Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

As used in this section and unless otherwise indicated, the terms "we," "us," "our," and "the Company" refer to Sui Group Holdings Limited.

This Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is intended to provide a reader of the Company's 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 its future results. In addition, unless expressly stated otherwise, the comparisons presented in this MD&A refer to the same period in the prior year. The Company's MD&A is presented in seven sections:

OVERVIEW

Sui Group Holdings Limited ("the Company") was originally incorporated as Mill City Ventures III, Ltd. in the State of Minnesota on January 10, 2006. From 2020 until 2025, we operated as a publicly traded specialty finance company focused on short-term, non-bank lending solutions, generating revenue primarily from interest income, transaction fees, and capital appreciation from related investments.

Beginning in 2025, the Company undertook a strategic shift in its business model to establish a digital asset treasury strategy focused on holding and managing SUI tokens, the native cryptocurrency of the SUI blockchain ("SUI"). Under this strategy, SUI has become the principal asset held in the Company's treasury. In connection with this shift, the Company entered into a strategic relationship with the Sui Foundation, an independent organization supporting the development and adoption of the SUI network, pursuant to which the Company acquired SUI tokens and participates in staking and other protocol-level activities.

On August 26, 2025, the Company changed its name to Sui Group Holdings Limited, following an amendment to its Articles of Incorporation filed with the Office 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 core blockchain initiatives.

The Company's strategy is to maximize the value of SUIG through scalable, transparent, and long-term value creation. The Company seeks to enhance balance sheet productivity by lending to its ecosystem and strategic partners on a risk adjusted basis, and allocating capital to high-conviction growth themes across the digital asset, financial technology and artificial intelligence sectors. To execute this strategy, the Company acquires SUI tokens through a combination of open-market purchases, negotiated transactions, and other institutional-grade sourcing arrangements, including an agreement with the Sui Foundation. In addition to holding SUI, the Company seeks to enhance the productivity of its SUI holdings through protocol-level activities, including staking. During the three months ended March 31, 2026, the Company also engaged in selective decentralized finance ("DeFi") activities, including liquid staking, protocol-level deployments, and stablecoin-related arrangements conducted through third-party platforms operating on the SUI blockchain. In early April 2026, the Company unwound all of its DeFi activities and recovered all amounts involved therein in response to security incidents affecting certain DeFi ecosystems. The Company has since adopted a strategy to deploy a portion of its digital asset holdings through trading-based activities, including high-frequency trading strategies.

As of September 30, 2026, the Company held approximately 91.3 million SUI tokens in our treasury (excluding SUI loaned to third parties), which on that date represented $106.3 million in digital assets. Including SUI tokens held through digital asset loan arrangements and digital asset receivable, the Company held approximately 109.3 million SUI tokens in our treasury, which equates to approximately 1.35 SUI per share of Common Stock and pre-funded warrants outstanding. The Company actively manages its digital asset holdings to balance liquidity requirements, risk exposure, and return objectives, including the use of third-party asset managers to deploy portions of its holdings into approved blockchain-native strategies.

The Company's principal sources of income currently include staking rewards from our SUI holdings, yield earned from deployed digital assets, realized and unrealized gains or losses on digital assets, and rewards associated with participating in blockchain protocols, and, to a lesser extent, income or valuation changes from other investments. The Company continues to hold the legacy lending assets, some of which generated interest and fee income during the three and nine months ended September 30, 2026; however, they represent a significantly reduced share of the Company's overall asset base and results of operations compared to prior periods.

Our operating expenses reflect the Company's transition to a digital asset treasury model and include fees to professionals and advisors, payroll, custody and infrastructure costs related to blockchain asset management, insurance and other general administrative expenses. The Company seeks to achieve enhanced operational leverage as it scales its digital asset treasury operation.

