table presents assets and liabilities measured at fair value on a nonrecurring basis:

Fair Value Measurement

(in thousands) December 31, 2025 December 31, 2024

Individually evaluated loans, net of allowance for credit losses $ 114,028 $ 80,757

Loans held for sale, net — 10,970

Real estate owned, net 16,402 18,574

Carrying amounts and fair values of financial instruments that are not carried at fair value at December 31, 2025 and December 31, 2024 in the Consolidated Balance Sheets are as follows:

Carrying Amount Fair Value Measurement

(in thousands) 2025 2024 2025 2024

Cash and cash equivalents $ 10,924 $ 18,066 $ 10,924 $ 18,066

Notes payable (listed) – fixed rate debt

Lines of credit and repurchase agreements – variable rate debt

Notes payable 171,349 231,241 163,854 194,810

Repurchase agreements — 33,708 — 33,708

Lines of credit 19,000 40,000 19,000 40,000

Loans held for investment, net 363,678 356,571 363,678 356,571

3 unchanged sentences

Advances from borrowers 4,016 4,047 4,016 4,047

Senior secured notes payable 86,573 — 89,277 —

Mortgage payable 917 1,002 917 1,002

Following is a description of the methodologies used for assets measured at fair value:

Following is a description of the methodologies used for assets and liabilities measured at fair value:

Stocks and ETFs (Level 1):

11 unchanged sentences

These inputs are based on market data or pricing models rather than quoted prices for identical assets.

Since the securities are not actively traded, the company uses observable inputs to estimate their value, making Level 2 the appropriate classification.

Since the securities

SACHEM CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

are not actively traded, the company uses observable inputs to estimate their value, making Level 2 the appropriate classification.

Loans held for investment and related interest and fees receivables and due from/advances from borrowers:

11 unchanged sentences

Please note this category is inclusive of foreclosed loans not held for sale, and is included in loans held for investment.

SACHEM CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Real estate owned, net :

8 unchanged sentences

Fixed rate debt:

Fixed rate debt is classified as Level 1 and its fair value is based on quoted prices for similar instruments or calculated utilizing model derived valuations in which significant inputs are observable in active markets.

Publicly traded fixed rate debt is classified as Level 1 and its fair value is based on quoted prices for similar instruments or calculated utilizing model derived valuations in which significant inputs are observable in active markets.

Private senior secured fixed rate debt is estimated using a discounted cash flow model based on the contractual coupon rate and a market yield assumption derived from observed yields on the Company’s publicly traded unsecured notes adjusted for secured credit spread.

Variable rate debt:

3 unchanged sentences

The mortgage payable does not have a quoted market price in an active market, and significant inputs such as the interest rate, the probability of default, and the estimated repayment terms are not readily observable in the market.

Impact of Fair Value of Available-for-sale Securities on Other Comprehensive (Loss) Income

The following table presents the impact of the Company’s debt securities on its Other Comprehensive Income (“OCI”) for the years ended December 31, 2024 and 2023:

(in thousands)

OCI from AFS debt securities:

Unrealized gain (losses) on debt securities at beginning of period

Unrealized holding gains on AFS securities

Reclassification adjustment for gains / losses realized in net (loss) income

Reclassification of losses from unrealized to provision for credit losses

Change in OCI from AFS debt securities

Balance at end of period

As of December 31, 2024, and December 31, 2023, the Company recorded an “Allowance for credit losses” on debt securities of $ 0 and $ 0.8 million, respectively, based on unrealized losses for a trailing twelve months, which is presented in “Investment securities (at fair value)” on the Company’s consolidated balance sheets.

During the year ended December 31, 2024, the Company sold all of its debt securities, as such, as of December 31, 2024, the balance of these securities was $ 0 .

As of December 31, 2023, the fair value of these securities was $ 0.8 million.

The cost basis of these securities was $ 1.6 million.

SACHEM CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Loans and Allowance for Credit Losses

1 unchanged sentence

The classification for a loan is based on management’s strategy for the loan.

SACHEM CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Loans held for investment

The Company offers secured, non-bank loans to real estate owners and investors (also known as “hard money” loans) to fund their acquisition, renovation, development, rehabilitation or improvement of properties located primarily in Connecticut, New York and Florida.

The Company’s lending standards typically require that the original principal amount of all mortgage receivable notes be secured by first mortgage liens on one or more properties owned by the borrower or related parties and that the maximum LTV be no greater than 70% of the appraised value of the underlying collateral, as determined by an independent appraiser at the time of the loan origination.

The Company considers the maximum LTV as an indicator for the credit quality of a mortgage note receivable.

In the case of properties undergoing renovation, the loan-to-value ratio is calculated based on the estimated fair market value of the property after the renovations have been completed.

The Company offers secured, non-bank loans to real estate owners and investors to fund their acquisition, renovation, development, rehabilitation or improvement of properties located primarily in Connecticut, New York, Massachusetts and Florida.

The Company’s lending standards typically require that the original principal amount of all mortgage receivable notes be secured by first mortgage liens on one or more properties owned by the borrower or related parties and that the maximum loan-to-value ("LTV") be no greater than 70% of the appraised value of the underlying collateral, as determined by an independent appraiser at the time of the loan origination.

The Company considers the maximum LTV as an indicator of credit risk of a mortgage note receivable.

In the case of properties undergoing renovation, the LTV ratio is calculated based on the estimated fair market value of the property after the renovations have been completed.

However, the Company makes exceptions to this guideline if the facts and circumstances support the incremental risk.

These factors include the additional collateral provided by the borrower, the credit profile of the borrower, the Company’s previous relationship, if any, with the borrower, the nature of the property, the geographic market in which the property is located and any other information the Company deems appropriate.

The loans are generally for a term of one to three years .

The loans are initially recorded and carried thereafter, in the financial statements, at cost.

Most of the loans provide for monthly payments of interest only (in arrears) during the term of the loan and a balloon payment of the principal on the maturity date.

Most of the loans provide for monthly payments of interest only (in arrears) during the term of the loan and a balloon payment of the principal at maturity.

As of December 31, 2025, and 2024, the Company had 115 and 157 loans held for investment, respectively.

4 unchanged sentences

As of December 31, 2024, such loans were on nonaccrual status and in pending/pre-foreclosure.

There were no such loans held for sale as of December 31, 2023.

In October 2024.

the Company retained Mission Capital, a subsidiary of Marcus and Millichap, which is a real estate capital markets firm, as our sole and exclusive advisor for the proposed sale of a pool of mortgage loans.

There were no such loans held for sale as of December 31, 2025 as three loans were sold, one loan was transferred to real estate owned, and seven loans were transferred back to loans held for investment during the year ended December 31, 2025.

In October 2024, the Company initiated the proposed sale of a pool of mortgage loans.

A majority of these loans were classified as “non-accrual,” meaning payments of interest owed are more than 90 days overdue.

4 unchanged sentences

In connection with the sale, the Company incurred a loss of $ 19.7 million on principal and $ 2.3 million on charges due from such loans, which is presented on the consolidated statement of operations in loss on sale of loans.

During the sale process, the Company removed $ 15.9 million of loans that were initially included in the sale, and these remain as loans held for sale as noted above.

During the sale process, the Company removed $ 15.9 million of loans that were initially included in the sale, and these remained as loans held for sale at December 31, 2024 as noted above.

Loan portfolio

2 unchanged sentences

For the year ended December 31, 2025 and 2024, $ 0.4 million and $ 0.7 million of interest income was recorded on nonaccrual loans due to payments received, respectively.

As of December 31, 2024, and 2023, the Company had direct reserves on outstanding principal of $ 13.3 million and $ 5.2 million, respectively.

The below table summarizes the Company’s loan portfolio by the past due status:

As of December 31, 2025, and 2024, the

SACHEM CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Company had direct reserves on outstanding principal of $ 6.3 million and $ 13.3 million, respectively.

