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Item 1. Financial Statements

2025-11-13 compared with 2025-08-14 · 453 added, 464 removed, 165 unchanged (85% of the section changed)

FINANCIAL STATEMENTS

MILL CITY VENTURES III, LTD.

SUI GROUP HOLDINGS LIMITED

CONDENSED BALANCE SHEETS

June 30, 2025 (unaudited)

December 31, 2024

Investments, at fair value (cost:

$ 17,641,707 and $ 13,717,089 , respectively)

September 30,

Current Assets

Cash and cash equivalents

Portfolio investments, at fair value (cost:

$ 9,960,216 and

$ 13,717,089 , respectively)

Interest and dividend receivable

Digital assets receivable, at fair value (cost:

$ 14,984 and $ 0 )

Prepaid expenses

Interest and dividend receivables

Deferred taxes

Total current assets

Digital assets, at fair value (cost:

$ 407,246,089 and $ 0 )

Portfolio investments, at fair value (cost:

$ 10,000,000 and $ 0 )

$ 429,147,708

Liabilities and Shareholders' Equity

Current Liabilities

Accounts payable

Deferred income

Accrued payroll liabilities

Accrued income tax

Total current liabilities

Long Term Liabilities

Deferred income

Total current liabilities

Total liabilities

Commitments and Contingencies

SHAREHOLDERS EQUITY (NET ASSETS)

Shareholders' Equity

Common stock, par value $ 0.001 per share ( 111,111,111 authorized;

1 unchanged sentence

Additional paid-in capital

Additional paid-in capital - stock options

Accumulated deficit

3 unchanged sentences

Accumulated undistributed net realized gains on investment transactions

Net unrealized appreciation (depreciation) in value of investments

Total Shareholders' Equity (Net Assets)

Net unrealized depreciation in value of investments

Total shareholders' equity

Total liabilities and shareholders' equity

Net Asset Value Per Common Share

$ 429,147,708

See accompanying Notes to Financial Statements

MILL CITY VENTURES III, LTD.

SUI GROUP HOLDINGS LIMITED

CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)

Three Months Ended

Six Months Ended

June 30, 2025

June 30, 2024

June 30, 2025

June 30, 2024

Investment Income

Interest income

Total Investment Income

Nine Months Ended

September 30, 2025

September 30, 2024

September 30, 2025

September 30, 2024

Portfolio investment income

SUI staking revenue

Total Revenues

Operating Expenses

Professional fees

Director's fees

Interest expense

Stock-based compensation

Asset and strategic management fees

Compensation expense

Unrealized loss on digital assets

Net realized and unrealized gain on portfolio investments

Other general and administrative

Total Operating Expenses

Net Investment Gain

Realized and Unrealized Gain on Investments

Net realized gain (loss) on investments

Net change in unrealized appreciation (depreciation) on investments

Net Realized and Unrealized Gain on Investments

Net Increase in Net Assets Resulting from Operations Before Taxes

Provision for Income Taxes

Net Increase in Net Assets Resulting from Operations

Net Increase in Net Assets Resulting from Operations per share:

Operating Income (Loss)

$ ( 63,662,475 )

$ ( 62,155,394 )

Portfolio investment income

Net realized and unrealized gain on portfolio investments

Total Other Income

Income (Loss) Before Taxes

$ ( 61,516,739 )

$ ( 60,009,658 )

Provision for (Benefit from) Income Taxes

( 17,249,785 )

( 16,871,485 )

Net Income (Loss)

$ ( 44,266,954 )

$ ( 43,138,173 )

Earnings per Share

Weighted-average number of common shares outstanding - basic

Weighted-average number of common shares outstanding - diluted

See accompanying Notes to Financial Statements

MILL CITY VENTURES III, LTD.

SUI GROUP HOLDINGS LIMITED

CONDENSED STATEMENTS OF SHAREHOLDERS’ EQUITY (UNAUDITED)

Three Months Ended June 30, 2025

Three Months Ended

September 30, 2025

Common Shares

1 unchanged sentence

Accumulated Deficit

Accumulated Undistributed Net Investment Gain

Accumulated Undistributed Net Realized Gain (Loss) on Investments Transactions

Net Unrealized Appreciation (Depreciation) in Value of Investments

Accumulated Undistributed Net Portfolio Investment Gain

Accumulated Undistributed Net Realized Gain on Portfolio Investments Transactions

Net Unrealized Appreciation (Depreciation) in value of Portfolio Investments

Total Shareholders' Equity

Balance as of March 31, 2025

Balance as of June 30, 2025

$ ( 1,159,665 )

Cumulative effect of ASC 946 derecognition

( 4,394,060 )

Undistributed net investment gain

Undistributed net realized loss on investment transactions

Appreciation in value of investments

Balance as of June 30, 2025

Issuance of shares and warrants in private offering, net of issuance costs of $21,192,358

Exercise of stock options and warrants

Stock-based compensation

Repurchase of common shares

( 2,578,364 )

Three Months Ended June 30, 2024

( 2,578,959 )

( 44,266,954 )

Balance as of September 30, 2025

$ 445,345,336

$ ( 40,319,899 )

$ 405,108,506

Three Months Ended

September 30, 2024

Common Shares

1 unchanged sentence

Accumulated Deficit

Accumulated Undistributed Net Investment Gain (Loss)

Accumulated Undistributed Net Realized Gain on Investments Transactions

Net Unrealized Depreciation in Value of Investments

Accumulated Undistributed Net Portfolio Investment Gain (Loss)

Accumulated Undistributed Net Realized Gain (Loss) on Portfolio Investments Transactions

Net Unrealized Appreciation (Depreciation) in value of Portfolio Investments

Total Shareholders' Equity

Balance as of March 31, 2024

Balance as of June 30, 2024

$ ( 1,159,665 )

1 unchanged sentence

$ ( 1,530,694 )

Undistributed net investment gain

Undistributed net realized gain on investment transactions

Depreciation in value of investments

Balance as of June 30, 2024

Exercise of stock options

Undistributed net portfolio investment gain

Undistributed net realized loss on portfolio investment transactions

Appreciation in value of portfolio investments

Balance as of September 30, 2024

$ ( 1,159,665 )

1 unchanged sentence

$ ( 1,000,001 )

Six Months Ended June 30, 2025

Nine Months Ended

September 30, 2025

Common Shares

1 unchanged sentence

Accumulated Deficit

Accumulated Undistributed Net Investment Gain (Loss)

Accumulated Undistributed Net Realized Gain on Investments Transactions

Net Unrealized Appreciation (Depreciation) in value of Investments

Accumulated Undistributed Net Portfolio Investment Gain (Loss)

Accumulated Undistributed Net Realized Gain on Portfolio Investments Transactions

Net Unrealized Depreciation in value of Portfolio Investments

Total Shareholders' Equity

3 unchanged sentences

$ ( 263,527 )

Issuance of shares and warrants in private offering, net of issuance costs of $21,192,358

Exercise of stock options and warrants

Stock-based compensation

Repurchase of common shares

Undistributed net investment gain

Undistributed net realized gain on investment transactions

Appreciation in value of investments

Balance as of June 30, 2025

( 3,208,478 )

Six Months Ended June 30, 2024

( 3,209,395 )

Undistributed net portfolio investment gain

Undistributed net realized gain on portfolio investment transactions

Depreciation in value of portfolio investments

Cumulative effect of ASC 946 derecognition

( 4,394,060 )

( 44,266,954 )

Balance as of September 30, 2025

$ 445,345,336

$ ( 40,319,899 )

$ 405,108,506

Nine Months Ended

September 30, 2024

Common Shares

3 unchanged sentences

Accumulated Undistributed Net Realized Gain on Investments Transactions

Net Unrealized Depreciation in value of Investments

Net Unrealized Appreciation (Depreciation) in value of Investments

Total Shareholders' Equity

3 unchanged sentences

$ ( 1,292,804 )

Undistributed net investment gain

Undistributed net realized gain on investment transactions

Depreciation in value of investments

Balance as of June 30, 2024

Undistributed net portfolio investment gain

Undistributed net realized gain on portfolio investment transactions

Appreciation in value of portfolio investments

Balance as of September 30, 2024

$ ( 1,159,665 )

2 unchanged sentences

See accompanying Notes to Financial Statements

MILL CITY VENTURES III, LTD.

SUI GROUP HOLDINGS LIMITED

CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)

Six Months Ended

June 30, 2025

June 30, 2024

Nine Months Ended

September 30, 2025

September 30, 2024

Cash flows from operating activities:

Net increase in net assets resulting from operations

Adjustments to reconcile net increase in net assets resulting

from operations to net cash provided (used) in operating activities:

Net change in unrealized appreciation (depreciation) on investments

Net realized gain on investments

Purchases of investments

Net income (loss)

$ ( 43,138,173 )

Proceeds from sales of investments

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

Deferred income taxes

( 17,922,000 )

Unrealized loss on digital assets

Net realized and unrealized gain on portfolio investments

( 1,001,678 )

Staking revenue

( 1,013,945 )

Stock-based compensation

Changes in operating assets and liabilities:

Prepaid expenses and other assets

Interest and dividends receivable

Prepaid expenses

( 1,822,110 )

Interest and dividend receivable

Digital assets receivable

Accounts payable and other liabilities

Net cash provided by (used in) operating activities

Accrued income tax

Deferred interest income

Net cash provided (used) in operating activities

( 1,782,339 )

Cash flows from investing activities:

Purchases of portfolio investments

( 8,247,139 )

( 5,106,503 )

Proceeds from sales and repayments of portfolio investments

Purchases of digital assets

( 243,986,118 )

Net cash provided (used) in investing activities

( 250,229,041 )

Cash flows from financing activities:

Proceeds from common shares and warrants issued in private offering

Issuance costs of private offering

( 21,192,358 )

Proceeds from option and warrant exercise

Payments for repurchase of common stock

Net cash used by financing activities

Net increase (decrease) in cash

( 3,209,395 )

Net cash provided in financing activities

Net increase in cash

Cash, beginning of period

Cash, end of period

Supplemental disclosure of cash flow information:

Cash paid for interest

Non-cash investing and financing activities:

In-kind digital assets contribution for equity and warrants in private offering

$ 137,541,272

In-kind digital assets acquired

$ ( 137,541,272 )

See accompanying Notes to Financial Statements

MILL CITY VENTURES III, LTD.