This MD&A should be read in conjunction with (i) the accompanying unaudited condensed financial statements and the related notes included in Part I, Item 1 of this Report, (ii) the audited financial statements and related notes for the year ended December 31, 2025, included in our Annual Report and (iii) other publicly available information. All amounts herein are unaudited. In addition, the following discussion of our results of operations and financial condition should be read in the context of this overview.

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. Since that time, our strategy has focused on building and actively managing a SUI-based treasury designed to support long-term value creation while enhancing the productivity of our digital assets through protocol-level participation and selective yield-generating activities. We also pursue opportunistic investments in the broader digital asset ecosystem and financial technology and artificial intelligence sectors with the aim of further enhancing balance sheet productivity.

SUI is a next-generation Layer 1 blockchain designed to deliver the scalability, speed, and security required to power decentralized applications and real-world crypto use cases across finance, gaming, artificial intelligence, stablecoins, and more.

During the current quarter, substantially all of our SUI holdings were deployed in staking, staking-related or lending arrangements. Approximately 82% of SUI holdings are staked, generating an estimated annualized yield of 1.5%. For the nine months ended September 30, 2026, we earned $1.1 million in staking rewards, representing 1,131,070 SUI tokens, compared to $1.0 million in staking rewards, representing 287,599 SUI tokens earned during the nine months ended September 30, 2025. We believe this staking strategy enhances the productivity of our treasury while maintaining exposure to potential SUI price appreciation.

We have also participated in ecosystem initiatives related to the deployment and promotion of SUI-native stablecoins ("SuiUSDe") in partnership with third-party platforms and Sui Foundation-supported programs. These initiatives are intended to support on-chain liquidity, transactional use cases, and broader adoption of the SUI network. To date, these activities are primarily strategic in nature and are designed to support ecosystem growth rather than serve as a primary source of near-term revenue. As of September 30, 2026, the Company held approximately $10.0 million of SuiUSDe in connection with these initiatives.

The Company also participates in strategic ecosystem initiatives designed to promote adoption and utility of the SUI network. As part of these efforts, the Company has entered into a digital asset lending arrangement with BlueFin Labs Inc., under which the Company has lent 6.0 million SUI tokens and is entitled to a percentage of revenues generated by certain BlueFin operations.

Our SUI treasury strategy is supported by our official relationship with the Sui Foundation, an independent organization dedicated to the development and adoption of the SUI ecosystem. We believe this relationship, together with our active participation in staking, lending, and other protocol-level activities, positions us to benefit from continued expansion of the SUI network while providing shareholders with exposure to SUI through a publicly traded corporate structure. On July 28, 2026, we extended our Trademark License Agreement with the Sui Foundation for an additional one-year term.

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.

INVESTMENT ACTIVITY

While our primary focus has shifted from our legacy finance operations, we still aim to enhance balance sheet productivity by lending to our ecosystem and strategic partners on a risk adjusted basis and allocating capital to high-conviction growth themes across the digital asset, financial technology and artificial intelligence sectors.

During the nine months ended September 30, 2026, we made $6.0 million of strategic investment in artificial intelligence companies, consisting of a $3.0 million investment in Nof1 Holdings, Inc. through a SAFE and a $3.0 million investment in Recursive Superintelligence through an investment structure providing the Company with an indirect beneficial interest in preferred equity interests. Nof1 is an agentic artificial intelligence research and trading technology company focused on developing AI-driven solutions for financial markets, while Recursive Superintelligence is an artificial intelligence research company focused on developing self-improving AI systems. We believe these investments complement our broader strategy of obtaining exposure to emerging technologies, including digital assets, financial technology and artificial intelligence opportunities. These strategic investments are distinct from the Company's traditional specialty finance and loan investment activities. The Company recorded an unrealized loss of $13.1 million reflecting certain borrowers' financial difficulty and uncertainty regarding the collection of principal and interest. In addition, the Company recorded allowance for credit losses against the accrued interest on these loan arrangement totaling $1.3 million. We also received $0.9 million of redemptions and repayments from legacy investments during the nine months ended September 30, 2026. As of September 30, 2026, investments of our traditional specialty finance and loan had a cost of $13.5 million and were carried at a fair value of $0.6 million.