The below table summarizes the Company’s loans held for investment gross principal balance by the past due status:

Loans held for investment

(in thousands)

30-59 days past due

60-89 days past due

Greater than 90 days

(in thousands) Current 30-59 days past due 60-89 days past due Greater than 90 days Total

As of December 31, 2025 $ 239,615 $ 20,218 $ — $ 117,585 $ 377,418

As of December 31, 2024 $ 223,513 $ 49,460 $ 16,936 $ 87,082 $ 376,991

SACHEM CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

There are no greater than 90 days past due loans that are on accrual status as of December 31, 2025 and 2024.

As of December 31, 2025 and 2024, there were loans greater than 90 days past due with gross principal balances of $ 96.8 million and $ 30.9 million, respectively, for which no specific allowance for credit losses on principal was recorded.

For the years ended December 31, 2025 and 2024, the aggregate amounts of loans funded by the Company were $ 151.8 million and $ 134.3 million, respectively, offset by principal repayments of $ 140.2 million and $ 191.0 million, respectively.

As of December 31, 2024, the Company’s mortgage loan portfolio includes loans ranging in size up to $ 42.9 million with stated interest rates ranging from 6.5 % to 15.0 %.

The aggregate gross outstanding principal of loans in pending/pre-foreclosure as of December 31, 2025, and 2024, was $ 37.5 million and $ 36.3 million, respectively.

As of December 31, 2025, and 2024, the Company had directly reserved against these loans in foreclosure in the amounts of $ 4.2 million and $ 6.1 million, respectively.

Further, the Company had direct reserves against non-performing loans held for investment that experienced declines in fair value of $ 2.1 million and $ 7.3 million, respectively.

As of December 31, 2025 and 2024, the aggregate outstanding principal amount of non-performing loans held for investment with direct allowances was $ 20.8 million and $ 57.8 million, respectively.

As of December 31, 2025, 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 % but could be more or less depending on state usury laws and other considerations deemed relevant by the Company.

13 unchanged sentences

The deferred origination, loan servicing and amendment fee income represents amounts that will be recognized over the contractual life of the underlying mortgage notes receivable.

SACHEM CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Allowance for credit loss

1 unchanged sentence

Balance as of

Provision for credit

Balance as of

December 31, 2023

losses related to loans

December 31, 2024 Provision for credit

losses related to loans Reclassification of loans held for sale to loans held for investment Charge-offs Balance as of

December 31, 2025

(in thousands)

Loans $ 18,470 $ 1,837 $ 3,745 $ ( 12,542 ) $ 11,510

Interest and fees receivable 3,133 ( 157 ) — ( 378 ) 2,598

2 unchanged sentences

Total allowance for credit losses $ 23,662 $ 3,280 $ 3,745 $ ( 14,825 ) $ 15,862

The below table represents the financial statement line items that are impacted by the CECL allowance:

Allowance for

credit losses on

Provision for credit

Balance as of

of January 1, 2023

losses related to loans

The below table represents the financial statement line items that are impacted by the allowance for credit losses for the year ended December 31, 2024:

Balance as of December 31, 2023 Provision for credit

losses related to loans Reclassification of loans held for sale to loans held for investment Charge-offs Balance as of

December 31, 2024

(in thousands)

Loans $ 7,523 $ 22,405 $ — $ ( 11,458 ) $ 18,470

Interest receivable 902 2,231 — — 3,133

1 unchanged sentence

Unfunded commitments 509 415 — — 924

Total CECL allowance

SACHEM CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Total allowance for credit losses $ 9,286 $ 26,928 $ — $ ( 12,552 ) $ 23,662

Recoveries for the years ended December 31, 2025 and 2024 were de minimis.

The following table summarizes the activity in the loans held for investment allowance for credit losses for the year ended December 31, 2025:

Allowance for credit losses

(in thousands) Allowance for credit losses

2024 Provision for credit losses

(in thousands)

loans Reclassification of loans held for sale to loans held for investment Charge-offs Allowance for credit losses

Geographical Location

The following table summarizes the activity in the loans held for investment allowance for credit losses from adoption on January 1, 2023, through December 31, 2023:

Allowance for credit losses

Provision for credit losses

Adoption of ASU

(in thousands)

loans held for investment

New England $ 12,844 $ 1,292 $ — $ ( 7,707 ) $ 6,429

Mid-Atlantic 1,857 ( 132 ) 3,745 ( 3,700 ) 1,770

South 1,802 1,014 — ( 1,135 ) 1,681

West 1,967 ( 337 ) — — 1,630

Total $ 18,470 $ 1,837 $ 3,745 $ ( 12,542 ) $ 11,510

SACHEM CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes the activity in the loans held for investment allowance for credit losses for the year ended December 31, 2024:

(in thousands) Allowance for credit losses as of December 31, 2023 Provision for credit losses

loans held for investment Charge-offs Allowance for credit losses

Geographical Location

The following table presents charge-offs by fiscal year of origination as of the year ended December 31, 2024:

New England $ 5,764 $ 13,859 $ ( 6,779 ) $ 12,844

Mid-Atlantic 1,324 533 — 1,857

South 435 6,046 ( 4,679 ) 1,802

West — 1,967 — 1,967

Total $ 7,523 $ 22,405 $ ( 11,458 ) $ 18,470

The following table presents charge-offs by fiscal year of origination during the year ended December 31, 2025:

2025 2024 2023 2022 2021 Prior Total

(in thousands)

Current period charge-offs $ — $ 1,720 $ 162 $ 7,070 $ 3,590 $ — $ 12,542

Presented below is the Company’s loans portfolio by geographical location:

December 31, 2024

December 31, 2023

(in thousands)

Carrying Value

% of Portfolio

Carrying Value

% of Portfolio

Total $ — $ 1,720 $ 162 $ 7,070 $ 3,590 $ — $ 12,542

Presented below is the Company’s loans held for investment portfolio by geographical location:

December 31, 2025 December 31, 2024

(in thousands) Carrying Value % of Portfolio Carrying Value % of Portfolio

Geographical Location

Loans held for investment:

New England $ 163,049 43.2 % $ 179,421 47.6 %

Mid-Atlantic 40,483 10.7 % 42,304 11.2 %

South 170,441 45.2 % 151,165 40.1 %

West 3,445 0.9 % 4,101 1.1 %

Total 377,418 100.0 % 376,991 100.0 %

SACHEM CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following tables allocate the carrying value of the Company’s loan portfolio based on credit quality indicators in assessing estimated credit losses and vintage of origination at the dates indicated:

December 31, 2024

The following tables allocate the gross principal balance of the Company’s loans held for investment portfolio based on credit quality indicators in assessing estimated credit losses and vintage of origination at the dates indicated:

December 31, 2025 Year Originated(1)

FICO Score (2) (in thousands)

Value 2025 2024 2023 2022 2021 Prior

Loans held for investment:

Under 500 $ 142 $ — $ 142 — $ — $ — $ —

501-550 35 — — — — — 35

551-600 — — — — — — —

601-650 17,665 2,914 4,250 1,025 3,102 — 6,374

651-700 81,859 18,654 4,017 10,594 9,010 38,375 1,209

701-750 125,603 24,082 7,226 23,721 5,299 64,348 927

751-800 137,725 42,340 15,795 46,339 13,449 19,802 —

801-850 14,389 — — 1,700 12,689 — —

Total 377,418 $ 87,990 $ 31,430 83,379 $ 43,549 $ 122,525 $ 8,545

__________________________

(1) Represents the year of origination or amendment where the loan was subject to a full re-underwriting.

(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.

December 31, 2023

Year Originated (1)

December 31, 2024 Year Originated(1)

FICO Score (2) (in thousands)

Value 2024 2023 2022 2021 2020 Prior

Under 500 $ 140 $ 140 $ — $ — $ — $ — $ —

501-550 2,860 — — — 1,060 — 1,800

551-600 7,094 1,222 290 2,170 1,816 636 960

601-650 28,779 8,432 3,347 1,798 7,411 6,149 1,642

651-700 35,711 4,250 7,177 10,302 12,079 660 1,243

701-750 159,575 6,275 40,459 11,982 97,980 1,023 1,856

751-800 124,599 26,465 32,016 36,280 28,427 1,411 —

801-850 18,233 — 415 17,818 — $ — —

Total 376,991 $ 46,784 $ 83,704 $ 80,350 $ 148,773 $ 9,879 $ 7,501

__________________________

(1) Represents the year of origination or amendment where the loan was subject to a full re-underwriting.