CONDENSED SCHEDULE OF INVESTMENTS (UNAUDITED)

JUNE 30, 2025

Investment / Industry

Percentage of Net Assets

Short-Term Non-banking Loans

Consumer - 18% secured loans

Consumer - 24% secured loans

Real Estate - 15% secured loans

Alatus Development Corp

Real Estate - 24% secured loans

Coventry Holdings LLC

Total Short-Term Non-Banking Loans

Commercial Business Loans

Business Services - 20% secured loans

Mustang Funding, LLC

Information Technology

Total Common Stock

Total Investments

Total Cash and cash equivalents

Total Investments and Cash

MILL CITY VENTURES III, LTD.

SCHEDULE OF INVESTMENTS

DECEMBER 31, 2024

Investment / Industry

Percentage of Net Assets

Short-Term Non-banking Loans

Business Services - 15% secured loans

Mustang Litigation Funding

Consumer - 18% secured loans

Real Estate - 15% secured loans

Alatus Development Corp

Real Estate - 24% secured loans

Coventry Holdings LLC

Total Short-Term Non-Banking Loans

Information Technology

Total Common Stock

Total Investments

Total Cash and cash equivalents

Total Investments and Cash

MILL CITY VENTURES III, LTD.

NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

June 30, 2025

NOTE 1 – ORGANIZATION

In this report, we generally refer to Mill City Ventures III, Ltd.

in the first person “we.” On occasion, we refer to our company in the third person as “Mill City Ventures” or the “Company.” We follow accounting and reporting guidance in Accounting Standards (“ASC”) Topic 946 “Financial Services – Investment Companies”.

We were incorporated in Minnesota in January 2006.

Until December 13, 2012, we were a development-stage company that focused on promoting and placing a proprietary poker game online and into casinos and entertainment facilities nationwide.

In 2013, we elected to become a business development company (“BDC”) under the Investment Company Act of 1940 (the “1940 Act”).

We operated as a BDC until we withdrew our BDC election at the end of December 2019.

Since that time, we have remained a public reporting company filing periodic reports with the SEC.

We engage in the business of providing short-term specialty finance solutions, typically in the form of short-term loans, primarily to small businesses, both private and public, and high-net-worth individuals.

To avoid regulation under the 1940 Act, we generally seek to structure our investments so they do not constitute “securities” for purposes of federal securities laws, and we monitor our investments as a whole to ensure that no more than 40% of our total assets consist of “investment securities” as defined under the 1940 Act.

SUI Group Holdings Limited (the “Company”, or “we”), formerly known as Mill City Ventures III, Ltd., is a Minnesota corporation headquartered in Wayzata, Minnesota.

The Company changed its name to SUI Group Holdings Limited on August 26, 2025, following an amendment to its Articles of Incorporation filed with the Office of the Minnesota Secretary of State.

This name change and concurrent rebranding marks a change in strategy toward blockchain-native treasury management.

Prior to the rebrand, the Company operated under the name Mill City Ventures III, Ltd.as a publicly traded specialty finance company listed on Nasdaq under the ticker symbol “MCVT”.

Its legacy business centered on issuing short-term, collateralized loans to small businesses and individuals, with a focus on generating high-yield returns.

To support the digital asset strategy, the Company completed a $ 450 million private placement in July 2025 (the “Private Placement”).

Following the capital raise, the Company began implementing its SUI treasury strategy, acquiring over 73 million SUI tokens in addition to the 33 million tokens received as in-kind consideration from the Private Placement.

To further institutionalize its position within the Sui ecosystem, the Company formalized its relationship with the Sui Foundation through Digital Asset Purchase and Sale Agreement (“the Foundation Agreement”), under which the Sui Foundation agreed to sell tokens to the Company.

This agreement provides formal recognition of the Company as a digital asset treasury company with official backing from the Sui Foundation.

In connection with this strategy, the Company changed its ticker symbol to “SUIG” and transitioned its operations to focus on institutional-grade exposure to the SUI digital asset.

The Company’s strategy is to maximize the SUI per-share and support the growth of the Sui ecosystem through scalable, transparent, and long-term value creation strategies.

Its common stock remains listed on the Nasdaq Capital Market and continues to be available for options trading on Cboe Global Markets.

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation:

The accompanying unaudited condensed financial statements have been prepared by the Company, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”).

In the opinion of the Company, the foregoing statements contain all adjustments, consisting only of normal recurring adjustments necessary to present fairly the financial position of the Company as of September 30, 2025 and December 31, 2024, as well as its results of operations for the three and nine months ended September 30, 2025 and 2024.

The condensed balance sheet as of December 31, 2024 has been derived from the audited financial statements as of that date.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts therein.

Due to the inherent uncertainty involved in making estimates, actual results in future periods may differ from the estimates.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted from this report, as is permitted by rules and regulations of the SEC.

Accordingly, the condensed financial statements do not include all information and footnotes required by GAAP for a complete financial statement presentation.

These condensed financial statements should be read in conjunction with the financial statements and the notes thereto for the year ended December 31, 2024, which are included in the Company’s Annual Report on Form 10-K filed with the SEC on March 10, 2025, as amended by Amendment No.

1 on Form 10-K/A filed with the SEC on May 9, 2025 (the “Annual Report”).

Change in application of ASC 946:

As discussed in “Note 1 – Organization”, the Company has changed its strategy during the quarter ended September 30, 2025 and as a result the Company will no longer apply the guidance of ASC 946 – Financial Services – Investment Companies .

The Company will account for this change on a prospective basis.

Use of estimates:

The preparation of financial statements in conformity with generally accepted accounting principles (GAAP) requires management and our independent board members to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosures of contingent assets and liabilities, at the date of the financial statements, as well as the reported amounts of expenses during the reporting period.

The preparation of financial statements in conformity with GAAP requires management and independent members of the Company’s board of directors (the “Board”) to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosures of contingent assets and liabilities, at the date of the financial statements, as well as the reported amounts of expenses during the reporting period.

Actual results could differ from those estimates.

For more information, see the “Valuation of portfolio investments” caption below, and “Note 4 – Fair Value of Financial Instruments” below.

The Company presents its financial statements as an investment company following accounting and reporting guidance in ASC 946.

Cash deposits:

We maintain our cash balances in financial institutions and with regulated financial investment brokers.

Cash on deposit in excess of FDIC and similar coverage is subject to the usual banking risk of funds in excess of those limits.

Cash and cash equivalents:

The Company maintains the cash balances in financial institutions and with regulated financial investment brokers.

The Company considers all highly liquid investments purchased with an original maturity date of three months or less to be cash equivalents.

Cash equivalents as of September 30, 2025 include $ 3,271,853 of USD Coins (USDC), a stablecoin pegged to the U.S.

Digital assets:

The Company has adopted ASU 2023-08 , Digital Assets , which provides guidance on the recognition, measurement, presentation, and disclosure of digital assets.

The standard was adopted prospectively, and no cumulative-effect adjustment was recorded upon adoption.

The Company accounts for its digital assets, including SUI tokens, in accordance with ASC 350 – Intangibles – Goodwill and Other.

The Company has determined its digital assets meet the scoping criteria of ASC 350-60, which requires eligible crypto assets to be measured at fair value, with changes in fair value recognized in net income.

Fair value is determined in accordance with ASC 820 – Fair Value Measurement, using quoted prices in active markets.

The Company has designated Coinbase as its principal market because it has the greatest volume and level of activity of SUI for determining the fair value of SUI tokens.

The activity from remeasurement of digital assets at fair value is reflected in the statements of operations within Unrealized gain/loss on digital assets.

Realized gains and losses from the derecognition of digital assets would be included in the Realized gain/loss on digital assets in the statements of operations.

Although the Company has not disposed of any digital assets during the reporting period, in the event that there are disposals in the future, the Company will use the specific identification method to calculate the realized gains/losses on digital assets.

Sales and purchases of digital assets are reflected as cash flows from investing activities in the statement of cash flows.

Contributions of digital assets received as part of the consideration received are presented as noncash investing and financing activities in the statements of cash flows.

Valuation of portfolio investments:

We carry our investments in accordance with ASC Topic 820, Fair Value Measurements and Disclosures (“ASC 820”), issued by the Financial Accounting Standards Board (“FASB”), which defines fair value, establishes a framework for measuring fair value, and requires disclosures about fair value measurements.

In connection with the change in accounting methods from ASC 946 - Financial Services - Investment Companies, the Company ceased applying investment company accounting and transitioned to accounting standards applicable to operating entities, in light of the change in its business model.

Concurrently, the Company elected to apply the fair value option under ASC 825 - Financial Instruments, as it relates to the portfolio investments.

The change in accounting policy has been applied prospectively from the date of the election of ASC 825 – Financial Instruments.

Portfolio investments are valued in accordance with ASC Topic 820 - Fair Value Measurements, which defines fair value, establishes a framework for measuring fair value, and requires disclosures about fair value measurements.

Fair value is generally based on quoted market prices provided by independent pricing services, broker or dealer quotations, or alternative price sources.

