Sui Group Holdings轉型數碼資產庫務公司 第二季淨虧損1,891萬美元

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________________
 
FORM 10-Q
__________________________
 
(Mark One)

☒
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 
For the quarterly period ended June 30, 2026

or

 
 

☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 
For the transition period from _______________________ to ___________________

 
Commission File Number 001-41472
__________________________
 
SUI GROUP HOLDINGS LIMITED

(Exact name of registrant as specified in its charter)

__________________________
 
Minnesota
 
90-0316651

(State or other jurisdiction of incorporation or organization)
 
(I.R.S. Employer Identification No.)

 
 
 

1907 Wayzata Blvd, #205, Wayzata, Minnesota
 
55391

(Address of principal executive offices)
 
(Zip Code)

 
(952) 479-1923
(Registrant’s telephone number, including area code)
__________________________
 
Mill City Ventures III, LTD
(Former name, former address and former fiscal year, if changed since last report)
__________________________
 
Securities registered pursuant to Section 12(b) of the Act:
 
Title of each class
 
Trading Symbol(s)
 
Name of each exchange on which registered

Common Stock, $0.001 par value
 
SUIG
 
The Nasdaq Stock Market LLC
(Nasdaq Capital Market)

 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes     ☐ No
 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). ☒ Yes     ☐ No
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
 
Large accelerated filer
☐
Accelerated filer
☐

Non-accelerated filer
☒
Smaller reporting company
☒

 
 
Emerging growth company
☐

 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes     ☒ No
 
As of August 3, 2026, Sui Group Holdings Limited had 76,802,872 shares of common stock, and no other classes of capital stock, outstanding.
 

 

 
 
SUI GROUP HOLDINGS LIMITED
 
Index to Form 10-Q
for the Quarter Ended June 30, 2026
 
PART I.
FINANCIAL INFORMATION
Page No.

 
 
 

Item 1.
Financial Statements
4

 
 
 

 
Condensed Balance Sheets – June 30, 2026 (unaudited) and December 31, 2025
4

 
 
 

 
Condensed Statements of Operations – Three and six months ended June 30, 2026 and June 30, 2025 (unaudited)
5

 
 
 

 
Condensed Statements of Shareholders’ Equity – Three and six months ended June 30, 2026 and June 30, 2025 (unaudited)
6

 
 
 

 
Condensed Statements of Cash Flows – Six months ended June 30, 2026 and June 30, 2025 (unaudited)
7

 
 
 

 
Notes to Financial Statements (unaudited)
8

 
 
 

Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
17

 
 
 

Item 3.
Quantitative and Qualitative Disclosures About Market Risk
26

 
 
 

Item 4.
Controls and Procedures
26

 
 
 

PART II.
OTHER INFORMATION
 

 
 
 

Item 1.
Legal Proceedings
27

 
 
 

Item 1A.
Risk Factors
27

 
 
 

Item 2.
Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities
29

 
 
 

Item 3.
Defaults Upon Senior Securities
29

 
 
 

Item 4.
Mine Safety Disclosures
29

 
 
 

Item 5.
Other Information
29

 
 
 

Item 6.
Exhibits
30

 
 
 

SIGNATURES
31

 
 
2

Table of Contents
 
FORWARD-LOOKING STATEMENTS
 
This quarterly report on Form 10-Q (the “Report”) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements are neither historical facts nor assurances of future performance.  You should not place undue reliance on any of these forward-looking statements. Forward-looking statements relate to future events or future financial performance of Sui Group Holdings Limited (the “Company,” “SUI Group,” or “we”), and can ordinarily be identified by terminology such as “aims,” “anticipates,” “believes,” “contemplates,” “continue,” “could,” “estimates,” “expects,” “intends,” “may,” “might,” “objective,” “plans,” “potential,” “predicts,” “projects,” “seeks,” “should,” “targets,” “will,” or “would” or the negative of these terms or other similar words. Some of the forward-looking statements contained in this Report relate to, and are based on the Company’s current assumptions regarding, the following:
 
 
·
the ability of the Company to execute its plans;
 
 
 

 
·
the Company’s digital asset treasury, stablecoin and treasury diversification strategies;
 
 
 

 
·
the capabilities and limitations of the SUI blockchain;

 
 
 

 
·
the digital assets to be held by us and the future performance thereof;
 
 
 

 
·
the success of the Company’s investments;
 
 
 

 
·risk of nonperformance by borrowers, service providers and other counterparties;

 
 
 

 
·
the Company’s relationships with third parties;
 
 
 

 
·
the dependence of the Company’s success on the general economy and its impact on the industries in which the Company operates;
 
 
 

 
·
the Company’s regulatory structure and tax treatment;
 
 
 

 
·
the adequacy of the Company’s cash resources and working capital; and
 
 
 

 
·
the timing of cash flows.
 
