SUI Group Holdings Ltd. 10-K

ITEM 7 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Our Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) set forth below should be read in conjunction with our audited financial statements, and notes thereto, filed together with this Annual Report. The following discussion contains “forward-looking statements” that reflect our future plans, estimates, beliefs and expected performance. We caution that assumptions, expectations, projections, intentions or beliefs about future events may, and often do, vary from actual results and the differences can be material. Please see “ Cautionary Statement Regarding Forward-Looking Statements ” and “ Item 1A — Risk Factors .” This MD&A is intended to provide a reader of our financial statements with a narrative from the perspective of management on our financial condition, results of operations, liquidity and certain other factors that may affect our future results. In addition, unless expressly stated otherwise, the comparisons presented in this MD&A refer to the same period in the prior year. Our MD&A is presented in below sections: · Overview · SUI Treasury Management Activity · Portfolio Investment Activity · Factors Affecting the Comparability of our Results of Operations and Material Trends · Results of Operations · Critical Accounting Policies and Estimates OVERVIEW Sui Group Holdings Limited was originally incorporated as Mill City Ventures III, Ltd. in the State of Minnesota on January 10, 2006. Since 2020, we operated as a publicly traded specialty finance company focused on short-term, non-bank lending solutions. Revenue was primarily generated through interest income, transaction fees, and capital appreciation from related portfolio investments. In July 2025, we undertook a strategic shift by launching the industry’s first SUI treasury strategy, under which the principal holding in our treasury reserve on the balance sheet is allocated to the native cryptocurrency of the Sui blockchain (commonly referred to as “SUI”). In support of this strategic shift, 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 Warrants, 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, USDC, and digital assets, resulting in cash and cash equivalents proceeds of $259.0 million and the receipt of approximately $191.0 million in SUI tokens and USDT coins contributed in-kind by certain investors as part of their investment consideration. The Company issued warrants to the Sui Foundation, certain investors involved in the private placement and certain management and directors in conjunction with the private placement. Since the launch of our digital asset treasury strategy, we have established the largest publicly traded SUI treasury, backed by an exclusive relationship with the Sui Foundation, an independent organization dedicated to the advancement and adoption of the Sui network. SUI is a next-generation Layer 1 blockchain designed to deliver the scalability, speed, and security required to power decentralized applications and real-world cryptocurrency use cases across finance, gaming, artificial intelligence, stablecoins, and more. Its horizontally scalable architecture, low-latency finality, and secure, developer-friendly design, position it as a leading infrastructure platform capable of handling real-world scale. As institutional and consumer adoption accelerates, SUI offers the potential to enable a wide range of transformative digital experiences and create long-term value opportunities for Sui Group and its shareholders. On August 26, 2025, we formally changed our name to Sui Group Holdings Limited, following an amendment to our Articles of Incorporation filed with the Officer of the Minnesota Secretary of State. In conjunction with the name change and the rebranding, we changed our ticker symbol from “MCVT” to “SUIG”, aligning our public identity with our new treasury strategy. The Company’s strategy is to maximize the value of SUI per-share and support the growth of the Sui ecosystem through scalable, transparent, and long-term value creation strategies. We therefore aim to capitalize on this opportunity by acquiring SUI tokens through open-market purchases, institutional-grade deal flow typically reserved for cryptocurrency funds, and a negotiated purchase agreement with the Sui Foundation. This structure enables broader investor access to SUI through a regulated, publicly traded vehicle. As the only SUI treasury with Sui Foundation support, we believe that we are uniquely positioned to capitalize on technology trends and ecosystem growth relating to SUI, while providing regulated, liquid, and institutional-grade access to the Sui blockchain designed for scalability and global adoption. On September 19, 2025, our shareholders approved all proposals presented at the annual meeting, including the amendment to increase the authorized capital stock and election of directors, as well as the approval of issuance of Common Stock issuable upon exercise of the management warrants and pursuant to the Purchase Agreement with A.G.P./Alliance Global Partners (“A.G.P.”). These changes are expected to enhance our corporate governance and better align executive compensation with shareholder interests. 