In the absence of quoted market prices, broker or dealer quotations, or alternative price sources, investments are measured at fair value as determined by our Board of Directors, based on, among other things, the input of our executive management, the Audit Committee of our Board of Directors, and any independent third-party valuation experts that may be engaged by management to assist in the valuation of our portfolio investments, but in all cases consistent with our written valuation policies and procedures.

Due to the inherent uncertainties of valuation, certain estimated fair values may differ significantly from the values that would have been realized had a ready market for these investments existed, and these differences could be material.

In addition, such investments are generally less liquid than publicly traded securities.

If we were required to liquidate a portfolio investment in a forced or liquidation sale, we could realize significantly less than the value at which we have recorded it.

Accounting guidance establishes a hierarchal disclosure framework that prioritizes and ranks the level of market price observability of inputs used in measuring investments at fair value.

In the absence of quoted market prices, broker or dealer quotations, or alternative price sources, portfolio investments are measured at fair value as determined by the Board, based on, among other things, the input of our executive management, the Audit Committee of the Board, and any independent third-party valuation experts that may be engaged by management to assist in the valuation of the Company’s portfolio investments, but in all cases consistent with our written valuation policies and procedures.

Due to the inherent uncertainties of valuation, certain estimated fair values may differ significantly from the values that would have been realized had a ready market for these portfolio investments existed, and these differences could be material.

In addition, such portfolio investments are generally less liquid than publicly traded securities.

If the Company were required to liquidate a portfolio investment in a forced or liquidation sale, it could realize significantly less than the value at which it has been recorded.

Accounting guidance establishes a hierarchal disclosure framework that prioritizes and ranks the level of market price observability of inputs used in measuring portfolio investments at fair value.

Observable inputs must be used when available.

Observable inputs are inputs that market participants would use in valuing the asset or liability based on market data obtained from independent sources.

Unobservable inputs are inputs that reflect our assumptions about the factors market participants would use in valuing the asset or liability based upon the best information available.

Unobservable inputs are inputs that reflect the Company’s assumptions about the factors market participants would use in valuing the asset or liability based upon the best information available.

Assets and liabilities measured at fair value are to be categorized into one of the three hierarchy levels based on the relative observability of inputs used in the valuation.

The three levels are defined as follows:

Observable inputs based on quoted prices (unadjusted) in active markets for identical assets or liabilities.

Observable inputs based on quoted prices for similar assets and liabilities in active markets, or quoted prices for identical assets and liabilities in inactive markets.

Unobservable inputs that reflect an entity’s own assumptions about what inputs a market participant would use in pricing the asset or liability based on the best information available in the circumstances.

MILL CITY VENTURES III, LTD.

NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

June 30, 2025

Our valuation policy and procedures:

Under our valuation policies and procedures, we evaluate the source of inputs, including any markets in which our investments are trading, and then apply the resulting information in determining fair value.

For our Level 1 investment assets, our valuation policy generally requires us to use a market approach, considering the last quoted closing price of a security we own that is listed on a securities exchange, and in a case where a security we own is listed on an over-the-counter market, to average the last quoted bid and ask price on the most active market on which the security is quoted.

In the case of traded debt securities the prices for which are not readily available, we may value those securities using a discounted cash flows approach, at their weighted-average yield to maturity.

The estimated fair value of our Level 3 investment assets is determined on a quarterly basis by our Board of Directors.

In general, we value our Level 3 equity investments at cost unless circumstances warrant a different approach.

Examples of these circumstances includes a situation in which a portfolio company has engaged in a subsequent financing of more than a de minimis size involving sophisticated investors (in which case we may use the price involved in that financing as a determinative input absent other known factors), or when a portfolio company is engaged in the process of a transaction that we determine is reasonably likely to occur (in which case we may use the price involved in the pending transaction as a determinative input absent other known factors).

Other facts and circumstances that may serve as an input supporting a change in the valuation of our Level 3 equity investments include (i) a third-party valuation conducted by an independent and qualified professional, (ii) changes in the performance of long-term financial prospects of the portfolio company, (iii) a subsequent financing that changes the distribution rights associated with the equity security we hold, or (iv) sale transactions involving comparable companies, but only if further supported by a third-party valuation conducted by an independent and qualified professional.

When valuing preferred equity investments, we generally view intrinsic value as a key input.

Intrinsic value means the value of any conversion feature (if the preferred investment is convertible) or the value of any liquidation or other preference.

Discounts to intrinsic value may be applied in cases where the issuer’s financial condition is impaired or, in cases where intrinsic value relating to a conversion is determined to be a key input, to account for resale restrictions applicable to the securities issuable upon conversion.

When valuing warrants, our valuation policy and procedures indicate that value will generally be the difference between the closing price of the underlying equity security and the exercise price, after applying an appropriate discount for restriction, if applicable, in situations where the underlying security is marketable.

If the underlying security is not marketable, then intrinsic value will be considered consistent with the principles described above.

Generally, “out-of-the-money” warrants will be valued at cost or zero.

For non-traded (Level 3) debt instruments with a residual maturity less than or equal to 60 days, we will generally value such instruments based on a discounted cash flows approach, considering the straight-line amortized face value of the debt unless justification for impairment exists.

For level 3 non-banking loans with a maturity in excess of 60 days, fair value is determined based on the initial purchase price and adjusted as necessary to reflect any changes in the financial strength of the creditor and changes in interest rates in the high-yield credit markets.

On a quarterly basis, our management provides members of our Board of Directors with recommendations, if any, to change any existing valuations of our portfolio investments or hierarchy levels for purposes of determining the fair value of such investments based upon the foregoing.

In such a case, the Board of Directors would then discuss these materials and, consistent with the policies and approaches outlined above, makes final determinations respecting the valuation and hierarchy levels of our portfolio investments.

We made no changes to our valuation policy and procedures during the reporting period.

Income taxes:

We account for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements.

Deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial statement carrying amount and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.

The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.

We record net deferred tax assets to the extent we believe these assets will more likely than not be realized.

In making such determination, we consider all available evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operations.

In the event we were to determine we would be able to realize our deferred income tax assets in the future in excess of their recorded amount, we would make an adjustment to the valuation allowance, which would reduce the provision for income taxes.

MILL CITY VENTURES III, LTD.

NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

June 30, 2025

We file income tax returns in the U.S.

Federal jurisdiction and various state jurisdictions.

We do not believe there will be any material changes in our unrecognized tax positions over the next 12 months.

Our evaluation was performed for the tax years ended December 31, 2021 through 2024, which are the tax years that remain subject to examination by major tax jurisdictions as of June 30, 2025.

Revenue recognition :

Realized gains or losses on the sale of investments are calculated using the specific investment method.

Interest income, adjusted for amortization of premiums and accretion of discounts, is recorded on an accrual basis.

Discounts from and premiums to par value on securities purchased are accreted or amortized, as applicable, into interest income over the life of the related security using the effective-yield method.

The amortized cost of investments represents the original cost, adjusted for the accretion of discounts and amortization of premiums, if any.

Loans are generally placed on non-accrual status when principal or interest payments are past due 30 days or more, or when there is reasonable doubt that principal or interest will be collected in full.

Loan origination fees are recognized when loans are issued.

Accrued and unpaid interest is generally reversed when a loan is placed on non-accrual status.

Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment regarding collectability.

Non-accrual loans are restored to accrual status when past-due principal and interest is paid and, in management’s judgment, are likely to remain current.

We may make exceptions to the policy described above if a loan has sufficient collateral value and is in the process of collection.

Dividend income on preferred equity securities is recorded as dividend income on an accrual basis to the extent that such amounts are payable by the portfolio company and are expected to be collected.

Dividend income on common equity securities is recorded on the record date for private portfolio companies or on the ex-dividend date for publicly traded portfolio companies.

Certain investments may have contractual payment-in-kind (“PIK”) interest or dividends.

PIK represents accrued interest or accumulated dividends that are added to the loan principal or stated value of the investment on the respective interest- or dividend-payment dates rather than being paid in cash, and generally becomes due at maturity or upon being repurchased by the issuer.

PIK interest or dividends is recorded as interest or dividend income, as applicable.

If at any point we believe that PIK interest or dividends is not expected be realized, the PIK-generating investment will be placed on non-accrual status.

Accrued PIK interest or dividends are generally reversed through interest or dividend income, respectively, when an investment is placed on non-accrual status.

Allocation of net gains and losses:

All income, gains, losses, deductions and credits for any investment are allocated in a manner proportionate to the shares owned.

These are discussed in “Note 5 – Fair Value of Portfolio Investments”.

Revenue recognition - SUI staking revenue:

Beginning in August 2025, the Company engaged in SUI staking activities.

This can include native staking, liquid staking and restaking.

The Company has entered into separate contractual agreements with various third-party entities to facilitate its SUI staking activities and has only engaged in native staking during the third quarter of 2025.

The Company intends for staking to become a primary revenue generation strategy of the Company within the current fiscal year.

The Company earns revenue primarily through staking activities involving its digital asset holdings.

Under its treasury strategy, the Company delegates certain digital assets, including SUI tokens, to third-party validator nodes to participate in proof-of-stake blockchain protocols.

These arrangements support the operation and security of the underlying blockchain networks and generate staking rewards as compensation.

In accordance with ASC 606 - Revenue from Contracts with Customers, the Company evaluated whether it acts as a principal or an agent in these arrangements.

The specified service in staking is the performance of validation activities, which are executed by the validator infrastructure.

The validator is selected by the blockchain protocol to perform transaction validation and is responsible for operating the necessary hardware and software, bearing the associated operational and investment risks.

Although the Company retains ownership and custody of the staked digital assets and receives staking rewards directly from the blockchain protocol, it does not control or perform the validation service.

Based on the control and performance obligation criteria under ASC 606 - Revenue from Contracts with Customers, the Company concluded that it does not control the specified service prior to its transfer to the customer.