During the nine months ended September 30, 2025, we made $8.2 million of investment purchases and had $2.0 million of redemptions and repayments. As of September 30, 2025, investments had a cost of $20.0 million and were carried at a fair value of $20.7 million.

RESULTS OF OPERATIONS

Our operating results for the three and nine months ended September 30, 2026 and September 30, 2025 were as follows:

three months ended September 30, 2026 Compared to three months ended September 30, 2025

SUI staking revenue

For the three months ended September 30, 2026, we generated $0.3 million in staking rewards from our SUI token holdings, compared to $1.0 million for the three months ended September 30, 2025. The decrease was driven by the lower market price of SUI at the time rewards were earned, despite an increase in the number of SUI tokens earned. The average value of SUI at the time rewards were earned was approximately $0.77 per token in the current period, compared to approximately $3.53 per token in the prior period. We earned 334,768 SUI tokens during the current period, compared to 287,599 SUI tokens during the prior-year period when staking commenced in August 2025. As of September 30, 2026, 89,481,987 SUI tokens, representing approximately 82% of our total SUI holdings, were staked with an estimated annualized return of 1.5%. Rewards were accrued daily in accordance with our treasury management strategy.

Digital lending interest income

During the three months ended September 30, 2026, our digital lending interest income was $53.0 thousand, compared to none for the three months ended September 30, 2025. The increase was attributable to interest income earned on digital assets lent to the borrowers and yield earned on deployed digital assets recorded as digital asset receivable. The Company did not have such digital asset lending arrangements in place during the prior-year period. Additional information regarding these arrangements is included in Note 4 - Digital Asset Loan Receivable to the accompanying unaudited condensed financial statements.

Professional fees

During the three months ended September 30, 2026, and 2025, we had professional fees expense amounting to $1.0 million and $0.5 million, respectively. The increase was driven primarily by higher professional costs associated with the Company's strategic transition and expanded public-company activities, including professional fees related to accounting and audit-related services, marketing and public relations in connection with the Company's rebranding and investor communications, and legal fees related to SEC reporting and regulatory compliance.

Stock-based compensation

During the three months ended September 30, 2026, and 2025, we had stock-based compensation amounting to $1.9 million and $2.3 million, respectively. The decrease was attributable to an expense in the prior period for the Advisor Warrants, which were fully vested at issuance and expensed in full in the third quarter of 2025, partially offset by a full quarter of amortization of the vesting warrants in the current period.

Asset and strategic management fees

During the three months ended September 30, 2026, we incurred $0.2 million in asset and strategic management fees under our strategic and asset management arrangements, compared to $0.4 million during the three months ended September 30, 2025. 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. The decrease reflects lower average AUM, driven primarily by the decline in the market price of SUI and lower cash balances.

Compensation expense

During the three months ended September 30, 2026, and 2025, we had compensation expense amounting to $0.5 million and $0.3 million, respectively. The increase was primarily due to higher director fees in the current quarter, compared to the prior period, following the expansion of our Board in connection with the Company's strategic transition, including the appointment of an additional independent director in each of January 2026 and July 2026.

Insurance expense

During the three months ended September 30, 2026, and 2025, we had insurance expense amounting to $0.4 million and $0.3 million, respectively. The increase reflects a full quarter of expense for the additional directors' and officers' insurance coverage the Company obtained in connection with its change in strategy, compared to a partial period in the prior period.