47 Table of Contents During 2025, we also continued to return capital to shareholders through our stock repurchase programs. For the year ended December 31, 2025, we repurchased 8,718,562 shares of Common Stock for $18.9 million, completing our original $2.0 million authorization and utilizing $16.9 million of the new $50.0 million program approved by the Board in September 2025. In comparison, during the year ended December 31, 2024, we did not repurchase any shares of Common Stock. As of December 31, 2025, we held 105 million SUI tokens in our treasury, representing $147.4 million in digital assets. This equates to approximately 1.34 SUI per share of Common Stock and Pre-Funded Warrants (as defined below) outstanding. Approximately 99% of our SUI holdings continued to be staked, generating an annualized yield of approximately 1.7%, or approximately $10,000 in daily staking rewards, with the balance of the SUI tokens applied to higher margin direct lending opportunities. We believe this staking strategy enhances the productivity of our treasury while maintaining exposure to potential SUI price appreciation and serves as a flexible source of liquidity for future acquisitions and operational portfolio investments. For the year ended December 31, 2025, we earned $2.1 million in staking rewards, representing 799,951 SUI tokens generated from substantially all tokens staked, as compared to $0 earned in staking rewards during the year ended December 31, 2024. Our principal sources of income now include staking rewards from our SUI holdings, realized and unrealized gains or losses on digital assets, and rewards earned through protocol participation. We actively monitor market conditions and developments across blockchain protocols to optimize yield and asset performance. Legacy income streams from interest and fees on short-term loans remain part of our portfolio, although they represent a smaller portion of our overall financial profile. Our operating expenses now reflect a blend of our legacy finance and digital asset treasury operation, including professional fees, payroll, custody and infrastructure costs related to blockchain asset management, and insurance. We seek to achieve enhanced operational leverage as we plan to scale our digital asset treasury strategy and expand our operational footprint. SUI TREASURY MANAGEMENT ACTIVITY In late July 2025, we formally launched our SUI treasury strategy, establishing SUI, the native token of the Sui blockchain, as a core component of our digital asset treasury platform. In connection with the launch of our SUI treasury strategy, on July 27, 2025, the Company entered into an agreement (the “Digital Asset Purchase Agreement”) with the Sui Foundation, whereby the Company acquired approximately 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 Digital Asset Purchase Agreement also obliges the Company to use one half of all cash raised after the PIPE transaction to offer to purchase additional SUI from the Sui Foundation, and an option for the Sui Foundation to purchase from the Company up to one hundred percent (100%) of the total dollar amount of SUI acquired by the Company in certain market purchases and subject to certain conditions including a 15% discount to prevailing market prices. This initiative reflects our conviction in the long-term potential of the Sui blockchain and its role in powering the next generation of decentralized applications across finance, gaming, artificial intelligence, and other sectors. During the fourth quarter of 2025, we also entered into certain digital asset lending arrangements, which resulted in the recognition of a digital loan receivable, measured at fair value, reflecting an extension of our broader digital asset activities. On September 29, 2025, the Company entered into a digital currency loan agreement with Galaxy Digital LLC (“Galaxy”) pursuant to which the Company lent 961,550 SUI tokens. The loan carries a fee of 4.5% per annum, paid in digital assets, and is structured as an evergreen facility with the ability to terminate upon a seven‑day notice period at the election of the Company. On October 7, 2025, the Company entered into a separate digital currency loan agreement with BlueFin Labs Inc. (“BlueFin”) under which the Company lent 2,000,000 SUI tokens to BlueFin for a fee equal to 5.0% of all revenues generated by BlueFin’s decentralized exchange, paid in SUI tokens. These arrangements were not material to our overall liquidity but are consistent with our strategy to responsibly deploy digital assets in ways that enhance yield and operational flexibility. 48 Table of Contents As of December 31, 2025, we held 105 million SUI tokens, valued at $147.4 million based on a market price of $1.4 per token as compared to $0 in cryptocurrency during the year ended December 31, 2024. 99% of our SUI holdings are staked, generating an estimated 1.7% annual yield, or approximately $10,000 in daily staking rewards. We believe this staking strategy enhances the productivity of our treasury while maintaining exposure to potential SUI price appreciation. For the year ended December 31, 2025, we earned $2.1 million in staking rewards, representing 799,951 SUI tokens generated from substantially all tokens staked, as compared to $0 earned in staking rewards during the year ended December 31, 2024. Our treasury strategy is designed for scale, transparency, and long-term value creation, and is supported by our official relationship with the Sui Foundation. We believe this alignment positions us uniquely as the only publicly traded company with institutional-grade exposure to the Sui blockchain. We continue to monitor developments in the Sui ecosystem, including advancements in staking infrastructure, validator expansion, and adoption of SUI-native