As such, the Company acts as an agent in these arrangements.

Accordingly, staking rewards in the form of SUI tokens are recognized on a net basis as non-cash consideration for staking activities, measured at the fair value of the digital assets at the inception of the day the rewards are earned, reflecting only the portion attributable to the Company for delegating its tokens.

Stock-based compensation:

The Company’s stock-based compensation consists of stock options issued to certain employees and directors of the Company.

The Company recognizes compensation expense based on an estimated grant date fair value using the Black Sholes option-pricing method.

The Company’s stock-based compensation consists of stock options and warrants issued to certain employees, non-employees and directors of the Company.

The Company recognizes compensation expense based on an estimated grant date fair value using the Black-Sholes option-pricing model or Monte Carlo simulation.

If the factors change and different assumptions are used, the Company’s stock-based compensation expense could be materially different in the future.

The Company recognizes stock-based compensation expense for these options on a straight-line basis over the requisite service period.

The Company recognizes stock-based compensation expense for these options and warrants on a straight-line basis over the requisite service period.

The Company has elected to account for forfeitures as they occur.

Management and service fees:

We do not incur expenses related to management and service fees.

Our executive management team manages our investments as part of their employment responsibilities.

The Company has a single reportable segment based on the nature of its operations.

The nature of business and the accounting policies of the segment are the same as described throughout Notes 1 and 2.

The Company’s Chief Operating Decision Maker (“CODM”) is its executive team.

The CODM assesses the reportable segment’s performance and allocates resources for the reportable segment based on the net income and total assets which are the same amounts in all material respects as those reported on the Statement of Operations and Balance Sheet.

MILL CITY VENTURES III, LTD.

NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

June 30, 2025

NOTE 3 – INVESTMENTS

The following table shows the composition of our investment portfolio by major class, at amortized cost and fair value, as of June 30, 2025 (together with the corresponding percentage of the fair value of our total portfolio of investments):

As of June 30, 2025

Investments at Amortized Cost

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the instruments’ specific terms and applicable authoritative guidance in ASC 480 – Distinguishing Liabilities from Equity and ASC 815 – Derivatives and Hedging.

The assessment considers whether the instruments are freestanding financial instruments pursuant to ASC 480 – Distinguishing Liabilities from Equity, meet the definition of a liability pursuant to ASC 480 – Distinguishing Liabilities from Equity, and whether the instruments meet all of the requirements for equity classification under ASC 815 – Derivatives and Hedging, including whether the instruments are indexed to the Company’s own shares of common stock and whether the instrument holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification.

NOTE 3 – DIGITAL ASSETS

On July 27, 2025, the Company entered into the Foundation Agreement with the Sui Foundation.

Under the Foundation Agreement, the Company acquired 44 million SUI tokens at a discounted purchase price equal to 85 % of the twenty-four-hour time-weighted average price (“TWAP”) of SUI tokens on July 31, 2025.

The SUI tokens acquired under the Foundation Agreement (the “ Foundation Agreement Tokens ”) are subject to contractual sales and transfer restrictions for a period of twenty-five months following July 31, 2025 (the “Restricted Period”).

During the Restricted Period, the Company is prohibited from selling, transferring, or otherwise disposing of the Foundation Agreement Tokens.

However, the Company may stake the Foundation Agreement Tokens on the SUI network to participate in network validation and earn staking rewards.

The contractual restrictions are scheduled to expire on July 31, 2027, at which time the Company will obtain full transferability of the Foundation Agreement Tokens.

The Foundation Agreement also grants the Company certain preemptive rights to purchase additional SUI tokens at 85% of the prevailing market prices during the Restricted Period.

No other events or circumstances under the Foundation Agreement would permit the early release or modification of the restrictions.

The total purchase price of the Foundation Agreement tokens was $ 140,000,000 reflecting a discount of $ 24,705,882 .

The 15 % discount on the acquisition of the Foundation Agreement Tokens is recorded as deferred income within liabilities in the balance sheet and is recognized as an increase to unrealized gain or a reduction to unrealized loss on digital asset investments using the straight-line method over the two-year restriction period ending July 2027, which corresponds to the period during which the transfer restrictions lapse and any related obligations are satisfied.

As of September 30, 2025, the current deferred income liability of $ 11,858,824 and the long term deferred income liability of $ 10,870,588 related to the remaining balance of the deferred income associated with discount on the acquisition of the Foundation Agreement Tokens.

For the nine months ended September 30, 2025, the Company recognized amortized deferred income of $ 1,976,471 as a reduction to unrealized loss on digital asset investments.

The following table presents the activities in digital assets for the period ended September 30, 2025:

For the nine months ended September 30, 2025

Digital Assets

Number of Tokens

Balance as of January 1, 2025

Purchases/acquisitions

Disposals/sales

Staking rewards earned

Digital assets receivable

Unrealized gains (losses)

( 62,740,063 )

Balance as of September 30, 2025

$ 344,521,010

Digital assets are measured at fair value on a recurring basis in accordance with ASC 820, Fair Value Measurement , using a quoted prices in active markets (Level 1 inputs).

For the nine months ended September 30, 2025, we incurred $ 437,736 in asset and strategic management fees under our strategic and asset management arrangements.

These fees were calculated based on a tiered schedule applied to our average daily Assets Under Management (AUM), which includes SUI, cash, and cash equivalents, but excludes assets related to our short-term lending business.

NOTE 4 – PORTFOLIO INVESTMENTS

The following table shows the composition of our portfolio investments by major class, at amortized cost and fair value, as of September 30, 2025 (together with the corresponding percentage of the fair value of our total portfolio investments):

As of September 30, 2025

Portfolio Investments at Amortized Cost

Percentage of Amortized Cost

Investments at

Portfolio Investments at

Percentage of

1 unchanged sentence

Commercial Business Loans

The following table shows the composition of our investment portfolio by major class, at amortized cost and fair value, as of December 31, 2024 (together with the corresponding percentage of the fair value of our total portfolio of investments):

The following table shows the composition of our portfolio investments by major class, at amortized cost and fair value, as of December 31, 2024 (together with the corresponding percentage of the fair value of our total portfolio investments):

As of December 31, 2024

Investments at Amortized Cost

Portfolio Investments at Amortized Cost

Percentage of Amortized Cost

Investments at

Portfolio Investments at

Percentage of

Short-term Non-banking Loans

The following table shows the composition of our investment portfolio by industry grouping, based on fair value as of June 30, 2025:

As of June 30, 2025

Investments at

Percentage of

Business Services

Information Technology

The following table shows the composition of our investment portfolio by industry grouping, based on fair value as of December 31, 2024:

As of December 31, 2024

Investments at

Percentage of

Business Services

Information Technology

MILL CITY VENTURES III, LTD.

NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

June 30, 2025

NOTE 4 – FAIR VALUE OF FINANCIAL INSTRUMENTS

Level 3 valuation information :

Due to the inherent uncertainty in the valuation process, the estimate of the fair value of our investment portfolio as of June 30, 2025 may differ materially from values that would have been used had a readily available market for those investments existed.

The following table presents the fair value measurements of our portfolio investments by major class, as of June 30, 2025, according to the fair value hierarchy:

As of June 30, 2025

NOTE 5 – FAIR VALUE OF PORTFOLIO INVESTMENTS

Observable inputs based on quoted prices (unadjusted) in active markets for identical assets or liabilities.

Observable inputs based on quoted prices for similar assets and liabilities in active markets, or quoted prices for identical assets and liabilities in inactive markets.

The following table presents the fair value measurements of our portfolio investments by major class, as of September 30, 2025, according to the fair value hierarchy:

As of September 30, 2025

Short-term Non-banking Loans

Commercial Business Loans

Preferred Stock

The following table presents the fair value measurements of our portfolio investments by major class, as of December 31, 2024, according to the fair value hierarchy:

1 unchanged sentence

Short-term Non-banking Loans

The following table presents a reconciliation of the beginning and ending fair value balances for our Level 3 portfolio investment assets for the six months ended June 30, 2025:

For the six months ended June 30, 2025

ST Non-banking Loans

Commercial Business Loans

The following table presents a reconciliation of the beginning and ending fair value balances for our Level 3 portfolio investment assets for the nine months ended September 30, 2025:

Balance as of January 1, 2025

2 unchanged sentences

Sales and redemptions

Transfers between investment classifications

( 2,000,100 )

Balance as of June 30, 2025

The net change in unrealized appreciation for the six months ended June 30, 2025 attributable to Level 3 portfolio investments still held as of June 30, 2025 was $ 343,751 .

The following table lists our Level 3 investments held as of June 30, 2025 and the unobservable inputs used to determine their valuation:

Balance as of September 30, 2025

The net change in unrealized depreciation for the nine months ended September 30, 2025 attributable to Level 3 portfolio investments still held as of September 30, 2025 was $ 274,168 .

The following table lists our Level 3 portfolio investments held as of September 30, 2025 and the unobservable inputs used to determine their valuation:

Security Type

4 unchanged sentences

determining private company interest rate based on changes in market rates of instruments with comparable creditworthiness

Commercial Business Loan

discounted cash flow

determining private company interest rate based on changes in market rates of instruments with comparable creditworthiness

Commercial Business Loans

last secured funding known by company

MILL CITY VENTURES III, LTD.

NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

June 30, 2025

The following table presents a reconciliation of the beginning and ending fair value balances for our Level 3 portfolio investment assets for the period ended December 31, 2024:

economic changes since last funding

Preferred Stock

last funding secured by company

economic changes since last funding

The following table presents a reconciliation of the beginning and ending fair value balances for our Level 3 portfolio investment assets for the year ended December 31, 2024:

For the year ended December 31, 2024

11 unchanged sentences

The net change in unrealized depreciation for the year ended December 31, 2024 attributable to Level 3 portfolio investments still held as of December 31, 2024 was $ 83,496 .