Unrealized gain (loss) on digital assets and receivable, net

During the three months ended September 30, 2026, we recognized a net unrealized gain of $82.7 million compared to a net unrealized loss of $60.8 million during the three months ended September 30, 2025. The current period net gain consisted of $79.7 million gross unrealized gain on our digital asset and receivable holdings and $3.0 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 prior-year period net loss consisted of $62.7 million gross unrealized loss, partially offset by $2.0 million of amortized deferred income. The change from the net unrealized loss in the prior-year period to a net realized gain in the current period was primarily attributable to change in the fair value of our SUI token holdings, including the effect of changes in the quantity and carrying value of SUI tokens held during the respective periods as a result of trading activity. The remaining deferred income balance of $10.9 million will amortize on a straight-line basis over the period to August 30, 2027.

Realized loss on digital assets, net

During the three months ended September 30, 2026, we recognized a net realized loss of $28.0 million compared to $0 during the three months ended September 30, 2025. The net realized loss in the current period reflects the loss of $28.0 million from high-frequency trading. No comparable realized gain or loss on digital assets was recognized for the three months ended September 30, 2025, as the Company had not commenced such trading activity. This realized loss is non-cash.

Provision for credit losses

During the three months ended September 30, 2026, the Company recognized a provision for credit losses of $1.0 million compared to $0 for the three months ended September 30, 2025. The provision was primarily attributable to the expected credit loss allowance amounting to $0.5 million recorded on the Company's digital asset loan receivables, reflecting changes in the underlying loan receivable balances subject to the allowance and $0.5 million of expected credit loss allowance on interest receivable associated with a legacy loan investment whose fair value was written down to zero, reflecting uncertainty regarding collectibility of the related interest receivable on this legacy loan investment. No comparable provision was recognized during the three months ended September 30, 2025, as no credit loss allowance was recognized on the Company's investment income receivable during the prior-year period.

Other general and administrative

During the three months ended September 30, 2026, and 2025, we had other general and administrative expenses amounting to $0.2 million and $54.0 thousand, respectively. The increase was due to additional custody fees, transfer agent and EDGARization fees incurred due to increased digital asset activity and public filing activities.

Investment income

For the three months ended September 30, 2026, our total investment income was $0.2 million, compared to $1.6 million for the three months ended September 30, 2025. The decrease was primarily attributable to lower investment income generated from the Company's legacy investment activities during the current period.

Net realized and unrealized gain/loss on investment

During the three months ended September 30, 2026, our net realized and unrealized loss on investment was $2.4 million, compared to net realized and unrealized gain of $0.5 million for the three months ended September 30, 2025. The change primarily reflecting downward fair value adjustments on a certain legacy investment. The downward fair value adjustment was due to increased credit risk, uncertainty arising from borrower delinquencies, and refinancing delays which outweighed mitigating factors such as contractual guaranties and prior repayment history as of September 30, 2026.

nine months ended September 30, 2026 Compared to nine months ended September 30, 2025

SUI staking revenue

For the nine months ended September 30, 2026, we generated $1.1 million in staking rewards from our SUI token holdings, compared to $1.0 million for the nine months ended September 30, 2025. The increase reflects a full nine months of staking activity in the current period, compared to the prior-year period, when staking commenced in August 2025. We earned 1,131,070 SUI tokens during the current period, compared to 287,599 SUI tokens earned in the prior year period. The impact of the higher number of SUI tokens earned was substantially offset by the lower average value of SUI at the time rewards were earned. During the current period, we had an average of 93,531,160 SUI tokens staked, representing approximately 82% of our total SUI holdings with an estimated annualized staking yield of 1.6%. Staking rewards were accrued daily in accordance with our treasury management strategy.

Digital lending interest income

During the nine months ended September 30, 2026, our digital lending interest income was $0.2 million, compared to $0 for the nine months ended September 30, 2025. The increase was attributable to interest income earned on digital assets lent to the borrowers and yield earned on deployed digital assets recorded as digital asset receivable. The Company did not have such digital asset lending arrangements in place during the prior-year period. Additional information regarding these arrangements is included in Note 4 - Digital Asset Loan Receivable to the accompanying unaudited condensed financial statements.