Forward-looking statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from the results expressed in, or implied by, these forward-looking statements. Applicable risks and uncertainties include, among others, the Company’s ability to achieve profitable operations; fluctuations in the market price of SUI and other digital asset tokens that will impact the Company’s accounting and financial reporting; government regulation of cryptocurrencies; changes in securities laws or regulations; changes in business, market, financial, political and regulatory conditions; risks relating to the Company’s operations and business, including the highly volatile nature of the price of cryptocurrencies; the risk that the Company’s stock price may be highly correlated to the price of the digital assets that it holds; risks related to increased competition in the industries in which the Company does and will operate; risks relating to significant legal, commercial, regulatory and technical uncertainty regarding digital assets generally; risks relating to the treatment of crypto assets for U.S. and foreign tax purposes; expectations with respect to future performance, growth and anticipated acquisitions; potential litigation involving the Company or the validity or enforceability of the intellectual property of the Company; global economic conditions; geopolitical events and regulatory changes; access to additional financing, and the potential lack of such financing; and the Company’s ability to raise funding in the future and the terms of such funding, including dilution caused thereby; risks relating to minority investments in other sectors including financial technology and artificial intelligence; as well as other risks and uncertainties discussed under “Item 1A. Risk Factors” in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on February 27, 2026 (the “Annual Report”), the Company’s Quarterly Report on Form 10-Q filed with the SEC on May 8, 2026 (the “Quarterly Report”), and in other filings made by the Company from time to time with the SEC. The Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances occurring after the date of this filing. The forward-looking statements made in this Report relate only to events as of the date on which the statements are made.
 
 
3

Table of Contents
 
PART I. FINANCIAL INFORMATION
 
ITEM 1. FINANCIAL STATEMENTS
 
SUI GROUP HOLDINGS LIMITED
CONDENSED BALANCE SHEETS
(In thousands, except for share and per share data)
 
 
 
June 30, 2026 (unaudited)
 
 
December 31, 2025
(audited)
 

Assets
 
 
 
 
 
 

Current Assets
 
 
 
 
 
 

Cash and cash equivalents
 
$3,141 
 
$21,936 

Equity investments
 
 
825 
 
 
956 

Debt investments
 
 
2,196 
 
 
3,414 

Interest and dividend receivable
 
 
302 
 
 
758 

Digital asset loan receivable
 
 
— 
 
 
1,305 

Prepaid expenses
 
 
936 
 
 
1,806 

Income tax receivable
 
 
131 
 
 
131 

Total current assets
 
 
7,531 
 
 
30,306 

 
 
 
 
 
 
 
 
 

Digital assets
 
 
62,808 
 
 
147,415 

Digital asset loan receivable
 
 
3,561 
 
 
2,306 

Digital asset receivable
 
 
18,010 
 
 
29 

Debt investments
 
 
— 
 
 
10,244 

Equity investments
 
 
6,030 
 
 
— 

Other assets
 
 
— 
 
 
65 

Total Assets
 
$97,940 
 
$190,365 

 
 
 
 
 
 
 
 
 

Liabilities and Shareholders’ Equity
 
 
 
 
 
 
 
 

Current Liabilities
 
 
 
 
 
 
 
 

Accounts payable and other liabilities
 
$266 
 
$857 

Deferred income
 
 
11,859 
 
 
11,859 

Accrued payroll liabilities
 
 
11 
 
 
1 

Total current liabilities
 
 
12,136 
 
 
12,717 

Long-term Liabilities
 
 
 
 
 
 
 
 

Deferred income
 
 
1,976 
 
 
7,906 

Total long-term liabilities
 
 
1,976 
 
 
7,906 

 
 
 
 
 
 
 
 
 

Total liabilities
 
 
14,112 
 
 
20,623 

 
 
 
 
 
 
 
 
 

Commitments and Contingencies
 
 
— 
 
 
— 

Shareholders’ Equity
 
 
 
 
 
 
 
 

Common stock, par value $0.001 per share (2,000,000,000 authorized; 76,802,872 issued and outstanding)
 
 
77 
 
 
77 

Additional paid-in capital
 
 
435,741 
 
 
431,800 

Accumulated deficit
 
 
(351,990) 
 