applications. These developments are expected to further support the intrinsic value of our SUI holdings and reinforce our strategic positioning. PORTFOLIO INVESTMENT ACTIVITY While our primary focus has shifted from our legacy finance operations, the business objective of our legacy business is to generate revenues from the interest and fees we charge, and capital appreciation from any related portfolio investments we make. During the year ended December 31, 2025, we made $8.2 million of portfolio investment purchases and had $4.5 million of redemptions and repayments, resulting in net portfolio investments at amortized cost of $17.5 million at the end of the period. During the year ended December 31, 2024, we made $5.7 million of portfolio investment purchases and had $9.8 million of redemptions and repayments, resulting in net portfolio investments at amortized cost of $13.7 million at the end of that period. In August 2025, the Company entered into a $3.0 million short-term secured loan arrangement, with a maturity date of May 12, 2026. In determination of the fair value of this short-term loan arrangement in accordance with the Company’s investment valuation policy at December 31, 2025, the Company determined the borrower is experiencing financial difficulty and the collection of the full amount of principal and related interest was in doubt. As a result, the fair value of the short-term loan arrangement includes an adjustment for the borrower’s creditworthiness and financial position, resulting in a fair value of zero as of December 31, 2025. In addition, the Company recorded a full reserve of the accrued interest of this short-term loan arrangement at December 31, 2025 totaling approximately $0.2 million. Our portfolio composition by major class, based on fair value at December 31, 2025, was as follows: As of December 31, 2025 Portfolio Investments at Amortized Cost Percentage of Amortized Cost Portfolio Investments at Fair Value Percentage of Fair Value Short-term Non-banking Loans $ 6,400,000 36.6 % $ 3,413,975 23.4 Commercial Business Loans (1) 10,000,000 57.3 10,244,122 70.1 Common Stock 1,050,216 6.0 955,747 6.5 Other Equity 10,000 0.1 — — Total $ 17,460,216 100.0 % $ 14,613,844 100.0 As of December 31, 2024 Portfolio Investments at Amortized Cost Percentage of Amortized Cost Portfolio Investments at Fair Value Percentage of Fair Value Short-term Non-banking Loans $ 13,000,000 94.8 % $ 13,006,231 96.7 % Common Stock 707,089 5.1 447,330 3.3 Other Equity 10,000 0.1 — — Total $ 13,717,089 100.0 % $ 13,453,561 100.0 % (1) Prior to the fiscal year ending December 31, 2025, the loan was classified as a short-term non-banking loan. In January 2025, the maturity date was extended to March 2027, resulting in the loan being reclassified as a commercial business loan. 49 Table of Contents FACTORS AFFECTING THE COMPARABILITY OF OUR RESULTS OF OPERATIONS AND MATERIAL TRENDS We believe that the most significant factors affecting the comparability of our results of operations include: · Strategic Shift: Our historical financial condition and results of operations for the periods presented may not be comparable, either from period to period or going forward, due to the recent strategic shift from our legacy finance business toward the SUI treasury strategy. As a result, the periods presented in our historical financial statements may not be comparable to one another, and our future results of operations and financial results may differ. · Price of SUI: Our treasury management business is expected to be heavily dependent on the price of SUI tokens, which has historically experienced significant volatility. From July 31, 2025 to December 31, 2025, the price of SUI declined from approximately $3.6 to $1.4 per token. As of December 31, 2025, we held 105 million SUI tokens, valued at $147.4 million based on a market price of $1.4 per token. SUI is valued at fair value at the end of each reporting period, with changes in fair value recognized in net income. As a result, fluctuations in the price of SUI may significantly impact our results of operations. Known Trends and Uncertainties Known trends and uncertainties that are reasonably likely to have a material impact on our future financial condition and results of operations include the following: (i) regulatory developments, including potential SEC guidance on the accounting treatment of digital assets, possible classification of SUI as a security, and implementation of pending digital asset market structure legislation, which could materially affect our financial reporting and business operations; (ii) custody and counterparty risks, including concentration of our digital asset custody with BitGo and risks associated with lending SUI tokens to third-party service providers; (iii) variability in staking rewards, as factors such as changes in network participation, validator performance, and Sui network economics could cause our staking yields to decline below the current annualized rate of approximately 1.7%; (iv) macroeconomic conditions, including changes in interest rates and general economic conditions that could affect the market price of SUI, demand for our portfolio investment products, and our ability to raise capital; and (v) competitive dynamics in the digital asset treasury management space, including the emergence of competing digital asset treasury vehicles and strategies that could affect our competitive positioning and growth prospects. RESULTS OF OPERATIONS This section of the Annual