Investment income

For the nine months ended September 30, 2026, our total investment income was $0, compared to $1.7 million for the nine months ended September 30, 2025. The variance is attributable to the Company's change in accounting presentation following its cessation of investment company accounting under ASC 946 with effect from August 2025. Accordingly, investment income is classified within other income August 2025 onwards amounting to $1.6 million for the nine months ended September 30, 2025, and $1.0 million for the nine months ended September 30, 2026. The decrease in overall investment income is on account of decrease in the Company's legacy investment activity.

Professional fees

During the nine months ended September 30, 2026, and 2025, we had professional fees expense amounting to $3.1 million and $0.8 million, respectively. The increase was driven primarily by higher professional costs associated with the Company's strategic transition and expanded public-company activities, including professional fees related to recruiting, accounting and audit-related services, marketing and public relations in connection with the Company's rebranding and investor communications, and legal fees related to SEC reporting and regulatory compliance.

Stock-based compensation

During the nine months ended September 30, 2026, and 2025, we had stock-based compensation amounting to $5.8 million and $2.3 million, respectively. The increase in the current period reflects nine months of non-cash expense in 2026 on the compensatory warrants issued in connection with the July 2025 Private Placement and the issuance of warrants to one existing director and two newly appointed directors in the first and third quarters of 2026, respectively, compared to approximately two months of expense in the prior period, which included the fully vested Advisor Warrants.

Asset and strategic management fees

During the nine months ended September 30, 2026, we incurred $0.9 million in asset and strategic management fees under our strategic and asset management arrangements, compared to $0.4 million during the nine months ended September 30, 2025. 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. The increase reflects nine months of fees in the current period compared to approximately two months in the prior period following the July 2025 effective date of these arrangements, partially offset by lower average AUM due to the decline in the market price of SUI.

Compensation expense

During the nine months ended September 30, 2026, and 2025, we had compensation expense amounting to $1.4 million and $0.7 million, respectively. The increase was primarily due to higher director fees compared to the prior period, following the expansion of our Board in connection with the Company's strategic transition, and higher salary expense compared to the prior period, reflecting increased compensation for certain personnel beginning in the third quarter of 2025.

Insurance expense

During the nine months ended September 30, 2026, and 2025, we had insurance expense amounting to $1.3 million and $0.3 million, respectively. The increase was due to additional directors' and officers' insurance policies that the Company deemed necessary due to our change in strategy, which were in place for the full nine-month period in 2026.

Unrealized (gain) loss on digital assets and receivable, net

During the nine months ended September 30, 2026, we recognized a net unrealized gain of $66.3 million compared to a net unrealized loss of $60.8 million during the nine months ended September 30, 2025. The current period net amount consisted of $57.4 million gross unrealized gain on our digital asset and receivable holdings and $8.9 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 prior period net loss consisted of $62.7 million gross unrealized loss, partially offset by $2.0 million of amortized deferred income. The change from a net unrealized loss in the prior-year period to a net unrealized gain in the current period was primarily attributable to changes in the fair value of our SUI token holdings, together with changes in the quantity and carrying value of SUI tokens subject to remeasurement during the respective period. We held approximately 91.3 million SUI tokens at September 30, 2026, compared to with approximately 105.0 million at December 31, 2025. As of September 30, 2026, the remaining deferred income balance was $10.9 million and will be amortized on a straight-line basis over the period to August 30, 2027.