(262,135)
Total shareholders’ equity
 
 
83,828 
 
 
169,742 

Total liabilities and shareholders’ equity
 
$97,940 
 
$190,365 

 
See accompanying Notes to Financial Statements 
 
 
4

Table of Contents
 
SUI GROUP HOLDINGS LIMITED
CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)
(In thousands, except for share and per share data)
 
 
 
Three Months Ended
 
 
Six Months Ended
 

 
 
June 30, 2026
 
 
June 30, 2025
 
 
June 30, 2026
 
 
June 30, 2025
 

Revenues
 
 
 
 
 
 
 
 
 
 
 
 

SUI staking revenue
 
$327 
 
$— 
 
$850 
 
$— 

Digital lending interest income
 
 
36 
 
 
— 
 
 
106 
 
 
— 

Investment income
 
 
— 
 
 
948 
 
 
— 
 
 
1,726 

Total Revenues
 
 
363 
 
 
948 
 
 
956 
 
 
1,726 

Operating (Income) Expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Professional fees
 
 
314 
 
 
99 
 
 
2,094 
 
 
241 

Stock-based compensation
 
 
1,947 
 
 
— 
 
 
3,941 
 
 
— 

Asset and strategic management fees
 
 
286 
 
 
— 
 
 
626 
 
 
— 

Compensation expense
 
 
445 
 
 
190 
 
 
896 
 
 
383 

Insurance
 
 
445 
 
 
— 
 
 
896 
 
 
24 

Unrealized (gain) loss on digital assets and receivable, net
 
 
(2,251) 
 
— 
 
 
16,354 
 
 
— 

Realized loss on digital assets, net
 
 
18,910 
 
 
— 
 
 
53,765 
 
 
— 

Impairment of digital asset receivable
 
 
— 
 
 
— 
 
 
1,367 
 
 
— 

Provision for (recovery of) credit losses
 
 
(81) 
 
— 
 
 
1,070 
 
 
— 

Net realized and unrealized gain on investments
 
 
— 
 
 
(314) 
 
— 
 
 
(477)
Other general and administrative
 
 
92 
 
 
27 
 
 
197 
 
 
47 

Total Operating Expenses
 
 
20,107 
 
 
2 
 
 
81,206 
 
 
218 

Operating Income (Loss)
 
$(19,744) 
$946 
 
$(80,250) 
$1,508 

Other Income (Loss) 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Investment income
 
 
151 
 
 
— 
 
 
825 
 
 
— 

Net realized and unrealized gain (loss) on investments
 
 
556 
 
 
— 
 
 
(10,668) 
 
— 

Other income
 
 
130 
 
 
— 
 
 
238 
 
 
— 

Total Other Income (Loss)
 
 
837 
 
 
— 
 
 
(9,605) 
 
— 

Income (Loss) Before Taxes
 
$(18,907) 
$946 
 
$(89,855) 
$1,508 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Provision for Income Taxes
 
 
— 
 
 
269 
 
 
— 
 
 
378 

Net Income (Loss)
 
$(18,907) 
$677 
 
$(89,855) 
$1,130 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Earnings per Share
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Basic
 
$(0.23) 
$0.11 
 
$(1.11) 
$0.18 

Diluted
 
$(0.23) 
$0.11 
 
$(1.11) 
$0.18 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Weighted-average number of common shares outstanding - basic
 
 
80,896,554 
 
 
6,062,773 
 
 
80,896,554 
 
 
6,190,941 

Weighted-average number of common shares outstanding - diluted
 
 
80,896,554 
 
 
6,062,773 
 
 
80,896,554 
 
 
6,190,941 

 
See accompanying Notes to Financial Statements
 
 
5

Table of Contents
 
SUI GROUP HOLDINGS LIMITED
CONDENSED STATEMENTS OF SHAREHOLDERS’ EQUITY (UNAUDITED)
(In thousands, except for share and per share data) 
 
Three Months Ended 
June 30, 2026
 
Common Shares
 
 
Par Value
 
 
Additional Paid In Capital
 
 
Accumulated Deficit
 
 
Total Shareholders’ Equity
 

Balance as of March 31, 2026
 
 
76,802,872 
 
$77 
 
$433,794 
 
$(333,083) 
$100,788 

Stock-based compensation
 
 
— 
 
 
— 
 
 
1,947 
 
 
— 
 
 
1,947 

Net loss
 
 
— 
 
 
— 
 
 
— 
 
 
(18,907) 
 