(2) The FICO Scores are calculated at the inception of a loan and are updated if the loan is modified or on an as needed basis.

SACHEM CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table presents the amortized cost of collateral dependent loans:

December 31, 2025 December 31, 2024

(in thousands)

Collateral Type Collateral Dependent Loans Collateral Dependent Loans

Residential $ 65,077 $ 69,904

Commercial 27,700 11,162

Pre-Development Land 12,832 6,512

Mixed Use 14,666 6,503

Total $ 120,275 $ 94,081

Loan modifications made to borrowers experiencing financial difficulty

4 unchanged sentences

The Company considers loans that are 90 days past due to be in payment default.

SACHEM CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The table below presents loan modifications made to borrowers experiencing financial difficulty:

The table below presents loan modifications made to borrowers experiencing financial difficulty during the year ended December 31, 2025:

Year Ended December 31, 2025

(in thousands) Carrying Value % of Total

Carrying Value of

(in thousands)

Carrying Value

Loans held for investment, net

Financial Effect

Loans held for investment, net Financial Effect

Loans modified during the period ended

Term extension

A weighted average of 11.5 months were added to the life of the loans

Principal modification, with no term extension

Unpaid interest/taxes/charges added to principal balance

Term extension $ 74,253 20.4 % A weighted average of 8.9 months were added to the life of the loans

Principal modification, with no term extension $ 5,232 1.4 % Unpaid interest/taxes/charges added to principal balance

The Company monitors the performance of loans modified to borrowers experiencing financial difficulty.

The table below presents the performance of loans that have been modified in the last 12 months to borrowers experiencing financial difficulty.

The table below presents the performance of loans that have been modified during the year ended December 31, 2025 to borrowers experiencing financial difficulty.

The Company considers loans that are 90 days past due to be in payment default.

Year Ended December 31, 2025

(in thousands)

90-119 days past due

120+ days past due

(in thousands) Current 90-119 days past due 120+ days past due Total

Loans modified during the period ended

2 unchanged sentences

The Company has committed to lend additional amounts totaling approximately $ 4.5 million to borrowers experiencing financial difficulty.

Of the loans that were modified that experienced financial difficulties during the year, six loans defaulted within twelve months of the modification.

These loans had an aggregate outstanding balance of $ 5.7 million which represented 1.6 % of the portfolio.

Of the loans that were modified that experienced financial difficulties during the year, ten loans with an outstanding principal balance of $ 12.2 million, experienced rate decreases due to the modification.

Of the loans that were modified that experienced financial difficulties during the year

SACHEM CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

ended December 31, 2025, one loan defaulted within 12 months of the modification.

This loan had an aggregate outstanding balance of $ 0.4 million which represented 0.1 % of the portfolio.

Of the loans that were modified that experienced financial difficulties during the year ended December 31, 2025, ten loans with an outstanding principal balance of $ 31.9 million, experienced rate decreases due to the modification.

The change in the rate was taking the loans off default rate.

The table below presents loan modifications made to borrowers experiencing financial difficulty:

The table below presents loan modifications made to borrowers experiencing financial difficulty during the year ended December 31, 2024:

Year Ended December 31, 2024

(in thousands) Carrying Value % of Total

Carrying Value of

(in thousands)

Carrying Value

Loans held for investment, net

Financial Effect

Loans held for investment, net Financial Effect

Loans modified during the period ended

Term extension

A weighted average of 16.7 months were added to the life of the loans

Principal modification, with no term extension

Unpaid interest/taxes/charges added to principal balance

SACHEM CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Term extension $ 108,045 30.1 % A weighted average of 11.5 months were added to the life of the loans

Principal modification, with no term extension $ 12,173 3.4 % Unpaid interest/taxes/charges added to principal balance

The Company monitors the performance of loans modified to borrowers experiencing financial difficulty.

The table below presents the performance of loans that have been modified in the last 12 months to borrowers experiencing financial difficulty.

The table below presents the performance of loans that have been modified during the year ended December 31, 2024 to borrowers experiencing financial difficulty.

The Company considers loans that are 90 days past due to be in payment default.

Year Ended December 31, 2024

(in thousands)

90-119 days past due

120+ days past due

(in thousands) Current 90-119 days past due 120+ days past due Total

Loans modified during the period ended

2 unchanged sentences

As of December 31, 2024, the Company had committed to lend additional amounts totaling approximately $ 10.8 million to borrowers experiencing financial difficulty.

Of the loans that were modified that experienced financial difficulties during the year, one loan defaulted within twelve months of the modification.

This loan had an outstanding balance of $ 1.6 million, which represented 0.3 % of the portfolio.

Of the loans that were modified that experienced financial difficulties during the year, fourteen loans with an aggregate outstanding principal balance of $ 29.1 million, experienced rate decreases due to the modification.

Of the loans that were modified that experienced financial difficulties during the year ended December 31, 2024, six loans defaulted within 12 months of the modification.

These loans had an outstanding balance of $ 5.7 million, which represented 1.6 % of the portfolio.

Of the loans that were modified that experienced financial difficulties during the year ended December 31, 2024, ten loans with an aggregate outstanding principal balance of $ 12.2 million, experienced rate decreases due to the modification.

The change in the rate was taking the loans off default rate.

Investment in Rental Real Estate, net

SACHEM CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Investment in Developmental Real Estate, net

For the years ended December 31, 2025 and 2024, investment in rental real estate, net consisted of the following:

Investment in Rental

Year Ending December 31, 2024

Accumulated Depreciation

Real Estate, Net

(in thousands)

Site improvements

Tenant improvements

Construction in progress

Investment in Rental

Year Ending December 31, 2023

Accumulated Depreciation

Real Estate, Net

(in thousands)

Year Ending December 31, 2025 Year Ending December 31, 2024

(in thousands) Cost Accumulated Depreciation Net investment Cost Accumulated Depreciation Net investment

Land and land improvements $ 8,392 $ ( 15 ) $ 8,377 $ 4,557 $ — $ 4,557

Building 1,346 ( 4 ) 1,342 4,936 ( 154 ) 4,782

Site improvements — — — 359 ( 30 ) 329

1 unchanged sentence

Construction in progress — — — 3,141 — 3,141

Building and site improvements are being depreciated using the straight-line method over its estimated useful life of 40 years and 15 years , respectively.

Total $ 9,738 $ ( 19 ) $ 9,719 $ 14,216 $ ( 184 ) $ 14,032

Building, land improvements, and site improvements are being depreciated using the straight-line method over their estimated useful lives of 40 years, 15 years and 15 years, respectively.

Tenant improvements are amortized over the life of the respective lease using the straight-line method.

Lease in-place intangible assets, deferred leasing costs and acquired below-market leases are amortized on a straight-line basis over the respective life of the lease.

For the year ended December 31, 2024, depreciation and amortization related to the asset was $ 0.1 million , which is presented in “Other expenses” on the Company’s consolidated Statements of Operations.

Tenant improvements and other intangibles associated with the tenant are not being amortized until the commencement of the lease which is not until 2025.

Additionally, the Company leases space to a tenant under an operating lease.

The lease provides for the payment of fixed base rent payable monthly in advance and periodic step-ups in rent over the term of the lease and a pass through to tenants their share of increases in real estate taxes and operating expenses over a base year.

The lease also provides for free rent and a tenant improvement allowance of $ 2.7 million.

The lease commences February 2025 with a cash rent abatement period of 425 days.