The following table lists our Level 3 investments held as of December 31, 2024 and the unobservable inputs used to determine their valuation:

The following table lists our Level 3 portfolio investments held as of December 31, 2024 and the unobservable inputs used to determine their valuation:

Security Type

5 unchanged sentences

last secured funding known by company

economic changes since last funding

Preferred Stock

last funding secured by company

1 unchanged sentence

NOTE 6 – RELATED-PARTY TRANSACTIONS

We maintain a conflicts of interest and related-party transactions policy requiring (i) certain disclosures be made to our Board of Directors in relation to situations where officers, directors, significant shareholders, or any of their affiliates may enter into transactions with us, and (ii) certain disclosures appear in the reports we prepare and file with the SEC.

In this regard, during the period covered by this report we entered into, or remained a party to, the following related-party transactions:

We held a promissory note with two shareholders in the principal amount of $ 250,000 .

The promissory note bore interest payable monthly at the rate of 10 % per annum.

The note was secured by the debtors’ pledge to us of 277,778 shares of common stock.

The note was paid in full including all accrued interest on September 26, 2024.

As disclosed in Note 7, a component of our now terminated loan agreement was with a director of our Company.

The Company maintains a conflict of interest and related-party transactions policy requiring (i) certain disclosures be made to the Board in relation to situations where officers, directors, significant shareholders, or any of their affiliates may enter into transactions with the Company, and (ii) certain disclosures appear in the reports prepared and filed with the SEC.

During the third quarter of 2025, the Company did not enter into, and was not party to, any related-party transactions.

NOTE 7 – INCOME TAXES

Presently, we are a C-Corporation for tax purposes and have booked an income tax provision for the periods described below.

Our tax provision or benefit from income taxes for interim periods is determined using an estimate of our annual effective tax rate.

MILL CITY VENTURES III, LTD.

NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

June 30, 2025

As of June 30, 2025 and December 31, 2024, we have a deferred tax asset of $ 641,000 and $ 770,000 , respectively.

As of June 30, 2025, our net deferred tax asset consists of foreign tax credit carryforwards, unrealized investment gain/loss, non-qualified stock option expenses, capital loss carryforwards, and depreciable assets.

Presently, the Company is a C-Corporation for tax purposes and have booked an income tax provision for the periods described below.

Our tax provision or benefit from income taxes for interim periods is determined using an estimate of its annual effective tax rate.

As of September 30, 2025 and December 31, 2024, the Company had a deferred tax asset of $ 18,692,000 and $ 770,000 , respectively.

As of September 30, 2025, our net deferred tax asset consisted of foreign tax credit carryforwards, unrealized investment gain/loss, unrealized digital asset gain/loss, non-qualified stock option expenses, capital loss carryforwards, and depreciable assets.

Our determination of the realizable deferred tax assets and liabilities requires the exercise of significant judgment, based in part on business plans and expectations about future outcomes.

As of June 30, 2025 and December 31, 2024 we had accrued taxes of $ 144,500 and $ 147,200 , respectively.

We recorded an increase of income taxes of $ 191,500 (28 percent effective tax rate) and $ 133,300 (26 percent effective tax rate) during the six months ended June 30 2025 and June 30 2024, respectively.

The deferred tax rate changed from 26.52 % as of December 31, 2024 to 28.25 % as of June 30, 2025 due to changes in state apportionment.

NOTE 7 – LINE OF CREDIT

We had a Loan and Security Agreement (the “Loan Agreement”) with a third party and director (collectively, the Lenders).

Under the Loan Agreement, the Lenders made available to us a $ 5 million revolving line of credit for us to use in the ordinary course of our short-term specialty finance business, of which our director was required to fund one half of the amount.

Amounts drawn under the Loan Agreement accrued interest at the per annum rate of 8 %, through January 3, 2027, subject to early termination provisions at the Lender’s right at any time after January 3, 2023.

Our obligations under the Loan Agreement were secured by a grant of a collateral security interest in substantially all of our assets.

In January 2024, we terminated the Loan Agreement.

Any applicable fees related to early termination of the Agreement were waived.

As of September 30, 2025 and December 31, 2024 the Company had accrued taxes of $ 945,715 and $ 147,200 , respectively.

The Company recorded a decrease in income taxes of $ 16,871,000 (28% effective tax rate) and an increase of income taxes of $ 426,000 (27% effective tax rate) during the nine months ended September 30, 2025 and September 30, 2024, respectively.

The deferred tax rate changed from 26.52 % as of December 31, 2024 to 28.00 % as of September 30, 2025 due to changes in state apportionment.

NOTE 8 – STOCK-BASED COMPENSATION

Our 2022 Stock Incentive Plan (the “Plan”) authorized the issuance of incentives relating to 900,000 shares of common stock.

As of June 30, 2025, incentives relating to the issuance of 870,000 shares have been issued under the Plan, leaving 30,000 shares available for issuance.

The Plan was amended by the Board of Directors on August 14, 2023, and a registration statement on Form S-8 respecting the Plan was filed with the SEC on August 23, 2023.

The following table summarizes the activity for all stock options outstanding for the six months ended June 30, 2025:

The following table summarizes the activity for all stock options outstanding for the nine months ended September 30, 2025:

Weighted Average Exercise Price

Options outstanding at beginning of year

Options outstanding at end of period

Options exercisable at June 30, 2025:

The following table summarizes additional information about stock options outstanding and exercisable at June 30, 2025:

Options outstanding at September 30, 2025

Options exercisable at September 30, 2025:

The following table summarizes additional information about stock options outstanding and exercisable at September 30, 2025:

Options Outstanding

7 unchanged sentences

Aggregate Intrinsic Value

MILL CITY VENTURES III, LTD.

NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

June 30, 2025

The Company recognized stock-based compensation expense for stock options of $ 0 and $ 0 for the three and six months ended June 30, 2025 and 2024, respectively.

The Company recognized stock-based compensation expense for stock options of $ 0 for each of the nine months ended September 30, 2025 and 2024, respectively.

At the closing of the Private Placement (see “Note 9 – Shareholders’ Equity”), the Company issued the following compensatory warrants with a five-year term to purchase its common stock as follows:

(i) Warrants to Karatage Opportunities (“Karatage”), to purchase 3,113,469 shares of common stock (the “Lead Investor Warrants”) that vest over a 24-month period, starting six months from the issue date, in four equal installments (being 25% every six months) subject to Karatage providing services under a strategic advisor agreement.

(ii) Warrants to certain members of the management of the Company to purchase 1,245,388 shares of common stock (the “Management Warrants”) that will vest over a 24-month period, starting six months from the issue date, in four equal installments (being 25% every six months) subject to the relevant holders still being employed by the Company.

(iii) Warrants to certain advisors of the Company to purchase 207,565 shares of common stock (the “Advisor Warrants”) that are fully vested at issuance.

(iv) Warrants to purchase up to 3,113,469 shares of common stock (the “Placement Agent Warrants”) to the Placement Agent in connection with their services under Placement Agent Agreement that are fully vested at issuance.

(v) Warrants to purchase 207,565 shares of common stock (the “Director Warrant”) issued to a member of our Board subject that will vest over a 24-month period, starting six months from the issue date, in four equal installments (being 25% every six months) subject continued service.

The following table summarizes the key terms of all warrants issued as compensation:

Number of Warrants

Exercise Price

Exercisable as of Date

Expiration Date

Lead Investor Warrants

25% exercisable as of January 27, 2026, and each 25% every six months thereafter

July 27, 2030

25% exercisable as of January 27, 2026, and each 25% every six months thereafter

July 27, 2030

25% exercisable as of January 27, 2026, and each 25% every six months thereafter

July 27, 2030

25% exercisable as of January 27, 2026, and each 25% every six months thereafter

July 27, 2030

Management Warrants

25% exercisable as of January 27, 2026, and each 25% every six months thereafter

July 27, 2030

25% exercisable as of January 27, 2026, and each 25% every six months thereafter

July 27, 2030

25% exercisable as of January 27, 2026, and each 25% every six months thereafter

July 27, 2030

Advisor Warrants

On or after January 31, 2026

July 27, 2030

Placement Agent Warrants

February 28, 2026

July 27, 2030

Director Warrants

25% exercisable as of January 27, 2026, and each 25% every six months thereafter

July 27, 2030

25% exercisable as of January 27, 2026, and each 25% every six months thereafter

July 27, 2030

25% exercisable as of January 27, 2026, and each 25% every six months thereafter

July 27, 2030

25% exercisable as of January 27, 2026, and each 25% every six months thereafter

July 27, 2030

All of the above warrants meet equity classification criteria and will be recognized based on the issue date fair value.

For the three months ended and nine months ended September 30, 2025, the Company recognized a total stock-based compensation expense of $ 2,261,737 associated with the warrants, except for the Placement Agent Warrants.

The fair value of the Placement Agent Warrants was $ 10,928,276 and is accounted for as a non-cash equity issuance cost, recognized net of the cash proceeds from for the share of common stock issued in the Private Placement.

As of September 30, 2025, there was $ 13,598,174 of unrecognized compensation cost related to nonvested warrants to be recognized over a weighted average period of 1.70 years.

The following table summarizes warrant activity for the period ended September 30, 2025:

Outstanding on December 31, 2024

Outstanding on September 30, 2025

Exercisable on September 30, 2025

Vested on September 30, 2025

The weighted average issue date fair value per share for the warrants issued in 2025 is $ 3.40 .

The following table summarizes the assumptions used to calculate the issue date fair value of the warrants issued on July 27, 2025:

Dividend Yield

Expected term (in years)

Risk-free rate

NOTE 9 – SHAREHOLDERS’ EQUITY

At June 30, 2025, we had 6,062,773 shares of common stock issued and outstanding.