(18,907)
Balance as of June 30, 2026
 
 
76,802,872 
 
$77 
 
$435,741 
 
$(351,990) 
$83,828 

 
Three Months Ended
June 30, 2025
 
Common Shares
 
 
Par Value
 
 
Additional Paid In Capital
 
 
Accumulated Deficit
 
 
Accumulated Undistributed Net Investment Gain (Loss)
 
 
Accumulated Undistributed Net Realized Gain on Investments Transactions
 
 
Net Unrealized Appreciation (Depreciation) in value of Investments
 
 
Total Shareholders’ Equity
 

Balance as of March 31, 2025
 
 
6,062,773 
 
$6 
 
$16,303 
 
$(1,160) 
$137 
 
$4,394 
 
$(101) 
$19,579 

Undistributed net investment gain
 
 
— 
 
 
— 
 
 
— 
 
 
— 
 
 
363 
 
 
— 
 
 
— 
 
 
363 

Undistributed net realized loss on investment transactions
 
 
— 
 
 
— 
 
 
— 
 
 
— 
 
 
— 
 
 
— 
 
 
— 
 
 
— 

Appreciation in value of investments
 
 
— 
 
 
— 
 
 
— 
 
 
— 
 
 
— 
 
 
— 
 
 
315 
 
 
315 

Balance as of June 30, 2025
 
 
6,062,773 
 
$6 
 
$16,303 
 
$(1,160) 
$500 
 
$
4,394 
 
$214 
 
$20,257 

 
Six Months Ended 
June 30, 2026
 
Common Shares
 
 
Par Value
 
 
Additional Paid In Capital
 
 
Accumulated Deficit
 
 
Total Shareholders’ Equity
 

Balance as of December 31, 2025
 
 
76,802,872 
 
$77 
 
$431,800 
 
$(262,135) 
$169,742 

Stock-based compensation
 
 
— 
 
 
— 
 
 
3,941 
 
 
— 
 
 
3,941 

Net loss
 
 
— 
 
 
— 
 
 
— 
 
 
(89,855) 
 
(89,855)
Balance as of June 30, 2026
 
 
76,802,872 
 
$77 
 
$435,741 
 
$(351,990) 
$83,828 

 
Six Months Ended
June 30, 2025
 
Common Shares
 
 
Par Value
 
 
Additional Paid In Capital
 
 
Accumulated Deficit
 
 
Accumulated Undistributed Net Investment Gain (Loss)
 
 
Accumulated Undistributed Net Realized Gain on Investments Transactions
 
 
Net Unrealized Appreciation (Depreciation) in value of Investments
 
 
Total Shareholders’ Equity
 

Balance as of December 31, 2024
 
 
6,385,255 
 
$6 
 
$16,933 
 
$(1,160) 
$(152) 
$4,394 
 
$(264) 
$19,757 

Repurchase of common shares
 
 
(322,482) 
 
— 
 
 
(630) 
 
— 
 
 
— 
 
 
— 
 
 
— 
 
 
(630)
Undistributed net investment gain
 
 
— 
 
 
— 
 
 
— 
 
 
— 
 
 
652 
 
 
— 
 
 
— 
 
 
652 

Undistributed net realized loss on investment transactions
 
 
— 
 
 
— 
 
 
— 
 
 
— 
 
 
— 
 
 
— 
 
 
— 
 
 
— 

Appreciation in value of investments
 
 
— 
 
 
— 
 
 
— 
 
 
— 
 
 
— 
 
 
— 
 
 
477 
 
 
477 

Balance as of June 30, 2025
 
 
6,062,773 
 
$6 
 
$16,303 
 
$(1,160) 
$500 
 
$4,394 
 
$213 
 
$20,256 

 
See accompanying Notes to Financial Statements
 
 
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Table of Contents
 
SUI GROUP HOLDINGS LIMITED
CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In thousands, except for share and per share data)
 
 
 
Six Months Ended
 

 
 
June 30, 2026
 
 
June 30, 2025
 

Cash flows from operating activities:
 
 
 
 
 
 

Net income (loss)
 
$(89,855) 
$1,130 

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

Deferred income taxes
 
 
— 
 
 
129 

Unrealized loss on digital assets and receivable, net
 
 
16,354 
 
 
— 

Realized loss on digital assets, net
 
 
53,765 
 
 
— 

Impairment of digital asset receivable
 
 
1,367 
 
 
— 

Net realized and unrealized loss/(gain) on investments
 
 
10,668 
 
 
(477)
Provision for credit losses
 
 
1,070 
 
 
— 

Staking income
 
 
(850) 
 
— 

Digital lending interest income
 
 
(106) 
 