Realized loss on digital assets, net

During the nine months ended September 30, 2026, we recognized a net realized loss of $81.7 million compared to $0 during the nine months ended September 30, 2025. The net realized loss primarily consisted of $38.5 million associated with the transfer of 11,900,024 SUI tokens to Galaxy Digital for deployment in blockchain protocol participation, stablecoin-related strategies, and selective DeFi activities; $28.0 million associated with high-frequency trading activity; $14.0 million associated with 4,000,000 SUI loaned to BlueFin; and $2.4 million recognized upon the return of the principal balance of 961,550 SUI tokens receivable from Galaxy Digital. These losses were partially offset by a $1.1 million realized gain upon the unwind of certain DeFi arrangements. The realized gains and losses were primarily resulted from changes in the market price of SUI between the applicable carrying value of the tokens and their value at the time of the respective transactions and did not reflect any loss of principal or shortfall in the recovery of the underlying SUI tokens nor any cash outflows since the initial acquisition of the SUI tokens. The realized gain associated with the unwind of certain DeFi arrangements primarily resulted from the recovery of digital assets for which impairment losses had been recognized in a prior period. No realized gains or losses on digital assets were recognized during the nine months ended September 30, 2025, as the Company had not yet commenced its SUI treasury strategy.

Net realized and unrealized gain/loss on investment

During the nine months ended September 30, 2026, our net realized and unrealized gain on investment was $0, compared to $0.5 million for the nine months ended September 30, 2025. The decrease 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, realized and unrealized gains and losses are no longer presented within this line item and are instead reflected within other income (expense).

During the nine months ended September 30, 2026, net realized and unrealized loss on investment of $13.1 million was recognized within other income, primarily reflecting downward fair value adjustments on certain legacy investment and loan-related positions. The downward fair value adjustments were due to increased credit risk, uncertainty arising from borrower delinquencies, and refinancing delays which outweighed mitigating factors such as contractual guaranties and prior repayment history as of September 30, 2026.

Impairment of digital asset receivable

During the nine months ended September 30, 2026, the Company recognized impairment charges of $1.4 million on its digital asset receivable. The impairment primarily reflected declines in the market price of SUI below the cost basis of certain receivable positions associated with previously deployed DeFi arrangements. The impairment did not result from a shortfall in the recovery of the underlying digital assets or a loss of principal, but rather from decreases in the fair value of the underlying SUI tokens. No such impairment was recognized during the nine months ended September 30, 2025.

Provision for credit losses

During the nine months ended September 30, 2026, the Company recognized a provision for credit losses of $2.1 million compared to $0 for the nine months ended September 30, 2025. The increase was primarily attributable to the establishment of credit loss estimates associated with the Company's digital asset loan receivable positions, deterioration of certain investments and allowance on interest receivable related to investments for which collectibility was deemed uncertain. No comparable provision was recognized during the nine months ended September 30, 2025, as no credit loss allowance was recognized on the Company's investment income receivable during the prior-year period.

Other general and administrative

During the nine months ended September 30, 2026, and 2025, we had other general and administrative expenses amounting to $0.4 million and $0.1 million, respectively. The increase was due to additional custody fees, transfer agent and EDGARization fees incurred due to increased digital asset activity.

Cash Flows for the nine months ended September 30, 2026 and 2025

Cash flows used in or provided by operating activities are affected primarily by net income or loss, adjusted for non-cash items including net realized and unrealized loss on digital assets and investment, stock-based compensation, and changes in working capital.

For the nine months ended September 30, 2026, net cash used in operating activities was $6.3 million, compared to $1.8 million for the nine months ended September 30, 2025. The increase in net cash used in operating activities period over period was driven primarily by higher operating expenses in the current period, including professional fees, insurance and compensation expense.

Although the Company generated a net loss of $42.2 million during the nine months ended September 30, 2026, a significant portion of the loss related to non-cash items, including $15.4 million of net realized and unrealized losses on digital assets and digital asset receivable, $5.8 million of stock-based compensation expense, $1.4 million of impairment of digital asset receivable, $2.1 million of provision for credit losses and a $13.1 million net realized loss on investments, which reduced net income but did not result in corresponding cash outflows during the period. By comparison, during the nine months ended September 30, 2025, the Company generated net loss of $43.1 million, including $60.8 million of net realized and unrealized losses on digital assets, partially offset by a $17.9 million deferred income tax benefit.