Report generally discusses fiscal years 2025 and 2024 results and year-to-year comparisons between fiscal year 2025 and fiscal year 2024. Discussions of fiscal year 2023 results and year-to-year comparisons between fiscal 2024 and 2023 that are not included in this Annual Report can be found Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of our annual report on Form 10-K for the year ended December 31, 2024. The recent trends and developments that have had, or are reasonably likely to have, a material favorable or unfavorable impact on our revenues or income from continuing operations include changes in digital asset market conditions and pricing, the ramp‑up of our treasury management activities beginning in the third quarter of 2025, and fluctuations in interest income earned on digital asset–related arrangements. More information on these trends and developments can be found in the Management’s Discussion and Analysis of Financial Condition and Results of Operations section, where we also discuss other operational and market factors that could impact our financial results in future periods. For the Year Ended December 31, Increase (Decrease) Change 2025 2024 Revenues Portfolio investment income $ 1,726,061 $ 3,301,119 $ (1,575,058 ) (48 )% Digital lending interest income 83,517 — 83,517 n/a SUI staking revenue 2,089,053 — 2,089,053 n/a Total Revenues 3,898,631 3,301,119 597,512 18 % Operating Expenses: Professional fees 2,766,442 550,248 (2,216,194 ) (403 )% Stock-based compensation 4,431,781 — (4,431,781 ) n/a Asset and strategic management fees 1,614,717 — (1,614,717 ) n/a Compensation expense 1,091,708 1,233,157 141,449 11 % Insurance 773,939 99,936 (674,003 ) (674 )% Unrealized loss on digital assets, net 253,582,413 — (253,582,413 ) n/a Realized loss on digital assets 3,292,227 — (3,292,227 ) n/a Provision for digital asset loan credit losses 548,144 — (548,144 ) n/a Net realized and unrealized gain on portfolio investments (476,986 ) (267,932 ) 209,054 (78 )% Other general and administrative 311,741 92,534 (219,207 ) (237 )% Total Operating Expenses 267,936,126 1,707,943 (266,228,183 ) (15,588 )% Operating Income (Loss) $ (264,037,495 ) $ 1,593,176 $ (265,630,671 ) (16,673) % 50 Table of Contents SUI Staking Revenue During the year ended December 31, 2025, we generated approximately $2.1 million in staking rewards from our SUI token holdings as compared to $0 during the year ended December 31, 2024. This income reflects the accrual of 799,951 SUI tokens earned on 104,266,127 SUI tokens staked, representing approximately 99% of our total SUI holdings during the period. The staking yield remains consistent with our estimated annualized return of 1.7%, and rewards were accrued daily in accordance with our treasury management strategy. Staking rewards are recognized as income when earned and are valued based on the market price of SUI at the time earned. These rewards enhance the productivity of our digital asset treasury while maintaining exposure to the underlying token. We continue to monitor validator performance, protocol-level developments, and infrastructure improvements to optimize staking efficiency and security. Portfolio Investment Income During the year ended December 31, 2025, our total portfolio investment income was $1.7 million as compared to $3.3 million for the year ended December 31, 2024. The decrease primarily reflects the Company’s change in accounting presentation following its cessation of investment company accounting under Accounting Standard Codification 946 (“ASC 946”) during the quarter ended September 30, 2025. As a result of this change, portfolio investment income recognized during the first half of 2025 continues to be presented within revenue, while portfolio investment income recognized during the second half of 2025 is presented within other income and totaled $2.9 million. Professional Fees During the year ended December 31, 2025, and 2024, we had professional fees expense amounting to $2.8 million and $0.6 million, respectively. The increase was due to the increased professional costs related to the launch of our new SUI treasury strategy and includes asset and strategic management fees under our asset and strategic management arrangements. Stock-based Compensation During the year ended December 31, 2025, and 2024, we had stock-based compensation amounting to $4.4 million and $0, (respectively the “Stock-based Compensation”). The increase was attributable to non-cash compensatory expenses incurred in connection with the issuance of warrants in the Private Placement to certain members of management and a director, as discussed in “ Note 8 — Share-Based Compensation ” of our condensed financial statements. 