— 

Stock-based compensation
 
 
3,941 
 
 
— 

Purchases of investments
 
 
— 
 
 
(4,429)
Proceeds from sales of investments
 
 
— 
 
 
504 

Changes in operating assets and liabilities:
 
 
 
 
 
 
 
 

Prepaid expenses
 
 
870 
 
 
(3)
Interest and dividend receivable
 
 
(384) 
 
(228)
Digital assets receivable
 
 
(12) 
 
— 

Other assets
 
 
65 
 
 
— 

Accounts payable and other liabilities
 
 
(581) 
 
(524)
Net cash used in operating activities
 
 
(3,688) 
 
(3,898)
Cash flows from investing activities:
 
 
 
 
 
 
 
 

Investments in equity securities
 
 
(6,030) 
 
— 

Proceeds from sales and repayments of investments
 
 
923 
 
 
— 

Purchases of digital asset receivable
 
 
(10,000) 
 
— 

Net cash used in investing activities
 
 
(15,107) 
 
— 

Cash flows from financing activities:
 
 
 
 
 
 
 
 

Payments for repurchase of common stock
 
 
— 
 
 
(630)
Net cash used in financing activities
 
 
— 
 
 
(630)
Net decrease in cash
 
 
(18,795) 
 
(4,528)
Cash, beginning of period
 
 
21,936 
 
 
6,026 

Cash, end of period
 
$3,141 
 
$1,498 

 
 
 
 
 
 
 
 
 

Supplemental disclosure of cash flow information:
 
 
 
 
 
 
 
 

Cash paid for interest
 
$— 
 
$— 

Non-cash investing activity
 
 
 
 
 
 
 
 

Transfer of digital assets to digital asset receivable 
 
$(11,666) 
$— 

Digital assets loan receivable
 
$(2,870) 
$— 

Digital assets loan receivable return
 
$1,023 
 
$— 

 
See accompanying Notes to Financial Statements
 
 
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Table of Contents
 
NOTE 1 – ORGANIZATION
 
Sui Group Holdings Limited (the “Company”, “Sui Group”, 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 our Articles of Incorporation filed with the Office of the Minnesota Secretary of State. This name change and concurrent rebranding coincide with a change in strategy toward digital asset 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 treasury strategy, the Company completed a $450 million private placement in July 2025 (the “Private Placement”). Following the Private Placement, the Company began implementing its SUI treasury strategy, acquiring over 74 million SUI tokens and generating 2.4 million SUI tokens from staking and other lending activities 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 the Digital Asset Purchase and Sale Agreement (the “Digital Asset Purchase Agreement”), under which the Sui Foundation agreed to sell 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 provides formal recognition of the Company as a digital asset treasury company with 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 value of SUIG and support the growth of the Sui ecosystem through scalable, transparent, and long-term value creation strategies. The Company also seeks to enhance balance sheet productivity by investing opportunistically in the SUI ecosystem and allocating capital to high-conviction growth themes across the wider digital asset, financial technology and artificial intelligence sectors. 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 interim statements contain all adjustments, consisting only of normal recurring adjustments necessary to present fairly the financial position of the Company as of June 30, 2026 and December 31, 2025, as well as its results of operations for the three months ended June 30, 2026 and 2025 and for the six months ended June 30, 2026 and 2025. The condensed balance sheet as of December 31, 2025 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, 2025, which are included in the Company’s Annual Report on Form 10-K filed with the SEC on February 27, 2026 (the “Annual Report”).
 
Use of estimates: The preparation of financial statements in conformity with GAAP requires management and the 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. Significant estimates and assumptions include, but are not limited to, the determination of the fair value of investment assets, impairment assessment of equity investments in privately held companies, fair value of embedded derivatives associated with equity investments, digital asset loans, digital asset receivable, impairment assessment of certain digital asset receivable, and the allowance of credit losses on digital assets subject to the current expected credit loss model, which involve the use of observable and unobservable market inputs and management’s judgment. These estimates are based on management’s evaluation of available positive and negative evidence, including historical operating results and expectations of future taxable income. Actual results could differ from those estimates.
 
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 June 30, 2026 include $1.7 million of USD Coins (USDC), a stablecoin that is highly liquid and readily redeemable into the U.S. dollar. 
 
 
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Digital assets: The Company accounts for its digital assets, including SUI tokens, in accordance with ASC 350-60, Goodwill and Other – Crypto Assets, which requires eligible cryptocurrency 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 based on the volume and level of activity.
 