Cash flows used in investing activities are affected primarily by purchases and dispositions of digital assets and investments. For the nine months ended September 30, 2026, net cash used in investing activities was $15.0 million, compared to $250.2 million during the nine months ended September 30, 2025. Cash used in investing activities during nine months ended September 30, 2026 was primarily attributable to purchases of SuiUSDe amounting to $10.0 million under the Company's SUI treasury strategy, a $3.0 million SAFE investment in Nof1 Holdings, Inc., an artificial intelligence research and trading technology company, and a $3.0 million investment in Recursive Superintelligence, an artificial intelligence research company focused on developing self-improving AI systems, through an investment vehicle providing the Company with an indirect beneficial interest in the underlying equity interests. These investments were made as part of the Company's broader strategy to enhance balance sheet productivity by lending to its ecosystem and strategic partners on a risk adjusted basis, and allocating capital to high-conviction growth themes across the digital asset, financial technology and artificial intelligence sectors. This was offset by cash provided from sale and repayments of investments amounting to $0.9 million and net cash provided as a result of digital assets purchase and sale activity under high frequency trading amounting to $0.1 million. Cash used in investing activities during the nine months ended September 30, 2025, was significantly higher primarily due to substantial investments made in connection with the Company's transition to a digital asset treasury strategy, including large-scale acquisitions of digital assets amounting to $244.0 million.

For the nine months ended September 30, 2026, net cash provided by financing activities was $0, compared to $288.7 million during the nine months ended September 30, 2025. Cash provided by financing activities during the nine months ended September 30, 2025, related primarily to proceeds from issuance of common shares and warrants in private offering amounting to $291.3 million (net of issuance costs amounting to $21.2 million). This was offset by the repurchase of shares of the Company's common stock pursuant to the Company's stock repurchase program amounting to $3.2 million.

LIQUIDITY AND CAPITAL RESOURCES

As of September 30, 2026, we had cash and cash equivalents of $0.7 million, a decrease of $21.3 million from $21.9 million as of December 31, 2025. The decrease was driven primarily by cash outflows related to purchases of SuiUSDe and other investing activities during the period.

The primary uses of the Company's existing liquidity and any funds raised in the future are expected to support the Company's value-creation strategies and for other general corporate purposes, including funding operating expenses or to service debt to the extent we borrow or issue senior securities. In addition to cash and cash equivalents, the Company's investments may include highly liquid stablecoins, including SuiUSDe, as well as temporary investments consisting of cash equivalents (including USDC), U.S. government securities, and high-quality debt securities with maturities of one year or less from the time of investment.

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 cash equivalents such as stablecoins and the cash generated from operations such as the sale of accrued tokens, 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 September 30, 2026, approximately 82% 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. Additionally, the Company has approximately 6% of its SUI holdings in digital asset loans, which mature within the next two years. During the loan period, the Company would not be able to rapidly access liquidity from these assets and approximately 11% held in Galaxy Digital controlled wallets. We view our SUI holdings as strategic assets, however we may periodically sell SUI or utilize other liquid digital asset holdings, including stablecoins, 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, investment activities, and working capital needs through our existing cash and cash equivalents, stablecoin holdings, and other liquid investments 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 (in thousands):

CRITICAL ACCOUNTING 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 asset receivable, digital asset loan receivable, as well as the application of the current expected credit loss ("CECL") model to digital asset receivable and digital asset loan receivable. The most significant estimates affecting the Company's results of operations and financial position currently relate to the following:

We will continue to evaluate and disclose additional critical accounting policies as our operations expand and as new standards or interpretations emerge. For further detail, refer to our Annual Report.

OFF-BALANCE-SHEET ARRANGEMENTS

During the nine months ended September 30, 2026, we did not engage in any off-balance sheet arrangements as described in Instruction 8 to Item 303(b) of Regulation S-K.