During the first quarter we repurchased 322,482 shares of common stock.

In connection with the 2022 public offering, we issued a five-year warrant to the underwriter.

The warrant allows the underwriter to purchase up to 75,000 common shares at $ 5.00 per share.

This warrant is exercisable after 180 days, and expires on August 8, 2027 .

This warrant is equity-classified and the fair value was $ 201,173 on the offering date.

NOTE 10 – PER-SHARE INFORMATION

Basic net gain per common share is computed by dividing net increase in net assets resulting from operations by the weighted-average number of common shares outstanding during the period.

Diluted net gain per common share is computed by dividing net increase in net assets resulting from operations by the weighted-average number of dilutive common shares outstanding during the period calculated using the Treasury Stock method.

The Treasury Stock method assumes that the proceeds received upon exercise of stock options are used to repurchase stock at the average market price during the period, thereby increasing the number of shares to be added in computing diluted earnings per share.

For the three and six month periods ended June 30, 2025, 670,000 stock options were excluded from the diluted net gain per common share calculation because their effect would be anti-dilutive.

A reconciliation of the numerator and denominator used in the calculation of basic and diluted net gain per common share is set forth below:

For the Three Months Ended June 30,

Net increase in net assets resulting from operations

Weighted-average number of common shares outstanding

Basic and diluted net gain (loss) per common share

For the Six Months Ended June 30,

Net increase (decrease) in net assets resulting from operations

Weighted-average number of common shares outstanding

Basic and diluted net gain (loss) per common share

MILL CITY VENTURES III, LTD.

NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

June 30, 2025

NOTE 11 – FINANCIAL HIGHLIGHTS

The following is a schedule of financial highlights for the six months ended June 30, 2025 through 2021:

Six Months Ended June 30,

Per Share Data (1)

Net asset value at beginning of period

Net investment income (loss)

Net realized and unrealized gains (losses)

(Provision for) benefit from income taxes

Issuance of stock options

Repurchase of common stock

Other changes in equity

Net asset value at end of period

Ratio / Supplemental Data

Per share market value of investments at end of period

Shares outstanding at end of period

Average weighted shares outstanding for the period - basic

Average weighted shares outstanding for the period - diluted

Net assets at end of period

Average net assets (2)

Total investment return

Portfolio turnover rate (3)

Ratio of operating expenses to average net assets (3)

Ratio of net investment income (loss) to average net assets (3)

Ratio of realized gains (losses) to average net assets (3)

Per-share data was derived using the ending number of shares outstanding for the period.

Based on the monthly average of net assets as of the beginning and end of each period presented.

Ratios are annualized.

NOTE 12 – SUBSEQUENT EVENTS

Private Placement and SUI Strategy

Securities Purchase Agreements and SUI Strategy

On July 31, 2025, we completed a private placement of 75,881,625 shares of our common stock at an offering price of $5.42 per share, and pre-funded warrants to purchase up to 7,144,205 shares of our common stock at an offering price of $5.4199 per share, exercisable at a per-share price of $0.0001 .

We consummated the offer and sale of our securities pursuant to securities purchase agreements that we entered into with the investors on July 27, 2025.

The securities offered and sold in the private placement, including the shares of common stock, the pre-funded warrants, the Placement Agent Warrants, Lead Investor Warrants, Foundation Investor Warrants, Management Warrants, and the Advisor Warrants (all as such warrants are defined in the disclosure below), and all of the shares of common stock issuable upon the exercise of all such warrants, were offered and sold in reliance upon the exemption from the registration requirements of the Securities Act, pursuant to Section 4(a)(2) thereof and/or Rule 506(b) of Regulation D promulgated thereunder, and applicable state securities laws.

The offer and sale of all of the above-described securities were not registered under the Securities Act, and such securities may not be offered or sold in the United States absent registration or an exemption from registration under the Securities Act and any applicable state securities laws.

MILL CITY VENTURES III, LTD.

NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

June 30, 2025

Simultaneously with the closing of the private placement, we adopted a new treasury policy and strategy under which the principal holding in our treasury reserve on the balance sheet will be allocated to the native cryptocurrency of the Sui blockchain commonly referred to as “SUI.” The Sui Foundation is an independent organization dedicated to the advancement and adoption of the Sui network.

The Board of Directors approved our treasury policy on July 27, 2025, authorizing the long-term accumulation of SUI.

We believe our position as a public company with an official Sui Foundation relationship provides us institutional-grade exposure to the SUI blockchain, and that Sui is well positioned for large-scale adoption with the speed and efficiency institutions require for crypto at scale, plus the technical architecture capable of supporting AI workloads while maintaining security and decentralization.

Our approach involves acquiring SUI directly—both through market purchases and direct purchases from the Sui Foundation.

This treasury initiative seeks to enhance our capital allocation strategy and does not affect our core commercial short-term non-bank lending and specialty finance business, which remains fully operational and a central part of our business.

At the closing of the private placement, we issued five-year warrants to purchase our common stock as follows:

warrants (the “Lead Investor Warrants”) to Karatage Opportunities (“Karatage”), to purchase 3,113,469 shares of common stock at various exercise prices as follows:

(i) 1,245,387 common shares at an exercise price of $5.42 per share;

(ii) 1,245,387 common shares at an exercise price of $5.962 per share;

(iii) 415,129 common shares at an exercise price of $6.504 per share;

and (iv) 207,565 common shares at an exercise price of $7.046 per share ;

warrants (the “Foundation Investor Warrants”) to the Sui Foundation (the “Foundation Investor”), to purchase 3,113,469 shares of common stock at various exercise prices as follows:

(i) 1,245,387 common shares at an exercise price of $5.42 per share;

(ii) 1,245,387 common shares at an exercise price of $5.962 per share;

(iii) 415,129 common shares at an exercise price of $6.504 per share;

and (iv) 207,565 common shares at an exercise price of $7.046 per share ;

warrants (the “Management Warrants”) to certain members of the management of the Company to purchase 1,245,388 shares of common stock at various exercise prices as follows:

(i) 622,694 common shares at an exercise price of $5.42 per share;

(ii) 415,130 common shares at an exercise price of $6.504 per share;

and (iii) 207,564 common shares at an exercise price of $7.046 per share ;

warrants (the “Advisor Warrants”) to certain advisors of the Company to purchase 207,565 shares of common stock at an exercise price of $5.962 per share .

All of the above-described warrants, other than the Advisor Warrants, will vest over a 24-month period starting six months from the Issue Date (as defined therein) in four equal installments (being 25% every six months), and in the case of the Management Warrants, subject to the relevant holder still being employed by the Company at each respective vesting date.

In the event that a member of the management team is terminated by the Company other than for cause or resigns for good reason (as defined in the individual’s employment agreement), the vesting of all of such individual’s Management Warrants will immediately accelerate and be fully vested as of the date of such termination.

The Advisor Warrants are fully exercisable beginning as of January 31, 2026.

Private Placement

On July 31, 2025, the Company completed the Private Placement of 75,881,625 shares of common stock at an offering price of $5.42 per-share, and pre-funded warrants to purchase up to 7,144,205 shares of common stock at an offering price of $5.4199 per pre-funded warrant, exercisable at a per-share price of $0.0001 .

On July 31, 2025, the Company consummated the offer and sale of its securities pursuant to the securities purchase agreement, dated as of July 27, 2025, by and among the Company and the investors identified on the signature pages thereto.

The transaction was settled through a combination of cash, cash equivalent, and digital assets, resulting in net cash and cash equivalent proceeds of $ 280,338,071 , net of issuance costs, and the receipt of approximately $ 137,541,272 million in SUI tokens contributed in-kind by certain investors as part of their investment consideration.

The Company also issued warrants (the “Foundation Investor Warrants”) to the Sui Foundation, to purchase 3,113,468 shares of common stock as follows:

(i) 1,245,387 shares of common stock at an exercise price of $5.42 per-share;

(ii) 1,245,387 shares of common stock at an exercise price of $5.962 per-share;

(iii) 415,129 shares of common stock at an exercise price of $6.504 per-share;

and (iv) 207,565 shares of common stock at an exercise price of $7.046 per-share.

The Foundation Investor Warrants will vest over a 24-month period starting six months from the issue date in four equal installments (being 25% every six months) .

The Company also issued warrants (the “Pre-Funded Warrants”) to certain investors involved in the Private Placement to purchase 7,144,205 shares of common stock at an exercise price of $0.0001 per-share with a purchase price of $5.4199 for one Pre-Funded Warrant .

The Pre-Funded Warrants are exercisable immediately and may be exercised at any time until all of the Pre-Funded Warrants issued in the Private Placement are exercised in full.

The Pre-Funded Warrants issued to certain investors in the Private Placement included provisions that restrict the holder from exercising any portion of the warrants to the extent that, following such exercise, the holder and its affiliates would beneficially own more than 4.99% of the Company’s outstanding common stock.

At the holder’s election this threshold may be increased to 9.99%.

Additionally, upon providing at least 61 days’ prior written notice to the Company, the holder may further increase the beneficial ownership limitation up to 19.99% of the Company’s outstanding common stock immediately following the exercise.

The Pre-Funded Warrants and the Foundation Investor Warrants are classified in equity.

Net proceeds received in the private placement were allocated to the common stock, the Pre-Funded Warrants, the Placement Agent Warrants disclosed below, and the Foundation Investor Warrants on a relative fair value basis.

2022 Public Offering

In connection with a public offering completed in 2022, the Company issued a five-year warrant to the underwriter to purchase up to 75,000 shares of common stock at an exercise price of $5.00 per-share.