Changes in fair value are reflected as unrealized gain or loss on digital assets and realized gains and losses from the derecognition are recognized upon disposition using the specific identification method.
 
For digital assets not in scope of ASC 350‑60, impairment is recognized when events or changes in circumstances indicate that the carrying amount may not be recoverable. Impairment losses are measured based on the excess of the carrying amount over the fair value of the digital asset, which is determined using the lowest observable market price during the period in which the impairment is identified.
 
Purchases and sales of digital assets are classified as investing activities in the statement of cash flows. Certain transfers of digital assets may be reflected as non-cash investing activities, as applicable. 
 
Digital asset receivable: The Company recognizes digital asset receivable for digital assets that are held in wallets controlled by third parties. These receivables represent contractual rights to receive specified digital assets. Depending on the nature of the underlying digital asset and the associated settlement mechanics, the receivable may contain an embedded feature that requires evaluation under ASC 815. In circumstances where the underlying digital asset is not readily convertible to cash, the embedded feature may not meet the definition of a derivative.
 
As a result, the Company applies different subsequent measurement approaches based on the substance of the underlying rights. Digital asset receivable arising from decentralized lending pool arrangements are remeasured at fair value each reporting period, as these receivables represent rights to receive SUI tokens and contain embedded derivatives that require bifurcation. In contrast, digital asset receivable representing rights to receive liquid staking tokens or vault tokens do not contain embedded derivatives and are therefore carried at cost and assessed for impairment, as applicable.
 
Credit losses: Digital asset loan and certain digital asset receivables are subject to credit exposure and are evaluated for expected credit losses in accordance with ASC 326, Financial Instruments—Credit Losses. The allowance for credit losses is based on management’s evaluation of historical experience, current conditions, and reasonable and supportable forecasts.
 
Equity investments: The Company accounts for equity investments in which it does not have significant influence in accordance with ASC 321, Investments — Equity Securities. 
 
Equity securities with readily determinable fair values are measured at fair value, with unrealized gains and losses recognized in net income in the period of the change. Fair value is determined in accordance with ASC 820, Fair Value Measurement. Dividends are recognized in earnings when the right to receive payment is established.
 
For equity investments that do not have a readily determinable fair value, the Company has elected the measurement alternative available under ASC 321. These investments are recorded at cost, less impairment, and adjusted for observable price changes in orderly transactions for identical or similar investments, with adjustments recognized in earnings in the period of the change. The Company evaluates these investments for impairment when indicators exist and records an impairment loss if the carrying amount is not recoverable. Gains or losses on disposals are recognized in earnings when realized.
 
Debt investments: The Company accounts for its debt investments in accordance with ASC 825, Financial Instruments, and has elected the fair value option for its debt investments, with changes in fair value recognized in earnings each reporting period.
 
Fair value is determined in accordance with ASC 820, using valuation techniques and inputs that reflect market participant assumptions. Because the fair value option has been elected, these debt investments are not evaluated for impairment or expected credit losses.
 
Interest income, including amounts attributable to payment-in-kind (PIK) features, is recognized based on the contractual terms of the instruments and recorded on an accrual basis when earned. Interest income recognition is suspended on loans on non-accrual status when collectability of principal or interest is not reasonably assured. Realized gains or losses on the disposition of debt investments are recognized in earnings upon sale.
 
Fair value measurement of investments: Investments measured at fair value are valued in accordance with ASC Topic 820, Fair Value Measurements, with changes in fair value recognized in earnings each reporting period.
 
 
 
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Fair value is generally based on quoted market prices provided by independent pricing services, broker or dealer quotations, or alternative price sources. When such observable inputs are not available, fair value is determined using valuation techniques that incorporate management judgment and consider all relevant facts and circumstances, consistent with the Company’s valuation policies and procedures.
 
Investments measured at fair value are classified within the fair value hierarchy based on the observability of the inputs used in the valuation. The determination of fair value, particularly for Level 3 investments, involves significant judgment. Due to the inherent uncertainty associated with valuation, actual results may differ materially from the values recorded.
 
Income taxes: The Company accounts for income taxes under the asset and liability method in accordance with ASC 740, Income Taxes. Deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial statement carrying amounts and tax basis of assets and liabilities using enacted tax rates in effect for the tax year in which the differences are expected to reverse.
 
Deferred tax assets are reduced by a valuation allowance when, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets will be realized. The Company’s assessment of realizability requires significant judgment.
 
The Company accounts for income taxes in interim periods using the estimated annual effective tax rate method. Under this method, the Company estimates its annual effective tax rate and applies that rate to year‑to‑date pre‑tax income or loss, with discrete income tax items recorded in the period in which they occur. 
 