SACHEM CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2024, future minimum rents under non-cancelable operating leases were as follows:

Years Ending December 31,

(in thousands)

As of December 31, 2024, estimated annual amortization of acquired below-market lease intangible is as follows:

Years Ending December 31,

(in thousands)

As of December 31, 2024, estimated annual amortization of acquired in-place lease intangible is as follows:

Years Ending December 31,

(in thousands)

As of December 31, 2024, estimated annual amortization of deferred leasing costs is as follows:

Years Ending December 31,

(in thousands)

In addition, the Westport Purchase Agreement contains a provision requiring the payment of an Additional Purchase Price, as defined, upon the earlier to occur of:

● the Company closing on any construction financing on the Project (as defined);

For the year ended December 31, 2025 and 2024, depreciation and amortization related to the asset was $ 0.1 million, which is presented in “Other expenses” on the Company’s Consolidated Statements of Operations.

Additionally, the Company leased space to a tenant under an operating lease at one developmental real estate property acquired in 2023.

The lease provided for the payment of fixed base rent payable monthly in advance and periodic step-ups in rent over the term of the lease and a pass through to tenants their share of increases in real estate taxes and operating expenses over a base year.

The lease also provided for free rent and a tenant improvement allowance of $ 2.7 million.

The lease commenced February 2025 with a cash rent abatement period of 425 days.

On December 31, 2025, the Company sold this property and recognized a gain of $ 4.0 million, which is presented in the Company's Consolidated Statements of Operations.

Real Estate Owned (REO), net

Property acquired through foreclosure are included on the Consolidated Balance Sheets as real estate owned and further categorized as held for sale or held for rental, described in detail below.

As of December 31, 2025, and 2024, REO, net totaled $ 16.4 million and $ 18.6 million, respectively.

During the year ended December 31, 2025, the Company’s REO portfolio recorded an impairment loss of $ 1.1 million compared to an impairment loss of $ 0.5 million in 2024.

SACHEM CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

● twelve months following receipt of all zoning and other state and municipal permits and approvals necessary to construct certain residential units (as defined).

These payments represent contingent consideration in connection with this acquisition, requiring accrual when the payments are deemed probable and reasonably estimable.

In January 2024, the Company submitted a proposal to the town of Westport for eight market rate residential units and two affordable rate units.

Those units were approved in March 2024, subject to a 30-day appeal period.

In April 2024, the 30-day appeal period for the Westport Asset land approval expired, and the Company deemed these events which would give rise to a payment of Additional Purchase Price allocated to land to be considered probable.

Accordingly, the agreed payment of $ 0.1 million per certain approved and sold or permitted market rate residential units has been recognized.

The expected payment is $ 0.6 million and has been accrued as of December 31, 2024 and is included in Accounts payable and accrued liabilities on the consolidated balance sheets included in the accompanying consolidated financial statements.

Real Estate Owned (REO)

Property acquired through foreclosure are included on the consolidated balance sheets as real estate owned and further categorized as held for sale or held for rental, described in detail below.

As of December 31, 2024, and 2023, real estate owned, net totaled $ 18.6 million and $ 3.5 million, respectively.

During the year ended December 31, 2024, the Company’s real estate owned portfolio recorded an impairment loss of $ 0.5 million compared to an impairment loss of $0.8 million in 2023, which is considered a level 3 non-recurring fair market value adjustment.

The following table presents the Company’s REO as of December 31, 2025 and 2024:

1 unchanged sentence

Real estate owned at the beginning of year $ 18,574 $ 3,462

Principal basis transferred to real estate owned

Principal amount transferred to real estate owned 22,141 28,640

Charge-off’s on principal transferred ( 8,769 ) ( 11,361 )

1 unchanged sentence

Proceeds from sale of real estate owned ( 7,511 ) ( 1,624 )

New loans generated from sale of real estate owned ( 840 ) ( 989 )

Properties transferred to investment in developmental real estate ( 6,160 ) —

Impairment loss ( 1,060 ) ( 492 )

4 unchanged sentences

Properties Held for Sale

During the year ended December 31, 2024, the Company sold seven properties held for sale and recognized an aggregate gain of $ 0.4 million.

During the year ended December 31, 2025, the Company sold fifteen properties held for sale and recognized a de minimis gain.

During the year ended December 31, 2024, the Company sold seven properties held for sale and recognized an aggregate gain of $ 0.4 million.

Such gains are included in, “Loss (gain) on sale of real estate owned and property and equipment, net” on the Compnay’s consolidated Statements of Operations.

Such gains are included in, “Gain (loss) on sale of investments in developmental real estate, real estate owned, and property and equipment, net” on the Company’s Consolidated Statements of Operations.

Properties Held for Rental

1 unchanged sentence

The tenant signed a 5 -year lease that commenced on August 1, 2021.

As of December 31, 2025, future minimum rent payments under this lease total $ 31,000 through maturity on July 31, 2026.

Property and Equipment, net

The following table represents the Company’s property and equipment, net as of December 31, 2025 and 2024:

December 31, 2025 December 31, 2024

(in thousands) Cost Accumulated Depreciation Net investment Cost Accumulated Depreciation Net investment

Building $ 2,594 $ ( 177 ) $ 2,417 $ 2,557 $ ( 110 ) $ 2,447

Land 255 — 255 255 — 255

Furniture and fixtures 308 ( 185 ) 123 308 ( 117 ) 191

Computer hardware and software 320 ( 276 ) 44 295 ( 246 ) 49

Vehicles 502 ( 181 ) 321 435 ( 155 ) 280

Total property and equipment, net $ 3,979 $ ( 819 ) $ 3,160 $ 3,850 $ ( 628 ) $ 3,222

SACHEM CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2024, future minimum rents under this lease were as follows:

Years Ending December 31,

(in thousands)

As of December 31, 2024, and December 31, 2023, other assets consist of the following:

December 31, 2024

December 31, 2023

As of December 31, 2025, and 2024, other assets consist of the following:

December 31, 2025 December 31, 2024

(in thousands)

1 unchanged sentence

Other receivables 1,251 1,793

Other assets 299 190

Notes receivable 2,319 2,130

1 unchanged sentence

Leases in place intangible — 568

Goodwill 391 391

Intangible asset – trade name 130 130

Total $ 5,002 $ 6,164

Line of Credit, Mortgage Payable, and Churchill Facility

Wells Fargo Margin Line of Credit

During the year ended December 31, 2020, the Company established a margin loan account at Wells Fargo Advisors that is secured by the Company’s portfolio of short-term securities.

The credit line bears interest at a rate equal to 1.75 % below the prime rate.

During the second quarter of 2024, the Company sold all of its investment securities that collateralized the line of credit.

As such, the balance of the line of credit as of December 31, 2024, was $ 0 .

At December 31, 2023, the total outstanding balance on the Wells Fargo credit line was $ 26.8 million.

Line of Credit – Needham Bank

On March 2, 2023, the Company entered into 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 $ 45 million revolving credit facility (the “Needham Credit Facility”).

Under the Credit Agreement, the Company also had the right to request an increase in the size of the Needham Credit Facility up to $ 75 million, subject to certain conditions, including the approval of the Lenders.

As of September 8, 2023, the Needham Credit Facility was increased to $ 65 million.

As of December 31, 2024 and December 31, 2023, the total outstanding principal balance on the Needham Credit Facility was $ 40.0 million and $ 35.0 million, respectively, with an interest rate of 7.25 % and 8.25 %, respectively.

The 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 agreement the borrower is SN Holdings LLC, a Connecticut limited liability company formed and wholly owned by Sachem Capital Corp.

for the sole purpose of acting as the borrower under the new agreement.

Sachem Capital Corp.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

is the guarantor of all SN Holdings’ obligations under the 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.

Sachem Capital Corp., 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 Sachem’s request to facilitate other financing at the Sachem Capital Corp.

and subsidiaries level.

Loans 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 %).

1 unchanged sentence

Assets excluded from the lien include real estate owned by the Company (other than real estate acquired pursuant to foreclosure) and mortgages sold under the Churchill Facility (as defined below).

The Needham Credit Facility expires March 2, 2026, but the Company has a right to extend the term for one year upon the consent of Needham and the Lenders, which consent cannot be unreasonably withheld, and so long as it is not in default and satisfies certain other conditions.

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.