51 Table of Contents Asset and Strategic Management Fees During the year ended December 31, 2025, we incurred $1.6 million in asset and strategic management fees under our strategic and asset management arrangements. During the year ended December 31, 2024, we incurred no fees in asset and strategic management fees. These fees were calculated based on a tiered schedule applied to our average daily AUM, which includes SUI, cash, and cash equivalents, but excludes assets from our short-term lending business. Fees are calculated monthly in arrears and pro-rated for partial periods due to asset contributions or withdrawals. These arrangements support our digital asset treasury strategy, including discretionary investment management, staking operations, protocol-specific guidance, and infrastructure alignment. We expect advisory fees to scale with AUM and remain aligned with our long-term strategy to deliver institutional-grade exposure to the Sui blockchain. Insurance Expense During the year ended December 31, 2025, and 2024, we had insurance expense amounting to $0.8 million and $0.1 million, respectively. The increase was due to additional directors and officers’ insurance policies that the Company deemed necessary due to our change in strategy. Unrealized Loss on Digital Assets, Net During the year ended December 31, 2025, we recognized an unrealized loss, net of $253.6 million compared to no unrealized loss during the year ended December 31, 2024. The net amount reflects a gross unrealized loss of $258.5 million on our digital asset holdings, partially offset by $4.9 million of amortized deferred income related to the discount received on the purchase of SUI tokens as discussed in “ Note 3 — Digital Assets ” of our financial statements. The remaining deferred income balance of $19.8 million will amortize on a straight line basis over the period to August 30, 2027. Net Realized and Unrealized Loss / (Gain) on Portfolio Investment During the year ended December 31, 2025, our net realized and unrealized gain on portfolio investment was $0.5 million, compared to $0.3 million for the year ended December 31, 2024. The decrease of $0.2 million primarily reflects the Company’s change in accounting presentation following its cessation of investment company accounting under ASC 946 during the quarter ended September 30, 2025. As a result of this change, net realized and unrealized gain on portfolio investment recognized during the first half of 2025 continues to be presented within operating expenses, while net realized and unrealized loss on portfolio investment recognized in the second half of 2025 is presented within other income and totaled $3.1 million. Cash Flows for the Year Ended December 31, 2025 and 2024 Net cash used in operating activities was $8.2 million for the year ended December 31, 2025, compared to $5.7 million provided in the prior year. Cash flows provided by operating activities for the year ended December 31, 2024, were primarily related to net proceeds from sales of investments. The decrease in operating cash flow was driven primarily by lower net income, with the Company’s operating loss for the year substantially influenced by significant non-cash charges, including the realized loss on digital assets of $3.3 million, unrealized loss on digital assets of $253.6 million, and net realized and unrealized loss on portfolio investments for $2.6 million for the year ended December 31, 2025. The decrease is also due to the Company’s change in accounting presentation following its cessation of investment company accounting under ASC 946 during the quarter ended September 30, 2025. Cash flows provided by operating activities for the year ended December 31, 2024, were primarily related to redemptions and repayments of short-term loans and portfolio investments totaling $9.8 million, offset mostly by the funding of our short-term loans and purchases of portfolio investments aggregating $5.7 million. Operating cash flows were also impacted by changes in working capital, including increases in prepaid expenses and interest and dividend receivable, which reduced cash generated from operations by $0.7 million. These outflows were partially offset by increases in accounts payable and accrued income taxes. For the year ended December 31, 2024, operating cash flows were primarily generated from interest earned on short‑term loans. The level of cash flow used in or provided by investing activities is affected primarily by our purchase of SUI tokens. For the year ended December 31, 2025, net cash used in investing activities was $195.5 million, as compared to $0 for the year ended December 31, 2024. The use of cash was primarily attributable to purchases of SUI tokens related to the SUI strategy. During the year ended December 31, 2025, non-cash investing activities consisted of the lending of 961,550 SUI tokens to Galaxy Digital LLC and 2,000,000 SUI tokens to BlueFin Labs Inc., representing an aggregate fair value of $8.1 million at the time of the transactions. The level of cash flows used in or provided by financing activities is affected primarily by the issuance and repurchase of Common Stock and the issuance of warrants in connection with the Private Placement. For the year ended December 31, 2025, net cash provided in financing activities was $219.5 million, as compared to $0 in the year ended December 31, 2024. Cash flows provided in financing activities for the year ended December 31, 2025 were related to the proceeds received from the Private Placement, which was supplemented by the proceeds received from the exercise of stock options and warrants, offset by issuance costs of our private offering and the repurchase of our Common Stock. During the year ended December 31, 2025, non-cash financing activities consisted of the receipt of approximately $191.0 million in SUI tokens and USDT. These digital assets were received from certain investors as a portion of the total consideration provided in connection with the Private Placement. 