SUI staking revenue: Beginning in August 2025, the Company commenced SUI staking activities, including native staking, liquid staking and restaking. The Company delegates SUI tokens to third-party validator nodes to participate in proof-of-stake blockchain protocols and earns staking rewards in the form of additional SUI tokens.
 
The Company evaluated its staking arrangements in accordance with ASC 606, Revenue from Contracts with Customers, and determined that it acts as an agent as it does not control the validation services provided by the third-party validators. Accordingly, staking rewards are recognized on a net basis. 
 
Staking rewards are recognized as non-cash consideration at the fair value of the SUI token earned on the date the rewards are earned, limited to the portion attributable to the Company for delegating its tokens. 
 
Stock-based compensation: 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-Scholes 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 and warrants on a straight-line basis over the requisite service period. The Company has elected to account for forfeitures as they occur.
 
Warrants: The Company evaluates warrants to determine whether they should be classified as equity or liabilities in accordance with ASC 480, Distinguishing Liabilities from Equity, and ASC 815, Derivatives and Hedging. Warrants issued as compensation are accounted for in accordance with ASC 718, Compensation - Stock Compensation. Such warrants are measured at fair value on the grant date and recognized as compensation expense over the requisite service period. 
 
Reclassifications: Certain prior‑period amounts have been reclassified to conform to the current financial statement presentation. These reclassifications primarily relate to the aggregation of previously separate operating expense line items into a single financial statement line within the statements of operations. The reclassifications had no impact on previously reported total assets, total liabilities, shareholders’ equity, net income (loss), or cash flows, and no changes were made to the underlying prior‑year balances.
 
NOTE 3 – DIGITAL ASSETS 
 
During the six months ended June 30, 2026, the Company continued to hold SUI tokens acquired pursuant to the Digital Asset Purchase and Sale Agreement with the Sui Foundation, which remain subject to contractual transfer restrictions through August 30, 2027. The Company is permitted to stake the restricted SUI tokens during the restriction period.
 
The discount associated with the acquisition of 32,613,028 restricted SUI tokens is recorded as deferred income and is recognized on a straight‑line basis over the period to August 30, 2027 as an adjustment to gains or losses on digital assets. As of June 30, 2026, the Company recorded deferred income related to the acquisition discount of $13.8 million, of which $11.9 million was classified as current and $1.9 million was classified as non‑current. For the six months ended June 30, 2026, the Company recognized $5.9 million of amortized deferred income, which was recorded as a reduction to realized loss on digital assets in the statements of operations.
 
 
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Table of Contents
 
The following table presents the activities in digital assets for the six months ended June 30, 2026:
 
Digital Assets (In thousands, except for token quantities)
 
Number of Tokens
 
 
Cost basis
 
 
Fair value
 

 
 
 
 
 
 

Balance as of January 1, 2026
 
 
105,086,451 
 
$401,991 
 
$147,415 

Return of digital asset loan
 
 
961,550 
 
 
1,023 
 
 
1,023 

Digital asset loan advanced
 
 
(4,000,000) 
 
(16,870) 
 
(2,870)
Transfers of digital asset receivable
 
 
(11,900,024) 
 
(50,186) 
 
(11,666)
Realized loss on transfer and digital asset loan advanced
 
 
— 
 
 
— 
 
 
(52,520)
Staking rewards earned and received
 
 
775,885 
 
 
829 
 
 
829 

Lending rewards earned and received
 
 
89,959 
 
 
90 
 
 
90 

Staking/lending rewards accrued in prior period, received
 
 
41,583 
 
 
57 
 
 
57 

Unrealized gains (losses)
 
 
— 
 
 
— 
 
 
(19,550)
Balance as of June 30, 2026
 
 
91,055,404 
 
$336,934 
 
$62,808 

 
Digital assets are measured at fair value on a recurring basis in accordance with ASC 820, Fair Value Measurement, using quoted prices in active markets (Level 1 inputs).
 
For the six months ended June 30, 2026, we incurred $0.6 million in asset and strategic management fees under our strategic and asset management arrangements. 
 
NOTE 4 – DIGITAL ASSET LOAN RECEIVABLE 
 
The Company has entered into digital asset loan arrangements pursuant to which it has lent SUI tokens to third parties in exchange for stated fees payable in digital assets. 
 