The warrant became exercisable 180 days after issuance and expires on August 8, 2027 .

During the three months ended September 30, 2025, the underwriter exercised the warrant for 71,531 shares of common stock for an aggregate exercise price of $ 357,655 .

As of September 30, 2025, 3,469 shares remained outstanding under the warrant.

Placement Agency Agreement

On July 27, 2025, and in connection with the private placement, we entered into a Placement Agency Agreement with A.G.P., pursuant to which A.G.P.

agreed to serve as our exclusive placement agent in connection with the private placement.

Under the terms of the Placement Agency Agreement, we paid A.G.P.

On July 27, 2025, and in connection with the Private Placement, the Company entered into a Placement Agency Agreement (the “Placement Agency Agreement”) with A.G.P./Alliance Global Partners (“A.G.P.”), pursuant to which A.G.P.

agreed to serve as the exclusive placement agent in connection with the Private Placement.

Under the terms of the Placement Agency Agreement, the Company paid A.G.P.

a cash fee of $ 18,000,000 .

We also issued to A.G.P.

warrants (the “Placement Agent Warrants”) to purchase up to 3,113,469 shares of our common stock (equal to 3.75% of the securities sold in the private placement).

The Placement Agent Warrants will become exercisable six months following the issuance date and will be exercisable for a period of five years following the issuance date, at an exercise price of $ 5.962 per share.

In addition, we agreed to reimburse A.G.P.

The Company also issued the Placement Agent Warrants to A.G.P.

to purchase up to 3,113,469 shares of common stock (equal to 3.75% of the securities sold in the Private Placement).

The Placement Agent Warrants will become exercisable six months following the issuance date of July 31, 2025 and will be exercisable for a period of five years following the issuance date, at an exercise price of $ 5.962 per-share.

In addition, the Company reimbursed A.G.P.

for accountable expenses in an amount of $ 200,000 for its legal fees in connection with the Private Placement, as well as non-accountable expenses incurred by A.G.P.

for up to $ 25,000 in connection with the Private Placement.

Registration Rights Agreement

On July 27, 2025, and in connection with the private placement, we entered into a Registration Rights Agreement with the investors and A.G.P.

pursuant to which we agreed to file a registration statement, within 10 days of the closing (i.e., on or before August 10, 2025), providing for the resale by the investors of the common shares and shares of common stock issuable upon exercise of the pre-funded warrants, and the shares of common stock issuable upon exercise of the Lead Investor Warrant, Foundation Investor Warrant, Management Warrants and the Placement Agent Warrants, and to have such registration statement declared effective within 30 days of its filing date (or 60 days, if the SEC conducts a full review), and to maintain the effectiveness of such registration statement until all securities registered pursuant thereto (i) shall have been sold, either thereunder or pursuant to Rule 144, or (ii) starting from the third anniversary of the Registration Rights Agreement, may be sold without volume or manner-of-sale restrictions pursuant to Rule 144 under the Securities Act, and without the requirement for our Company to be in compliance with the current public information requirement Rule 144.

MILL CITY VENTURES III, LTD.

NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

June 30, 2025

The related fees associated with the Placement Agency Agreement are recorded against the net proceeds from the Private Placement.

Common Stock Purchase Agreement

On August 1, 2025, the Company entered into a Common Stock Purchase Agreement (the “Purchase Agreement”) with A.G.P., granting the Company the right, but not the obligation, to direct A.G.P.

to purchase up to the lesser of $500.0 million in aggregate gross proceeds or a number of shares not to exceed 19.99% of the Company’s outstanding common stock as of August 1, 2025 , unless shareholder approval is obtained to exceed such threshold.

The Company also entered into a Registration Rights Agreement with A.G.P.

on the same date, pursuant to which it agreed to file a resale registration statement with the SEC covering the shares issuable under the Purchase Agreement.

As of September 30, 2025, no shares have been issued under the Purchase Agreement.

Sales of common stock under the Purchase Agreement, if any, will be made at a per-share purchase price equal to no less than 95% of the volume-weighted average price over a specified period, as set forth in the Purchase Agreement.

Proceeds from any such sales will be used as described in the related registration statement and any applicable prospectus supplements.

Strategic Advisor Agreement

On July 27, 2025, we entered into a Strategic Advisor Agreement (the “Strategic Advisor Agreement”) with Karatage to expand and diversify our business operations through the integration of cryptocurrency and digital asset strategies in both our product offerings and as part of our treasury management strategy.

Pursuant to the Strategic Advisor Agreement, Karatage will provide us with technical advisory services regarding the digital asset ecosystem, including SUI and related technologies, developments in the digital asset and crypto gaming industries, the selection of third-party vendors with respect to asset management and related digital asset services, and other strategic advice regarding our digital assets treasury operations.

We will pay Karatage a tiered asset-based fee ranging from 0.0 % to 0.80 % per annum of the assets managed by the Company or an asset manager engaged by the Company, excluding the assets of the Company’s short-term lending business.

The Strategic Advisor Agreement will, unless earlier terminated in accordance with its terms, continue in effect for a period of ten years beginning on July 27, 2025, after which time the Strategic Advisor Agreement will automatically renew for a successive period of five years each, subject to the mutual agreement between the parties.

On July 27, 2025 (the “SAA Effective Date”), the Company entered into a Strategic Advisor Agreement (the “Strategic Advisor Agreement”) with Karatage to expand and diversify the Company’s business operations through the integration of cryptocurrency and digital asset strategies in both its product offerings and as part of its treasury management strategy.

Pursuant to the Strategic Advisor Agreement, Karatage will provide the Company with technical advisory services regarding the digital asset ecosystem, including SUI and related technologies, developments in the digital asset and crypto gaming industries, the selection of third-party vendors with respect to asset management and related digital asset services, and other strategic advice regarding the Company’s digital assets treasury operations.

The Company will pay Karatage a tiered asset-based fee ranging from 0.0 % to 0.80 % per annum of the assets managed by the Company or an asset manager engaged by the Company, excluding the assets of the Company’s short term lending business.

The Strategic Advisor Agreement will, unless earlier terminated in accordance with its terms, continue in effect for a period of ten years beginning on the SAA Effective Date and will automatically renew for successive periods of five years, subject to the mutual agreement between the parties (the “Term”).

Either the Company or Karatage may terminate the Strategic Advisor Agreement for cause immediately upon written notice if the other party:

1 unchanged sentence

and (ii) fails to cure such breach within 30 days after receiving written notice of the breach.

If the Strategic Advisor Agreement is terminated by the Company for cause or by Karatage other than for cause, Karatage will cease providing such technical advisory services and the Company will pay Karatage any fees due and payable under the Strategic Advisor Agreement up to the date of termination, provided that if the Strategic Advisor Agreement is terminated by the Company for any other reason or by the Advisor for cause, Karatage will cease providing such technical advisory services and the Company will pay Karatage any fees that would be due and payable under the Strategic Advisor Agreement for the remainder of the term of the agreement, as if the Strategic Advisor Agreement had not been terminated.

Asset Management Agreement

On July 27, 2025, we entered into an Asset Management Agreement (the “Asset Management Agreement”) with Galaxy Digital Capital Management LP (the “Asset Manager”).

The Asset Manager will provide discretionary investment management services with respect to, among other assets (including without limitation certain subsequently raised funds), our proceeds from the private placement (the “Account Assets”), and will have exclusive right to manage the first $750 million of our digital assets or cryptocurrencies and at least 50% of our digital assets or cryptocurrencies in excess of $750 million in accordance with the terms of the Asset Management Agreement .

The Asset Manager will pursue a long-only investment strategy investing primarily in SUI, which strategy may include staking and restaking SUI to improve returns (the “SUI Strategy”).

The custodians under the Asset Management Agreement will consist of cryptocurrency wallet providers agreed to by us and the Asset Manager.

We will pay the Asset Manager a tiered asset-based fee (the “Asset-based Fee”) ranging from 0.60 % to 0.80 % per annum of the Account Assets under management, in each case based on the value of Account Assets as of the applicable calculation date, as determined by a third-party administrator in accordance with the Asset Manager’s valuation policy;

subject, however, to a minimum Asset-based Fee of $ 1,000,000 per year.

The Asset Management Agreement will, unless terminated earlier in accordance with its terms, remain in effect for five years, after which time it will automatically renew for one-year terms, subject to mutual agreement between the Company and the Asset Manager.

Beginning on the second anniversary of the Asset Management Agreement, such agreement may be terminated by us upon at least 90 days prior written notice to the Asset Manager at the good faith discretion of our Chief Investment Officer (“CIO”) or our Board of Directors if the Asset Manager has underperformed according to such CIO’s internal objective metrics, as agreed with the Asset Manager.

Additionally, the Asset Management Agreement may be terminated at any time for cause by us or the Asset Manager upon at least 30 days prior written notice to the other party.

Additionally, the Asset Management Agreement may be terminated immediately by us if we determine in good faith after consultation with counsel, reasonably acceptable to the Asset Manager, that the Asset Management Agreement is prohibited or otherwise required to be terminated by applicable law.

Digital Asset Purchase and Sale Agreement

On July 27, 2025, we also entered into a Digital Asset Purchase and Sale Agreement (the “Digital Asset Purchase and Sale Agreement”) with the Foundation Investor, pursuant to which we agreed to purchase and the Foundation Investor agreed to sell and transfer certain SUI tokens as set forth in one or more confirmations.

The USD price per SUI token purchased pursuant to the Digital Asset Purchase and Sale Agreement will be equal to the product of (i) 0.85 multiplied by (ii) the 24-hour time weighted-average price on the closing date (as defined in the securities purchase agreements entered into in the private placement), as reasonably calculated by the Company.

Pursuant to the terms of the Digital Asset Purchase and Sale Agreement, the SUI tokens purchased will be subject to transfer restrictions for a period of two years following purchase.