All 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:

The Needham Credit Facility is subject to other terms and conditions, including representations and warranties, covenants and agreements typically found in these types of

SACHEM CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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;

1 unchanged sentence

and (C) an asset coverage ratio of at least 150 %.

As of December 31, 2024, the Company was not in compliance with the debt service coverage ratio covenant described above.

On March 20, 2025, we terminated our existing Needham Credit Facility and replaced it with a new Credit Facility with Needham.

Except as described below, the new Credit Facility is identical to the old Credit Facility in all material respects:

● First, under the new agreement the borrower is SN Holdings LLC, a Connecticut limited liability company formed and wholly owned by Sachem Capital Corp.

for the sole purpose of acting as the borrower under the new agreement.

Sachem Capital Corp.

is the guarantor of all SN Holdings’ obligations under the new agreement.

● Second, SN Holdings, in its capacity as borrower, granted Needham a lien on all its assets.

SN Holdings is required to maintain assets equal to 2 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 million and (ii) the aggregate principal outstanding principal balance on the facility.

● Third, Sachem Capital Corp., in its capacity as guarantor, agreed to grant Needham a blanket lien on all its assets.

However, Needham is required to release its lien at Sachem’s request to facilitate other financing at the Sachem Capital Corp.

and subsidiaries level.

● Fourth, the size of the new credit facility is a committed facility of up $ 50 million, subject to borrowing base limitations and facility covenant compliance.

● Fifth, the new Needham Credit Facility retained the same maturity of March 2, 2026 as original term with the option to extend one year provided we are in compliance with all the covenants and other terms and conditions of the new Needham Credit Facility.

SACHEM CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Simultaneously with the execution and delivery of the Credit, Security and Guaranty Agreement, dated as of March 20, 2025, among SN Holdings, Sachem and Needham, which governs the new Credit Facility, Sachem Capital Corp.

repaid the entire outstanding balance on the old credit facility, $ 39.6 million, and SN Holdings drew $ 36.1 million on the new credit facility, reducing our outstanding indebtedness by $ 3.5 million.

As of March 20, 2025, the Company was no longer in violation of any Credit Facility covenants.

As of December 31, 2025 and 2024, the total outstanding principal balance on the Needham Credit Facility was $ 19.0 million and $ 40.0 million, respectively, with an interest rate of 6.50 % and 7.25 %, respectively.

As of December 31, 2025, the Company was in compliance with all debt covenants.

Mortgage Payable

In 2021, the Company obtained a $ 1.4 million adjustable-rate mortgage loan from New Haven Bank (the “Old NHB Mortgage”) of which $ 750,000 was funded at closing to reimburse the Company for out-of-pocket costs relating to the acquisition of the property located at 568 East Main Street, Branford, Connecticut, which now serves as the Company’s headquarters.

The Old NHB Mortgage accrued interest at an initial rate of 3.75 % per annum for the first 72 months and was due and payable in full on December 1, 2037.

The Old NHB Mortgage was a non-recourse loan, secured by a first mortgage lien on the Company’s prior headquarters, which was located at 698 Main Street, Branford, Connecticut and the property located at 568 East Main Street, Branford, Connecticut.

On February 28, 2023, the Company refinanced the Old NHB Mortgage with an adjustable-rate mortgage loan from New Haven Bank (the “NHB Mortgage”) in the original principal amount of $ 1.66 million.

The loan accrues interest at an initial rate of 5.75 % per annum for the first 60 months .

On February 28, 2023, the Company entered into an adjustable-rate mortgage loan with New Haven Bank in the original principal amount of $ 1.66 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.

All payments under the loan are amortized based on a 20-yea r 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.

4 unchanged sentences

On July 21, 2021, the Company consummated a $ 200 million master repurchase financing facility (“Churchill Facility”) with Churchill MRA Funding I LLC (“Churchill”), a subsidiary of Churchill Real Estate, a vertically integrated real estate finance company based in New York, New York.

Under the terms of the Churchill Facility, the Company has the right, but not the obligation, to sell mortgage loans to Churchill, and Churchill has the right, but not the obligation, to purchase those loans.

In addition, the Company has the right and, in some instances the obligation, to repurchase those loans from Churchill.

The amount that Churchill will pay for each mortgage loan it purchases will vary based on the attributes of the loan and various other factors.

The repurchase price is calculated by applying an interest factor, as defined, to the purchase price of the mortgage loan.

The Company has also pledged the mortgage loans sold to Churchill to secure its repurchase obligation.

The cost of capital under the Churchill Facility is equal to the sum of (a) the greater of (i) 0.25 % and (ii) the 90-day SOFR (which replaced the 90 -day LIBOR) plus (b) 3 %- 4 %, depending on the aggregate principal amount of the mortgage loans held by Churchill at that time.

As of December 31, 2024 and 2023, the effective interest rate charged under the facility was 8.69 % and 9.47 %, respectively.

The Churchill Facility is subject to other terms and conditions, including representations and warranties, covenants and agreements typically found in these types of financing arrangements.

Under one such covenant, the Company (A) is prohibited from (i) paying any dividends or making distributions in excess of 90% of its taxable income, (ii) incurring any indebtedness or (iii) purchasing any of its capital stock, unless, it has an asset coverage ratio of at least 150 %;

and (B) must maintain unencumbered cash and cash equivalents in an amount equal to or greater than 2.50 % of the amount of its repurchase obligations.

Churchill has the right to terminate the Churchill Facility at any time upon 180 days prior notice to the Company.

The Company then has an additional 180 days after termination to repurchase all the mortgage loans held by Churchill.

The Company uses the proceeds from the Churchill Facility to finance the continued expansion of its lending business and for general corporate purposes.

Under the terms of the Churchill Facility, the Company had the right, but not the obligation, to sell mortgage loans to Churchill, and Churchill had the right, but not the obligation, to purchase those loans.

In addition, the Company had the right and, in some instances the obligation, to repurchase those loans from Churchill.

The amount that Churchill would pay for each mortgage loan it purchased varied based on the attributes of the loan and various other factors.

The repurchase price was calculated by applying an interest factor, as defined, to the purchase price of the mortgage loan.

The Company had also pledged the mortgage loans sold to Churchill to secure its repurchase obligation.

The cost of capital under the Churchill Facility was equal to the sum of (a) the greater of (i) 0.25 % and (ii) the 90-day SOFR (which replaced the 90-day LIBOR) plus (b) 3 %- 4 %, depending on the aggregate principal amount of the mortgage loans held by Churchill at that time.

As of December 31, 2024, the effective interest rate charged under the facility was 8.69 %.

In December 2025, all parties mutually agreed to terminate the Churchill Facility which had previously been repaid in full during the fourth quarter of 2025.

The Churchill Facility was subject to other terms and conditions, including representations and warranties, covenants and agreements typically found in these types of financing arrangements.

Under one such covenant, the Company (A) was prohibited from (i) paying any dividends or making distributions in excess of 90 % of its taxable income, (ii) incurring any indebtedness or (iii) purchasing any of its capital stock, unless, it has an asset coverage ratio of at least 150 %;

and (B) had to maintain unencumbered cash and cash equivalents in an amount equal to or greater than 2.50 % of the amount of its repurchase obligations.

Churchill had the right to terminate the Churchill Facility at any time upon 180 days prior notice to the Company.

The Company then had an additional 180 days after termination to repurchase all the mortgage loans held by Churchill.

SACHEM CAPITAL CORP.

1 unchanged sentence

The following table summarizes the outstanding balances under the Churchill Facility agreement:

December 31, 2024

December 31, 2023

(in thousands)

December 31, 2025 December 31, 2024

(in thousands) Total

Outstanding Rate Total

Outstanding Rate

Repurchase Agreement $ — — % $ 33,708 8.69 %

Total $ — $ 33,708

The following table summarizes loans held for investment pledged as collateral under the Churchill Facility agreement:

December 31, 2024

December 31, 2023

Total Carrying Value

(in thousands)

Loans Pledged

Number of Loans

Loans Pledged

Number of Loans

December 31, 2025 December 31, 2024

(in thousands) Total Carrying Value

Loans Pledged Number of Loans Total Carrying Value

Loans Pledged Number of Loans

Loans held for investment sold under the repurchase agreement $ — — $ 66,365 17

Total $ — $ 66,365

The following table summarizes the contractual maturities for loans held for investment sold under the repurchase agreement:

December 31, 2024

December 31, 2023

December 31, 2025 December 31, 2024

(in thousands)

1 unchanged sentence

After 1 but within 2 years — 10,315

The NHB Mortgage and the Churchill Facility contain cross-default provisions.