Under a digital asset loan arrangement entered into in September 2025 with Galaxy Digital LLC (“Galaxy Digital”), the Company lent SUI tokens under an evergreen facility that may be terminated with seven days’ notice at the Company’s election. The Company earns fees based on a stated annual rate, payable in SUI tokens. Repayment may be made either in kind or in cash equal to the fair value of the digital assets loaned. During the six months ended June 30, 2026, the loan arrangement was fully settled and all outstanding amounts were repaid. The realized loss recognized upon settlement primarily reflected changes in the market value of the underlying SUI tokens during the loan period, rather than any credit-related loss or shortfall in repayment.
 
In September 2025, the Company entered into a separate digital asset loan agreement with BlueFin Labs Inc. (“BlueFin”), pursuant to which the Company lent 2.0 million SUI tokens in exchange for a fee of 5% of specified revenues generated by certain of BlueFin’s operations relating to its decentralized exchange, payable in SUI tokens. During the six months ended June 30, 2026, the Company and BlueFin entered into an amended and restated digital asset loan agreement (the “Amended and Restated BlueFin Loan Agreement”) whereby the Company lent an additional 4.0 million SUI tokens to BlueFin (increasing the total number of lent SUI tokens to 6.0 million) and increased its fee to 11% of the revenues generated by the specified operations of BlueFin and certain of its affiliates. The Amended and Restated BlueFin Loan Agreement has an initial term ending September 30, 2028, which may be extended upon written consent of both parties. The loaned digital assets are required to be returned in kind, subject to customary exceptions, at maturity or upon earlier termination.
 
Neither of the above-mentioned arrangements contain a collateral requirement.
 
(In thousands)
 
June 30, 2026
 
 
December 31, 2025
 

Digital asset loan receivable — current
 
$— 
 
$1,354 

Digital asset loan receivable — non current
 
 
4,139 
 
 
2,806 

Less: allowance for credit loss
 
 
(578) 
 
(548)
Total Digital asset loan receivable (net)
 
$3,561 
 
$3,612 

 
 
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Table of Contents
 
Digital asset loan receivable activity for the six months ended June 30, 2026, is as follows (In thousands, except for token quantities):
 
 
 
Number of Tokens
 
 
Cost basis
 
 
Fair value
 

December 31, 2025 
 
 
2,965,276 
 
$8,082 
 
$3,612 

Loans advanced
 
 
4,000,000 
 
 
2,870 
 
 
2,870 

Return of digital asset loan
 
 
(961,550) 
 
(3,394) 
 
(1,023)
Realized loss on return of digital asset loan
 
 
— 
 
 
— 
 
 
(2,371)
Digital asset loans interest earned
 
 
89,959 
 
 
90 
 
 
90 

Digital asset loans interest received
 
 
(93,685) 
 
(96) 
 
(96)
Provision for credit losses
 
 
— 
 
 
— 
 
 
(30)
Unrealized gains losses
 
 
— 
 
 
— 
 
 
509 

June 30, 2026
 
 
6,000,000 
 
$7,552 
 
$3,561 

 
Digital asset loan receivables are measured at fair value on a recurring basis in accordance with ASC 820, Fair Value Measurement, using quoted prices in active markets (Level 1 inputs).
 
NOTE 5 – DIGITAL ASSET RECEIVABLE
 
During the six months ended June 30, 2026, with the assistance of its asset manager, Galaxy Digital, the Company participated in decentralized finance (“DeFi”) protocols built on the SUI blockchain, including liquid staking pools, decentralized lending pools, and vault‑based arrangements governed by on‑chain smart contracts.
 
The DeFi activity occurred toward the end of the first quarter of 2026 and was unwound by the Company shortly thereafter, at the beginning of the second quarter of 2026 following a change in the Company’s risk assessment of DeFi activities due to DeFi-related security incidents at the time. All amounts deployed in these DeFi arrangements were subsequently collected. The balance remained recorded as a digital asset receivable because the related tokens continued to be held in wallets controlled by Galaxy Digital as of June 30, 2026. 
 
As of June 30, 2026, the digital asset receivable primarily related to rights to receive SuiUSDe from Galaxy Digital and was separate from the DeFi positions described above, which had been unwound and collected at the beginning of the second quarter of 2026. Digital asset receivables are subsequently measured at fair value, with fair value determined using quoted prices in active markets for the underlying digital assets, when available. Changes in fair value are recognized in earnings in the period incurred. The reason for these amounts being recognized as digital asset receivables relates to these SuiUSDe tokens being held in wallets controlled by Galaxy Digital. Because Galaxy Digital controls the wallets holding the underlying assets, the Company does not have direct access to the associ