Sachem Capital Corp. 10-Q

Item 1. FINANCIAL STATEMENTS SACHEM CAPITAL CORP. CONDENSED CONSOLIDATED BALANCE SHEETS (dollars in thousands, except share data) June 30, 2026 December 31, 2025 (unaudited) (audited) Assets Cash and cash equivalents $ 28,819 $ 10,924 Investment securities (at fair value) 803 936 Loans held for investment (net of deferred loan fees of $ 1,753 and $ 2,230 ) 335,804 375,188 Allowance for credit losses ( 13,491 ) ( 11,510 ) Loans held for investment, net 322,313 363,678 Interest and fees receivable (net of allowance of $ 1,233 and $ 2,598 ) 3,975 4,116 Due from borrowers (net of allowance of $ 2,043 and $ 1,084 ) 4,413 6,978 Real estate owned (net of impairment of $ 1,028 and $ 1,110 ) 20,968 16,402 Investments in limited liability companies 34,237 39,132 Investments in developmental real estate, net 45,536 9,719 Property and equipment, net 3,043 3,160 Other assets 8,793 5,002 Total assets $ 472,900 $ 460,047 Liabilities and Shareholders’ Equity Liabilities: Notes payable (net of deferred financing costs of $ 1,213 and $ 1,905 ) $ 172,041 $ 171,349 Senior secured notes payable (net of deferred financing costs of $ 3,152 and $ 3,427 ) 96,848 86,573 Mortgage payable 873 917 Lines of credit 36,500 19,000 Accounts payable and accrued liabilities 4,727 3,255 Advances from borrowers 3,119 4,016 Total liabilities 314,108 285,110 Commitments and Contingencies - Note 14 Shareholders’ equity: Preferred shares - $ 0.001 par value; 5,000,000 shares authorized; 3,332,000 shares designated as Series A Preferred Stock; 2,312,758 shares of Series A Preferred Stock issued and outstanding at June 30, 2026 and December 31, 2025, respectively 2 2 Common Shares - $ 0.001 par value; 200,000,000 shares authorized; 47,954,632 and 47,684,955 issued and outstanding at June 30, 2026 and December 31, 2025, respectively 48 48 Additional paid-in capital 258,332 257,905 Cumulative net earnings 30,372 41,826 Cumulative dividends paid ( 129,962 ) ( 124,844 ) Total shareholders’ equity 158,792 174,937 Total liabilities and shareholders’ equity $ 472,900 $ 460,047 The accompanying notes, together with the notes to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, are an integral part of these financial statements. 1 Table of Contents SACHEM CAPITAL CORP. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) (dollars in thousands, except share and per share data) Three Months Ended Six Months Ended June 30, June 30, 2026 2025 2026 2025 Interest income from loans $ 7,252 $ 7,482 $ 16,006 $ 15,370 Interest income from limited liability company investments 750 859 1,608 2,801 Interest expense and amortization of deferred financing costs ( 6,328 ) ( 6,139 ) ( 12,387 ) ( 12,233 ) Net interest income 1,674 2,202 5,227 5,938 Provision for credit losses related to loans held for investment ( 2,551 ) ( 925 ) ( 7,923 ) ( 1,977 ) Change in valuation allowance related to loans held for sale — 1,043 — 1,047 Net interest (loss) income after provision for credit losses related to loans held for investment and changes in valuation allowance related to loans held for sale ( 877 ) 2,320 ( 2,696 ) 5,008 Other income Fee income from loans 1,146 1,771 2,438 3,196 Income from limited liability company investments 71 119 176 229 Other investment income 4 12 7 17 Gain (loss) on equity securities 7 821 ( 133 ) 696 Other income 134 532 277 604 Total other income 1,362 3,255 2,765 4,742 Operating expenses Compensation and employee benefits ( 1,937 ) ( 1,821 ) ( 4,075 ) ( 3,592 ) General and administrative expenses ( 1,450 ) ( 1,304 ) ( 3,413 ) ( 2,659 ) Transaction expenses ( 2,567 ) — ( 4,175 ) — Impairment loss on real estate ( 288 ) — ( 191 ) — Gain on sale of investments in developmental real estate, real estate owned, and property and equipment, net 475 131 671 131 Other expenses ( 95 ) ( 694 ) ( 340 ) ( 839 ) Total operating expenses ( 5,862 ) ( 3,688 ) ( 11,523 ) ( 6,959 ) Net (loss) income ( 5,377 ) 1,887 ( 11,454 ) 2,791 Preferred stock dividends ( 1,120 ) ( 1,118 ) ( 2,240 ) ( 2,235 ) Net (loss) income attributable to common shareholders $ ( 6,497 ) $ 769 $ ( 13,694 ) $ 556 Basic and diluted (loss) income per common share $ ( 0.14 ) $ 0.02 $ ( 0.29 ) $ 0.01 Basic and diluted weighted average number of common shares outstanding 47,281,931 46,875,187 47,230,349 46,830,215 The accompanying notes, together with the notes to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, are an integral part of these financial statements. 2 Table of Contents SACHEM CAPITAL CORP. CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (unaudited) (dollars in thousands, except share data) FOR THE THREE MONTHS ENDED JUNE 30, 2026 Preferred Shares Common Shares Additional Paid in Capital Cumulative Net Earnings Cumulative Dividends Paid Totals Shares Amount Shares Amount Balance, April 1, 2026 2,312,758 $ 2 47,955,647 $ 48 $ 258,172 $ 35,749 $ ( 128,362 ) $ 165,609 Stock-based compensation, less shares forfeited — — ( 1,015 ) — 160 — — 160 Dividends paid on Series A Preferred Stock — — — — — — ( 1,120 ) ( 1,120 ) Dividends paid on Common Shares — — — — — — ( 480 ) ( 480 ) Net loss — — — — — ( 5,377 ) — ( 5,377 ) Balance, June 30, 2026 2,312,758 $ 2 47,954,632 $ 48 $ 258,332 $ 30,372 $ ( 129,962 ) $ 158,792 FOR THE THREE MONTHS ENDED JUNE 30, 2025 Preferred Shares Common Shares Additional Paid in Capital Cumulative Net Earnings Cumulative Dividends Paid Totals Shares Amount Shares Amount Balance, April 1, 2025 2,306,748 $ 2 47,310,139 $ 47 $ 257,220 $ 36,422 $ ( 114,352 ) $ 179,339 Stock-based compensation, less shares forfeited — — — — 164 — — 164 Dividends paid on Series A Preferred Stock — — — — — — ( 1,118 ) ( 1,118 ) Dividends paid on Common Shares — — — — — — ( 2,365 ) ( 2,365 ) Net income — — — — — 1,887 — 1,887 Balance, June 30, 2025 2,306,748 $ 2 47,310,139 $ 47 $ 257,384 $ 38,309 $ ( 117,835 ) $ 177,907 The accompanying notes, together with the notes to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, are an integral part of these financial statements. 3 Table of Contents SACHEM CAPITAL CORP. CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (unaudited) (dollars in thousands, except share data) FOR THE SIX MONTHS ENDED JUNE 30, 2026 Preferred Shares Common Shares Additional Paid in Capital Cumulative Net Earnings Cumulative Dividends Paid Totals Shares Amount Shares Amount Balance, January 1, 2026 2,312,758 $ 2 47,684,955 $ 48 $ 257,905 $ 41,826 $ ( 124,844 ) $ 174,937 Stock-based compensation, less shares forfeited — — 269,677 — 427 — — 427 Dividends paid on Series A Preferred Stock — — — — — — ( 2,240 ) ( 2,240 ) Dividends paid on Common Shares — — — — — — ( 2,878 ) ( 2,878 ) Net loss — — — — — ( 11,454 ) — ( 11,454 ) Balance, June 30, 2026 2,312,758 $ 2 47,954,632 $ 48 $ 258,332 $ 30,372 $ ( 129,962 ) $ 158,792 FOR THE SIX MONTHS ENDED JUNE 30, 2025 Preferred Shares Common Shares Additional Paid in Capital Cumulative Net Earnings Cumulative Dividends Paid Totals Shares Amount Shares Amount Balance, January 1, 2025 2,306,748 $ 2 46,965,306 $ 47 $ 256,956 $ 35,518 $ ( 110,872 ) $ 181,651 Stock-based compensation, less shares forfeited — — 344,833 — 428 — — 428 Dividends paid on Series A Preferred Stock — — — — — — ( 2,235 ) ( 2,235 ) Dividends paid on Common Shares — — — — — — ( 4,728 ) ( 4,728 ) Net income — — — — — 2,791 — 2,791 Balance, June 30, 2025 2,306,748 $ 2 47,310,139 $ 47 $ 257,384 $ 38,309 $ ( 117,835 ) $ 177,907 The accompanying notes, together with the notes to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, are an integral part of these financial statements. 4 Table of Contents SACHEM CAPITAL CORP. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (dollars in thousands) Six Months Ended June 30, 2026 2025 CASH FLOWS FROM OPERATING ACTIVITIES Net (loss) income $ ( 11,454 ) $ 2,791 Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: Amortization of deferred financing costs 1,035 1,101 Depreciation and amortization expense 152 234 Stock-based compensation 427 428 Provision for credit losses related to loans held for investment 7,923 1,977 Change in valuation allowance related to loans held for sale — ( 1,047 ) Impairment loss on real estate owned 191 — Gain on sale of real estate owned and property and equipment, net ( 671 ) ( 131 ) Loss (gain) on equity securities 133 ( 696 ) Change in deferred loan fees ( 477 ) 681 Changes in operating assets and liabilities: Interest and fees receivable, net ( 332 ) ( 462 ) Other assets 310 ( 1,010 ) Due from borrowers, net ( 448 ) ( 2,277 ) Accounts payable and accrued liabilities 1,355 ( 996 ) Advances from borrowers ( 897 ) 99 NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES ( 2,753 ) 692 CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from the sale of investment securities — 1,174 Purchase of interests in limited liability companies ( 721 ) ( 5,731 ) Proceeds from investments in limited liability companies 5,616 10,963 Proceeds from sale of real estate owned 2,402 1,559 Purchase of property and equipment — ( 43 ) Investments in developmental real estate ( 1,104 ) ( 1,022 ) Proceeds from sale of investments in developmental real estate 1,215 — Principal disbursements for loans ( 79,308 ) ( 80,952 ) Principal collections on loans 70,360 71,394 NET CASH USED IN INVESTING ACTIVITIES ( 1,540 ) ( 2,658 ) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from lines of credit 38,500 36,100 Repayments on lines of credit ( 21,000 ) ( 49,862 ) Proceeds from repurchase agreements — 11,693 Repayments of repurchase agreements — ( 30,959 ) Repayment of mortgage payable ( 44 ) ( 42 ) Dividends paid on common shares ( 2,878 ) ( 4,728 ) Dividends paid on Series A Preferred Stock ( 2,240 ) ( 2,235 ) Proceeds from issuance of Senior Secured Notes 10,000 50,000 Payments of deferred financing costs ( 150 ) ( 3,593 ) NET CASH PROVIDED BY FINANCING ACTIVITIES 22,188 6,374 NET INCREASE IN CASH AND CASH EQUIVALENTS 17,895 4,408 CASH AND CASH EQUIVALENTS – BEGINNING OF PERIOD 10,924 18,066 CASH AND CASH EQUIVALENTS – END OF PERIOD $ 28,819 $ 22,474 The accompanying notes, together with the notes to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, are an integral part of these financial statements. 5 Table of Contents SACHEM CAPITAL CORP. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued) (unaudited) (dollars in thousands) Six months ended June 30, 2026 2025 SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION Cash paid during the period for interest $ 11,437 $ 11,005 Real estate acquired in connection with foreclosure of certain mortgages $ 6,500 $ 6,298 Loans held for sale transferred to loans held for investment $ — $ 6,479 Developmental real estate acquired in restructuring of loan held for investment $ 35,948 $ 1,696 Loans held for investment transferred to other assets $ 454 $ — Loans originated from sale of real estate owned $ — $ 840 The accompanying notes, together with the notes to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, are an integral part of these financial statements. 6 Table of Contents SACHEM CAPITAL CORP. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2026 1. The Company Sachem Capital Corp. (the “Company”), a New York corporation, specializes in originating, underwriting, funding, servicing and managing a portfolio of first mortgage loans. The Company operates its business as one segment. The Company offers short-term (i.e., one to three years ), secured, non-bank loans to real estate owners and investors to fund their acquisition, renovation, development, rehabilitation or improvement of properties located primarily in the northeastern and southeastern sections of the United States. The properties securing the Company’s loans are generally classified as residential or commercial real estate and, typically, are held for resale or investment. Each loan is typically secured by a first mortgage lien on real estate and may also be secured with additional collateral, such as other real estate owned by the borrower or its principals, a pledge of the ownership interests in the borrower by the principals thereof, and/or personal guarantees by the principals of the borrower. The Company does not lend to owner occupants of residential real estate. The Company’s primary underwriting criterion is a conservative loan to value ratio. In addition, the Company may make opportunistic real estate purchases apart from its lending activities. Segment Reporting The Company uses the management approach to determine reportable operating segments. The Company operates through a single operating and reporting segment with an investment objective to generate both current income and capital appreciation through its investments in real estate mortgage loans and real estate. The management approach considers the internal organization and reporting used by the Company’s Chief Executive Officer, whom serves as the chief operating decision maker (“CODM”) for making decisions, allocating resources and assessing performance. The CODM assesses the performance and makes operating decisions of the Company on a consolidated basis primarily based on the Company’s net income. 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 shareholders. 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 Contribution Agreement with Industrial Realty Group Global, LLC On May 17, 2026, the Company entered into a Contribution Agreement (the “Contribution Agreement”) with Industrial Realty Group Global, LLC, a Delaware limited liability company (“IRG Global”). The Contribution Agreement and the transactions contemplated thereby (the “Transaction”) were unanimously approved by the Board of Directors of the Company. Pursuant to the Contribution Agreement, IRG Global will contribute to IRG Realty Operating Partnership, L.P., a Delaware limited partnership to be formed as a subsidiary of the Company prior to the Closing (as defined below) (the “Operating Partnership”), 100 % of the outstanding membership interests of IRG Master Holdings, LLC, a Delaware limited liability company (“IRG Master Holdings”), in exchange for (i) a number of common units of limited partnership interest in the Operating Partnership (“OP Units”) equal to the Transferee Consideration Units (as defined below) and (ii) a number of shares of Class B common stock of the Company (the “Class B Common Stock”) equal to the Transferee Consideration Units. IRG Master Holdings, together with its subsidiaries, owns and operates a portfolio of industrial real estate assets. Prior to the closing of the Transaction (the “Closing”), the Company will complete a series of pre-closing reorganization steps, including (i) forming the Operating Partnership and contributing all or substantially all of its assets thereto, (ii) redomesticating from the State of New York to the State of Delaware, (iii) effecting a 20-to-1 reverse stock split of all issued and outstanding Common Shares (as defined below), following which such shares will be redesignated as Class A common stock of the Company (the “Class A Shares”), (iv) authorizing a new class of Class B Common Stock (the “Class B Shares”), (v) adjusting the conversion and anti-dilution rights applicable to the issued and outstanding preferred stock of the Company in accordance with the applicable certificate of designations to reflect the reverse stock split, and (vi) changing its corporate name to “IRG Realty Trust, Inc.” 7 Table of Contents SACHEM CAPITAL CORP. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2026 The number of OP Units and Class B Shares to be issued to IRG Global at the Closing (the “Transferee Consideration Units”) will be calculated based on a formula set forth in the Contribution Agreement, subject to downward adjustment based on the aggregate shortfall in replacement value for any dispositions of IRG Master Holdings’ properties occurring during the Interim Period (as defined in the Contribution Agreement), other than dispositions with an aggregate shortfall of less than $ 3.0 million. The calculation of the Transferee Consideration Units was based on an assumed implied gross asset value of the IRG Global portfolio to be contributed of approximately $ 2.9 billion, with a net asset value of approximately $ 1.5 billion after approximately $ 1.4 billion of debt, and a deemed exchange value of the Company’s Common Shares at a price of $ 2.00 per share. Immediately following the Closing, IRG Global is expected to hold approximately 94.1 % of the outstanding OP Units, with the Company retaining the remaining approximately 5.9 % of the outstanding OP Units. Subject to certain restrictions, a holder of OP Units may require the Operating Partnership to exchange all or a portion of such holder’s OP Units for cash or, at the option of the Company, Class A Shares on a one -for-one basis, subject to the ownership, transfer, REIT qualification and other limitations set forth in the Operating Partnership Agreement (as defined below). The parties to the Contribution Agreement made representations and warranties customary for transactions of this type. The representations and warranties made under the Contribution Agreement do not survive the Closing. In addition, the parties made covenants customary for transactions of this type, including, among others, covenants providing for the conduct of each party’s business during the period between signing and Closing, including restrictions on specified actions without the other party’s consent, subject to customary exceptions. The Contribution Agreement may be terminated by either party under certain circumstances, including if the Closing has not occurred by April 30, 2027, subject to IRG Global’s one-time right to extend such date by up to 45 days in certain circumstances related to a pending arbitration matter, among other circumstances. At the Closing, the parties will execute and deliver or file, as applicable, among other things, the following (forms of which are included as exhibits to the Contribution Agreement): (i) a Tax Protection Agreement, pursuant to which the Company and the Operating Partnership will agree to certain restrictions on the disposition of the contributed properties and the maintenance of minimum liability allocations for the benefit of IRG Global and certain other protected unitholders; (ii) a Registration Rights Agreement, providing IRG Global with certain registration rights with respect to the Class A Shares issuable upon exchange of the OP Units, including shelf registration and underwritten demand rights, piggyback registration rights and block trade rights, in each case subject to a six-month lock-up period following the Closing; (iii) an Amended and Restated Limited Partnership Agreement of the Operating Partnership (the “Operating Partnership Agreement”); (iv) an Amended and Restated Certificate of Incorporation of the Company; (v) Amended and Restated Bylaws of the Company; and (vi) a Property Management Agreement related to the management of the properties contributed by IRG Global and its affiliates following the Closing. The Contribution Agreement also provides that, prior to the Closing, the parties will use commercially reasonable efforts to negotiate, finalize and, effective as of the Closing, execute a strategic services agreement with respect to the provision of certain services by IRG Global or one or more of its affiliates to the Company or one or more of its subsidiaries. Additional information regarding the Contribution Agreement and the Transaction is included in the Company’s Current Report on Form 8-K filed with the SEC on May 18, 2026. 2. Significant Accounting Policies The significant accounting policies of the Company, unless further updated below, are consistent with those disclosed in Note 2 to the Company’s audited consolidated financial statements for the year ended December 31, 2025 included in the Company’s Annual Report on Form 10-K, filed with the U.S. Securities and Exchange Commission on March 13, 2026 (the "2025 Annual Report"). Unaudited Condensed Consolidated Financial Statements The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles in the United States of America (“GAAP”) for complete financial statements. However, in the opinion of management, all normal and recurring adjustments considered necessary for a fair presentation have been included. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the year ended 8 Table of Contents SACHEM CAPITAL CORP. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2026 December 31, 2025 and the notes thereto included in the 2025 Annual Report. The balance sheet information as of December 31, 2025 is derived from audited financial statements, but does not include all disclosures required by GAAP. Results of operations for the three and six months ended June 30, 2026, are not necessarily indicative of the operating results to be attained in the entire fiscal year or for any subsequent period. Basis of Presentation and Principles of Consolidation The preparation of the unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Management bases the use of estimates on (a) various assumptions that consider prior reporting results, (b) projections regarding future operations and (c) general financial market and local and general economic conditions. Actual amounts could differ from those estimates. Significant estimates include the provisions for credit losses and valuation of real estate owned. The accompanying unaudited condensed consolidated financial statements of the Company include the accounts of all subsidiaries in which the Company has control over significant operating, financial and investing decisions of the entity. All intercompany accounts and transactions have been eliminated in consolidation. Variable Interest Entities The Company consolidates SN Holdings LLC (“SN Holdings”), a wholly owned subsidiary of the Company established for the sole purpose of acting as the borrower under the revolving credit facility with Needham Bank (as described in Note 9 below), and Sachem Capital Corporation Holdings, LLC ("Holdings"), an indirect, wholly-owned subsidiary of the Company, formed for the sole purpose of acting as the issuer of the $ 100 million Senior Secured Notes (defined below). SN Holdings and Holdings are variable interest entities (“VIEs”) under the guidance of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810-10, Consolidation , as they were established with insufficient equity at risk and do not have independent operations apart from the Company. The Company has determined that it is the primary beneficiary of SN Holdings and Holdings because it has both (i) the power to direct the activities that most significantly impact their economic performance and (ii) the obligation to absorb losses or the right to receive benefits that could be significant to each entity, primarily through its role as the guarantor and through its ability to direct all operational and financing decisions. As of June 30, 2026, SN Holdings had total assets of $ 99.3 million and total liabilities of $ 38.6 million, consisting primarily of collateralized mortgage loans and borrowings under the Needham Credit Facility (defined below). The assets of SN Holdings can only be used to settle obligations of SN Holdings and are not available to the Company or its creditors, other than as permitted under the intercompany guaranty and lien release provisions of the Needham Credit Facility. As of June 30, 2026, Holdings had total assets of $ 187.1 million and total liabilities of $ 99.2 million, consisting primarily of collateralized mortgage loans and indebtedness evidenced by the Senior Secured Notes. The assets of Holdings can only be used to settle obligations of Holdings and are not available to the Company or its creditors. 9 Table of Contents SACHEM CAPITAL CORP. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2026 The following table presents the assets and liabilities of our consolidated VIEs: June 30, 2026 (in thousands) SN Holdings Holdings Assets Cash and cash equivalents $ 200 $ 21,401 Loans held for investment 99,140 162,226 Allowance for credit losses ( 1,711 ) ( 2,431 ) Loans held for investment, net 97,429 159,795 Interest and fees receivable, net 675 1,693 Due from borrowers, net 1,029 1,418 Other assets — 2,773 Total assets $ 99,333 $ 187,080 Liabilities Senior secured notes payable, net $ — $ 96,848 Lines of credit 36,500 — Accounts payable and accrued liabilities 477 1,279 Advances from borrowers 1,608 1,110 Total liabilities $ 38,585 $ 99,237 3. Fair Value Measurement The following table presents assets and liabilities measured at fair value on a recurring basis: Fair Value Measurement (in thousands) June 30, 2026 December 31, 2025 Level 1 Investment securities $ 803 $ 936 Certain assets are measured at fair value on a nonrecurring basis; that is, not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment.) The following table illustrates assets and liabilities measured at fair value on a nonrecurring basis: Fair Value Measurement (in thousands) June 30, 2026 December 31, 2025 Level 3 Individually evaluated loans, net of allowance for credit losses $ 100,447 $ 114,028 Real estate owned, net 20,968 16,402 Investments in developmental real estate, net 19,168 — 10 Table of Contents SACHEM CAPITAL CORP. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2026 The following table presents the carrying amounts and fair values of financial instruments at June 30, 2026 and December 31, 2025: Carrying Amount Fair Value Measurement (in thousands) June 30, 2026 December 31, 2025 June 30, 2026 December 31, 2025 Level 1 Cash and cash equivalents $ 28,819 $ 10,924 $ 28,819 $ 10,924 Notes payable (listed) - fixed rate debt 172,041 171,349 170,422 163,854 Level 2 Lines of credit 36,500 19,000 36,500 19,000 Level 3 Loans held for investment, net 322,313 363,678 322,313 363,678 Interest and fees receivable and due from borrowers 8,388 11,094 8,388 10,963 Investments in limited liability companies 34,237 39,132 34,237 39,132 Advances from borrowers 3,119 4,016 3,119 4,016 Senior secured notes payable 96,848 86,573 105,423 89,277 Mortgage payable 873 917 873 917 4. Loans and Allowance for Credit Losses Loans include loans held for investment that are accounted for at amortized cost net of allowance for credit losses. The classification for a loan is based on management’s strategy for the loan. Loans held for investment As of June 30, 2026 and December 31, 2025, the Company had 100 and 115 loans held for investment, respectively. As of June 30, 2026 and December 31, 2025, the Company had direct reserves on outstanding principal for loans held for investment of $ 8.9 million and $ 6.3 million, respectively. Loan portfolio As of June 30, 2026 and December 31, 2025, loans held for investment on non-accrual status had an outstanding principal balance of $ 95.8 million and $ 117.6 million, respectively. The non-accrual loans are inclusive of loans pending foreclosure. The following table summarizes the Company’s loan portfolio by past due status: Loans held for investment (in thousands) Current 30-59 days past due 60-89 days past due 90 days and greater Total As of June 30, 2026 $ 255,512 $ — $ 1,710 $ 80,335 $ 337,557 As of March 31, 2026 $ 259,192 $ 37,956 $ 1,360 $ 57,327 $ 355,835 As of December 31, 2025 $ 239,615 $ 20,218 $ — $ 117,585 $ 377,418 As of June 30, 2026 and December 31, 2025, there were no loans on accrual status that were 90 days or greater past due in their payment obligations. As of June 30, 2026 and December 31, 2025, there were loans 90 days and greater past due with gross principal balances of $ 60.3 million and $ 96.8 million, respectively, for which no specific allowance for credit losses was recorded. As of June 30, 2026 and December 31, 2025, there were loans 90 days and greater past due with gross principal balances of $ 20.0 million and $ 20.8 million, respectively, for which specific allowances were recorded. 11 Table of Contents SACHEM CAPITAL CORP. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2026 The aggregate gross outstanding principal of loans in pending/pre-foreclosure as of June 30, 2026, and December 31, 2025, was $ 31.6 million and $ 37.5 million, respectively. As of June 30, 2026, and December 31, 2025, the Company had directly reserved against these loans in foreclosure in the amounts of $ 6.8 million and $ 4.2 million, respectively. Further, as of June 30, 2026 and December 31, 2025, the Company had direct reserves against non-performing loans held for investment that experienced declines in fair value of $ 2.1 million and $ 2.1 million, respectively. As of June 30, 2026, the Company’s mortgage loan portfolio includes loans with stated interest rates ranging from 7.25 % to 15.0 %. The default interest rate is generally 18.0 %, but could be more or less depending on state usury laws and other considerations deemed relevant by the Company. As of June 30, 2026, no borrower exceeded 10% of the Company's outstanding mortgage loan portfolio. At December 31, 2025, the Company had one borrower representing 13.3 % of the outstanding mortgage loan portfolio. These loans were included in our nonperforming loan portfolio at December 31, 2025. The following table presents the Company’s loans held for investment by geographic location as of June 30, 2026 and December 31, 2025: June 30, 2026 December 31, 2025 (in thousands) Carrying Value % of Portfolio Carrying Value % of Portfolio New England $ 137,801 40.9 % $ 163,049 43.2 % Mid-Atlantic 48,098 14.2 % 40,483 10.7 % South 138,213 40.9 % 170,441 45.2 % West 13,445 4.0 % 3,445 0.9 % Total $ 337,557 100.0 % $ 377,418 100.0 % The following tables present the carrying value of the Company’s loans held for investment based on credit quality indicators in assessing estimated credit losses and year of origination at the dates indicated: June 30, 2026 Year Originated (1) FICO Score (2) (in thousands) Carrying Value 2026 2025 2024 2023 2022 Prior Under 500 $ — $ — $ — $ — $ — $ — $ — 501-550 35 — — — — — 35 551-600 — — — — — — — 601-650 25,042 10,000 1,218 4,445 649 2,628 6,102 651-700 64,152 — 15,288 2,453 3,591 9,042 33,778 701-750 105,188 33,239 25,534 7,675 12,154 5,298 21,288 751-800 143,140 2,456 38,644 18,897 49,319 13,737 20,087 801-850 — — — — — — — Total $ 337,557 $ 45,695 $ 80,684 $ 33,470 $ 65,713 $ 30,705 $ 81,290 12 Table of Contents SACHEM CAPITAL CORP. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2026 December 31, 2025 Year Originated (1) FICO Score (2) (in thousands) Carrying Value 2025 2024 2023 2022 2021 Prior 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. The following table presents the amortized cost of collateral dependent loans: June 30, 2026 December 31, 2025 (in thousands) Collateral Type Collateral Dependent Loans Collateral Dependent Loans Residential $ 38,565 $ 65,077 Commercial 49,629 27,700 Pre-Development Land 6,320 12,832 Mixed Use 14,825 14,666 Total $ 109,339 $ 120,275 13 Table of Contents SACHEM CAPITAL CORP. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2026 Loan modifications made to borrowers experiencing financial difficulty The following tables present loan modifications during the periods indicated made to borrowers experiencing financial difficulty: (in thousands) Three months ended June 30, 2026 Carrying Value % of Total Carrying Value of Loans held for investment, net Financial Effect Principal modification, with no term extension $ — — % Unpaid interest/taxes/charges added to principal balance Term extension 23,272 7.2 % A weighted average of 8.5 months were added to the life of the loans (in thousands) Three months ended June 30, 2025 Carrying Value % of Total Carrying Value of Loans held for investment, net Financial Effect Principal modification, with no term extension $ 14,042 3.9 % Unpaid interest/taxes/charges added to principal balance Term extension 25,559 7.0 % A weighted average of 7.7 months were added to the life of the loans (in thousands) Six months ended June 30, 2026 Carrying Value % of Total Carrying Value of Loans held for investment, net Financial Effect Principal modification, with no term extension $ 5,810 1.8 % Unpaid interest/taxes/charges added to principal balance Term extension 55,141 17.1 % A weighted average of 3.6 months were added to the life of the loans (in thousands) Six months ended June 30, 2025 Carrying Value % of Total Carrying Value of Loans held for investment, net Financial Effect Principal modification, with no term extension $ 14,042 3.9 % Unpaid interest/taxes/charges added to principal balance Term extension 47,702 13.1 % A weighted average of 7.4 months were added to the life of the loans As of June 30, 2026, the Company had commitments to fund an additional $ 2.0 million to borrowers experiencing financial difficulty. During the six months ended June 30, 2026, the Company modified the interest rate on five loans with an outstanding principal balance of $ 28.5 million. The change in the rate was due to taking the loan off default rate. As of June 30, 2025, the Company had committed to fund an additional $ 7.7 million to borrowers experiencing financial difficulty. During the six months ended June 30, 2025, the Company modified the interest rate on five loans with an outstanding principal balance of $ 18.9 million. The change in the rate was due to taking the loan off default rate. The following table presents the performance of loans that have been modified during the twelve-month period ended June 30, 2026 to borrowers experiencing financial difficulty, of which none of 23 defaulted during the period. (in thousands) Current 90-119 days past due 120+ days past due Total Principal modification, with no term extension $ 5,810 $ — $ — $ 5,810 Term extension 77,986 9,571 — 87,557 14 Table of Contents SACHEM CAPITAL CORP. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2026 The following table presents the performance of loans that have been modified during the twelve-month period ended June 30, 2025 to borrowers experiencing financial difficulty, of which none of 31 defaulted during the period. (in thousands) Current 90-119 days past due 120+ days past due Total Principal modification, with no term extension $ 15,268 $ — $ — $ 15,268 Term extension 61,692 12,895 — 74,587 Allowance for credit losses The following table presents the financial statement line items that are impacted by the allowance for credit losses for the three months ended June 30, 2026: Balance as of March 31, 2026 Provision for (recovery of) credit losses related to loans Charge-offs Balance as of June 30, 2026 (in thousands) Loans held for investment $ 12,401 $ 1,102 $ ( 12 ) $ 13,491 Interest and fees receivable 922 497 ( 186 ) 1,233 Due from borrower 1,791 753 ( 501 ) 2,043 Unfunded commitments 588 199 — 787 Total allowance for credit losses $ 15,702 $ 2,551 $ ( 699 ) $ 17,554 The following table presents the financial statement line items that are impacted by the allowance for credit losses for the six months ended June 30, 2026: Balance as of December 31, 2025 Provision for (recovery of) credit losses related to loans Charge-offs Balance as of June 30, 2026 (in thousands) Loans held for investment $ 11,510 $ 5,873 $ ( 3,892 ) $ 13,491 Interest and fees receivable 2,598 473 ( 1,838 ) 1,233 Due from borrower 1,084 1,460 ( 501 ) 2,043 Unfunded commitments 670 117 — 787 Total allowance for credit losses $ 15,862 $ 7,923 $ ( 6,231 ) $ 17,554 The following table presents activity in the allowance for credit losses by geographic location with respect to loans held for investment for the three months ended June 30, 2026: Balance as of March 31, 2026 Provision for (recovery of) credit losses related to loans Charge-offs Allowance for credit losses as of June 30, 2026 (in thousands) New England $ 6,599 $ 1,065 $ — $ 7,664 Mid-Atlantic 2,411 ( 158 ) — 2,253 South 1,803 ( 55 ) ( 12 ) 1,736 West 1,588 250 — 1,838 Total $ 12,401 $ 1,102 $ ( 12 ) $ 13,491 15 Table of Contents SACHEM CAPITAL CORP. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2026 The following table presents activity in the allowance for credit losses by geographic location with respect to loans held for investment for the six months ended June 30, 2026: Balance as of December 31, 2025 Provision for (recovery of) credit losses related to loans Charge-offs Allowance for credit losses as of June 30, 2026 (in thousands) New England $ 6,429 $ 1,235 $ — $ 7,664 Mid-Atlantic 1,770 483 — 2,253 South 1,681 3,947 ( 3,892 ) 1,736 West 1,630 208 — 1,838 Total $ 11,510 $ 5,873 $ ( 3,892 ) $ 13,491 The following table presents charge-offs on loan principal related to loans held for investment by fiscal year of origination for the three months ended June 30, 2026: 2026 2025 2024 2023 2022 Prior Total (in thousands) Current period charge-offs $ — $ — $ — $ — $ — $ 12 $ 12 Total $ — $ — $ — $ — $ — $ 12 $ 12 The following table presents charge-offs on loan principal related to loans held for investment by fiscal year of origination for the six months ended June 30, 2026: 2026 2025 2024 2023 2022 Prior Total (in thousands) Current period charge-offs $ — $ — $ — $ — $ — $ 3,892 $ 3,892 Total $ — $ — $ — $ — $ — $ 3,892 $ 3,892 5. Investment in Developmental Real Estate, Net As of June 30, 2026 and December 31, 2025, investment in developmental real estate, net consisted of the following: As of June 30, 2026 As of December 31, 2025 (in thousands) Cost Accumulated Depreciation Net investment Cost Accumulated Depreciation Net investment Land and land improvements $ 8,350 $ — $ 8,350 $ 8,392 $ ( 15 ) $ 8,377 Building 19,563 ( 9 ) 19,554 1,346 ( 4 ) 1,342 Construction in progress 17,664 ( 32 ) 17,632 — — — Total $ 45,577 $ ( 41 ) $ 45,536 $ 9,738 $ ( 19 ) $ 9,719 In January 2026, the Company restructured the loan associated with its Naples, Florida mortgage receivable. Prior to the restructuring, the Company had designated the loan as a mortgage loan held for investment and was carried at $ 39.8 million. Through the restructuring, the Company acquired 100 % of the membership interests of the entity holding the condominium assets associated with this loan. The assets acquired include three completed condominium units and an entitled parcel, including existing project costs classified as construction in progress for accounting purposes, for the 16 Table of Contents SACHEM CAPITAL CORP. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2026 planned development of four additional condominium units. The transaction was accounted for in accordance with ASC 310 (Receivables). Based on a discounted cash flow model, the fair value of the assets acquired was estimated to be $ 35.9 million, resulting in a credit loss of $ 3.9 million upon restructuring of the loan. The discounted cash flow model utilized a 10.2 % discount rate which is an unobservable input. The three completed condominium units carried at $ 19.2 million are classified as available for sale. During the three and six months ended June 30, 2026, the Company sold one building and the related land for net proceeds of $ 1.2 million and recognized a de minimis gain on the sale. Building and land improvements that are placed in service are being depreciated using the straight-line method over their estimated useful lives of 40 years and 15 years, respectively. For the three and six months ended June 30, 2026 and 2025, depreciation and amortization related to the asset was de minimis and is presented in other expenses on the Company’s unaudited Condensed Consolidated Statements of Operations. 6. Real Estate Owned (“REO”) Properties acquired through foreclosure are included on the Company's unaudited Condensed Consolidated Balance Sheets as real estate owned. As of June 30, 2026 and December 31, 2025, real estate owned, net totaled $ 21.0 million and $ 16.4 million, respectively. During the six months ended June 30, 2026, the Company recorded an impairment loss on real estate owned of $ 0.2 million compared to none during the six months ended June 30, 2025, which is considered a Level 3 non-recurring fair market value adjustment. The following table presents the Company’s REO activity during the six months ended June 30, 2026 and June 30, 2025: June 30, 2026 June 30, 2025 (in thousands) Real estate owned at beginning of period $ 16,402 $ 18,574 Principal basis transferred to real estate owned 6,500 6,298 Charge-offs on principal transferred — ( 3,978 ) Proceeds from sale of real estate owned ( 2,402 ) ( 1,559 ) Loans origination from sale of real estate owned — ( 840 ) Impairment loss on real estate owned ( 191 ) — Gain on sale of real estate owned 659 131 Real estate owned at end of period $ 20,968 $ 18,626 7. Property and Equipment, Net The following tables represent the Company’s property and equipment, net as of June 30, 2026 and December 31, 2025: June 30, 2026 December 31, 2025 (in thousands) Cost Accumulated Depreciation Net investment Cost Accumulated Depreciation Net investment Building $ 2,594 $ ( 211 ) $ 2,383 $ 2,594 $ ( 177 ) $ 2,417 Land 255 — 255 255 — 255 Furniture and fixtures 308 ( 214 ) 94 308 ( 185 ) 123 Computer hardware and software 322 ( 291 ) 31 320 ( 276 ) 44 Vehicles 502 ( 222 ) 280 502 ( 181 ) 321 Total property and equipment, net $ 3,981 $ ( 938 ) $ 3,043 $ 3,979 $ ( 819 ) $ 3,160 17 Table of Contents SACHEM CAPITAL CORP. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2026 8. Other Assets As of June 30, 2026 and December 31, 2025, other assets consisted of the following: June 30, 2026 December 31, 2025 (in thousands) Prepaid expenses $ 668 $ 612 Other receivables 865 1,251 Other assets 405 299 Notes receivable 6,334 2,319 Goodwill 391 391 Intangible asset – trade name 130 130 Total $ 8,793 $ 5,002 9. Line of Credit and Mortgage Payable Line of Credit – Needham Bank 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 Credit Agreement, the borrower is SN Holdings and the Company is the guarantor of all SN Holdings’ obligations under the Credit Agreement. SN Holdings, in its capacity as borrower, has granted Needham a lien on all its assets. SN Holdings is required to maintain assets equal to 2.0 times of the outstanding balance on the new credit facility. In addition, SN Holdings is required to collaterally assign to Needham mortgage loans having an outstanding principal balance in an amount no less than the greater of (i) $ 30.0 million and (ii) the aggregate outstanding principal balance on the facility. The Company, in its capacity as guarantor, has agreed to grant Needham a blanket lien on all its assets. However, Needham is required to release its lien at the Company’s request to facilitate other financings in accordance with the terms of the Credit Agreement. 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 %). All amounts borrowed under the Needham Credit Facility are secured by a first priority lien on virtually all of the Company’s assets. Assets excluded from the lien include real estate owned by the Company (other than real estate acquired pursuant to foreclosure). On January 21, 2026, the Company entered into 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 are due and payable on the expiration date. The Company may terminate the Needham Credit Facility at any time without premium or penalty by delivering written notice to Needham at least ten ( 10 ) days prior to the proposed date of termination. The Needham Credit Facility is subject to other terms and conditions, including representations and warranties, covenants and agreements typically found in these types of financing arrangements, including a covenant that requires the Company to maintain: (A) a ratio of Adjusted EBITDA (as defined in the Credit Agreement) to Debt Service (as defined in the Credit Agreement) of not less than 1.40 to 1.0, tested on a trailing-twelve-month basis at the end of each fiscal quarter; (B) a sum of cash, cash equivalents and availability under the facility equal to or greater than $ 10.0 million; and (C) an asset coverage ratio of at least 150 %. As of June 30, 2026 and December 31, 2025, the total outstanding principal balance on the Needham Credit Facility was $ 36.5 million and $ 19.0 million, respectively, with an interest rate of 6.50 % and 6.50 %, respectively. As of June 30, 2026 and December 31, 2025, the Company was in compliance with all debt covenants. 18 Table of Contents SACHEM CAPITAL CORP. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2026 Mortgage Payable On February 28, 2023, the Company entered into an adjustable-rate mortgage loan with New Haven Bank in the original principal amount of $ 1.7 million (the "NHB Mortgage"). The NHB Mortgage accrues interest at an initial rate of 5.75 % per annum for the first 60 months. The interest rate will be adjusted on each of March 1, 2028, and March 1, 2033, to the then published 5-year Federal Home Loan Bank of Boston Classic Advance Rate, plus 1.75 %. Beginning on April 1, 2023, and through March 1, 2038, principal and interest will be due and payable on a monthly basis. All payments under the loan are amortized based on a 20-year amortization schedule. Over the next five years, the Company is scheduled to make principal payments ranging from $ 47,000 to $ 59,000 annually, with the remaining balance due thereafter. The unpaid principal amount of the loan and all accrued and unpaid interest are due and payable in full on March 1, 2038. The loan is a non-recourse obligation, secured by a first mortgage lien on the property located at 568 East Main Street, Branford, Connecticut. As of June 30, 2026 and December 31, 2025, the total outstanding principal balance on the NHB Mortgage was $ 0.9 million and $ 0.9 million, respectively. 10. Unsecured Notes Payable At June 30, 2026 , the Company h ad an aggregate of $ 172.0 million of unsecured, unsubordinated notes payable outstanding, net of $ 1.2 million of deferred financing costs (collectively, the “Notes”). At June 30, 2026, the Company had four series of Notes outstanding: (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”); and (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. So long as the Notes are outstanding, the Company is prohibited from making distributions in excess of 90 % of its taxable income, incurring any additional indebtedness or purchasing any shares of its capital stock unless it has an “Asset Coverage Ratio” of at least 150 % after giving effect to the payment of such dividend, the incurrence of such indebtedness or the application of the net proceeds, as the case may be. The Company was in compliance with all debt covenants as of June 30, 2026. The Company may redeem the Notes, in whole or in part, without premium or penalty, at any time after their second anniversary of issuance upon at least 30 days prior written notice to the holders of the Notes. The redemption price will be equal to the outstanding principal amount of the Notes redeemed plus the accrued but unpaid interest thereon up to, but not including the date of redemption. Currently, all the Notes are callable at any time. 19 Table of Contents SACHEM CAPITAL CORP. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2026 The following table presents the future principal payments on the Notes payable as of June 30, 2026: Years ending December 31, Amount (in thousands) 2026 (six months remaining) $ 51,750 2027 121,504 Total principal payments 173,254 Deferred financing costs ( 1,213 ) Total notes payable, net of deferred financing costs $ 172,041 The following table presents the estimated amortization of the deferred financing costs as of June 30, 2026 : Years ending December 31, Amount (in thousands) 2026 (six months remaining) $ 718 2027 495 Total deferred costs $ 1,213 11. 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 was drawn in March 2026. The Senior Secured Notes bear interest at a fixed rate of 9.875 % per annum, with interest only payable quarterly on the 1st day of March, June, September and December, and include a commitment fee of 1.0 % on the undrawn portion of the Senior Secured Notes. The Company paid an approximately $ 1.5 million original issue discount on the $ 100.0 million aggregate principal amount which is part of the $ 3.6 million of deferred financing costs recorded related to the Senior Secured Notes. The deferred financing costs will be amortized over the five year term of the Senior Secured Notes using the effective interest method and amortization by year is as follows: 2026 - $ 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 June 30, 2026 and 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. 20 Table of Contents SACHEM CAPITAL CORP. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2026 12. Accounts Payable and Accrued Liabilities The table below presents the Company's accounts payable and accrued liabilities as of June 30, 2026 and December 31, 2025: June 30, 2026 December 31, 2025 (in thousands) Accounts payable and accrued expenses $ 2,991 $ 1,551 Allowance for credit losses on unfunded commitments 787 669 Accrued interest 949 1,035 Total $ 4,727 $ 3,255 13. Fee Income from Loans The table below presents the Company's fee income from loans for the three and six months ended June 30, 2026 and 2025: Three Months Ended Six Months Ended June 30, June 30, 2026 2025 2026 2025 (in thousands) (in thousands) Origination and modification fees $ 728 $ 761 $ 1385 $ 1,541 Extension fees 73 184 332 462 Late and other fees 129 147 293 226 Processing fees 14 30 37 51 Construction servicing fees 69 104 143 241 Legal fees 40 71 79 134 Other fees 93 474 169 541 Total $ 1,146 $ 1,771 $ 2,438 $ 3,196 14. Commitments and Contingencies Unfunded Commitments At June 30, 2026, the Company had future funding obligations on loans held for investment totaling $ 41.4 million and obligations relating to investments in limited liability companies totaling $ 0.7 million, which can be drawn by the borrowers when the conditions relating thereto have been satisfied. The unfunded commitments will be funded from loan payoffs and additional drawdowns under existing and future credit facilities and proceeds from sale of debt and equity securities. The Company’s unfunded commitments are subject to allowances under the scope of current expected credit losses. See Note 4 – Loans and Allowance for Credit Losses — for further details. Litigation The Company is subject to various pending and threatened legal proceedings or other matters arising out of the normal conduct of business in which claims for monetary damages are asserted. As of the date of this report, management, after consultation with legal counsel, does not anticipate that the aggregate ultimate liability arising out of such pending or threatened matters will be material to the Company’s consolidated financial position. On at least a quarterly basis, the Company assesses its liabilities and contingencies in connection with such matters. For those matters where it is probable that the Company will incur losses and the amounts of the losses can be reasonably estimated, the Company records an expense and corresponding liability in its consolidated financial statements. To the extent such matters could result in exposure in excess of that liability, the amount of such excess is not currently estimable. The range of losses for matters where an exposure is not currently estimable or considered probable is not believed to be material in the aggregate. This is based on information currently available to the Company and involves elements of judgment and significant uncertainties. 21 Table of Contents SACHEM CAPITAL CORP. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2026 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. In addition, regardless of the ultimate outcome of any such legal proceeding, inquiry or investigation, any such matter could cause the Company to incur additional expenses, which could be significant, and possibly material, to the Company’s results of operations in any future period. On April 6, 2026, Oppenheimer & Co. Inc. filed a complaint against the Company and Sachem Capital Corporation Holdings, LLC in the United States District Court for the Southern District of New York, asserting claims for breach of contract and quantum meruit relating to a May 2024 engagement letter. The complaint sought damages of not less than approximately $ 1.8 million, plus interest, costs, disbursements and attorneys’ fees. In July 2026, Oppenheimer & Co. voluntarily dismissed the complaint without prejudice, preserving its right to refile its claims. The Company believes the claims are without merit and intends to vigorously defend against any refiled action. On July 27, 2026, a group of seventeen plaintiffs filed a complaint in the Superior Court of the State of California in the County of Los Angeles, Case No. 26STCV23391, against the Company, IRG Master Holdings, IRG Holdings Manager, LLC (“IRGHM”), IRG Global, and Stuart Lichter (together with IRG Master Holdings, IRGHM, and IRG Global, the “IRG Defendants”). The plaintiffs purport to be investors who hold interests in IRG Master Holdings. The complaint alleges, among other things, that the plaintiffs are pursuing certain claims against the IRG Defendants in an underlying arbitration (the “Arbitration”). The Company is not a party to the underlying Arbitration. The Complaint asserts a single cause of action for injunctive relief in aid of arbitration, pursuant to California Code of Civil Procedure sections 1281.8 and 525, et seq., seeking to enjoin the closing of the previously announced Transaction and certain related transactions, until the conclusion of the Arbitration. The Company intends to vigorously defend itself against the claims made in the complaint. Other In the normal course of its business, the Company is named as a party-defendant in connection with tax foreclosure proceedings against properties on which it holds a first mortgage lien. The Company actively monitors these actions and, in all cases, believes there remains sufficient value in the subject property to assure that no loan impairment exists. At June 30, 2026, there was one such property with an unpaid principal balance of $ 1.3 million, net of reserves for credit losses. At December 31, 2025, there was one such property with an unpaid principal balance of $ 0.3 million. 15. Related Party Transactions In the ordinary course of business, the Company may originate, fund, manage and service loans to shareholders. The underwriting process on these loans adheres to prevailing Company policy. The terms of such loans, including the interest rate, income, origination fees, and other closing costs are the same as those applicable to loans made to unrelated third parties in the portfolio. As of June 30, 2026 , and December 31, 2025 , loans to known shareholders totaled $ 19.5 million and $ 17.2 million , respectively, which is included in loans held for investment, net in the Company’s accompanying Condensed Consolidated Balance Sheets. Of these amounts, $ 19.5 million and $ 17.2 million , respectively, were loaned to a joint venture entity fifty percent owned in aggregate by the Company’s Senior Vice President of Asset Management and Vice President of Asset Management. All such loans are performing. Interest income earned on all related party loans for the three and six months ended June 30, 2026 totaled $ 0.3 million and $ 0.6 million, respectively. Interest income earned on all related party loans for the three and six months ended June 30, 2025 totaled $ 0.3 million and $ 0.8 million, respectively. Subsequent to June 30, 2026, one of the loans to the related-party joint venture was repaid in full following the sale of the underlying Coconut Grove, Florida residence. The residence sold for gross sale proceeds of approximately $ 7.5 million and generated net sale proceeds of approximately $ 7.0 million. The Company received approximately $ 7.0 million in cash to repay the associated loan in full. In December 2021, the Company hired the daughter of its chief executive officer to perform certain internal audit and compliance services. For the three and six months ended June 30, 2026 , she received compensation of $ 0.1 million and $ 0.2 million , respectively. For the three and six months ended June 30, 2025 , she received compensation of $ 0.1 million and $ 0.1 million , respectively. 22 Table of Contents SACHEM CAPITAL CORP. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2026 16. Stock-Based Compensation and Employee Benefits Stock-Based Compensation On July 9, 2025, the Company adopted the 2025 Omnibus Incentive Plan (the "2025 Plan"), which replaced the 2016 Equity Compensation Plan. The purpose of the 2025 Plan is to align the interests of the Company’s officers, other employees, advisors and consultants or any subsidiary, if any, with those of the Company’s shareholders and to afford an incentive to such officers, employees, consultants and advisors to continue as such, to increase their efforts on the Company’s behalf and to promote the success of the Company’s business. The maximum number of the Company's common shares, par value $ 0.001 per share (the "Common Shares") reserved for grant of awards under the 2025 Plan is 2,936,762 . The number of securities remaining available for future issuance under the 2025 Plan as of June 30, 2026 was 2,276,038 . During the six months ended June 30, 2026, the Company granted an aggregate of 282,217 restricted Common Shares, net of shares surrendered to cover taxes, under the 2025 Plan with a grant date fair value of $ 0.3 million. During the six months ended June 30, 2025, the Company granted an aggregate of 767,668 restricted Common Shares, of which a grant of 420,168 shares was rescinded immediately after the grant, with a grant date fair value of $ 0.9 million. Stock-based compensation for the three and six months ended June 30, 2026 was $ 0.2 million and $ 0.4 million, respectively. Stock-based compensation for the three and six months ended June 30, 2025 was $ 0.2 million and $ 0.4 million, respectively. As of June 30, 2026, there was unrecognized stock-based compensation expense of $ 0.6 million. Employee Benefits On April 16, 2018, the Company’s Board of Directors approved the adoption of the Sachem Capital Corp. 401(k) Profit Sharing Plan (the “401(k) Plan”). All employees, who meet the participation criteria, are eligible to participate in the 401(k) Plan. Under the terms of the 401(k) Plan, the Company is obligated to contribute 3 % of a participant’s compensation to the 401(k) Plan on behalf of an employee-participant. For the three and six months ended June 30, 2026, the 401(k) Plan expense was $ 30,661 and $ 74,595 , respectively, and for the three and six months ended June 30, 2025, the 401(k) Plan expense was $ 23,655 and $ 60,147 , which is included within compensation and employee benefits in the accompanying unaudited Condensed Consolidated Statements of Operations. 17. Equity 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 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 23 Table of Contents SACHEM CAPITAL CORP. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2026 Designation Certificate, including provisions for the receipt, under specified circumstances, of alternative consideration as described in the Series A Designation Certificate. Except under limited circumstances, holders of the Series A Preferred Stock generally do not have any voting rights. The Company has reserved 83,300,000 Common Shares for issuance upon conversion of the Series A Preferred Stock. At-The-Market Offerings 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 an ATM offering (the "ATM Offering"). There were no sales under the ATM Offering during the three and six months ended June 30, 2026. During the year ended December 31, 2025, the Company did not sell any Common Shares but it did sell 6,010 shares of Series A Preferred Stock having an aggregate liquidation preference of $ 0.1 million, realizing gross proceeds of $ 0.1 million (representing a discount of 25.5 % from the liquidation preference). The Company’s issuance costs for Series A Preferred Stock shares sold during the year ended December 31, 2025 were de minimis. At June 30, 2026, $ 18.3 million of Series A Preferred Stock were available for future sale under the ATM Offering. Repurchase Plan Effective on October 10, 2024, the Board adopted a Repurchase Plan (the “Repurchase Plan”). Under the Repurchase Plan, the Company may repurchase up to an aggregate of 5,802,959 of Common Shares and share repurchases 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 three and six months ended June 30, 2026 and the year ended December 31, 2025, the Company did not repurchase any Common Shares. 18. 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 two-class 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. For the three and six months ended June 30, 2026, the Company had basic and diluted weighted average Common Shares outstanding of 47,281,931 and 47,230,349 , respectively, resulting in basic and diluted loss per Common Share of $ 0.14 and $ 0.29 , respectively. For the three and six months ended June 30, 2025, the Company had basic and diluted weighted average Common Shares outstanding of 46,875,187 and 46,830,215 , respectively, resulting in basic and diluted income per Common Share of $ 0.02 and $ 0.01 , respectively. 24 Table of Contents SACHEM CAPITAL CORP. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2026 19. Limited Liability Company (“LLC”) Investments The following table presents the carrying value of each investment reflected on the Company's unaudited Condensed Consolidated Balance Sheets as of June 30, 2026 and December 31, 2025: June 30, 2026 December 31, 2025 Investment Carrying Value Ownership Percentage Carrying Value Ownership Percentage (in thousands) (in thousands) Shem Creek Capital Fund V LLC $ 770 7.6 % $ 867 7.6 % Shem Creek Capital Fund VI LLC 1,463 9.9 % 3,071 9.9 % Shem Creek Capital Fund VII LLC 4,294 13.0 % 3,605 13.0 % Shem Creek Sachem V LLC 1,639 49.0 % 1,736 49.0 % Shem Creek Sachem VI LLC 10,440 44.6 % 13,403 45.5 % Shem Creek Sachem 100 LLC 8,131 69.5 % 8,950 67.6 % Shem Creek Capital LLC 5,000 20.0 % 5,000 20.0 % Total Shem LLC Investments $ 31,737 $ 36,632 Cordo CLT Investors LLC $ 2,500 7.2 % $ 2,500 7.2 % Total investments in LLC’s $ 34,237 $ 39,132 Shem Creek (“Shem”) For the three months ended June 30, 2026, the Shem LLC investments generated $ 0.7 million of interest income and $ 0.1 million of other income. For the six months ended June 30, 2026, the Shem LLC investments generated $ 1.6 million of interest income and $ 0.2 million of other income. For the three months ended June 30, 2025, the Shem LLC investments generated $ 0.9 million of interest income and $ 0.1 million of other income. For the six months ended June 30, 2025, the Shem LLC investments generated $ 2.8 million of interest income and $ 0.2 million of other income. At June 30, 2026, the Company had unfunded commitments totaling $ 0.7 million to the Shem LLC entities. Cordo CLT Investors LLC In September 2024, the Company, through its wholly owned subsidiary Urbane Capital, LLC, acquired a member's interest in Cordo CLT Investors LLC for a one time contribution of $ 2.5 million. As of June 30, 2026 and December 31, 2025, the Company held 7.2 % of total common member equity. This entity was formed for the sole purpose of developing a commercial multifamily property in Charlotte, North Carolina. The Company anticipates the project construction to be completed by the end of 2026, with monetization of the Company's investment in the first half of 2028 upon rent stabilization of the project. 20. Income Taxes 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 three and six months ended June 30, 2026, the Company’s taxable REIT subsidiary ("TRS") recognized a de minimis provision for federal and state income tax, which would be presented in other expenses on the Company’s unaudited Condensed Consolidated Statements of Operations. 25 Table of Contents SACHEM CAPITAL CORP. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2026 The table below presents the effects of temporary differences that gave rise to significant portions of deferred tax assets and liabilities as of June 30, 2026: June 30, 2026 Deferred Tax Assets: Net Operating Loss Carryforwards $ 1,054 Investment in LLCs 179 Basis in REO Assets 261 Total Gross Deferred Tax Assets 1,494 Less: Valuation Allowance ( 1,395 ) Net Deferred Tax Assets 99 Deferred Tax Liabilities: Depreciation ( 54 ) Prepaid Expenses ( 12 ) Amortization ( 33 ) Total Deferred Tax Liabilities ( 99 ) Total Deferred Tax Assets/(Liabilities) $ — At June 30, 2026, the Company’s TRS had federal net operating loss carryforwards of approximately $ 4.7 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 June 30, 2026. 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. The Company has determined that there are no uncertain tax positions requiring accrual or disclosure in the accompanying unaudited condensed consolidated financial statements as of June 30, 2026. 21. Subsequent Events The Company evaluated subsequent events from July 1, 2026 until the condensed consolidated financial statements were available to be issued. Based on the evaluation, no adjustments were required in the accompanying unaudited condensed consolidated financial statements. 26 Table of Contents