Total $ — $ 66,365

The NHB Mortgage and the Churchill Facility contained cross-default provisions.

Unsecured Notes Payable

At December 31, 2025, the Company had an aggregate of $ 171.3 million of unsecured, unsubordinated notes payable outstanding, net of $ 1.9 million of deferred financing costs (collectively, the “Notes”).

(i) Notes having an aggregate principal amount of $ 56.4 million bearing interest at 7.75 % per annum and maturing September 30, 2025 (the “September 2025 Notes”);

(ii) 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”);

(iii) Notes having an aggregate principal amount of $ 51.9 million bearing interest at 6.0 % per annum and maturing March 30, 2027 (the “March 2027 Notes”);

(iv) Notes having an aggregate principal amount of $ 30.0 million bearing interest at 7.125 % per annum and maturing June 30, 2027 (the “June 2027 Notes”);

(v) Notes having an aggregate principal amount of $ 40.3 million bearing interest at 8.00 % per annum and maturing September 30, 2027 (the “September 2027 Notes”).

The 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 “SCCC,” “SCCD,” “SCCE,” “SCCF” and “SCCG,” respectively.

All the Notes were issued at par except for the last tranche of the September 2025 notes, in the original principal amount of $ 28 million, which were issued at $ 24.75 each.

(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”);

(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”);

(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”);

(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”).

The 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.

1 unchanged sentence

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.

The redemption price will be equal to the outstanding principal amount of

SACHEM CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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.

The following are the future principal payments on the notes payable as of December 31, 2025:

Years ending December 31,

Years ending December 31, Amount

(in thousands)

2026 $ 51,750

Total principal payments 173,254

2 unchanged sentences

The estimated amortization of the deferred financing costs as of December 31, 2025 is as follows:

Years ending December 31,

Years ending December 31, Amount

(in thousands)

Total deferred costs $ 1,905

Senior Secured Notes Payable

On 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 may be drawn at any time on or prior to May 15, 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:

2025 - $ 164,000 , 2026 - $ 609,000 , 2027 - $ 718,000 , 2028 - $ 804,000 , 2029 - $ 894,000 , and 2030 - $ 401,000 .

The 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 December 31, 2025.

The 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.

SACHEM CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Accounts Payable and Accrued Liabilities

Accounts payable and accrued liabilities include the following:

December 31, 2024

December 31, 2023

December 31, 2025 December 31, 2024

(in thousands)

2 unchanged sentences

Accrued interest 1,035 525

Total $ 3,255 $ 4,377

Fee Income from Loans

6 unchanged sentences

Construction servicing fees 440 457

SACHEM CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Legal fees 264 250

Other fees 811 1,382

Total $ 5,978 $ 8,594

Commitments and Contingencies

9 unchanged sentences

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.

SACHEM CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

based on information currently available to the Company and involves elements of judgment and significant uncertainties.

While 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.

2 unchanged sentences

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 December 31, 2024, there were two such properties.

The unpaid principal balance on the properties that are subject to these proceedings was $ 1.9 million.

At December 31, 2025, there was one such property with an unpaid principal balance of $ 0.3 million.

At December 31, 2024, there were two such property with an aggregate unpaid principal balance of $ 1.9 million.

Related Party Transactions

2 unchanged sentences

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 December 31, 2024, and 2023, loans to known shareholders totaled $ 17.2 million and $ 25.6 million, respectively, which is included in loans held for investment, net in the Company’s accompanying consolidated balance sheets.

Of the $ 17.2 million and $ 25.6 million loans to known shareholders as of December 31, 2024, and 2023, $ 17.0 million and $ 25.0 million, respectively, related to Mod 21, LLC, which is a wholly owned entity of the Company’s Senior Vice President of Asset Management and Vice President of Asset Management.

As of December 31, 2025, and 2024, loans to known shareholders totaled $ 17.2 million, which is included in loans held for investment, net in the Company’s accompanying Consolidated Balance Sheets.

As of December 31, 2025, and 2024, $ 17.2 million and $ 17.0 million, respectively, related to Mod 21, LLC, which is a wholly owned entity of the Company’s Senior Vice President of Asset Management and Vice President of Asset Management.

All of such loans are performing, and interest income earned on all related party loans for the years ended December 31, 2025 and 2024 totaled $ 1.1 million and $ 1.4 million, respectively.

1 unchanged sentence

For the years ended December 31, 2025 and 2024, she received compensation of $ 0.2 million and $ 0.2 million, respectively.

SACHEM CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Concentrations of Credit Risk

The Company maintains its cash and cash equivalents with various financial institutions.

Accounts at the financial institution are insured by the Federal Deposit Insurance Corporation (FDIC) up to $ 250,000 per depositor.

Concentrations of credit risk related to loans geographical location and property type may be affected by changes in economic or other conditions of the particular geographic area or particular asset type that collateralize the Company’s mortgage loans.

For further details see Note 4 – Loans and Allowances for Credit Losses.

Credit risks associated with the Company’s mortgage loan portfolio and related interest receivable are described in Note 4 – Loans and Allowance for Credit Losses.

Stock-Based Compensation and Employee Benefits

1 unchanged sentence

On October 27, 2016, the Company adopted the 2016 Equity Compensation Plan (the “Plan”), the purpose of which 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 Plan is administered by the Compensation Committee.

The maximum number of Common Shares reserved for the grant of awards under the Plan is 1,500,000 , subject to adjustment as provided in Section 5 of the Plan.

The Plan was administered by the Company's Compensation Committee (the "Compensation Committee").

The maximum number of the Company's common shares, par value $ 0.001 per share (the "Common Shares") reserved for the grant of awards under the Plan was 1,500,000 , subject to adjustment as provided in Section 5 of the Plan.

The number of shares issuable to any one individual in a plan year was also limited to 100,000 shares, subject to adjustment as provided for in the Plan.

On July 9, 2025, the Company adopted the 2025 Omnibus Incentive Plan (the "2025 Plan"), which replaced the Plan.

The purpose of the 2025 Plan is consistent with that of the Plan and the maximum number of 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 December 31, 2025 was 2,553,447 .

The number of shares issuable to any one individual in a plan year is also limited to 100,000 shares, subject to adjustment as provided for in the Plan.

The table below summarizes the Company’s awards granted, forfeited, or vested under the 2016 Plan during the years ended December 31, 2024 and 2023:

SACHEM CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The table below summarizes the Company’s awards granted, forfeited, or vested under the Plan and 2025 Plan during the years ended December 31, 2025 and 2024:

Restricted Stock

Weighted Average

Number of Shares

Number of Shares Weighted Average

Grant Date Fair Value

Unvested shares at December 31, 2023 297,412 $ 3.74

Granted 212,857 3.89

Vested ( 183,762 ) 4.39

Forfeited ( 333 ) 3.87

Unvested shares at December 31, 2024 326,174 4.31

Granted 1,150,983 1.20

Vested ( 312,789 ) 2.71

Forfeited ( 431,334 ) 1.21

Unvested shares at December 31, 2025 733,034 $ 1.80

During the years ended December 31, 2024 and 2023, the Company granted an aggregate of 212,857 and 196,056 , respectively, of restricted Common Shares under the Plan, including restricted Common Shares granted to the Company’s Chief Executive Officer (see Note 12).

The fair value of each block of shares at the time of grant was approximately $ 0.8 million.

With respect to the restricted Common Shares granted during the year ended December 31, 2024, (i) 33,666 shares vested on May 9, 2024;

(ii) 37,285 shares vested on January 1, 2025;

(iii) 33,667 shares will vest on May 1, 2025, and 2026 , respectively;

and (iv) 37,286 shares will vest on January 1, 2026 and 2027 , respectively.