52 Table of Contents Liquidity and Capital Resources As of December 31, 2025, we had cash and cash equivalents of $21.9 million, an increase of $15.9 million from $6.0 million as of December 31, 2024. Cash equivalents as of December 31, 2025 include $2.2 million of USD Coins (USDC), a stablecoin pegged to the U.S. dollar. The primary use of our existing funds and any funds raised in the future is expected to be for our SUI strategy and other general corporate purposes, including operating expenses or to service debt to the extent we borrow or issue senior securities. Our portfolio investments may consist of cash, cash equivalents (including USDC), U.S. government securities or high-quality debt securities maturing in one year or less from the time of investment, which we refer to collectively as “temporary portfolio investments.” To support our ongoing liquidity and capital needs, we also have access to additional financing under the equity line of credit established pursuant to our purchase agreement with A.G.P./Alliance Global Partners (“A.G.P.”). Subject to the terms and conditions of the agreement, we may, from time to time at our discretion, direct A.G.P. to purchase shares of our Common Stock, providing us with a flexible source of capital to fund operations or strategic initiatives. Any sales of Common Stock under the agreement will be made at our discretion and are subject to customary limitations, including share volume restrictions and conditions relating to market pricing and effectiveness of our registration statement. The A.G.P. purchase agreement provides additional optional capacity up to $500 million that we may utilize if needed to supplement liquidity. Management believes our existing liquidity sources, together with the cash general from operations, will be sufficient to meet our liquidity needs in the short and long term. However, we recognize that a significant portion of our assets consist of SUI tokens, which are less liquid than cash and cash equivalents. As of December 31, 2025, approximately 99% of our SUI holdings are staked and subject to a one-day unbonding period, which may limit our ability to rapidly access liquidity from these assets. While we view our SUI holdings as long-term strategic assets and do not currently expect to need to sell SUI to meet our operating liquidity requirements over the next twelve months, we may periodically sell SUI for general corporate purposes, including to generate cash for treasury management, acquisitions, or strategies that generate tax benefits in accordance with applicable law. In the short term, we expect to meet our operating expenses, portfolio investment activities, and working capital needs through our existing cash and cash equivalents and cash generated from operations. We do not have material contractual obligations that we believe would impair our ability to meet our liquidity needs or otherwise impact our short- or long-term financial condition. Our existing contractual arrangements including our strategic advisory agreement with Karatage, advisory agreement with the Sui Foundation and agreements with key executives are not expected to materially affect our liquidity. In the long term, our liquidity will depend on our ability to generate cash from operations, the performance and realizable value of our SUI holdings, and our ability to access capital markets or secure additional financing arrangements. Summary cash flow data is as follows: For the Year Ended December 31, Cash flows provided by (used in):: 2025 2024 Operating activities $ (8,235,211 ) $ 5,650,086 Investing activities (195,358,509 ) — Financing activities 219,503,884 — Net increase (decrease) in Cash and cash equivalents 15,910,164 5,650,086 Cash and cash equivalents, beginning of period 6,026,110 376,024 Cash and cash equivalents, end of period $ 21,936,274 $ 6,026,110 53 Table of Contents CRITICAL ACCOUNTING POLICIES AND ESTIMATES Our financial statements are prepared in conformity with the Generally Accepted Accounting Principles in the United States of America (“GAAP”), which requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Critical accounting policies are those that require the application of management’s most difficult, subjective or complex judgments, often because of the need to make estimates about the effect of matters that are inherently uncertain and that may change in subsequent periods. In preparing the financial statements, management utilizes available information—including historical performance, industry benchmarks, and current economic conditions—to inform its estimates and judgments, with appropriate consideration of materiality. Actual results may differ materially from these estimates. In addition, other companies may utilize different estimates, which may impact the comparability of our results of operations to those of companies in similar businesses. As our operations have evolved to include blockchain-native treasury management, our critical accounting policies now encompass both legacy finance and digital asset activities. The critical accounting policies include fair value measurement of digital assets and digital assets loan receivables and current expected credit loss (CECL) measurement of digital assets loan receivables. Further, the most significant estimates currently relate to: · Legacy portfolio valuation: We continue to hold certain short-term, secured loans and equity-linked portfolio investments from our specialty finance operations. These assets are measured at fair value and are evaluated quarterly for impairment. Valuation inputs include expected cash flows, collateral assessments, and market comparables, with oversight from management and the Audit Committee. ITEM 7A QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this item. 54 Table of Contents