Notwithstanding the foregoing, the transfer restrictions will not apply to the extent necessary to enable us to comply, or to be in compliance with, the provisions of the U.S.

Investment Company Act of 1940, as amended.

The Digital Asset Purchase and Sale Agreement also provides us with certain preemptive rights to purchase additional SUI tokens through July 31, 2027.

MILL CITY VENTURES III, LTD.

NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

June 30, 2025

Executive Employment Agreements

On July 31, 2025, we entered into new executive employments with Douglas M.

Polinsky, our Chief Executive Officer, and Joseph A.

Geraci II, our Chief Financial Officer.

Each new employment agreement has a three-year term (subject to certain early-termination rights).

Each employment agreement provides the executive with a base annual salary of $ 450,000 and a bonus up to 100% of the base salary , at the discretion of the Compensation Committee of the Board of Directors.

Each executive is also entitled to have health insurance provided by the Company and the ability to contribute to its 401(k) plan.

Each employment agreement contains a non-solicitation covenant effective during the term of the agreement and one year thereafter, as well as customary confidentiality covenants relating to the confidentiality of the Company information.

In the event that an executive is terminated for cause, as defined in the employment agreements, or in the event that an executive’s services are terminated due to death or disability, the terminated executive will be entitled to receive only his base annual salary through the date of termination.

In the event of other non-cause terminations, or in the event the executive resigns for good reason, as defined in the employment agreements, the Company will be obligated to pay the terminated executive’s base annual salary through the remainder of the employment term.

Change in Directors

On July 27, 2025, Mr.

Lyle Berman resigned his position as a director on our Board of Directors.

On the same day, the Board approved, subject to the closing of the private placement (which occurred on July 31, 2025), to set the size of the Board of Directors to five members, and appoint Messrs.

Marius Barnett and Dana Wagner to serve as directors.

Barnett is expected to serve as Chairman of the Board, and Mr.

Wagner is expected to serve as a member of the Audit Committee of the Board.

The Board believes that Messrs.

Wagner and Barnett are qualified to serve as directors due to their extensive experience with SUI and cryptocurrency technology.

Wagner and Barnett are also regarded as leaders in financial investments and treasury strategies.

As compensation for his services on the Board, Mr.

Wagner will receive an annual director fee of $ 250,000 to be paid on a quarterly basis.

In addition, we agreed to grant to Mr.

Wagner five-year warrants (the “Director Warrants”) to purchase 207,565 shares of common stock at various prices per share as follows:

(i) 83,026 common shares at an exercise price of $5.42 per share;

(ii) 41,513 common shares at an exercise price of $5.962 per share;

(iii) 41,513 common shares at an exercise price of $6.504 per share;

and (iv) 41,513 common shares at an exercise price of $7.046 per share .

The Director Warrants will vest over a period of 24 months starting six months from their issuance date (as defined therein) in four equal instalments (being 25% every six months) , subject to Mr.

Wagner (i) being a director of the Company at each respective vesting date and (ii) not having been legally and validly terminated or removed as a director pursuant to the Company’s bylaws and applicable law.

Amended and Restated Bylaws

On July 27, 2025, the Board of Directors amended and restated our Company’s bylaws, effective immediately.

The principal changes to the bylaws are to:

permit the Board to take action without a meeting by less than unanimous written consent;

establish the rights of shareholders to nominate directors for election at shareholder meetings pursuant to a written agreement, approved by the Board, as well as to include supporting materials in the Company’s proxy statement;

provide for the ability of the Board to increase or decrease the size of the Board.

Common Stock Purchase Agreement

On August 1, 2025, we entered into a Common Stock Purchase Agreement (the “Purchase Agreement”) with A.G.P./Alliance Global Partners (the “Investor”), pursuant to which we have the right, but not the obligation, to direct the Investor to purchase the lesser of (i) $500,000,000 or (ii) a number of shares not to exceed 19.99% of our shares of common stock outstanding on August 1, 2025 , unless our shareholders shall have approved the issuance of common stock in excess of such percentage, upon satisfaction of certain terms and conditions contained in the Purchase Agreement, including but not limited to an effective resale registration statement filed with the SEC.

In this regard, we also entered into a Registration Rights Agreement with the Investor on August 1, 2025, pursuant to which we agreed to file a resale registration statement registering the resale of shares of common stock that may be purchased by the Investor pursuant to the Purchase Agreement.

Any purchases and sales under the Purchase Agreement will be at a per-share purchase price equal 95% of the volume-weighted average price for the applicable period, as calculated pursuant to the Purchase Agreement.

Any proceeds from sales of common stock under the Purchase Agreement will be used in the manner set forth in the prospectus included in the related registration statement (and any post-effective amendment thereto), and any prospectus supplement thereto, filed pursuant to the registration rights agreement.

If the Strategic Advisor Agreement is terminated by the Company for cause or by Karatage other than for cause, Karatage will cease providing such technical advisory services and the Company will pay Karatage any fees due and payable under the Strategic Advisor Agreement up to the date of termination, provided that if the Strategic Advisor Agreement is terminated by the Company for any other reason or by Karatage for cause, Karatage will cease providing such technical advisory services and the Company will pay Karatage any fees that would be due and payable under the Strategic Advisor Agreement for the remainder of the Term as if the Strategic Advisor Agreement had not been terminated.

Stock Repurchase Program

During the nine months ended September 30, 2025, the Company repurchased a total of 917,251 shares of common stock for $3,209,394(of which 595,039 shares of common stock were acquired during the three months ended September 30, 2025, completing its previously authorized $2.0 million stock repurchase program and utilizing $1.2 million of the new $50 million stock repurchase program approved by the Board on September 15, 2025 .

As of September 30, 2025, 276,296 shares had been repurchased under the new $ 50 million authorization for $ 1,209,398 .

NOTE 10 – PER-SHARE INFORMATION

Basic net gain (loss) per common share is computed by dividing net income by the weighted-average number of common shares outstanding during the period.

Diluted net gain (loss) per common share is computed by dividing net income by the weighted-average number of dilutive common shares outstanding during the period calculated using the treasury stock method.

A reconciliation of the numerator and denominator used in the calculation of basic and diluted net gain (loss) per common share is set forth below:

For the Three Months Ended

September 30,

Basic earnings per share:

Net income (loss)

$ ( 44,266,954 )

Weighted-average number of common shares outstanding - basic

Effect of dilutive share-based rewards

Weighted-average number of common shares outstanding - diluted

Basic earnings (loss) per common share

Diluted earnings (loss) per common share

For the Nine Months Ended

September 30,

Basic earnings per share:

Net income (loss)

$ ( 43,138,173 )

Weighted-average number of common shares outstanding - basic

Effect of dilutive share-based rewards

Weighted-average number of common shares outstanding - diluted

Basic earnings (loss) per common share

Diluted earnings (loss) per common share

For the three and nine months ended September 30, 2025, the following instruments were excluded due to being anti-dilutive:

Foundation Investor Warrants

Placement Agent Warrants

Lead Investor Warrants

Management Warrants

Advisor Warrants

Director Warrants

The Pre-Funded Warrant shares of 5,628,727 are included in the computation of basic and diluted net loss per share for the three and nine months ended September 30, 2025, as the Pre-Funded Warrants are exercisable for nominal consideration.

NOTE 12 – SEGMENT

The Company has one reportable operating segment, which is a digital asset platform focused on maximizing SUI per share value and advancing the SUI ecosystem.

The legacy financing solutions business is not considered a separate reportable segment, as the Company’s segment reporting has been to reflect the Company’s current strategic and operational decision-making.

The Company’s chief operating decision makers (“CODM”), are the Company’s Chairman and the Chief Investment Officer, who, together, manage the Company’s operations on a consolidated basis as one operating segment for the purpose of evaluating financial performance and allocating resources.

The accounting policies of the Company’s segment are the same as those described in the summary of significant accounting policies.

The CODMs use revenue, unrealized gain/loss on SUI and operating income to assess performance and allocate resources.

The significant segment expense categories regularly provided to the CODMs are the same as those included on the condensed statements of operations.

The measure of segment assets is total assets as reported on the balance sheets.

NOTE 13 – SUBSEQUENT EVENTS

On September 29, 2025, the Company entered into a Master Digital Currency Loan Agreement with Galaxy Digital LLC (“Galaxy Digital”) (the “Galaxy Digital Loan Agreement”).

Under the Galaxy Digital Loan Agreement, the Company may, from time to time, lend digital assets and/or U.S.

dollars to Galaxy Digital.

The Galaxy Digital Loan Agreement provides for both open loans (callable at any time) and term loans (with fixed maturity dates), subject to negotiated loan term sheets.

The initial term of the Galaxy Digital Loan Agreement is one year, automatically renewable unless terminated with notice.

Pursuant to the Galaxy Loan Agreement, the Company transferred 961,550 SUI tokens on October 8, 2025.

In October 2025, the Company entered into a Digital Currency Loan Agreement with BlueFin Labs Inc., a Panama-based company (“BlueFin Labs”) (the “BlueFin Agreement”).

Under the BlueFin Agreement, the Company loaned 2,000,000 SUI tokens to BlueFin Labs for a term of three years, automatically renewable unless terminated under specified conditions.

BlueFin Labs will pay the Company a loan fee equal to 5 % of BlueFin Dex revenues, payable in SUI tokens.

The BlueFin Agreement permits BlueFin Labs to use, pledge, or transfer the loaned SUI tokens at its discretion.

Management has evaluated subsequent events through the date of issuance of this Form 10-Q and concluded that the above agreements represent material subsequent events requiring disclosure but do not require adjustment to the financial statements as of September 30, 2025.

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-Q

Item 1. Financial Statements