During the years ended December 31, 2025 and 2024, the Company granted an aggregate of 1,150,983 and 212,857 , respectively, of restricted Common Shares under the 2025 Plan and the Plan.

Of the 1,150,983 shares granted during the year ended December 31, 2025, a grant of 420,168 shares was rescinded immediately after the grant as discussed further below.

Excluding the grant of 420,168 shares that was rescinded, grants during the year ended December 31, 2025 had a grant date fair value of $ 0.9 million.

On March 10, 2025, the Compensation Committee authorized (i) a grant of 420,168 restricted Common Shares to John L.

Villano, which shares had a fair market value on the date of grant of approximately $ 0.5 million;

and (ii) a one-time bonus grant of 20,000 restricted Common Shares to each of the Company’s directors other than Mr.

Each of the grantees, except for Mr.

Walraven, also had the option, at his or her election, to receive the fair market value equivalent of his or her grant in a lump sum cash payment of $ 23,800 .

An aggregate of 60,000 restricted Common Shares were granted to the Company’s non-employee directors, which shares had an aggregate fair market value on the date of grant of approximately $ 71,400 .

One director elected the cash option.

Subsequent to the Compensation Committee's action on March 10, 2025, authorizing the issuance of 420,168 Common Shares, subject to certain restrictions, to John L.

Villano under the Plan, the Company realized that the grant exceeded the 100,000 share limit on grants to any single individual in any one year set forth in the Plan by 320,168 shares.

In addition, upon further investigation, the Company determined that restricted stock grants made to Mr.

Villano with respect to calendar years 2023 and 2024, exceeded the Plan's 100,000 share limit by 30,890 and 11,857 shares, respectively.

Thus, in the aggregate, 362,915 restricted shares were issued in excess of Plan limitations.

All such shares were unvested and subject to restriction.

In an immediate full and in excess of necessary remediation of this matter, on March 24, 2025, the Compensation Committee rescinded the March 10, 2025 award to Mr.

Villano ab initio.

No other over issuances have been identified and no applicable adjustment have been identified.

SACHEM CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

With respect to the restricted Common Shares granted during the year ended December 31, 2025 and excluding the 420,168 share grant rescinded, the grants had the vesting dates as follows:

Vesting Date Number of Shares

March 10, 2025 110,833

July 31, 2025 34,482

January 1, 2026 37,538

March 10, 2026 110,833

January 1, 2027 37,538

March 10, 2027 110,834

January 1, 2028 37,537

March 10, 2028 15,000

September 3, 2028 236,220

Stock-based compensation for the years ended December 31, 2025 and 2024, was $ 0.8 million and $ 0.9 million, respectively.

As of December 31, 2025, there was unrecognized stock-based compensation expense of $ 0.7 million.

Additionally, during the years ended December 31, 2024 and 2023, the Company had 333 and 5,333 , respectively, of unvested restricted Common Shares forfeited to the Company as a result of the ending of the relationship with former employees.

Employee Benefits

On April 16, 2018, the Board approved the adoption of the Sachem Capital Corp.

On April 16, 2018, the Company's board of directors (the "Board") approved the adoption of the Sachem Capital Corp.

401(k) Profit Sharing Plan (the “401(k) Plan”).

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For the years ended December 31, 2025, and 2024, the 401(k) Plan expense was $ 0.1 million and $ 0.1 million, respectively, and is included under Compensation and employee benefits in the Consolidated Statements of Operations.

On August 24, 2022, the Company filed a prospectus supplement to its Form S-3 Registration Statement covering the sale of up to $ 75.0 million of its Common Shares and shares of its Series A Preferred Stock (as defined in Note 18 below) with an aggregate liquidation preference of up to $ 25.0 million in an “at-the market” offering, which terminated in February 2025 by its own terms (the “ATM Offering”).

On June 17, 2024, the Company filed a new prospectus supplement (the “New Prospectus Supplement”) which modified the ATM Offering by reducing the amount of Common Shares the Company may offer and sell to up to an aggregate of $ 48.7 million, including the Common Shares the Company has already sold in the ATM Offering prior to the date of the New Prospectus Supplement.

All the other terms of the ATM Offering remained the same.

During the year ended December 31, 2024, the Company sold 568,711 Common Shares with gross proceeds of $ 2.1 million and sold an aggregate of 276,825 shares of Series A Preferred Stock having an aggregate liquidation preference of $ 6.9 million, realizing gross proceeds of $ 5.8 million (representing a discount of 15.9 % from the liquidation preference).

The Company’s issuance costs for both Common Shares and Series A Preferred Stock shares sold during the year ended December 31, 2024 were $ 0.1 million.

Series A Preferred Stock

The 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

SACHEM CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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.

At-The-Market Offerings

On August 24, 2022, the Company filed a prospectus supplement to its Form S-3 Registration Statement covering the sale of up to $ 75.0 million of its Common Shares and shares of its Series A Preferred Stock with an aggregate liquidation preference of up to $ 25.0 million in an “at-the market” offering (the “ATM Offering”).

On June 17, 2024, the Company filed a new prospectus supplement (the “New Prospectus Supplement”) which modified the ATM Offering by reducing the amount of Common Shares the Company may offer and sell up to an aggregate of $ 48.7 million, including the Common Shares the Company has already sold in the ATM Offering prior to the date of the New Prospectus Supplement All the other terms of the ATM Offering remained the same.

In February 2025, the effectiveness of the S-3 Registration Statement expired and, as a result, the ATM Offering terminated.

On 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 a new ATM offering (the "New ATM Offering")..

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.

During the year ended December 31, 2024, the Company sold an aggregate of 276,825 shares of Series A Preferred Stock having an aggregate liquidation preference of $ 6.9 million, realizing gross proceeds of $ 5.7 million (representing a discount of 15.9 % from the liquidation preference) and an aggregate of 568,711 Common Shares, realizing net proceeds of $ 2.1 million.

At December 31, 2024, $ 49.9 million of Common Shares and shares of Series A Preferred Stock having a liquidation preference of $ 16.6 million were available for future sale under the ongoing “at-the market” offering.

In February 2025, the ATM Offering terminated by its own terms.

At December 31, 2025, $ 18.3 million of Series A Preferred Stock were available for future sale under the New ATM Offering.

Repurchase Plans

In October 2022, the Board adopted a stock repurchase plan (the “Original Repurchase Plan”), pursuant to which the Company may repurchase up to an aggregate of $ 7.5 million of its Common Shares.

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Under the New Repurchase Plan, the Company may repurchase up to an aggregate of $ 5,802,959 (the amount remaining under the Original Purchase Plan) of Common Shares and share repurchases will 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.

During the years ended December 31, 2024 and 2023, the Company repurchased an aggregate of 581,745 and 71,000 Common Shares at a total cost of $ 1.5 million and $ 0.2 million, respectively.

During the year ended December 31, 2025, the Company did not repurchase any Common Shares.

During the year ended December 31, 2024, the Company repurchased an aggregate of 581,745 Common Shares at a total cost of $ 1.5 million.

Earnings (Losses) Per Share

Basic and diluted earnings (lo sses) 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.

SACHEM CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Limited Liability Company Investments

The following table details the carrying value of each investment reflected on our consolidated balance sheets as of December 31, 2024:

(in thousands )

For the year ended December 31, 2025, the Company had basic and diluted weighted average Common Shares outstanding of 46,893,413 , resulting in basic and diluted earnings per Common Share of $ 0.04 .

For the year ended December 31, 2024, the Company had basic and diluted weighted average Common Shares outstanding of 47,413,012 , resulting in basic and diluted loss per Common Share of $( 0.93 ).

Limited Liability Company ("LLC") Investments

The following table details the carrying value of each investment reflected on the Consolidated Balance Sheets as of December 31, 2025 and 2024:

December 31, 2025 December 31, 2024

Investment Ownership

Percentage Carrying

Value Ownership

Percentage Carrying

(in thousands ) (in thousands )

Shem Creek Capital Fund V LLC 7.6 % $ 867 7.6 % $ 1,143

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Cordo CLT Investors LLC 7.2 % 2,500 7.2 % 2,500

Total $ 39,132 $ 53,942

Shem Creek (“Shem”)

2 unchanged sentences

The Shem LLC’s are commercial real estate finance companies that provide first mortgage debt capital solutions to local and regional commercial multi-family real estate owners in the Northeastern United States.

The Company has no management or voting rights in the operations of any of the Shem Creek LLC’s.

The Company has no management or voting rights in the operations of any of the Shem LLC’s.

In September 2024, the Company acquired the seventh ownership interest, a 20 % membership interest in Shem Creek Capital, LLC, the management company of all Shem Creek investment vehicles.

At close, the Company paid $ 2.5 million in cash.

The balance of the purchase price is due and payable on or before September 6, 2025.

In February 2025, the Company paid the remaining $ 2.5 million in cash to complete the acquisition of the 20 % membership interest.

2 unchanged sentences

The remaining two of three members of the investment committee is comprised of the two members who are also the sole manager of the Shem Creek Capital, LLC entity.

The Company accounts for the funds and the manager investments at the measurement alternative of at cost less impairment, adjusted for observable price changes, because the Company does not manage the fund or management entities in which it holds an interest.

The Company accounts for the funds and the manager investments at the measurement alternative of cost less impairment, adjusted for observable price changes, because the Company does not manage the fund or management entities in which it holds an interest.

The Company has no control by contract or influence over operating and financial policies through member voting rights or deemed to have significant influence over the investments, even though FASB ASC 323-10-30-299-1 would presume such based on membership percentage owned levels being greater than 3% – 5%.

14 unchanged sentences

The Company expects to receive quarterly distributions from the respective entities operating cash flows.

For the years ended December 31, 2024 and 2023, the Shem investments generated $ 5.1 million and $ 3.5 million, respectively, of income for the Company.

At December 31, 2024, the Company had unfunded commitments totaling $ 4.4 million in the Shem entities.

For the years ended December 31, 2025 and 2024, the Shem investments generated interest income of $ 4.8 million and $ 5.1 million, respectively, for the Company, and management fee income of $ 0.5 million and $ 0.1 million, respectively, for the Company.

At December 31, 2025, the Company had unfunded commitments totaling $ 1.4 million in the Shem LLCs.

Cordo CLT Investors LLC

In September 2024, the Company, through its wholly owned subsidiary Urbane Capital, LLC, initially acquired a 21.6 % interest in Cordo CLT Investors LLC for one time contribution of $ 2.5 million.

As the remainder of committed common member equity is received by Cordo CLT Investors LLC, the Company’s membership interest will decline to an expected 7.2 % of total, but as of December 31, 2024, the Company was 11.33 % of total.

As the remainder of committed common member equity is received by Cordo CLT Investors LLC, the Company’s membership interest declined to 7.2 %.

This entity was formed for the sole purpose of developing a commercial multifamily property in Charlotte, North Carolina.

1 unchanged sentence

The Company also accounts for this member investment at FASB ASC 321 measurement alternative at cost, less impairment, because the Company does not manage the entity in which it holds an interest and has no contractual control, voting powers or significant influence over the entity’s operating and financial policies of any kind by contract of the operating agreement.

Series A Preferred Stock

The Company has designated 2,903,000 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 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).

Except under limited circumstances, holders of the Series A Preferred Stock generally do not have any voting rights.

The Company has reserved 72,575,000 Common Shares for issuance upon conversion of the Series A Preferred Stock.

To 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.

For the year ended December 31, 2025, the Company’s TRS recognized a provision for federal and state income tax of $ 0 ,which would be represented in other expenses on the Company’s Consolidated Statements of Operations.

SACHEM CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The table below presents the effects of temporary differences that gave rise to significant portions of deferred tax assets and liabilities as of December 31, 2025:

December 31, 2025

Deferred Tax Assets:

Net Operating Loss Carryforwards $ 920

Investment in LLCs 58

Basis in REO Assets 227

Total Gross Deferred Tax Assets 1,205

Valuation Allowance ( 1,126 )

Net Deferred Tax Assets 79

Deferred Tax Liabilities:

Depreciation ( 52 )

Prepaid Expenses ( 2 )

Amortization ( 25 )

Total Deferred Tax Liabilities ( 79 )

Total Deferred Tax Assets/(Liabilities) $ —

At December 31, 2025, the Company’s TRS had federal net operating loss carryforwards of approximately $ 4.1 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.

The 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.

Because 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 December 31, 2025.

The Company has determined that there are no uncertain tax positions requiring accrual or disclosure in the accompanying consolidated financial statements as of December 31, 2025.

Subsequent Events

The Company evaluated subsequent events from January 1, 2026 until the financial statements were issued.

On February 24, 2025 , the board of directors authorized and the Company declared a dividend of $ 0.484375 per share on the Company’s 7.75 % Series A Cumulative Redeemable Preferred Stock (“Series A Preferred”) payable on March 31, 2025 to Series A Preferred shareholders of record on March 15, 2025 .

On January 1, 2026, the Company granted 282,217 restricted Common Shares, net of shares surrendered to cover taxes, to employees under the 2025 Plan.

The grant date fair value of these awards was $ 0.3 million.

On January 21, 2026, the Company entered into Amendment No.

2 to the Needham Credit Facility as discussed in Note 9 above

SACHEM CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

On March 4, 2026, the board of directors authorized and the Company declared a dividend of $ 0.484375 per share on the Company’s 7.75 % Series A Cumulative Redeemable Preferred Stock (“Series A Preferred”) payable on March 30, 2026 to Series A Preferred shareholders of record on March 15, 2026.

The payment represents the full amount of the dividend accruing from December 30, 2025 through and including March 29, 2026.

On March, 5, 2025 , the Company’s board of directors authorized and declared a quarterly dividend of $ 0.05 per common share to be paid to shareholders of record as of the close of trading on the NYSE American on March 17, 2025 .

On March 4, 2026, the Board authorized and declared a quarterly dividend of $ 0.05 per common share to be paid to shareholders of record as of the close of trading on the NYSE American on March 15, 2026.

The dividend is payable on March 30, 2026.

On March 10, 2025, the Company’s Compensation Committee authorized (i) a grant of 420,168 restricted Common Shares to John L.

Villano, which shares had a fair market value on the date of grant of approximately $ 0.5 million;

and (ii) a one-time bonus grant of 20,000 restricted Common Shares to each of the Company’s non-employee directors, Arthur Goldberg, Brian Prinz, Leslie Bernhard and Jeffery Walraven.

Each of the Company’s non-employee directors, with the except for Mr.

Walraven, also had the option, at his or her election, to receive the fair market value equivalent of his or her grant in a lump sum cash payment of $ 23,800 .

Bernhard elected to receive the lump sum cash payment.

The Company identified subsequent to the above March 10, 2025 action of the Company’s Compensation Committee regarding authorization of issuance of 420,168 share of restricted stock to John L.

Villano under the effective 2016 Equity Compensation Plan that it had over authorized on the total issuance by 320,168 shares.

The over issuance is a result of a specified limitation in the Plan that no more than 100,000 shares of restricted Common Shares may be made subject to awards to a single individual in a single plan year, subject to adjustments as provided.

No identified adjustment provisions were deemed applicable.

In result of this identification it was also determined that in calendar 2023 and 2024 there were additional similar over issuances of 30,890 and 11,857 , respectively.

In total there were 362,915 restricted shares which have been issued in excess of Plan limitations, all of which still remain unvested and restricted.

No other plan years have identified any additional over issuances.

In an immediate full and in excess of necessary remediation of this matter on March 25, 2025 John L.

Villano voluntarily forfeited the 420,168 shares that were granted on March 10, 2025.

See the Needham Credit Facility subsequent event as disclosed in Note 8 – Line of Credit, Mortgage Payable, and Churchill Facility.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures