Mill City Ventures III(MCVT) - 2025 Q4 - Annual Report

Share Repurchase and Stock Issuance - For the year ended December 31, 2025, the company repurchased 8,718,562 shares of Common Stock for $18.9 million, completing the original $2.0 million authorization and utilizing $16.9 million of the new $50.0 million program approved by the Board[301]. - The company completed a Private Placement on July 31, 2025, issuing 75,881,625 shares of Common Stock at $5.42 per share, resulting in cash proceeds of $258,998,851 and approximately $191,001,099 in digital assets[436]. - The company has authorized the issuance of incentives relating to 900,000 shares under its 2022 Stock Incentive Plan, with 870,000 shares already issued as of December 31, 2025[445]. - The company issued warrants to purchase 3,113,468 shares of Common Stock to the Sui Foundation, with exercise prices ranging from $5.42 to $7.046 per share, vesting over a 24-month period[437]. - As of December 31, 2025, a total of 3,050,523 shares of Common Stock had been issued upon the exercise of Pre-Funded Warrants, with 4,093,682 Pre-Funded Warrants remaining outstanding[439]. - The company had 7,887,456 warrants outstanding as of December 31, 2025, with a weighted average exercise price of $5.95[453]. Financial Performance - Total revenues for the year ended December 31, 2025, were $3.9 million, an increase of 18% from $3.3 million in 2024[321]. - The company reported a net loss of $264,953,075 for the year ended December 31, 2025, compared to a net income of $1,167,726 in 2024, indicating a significant decline in profitability[362]. - The basic earnings per share for the year ended December 31, 2025, was $(6.59), compared to $0.18 for the year ended December 31, 2024[455]. - Operating expenses totaled $267.9 million in 2025, a significant increase from $1.7 million in 2024, largely due to unrealized losses on digital assets[323]. - The company recognized an unrealized loss of $253.6 million on digital assets in 2025, compared to no unrealized loss in 2024[332]. Digital Assets and Investments - As of December 31, 2025, the company held 105 million SUI tokens valued at $147.4 million, equating to approximately 1.34 SUI per share of Common Stock and Pre-Funded Warrants outstanding[302]. - The company established a digital asset treasury strategy, acquiring approximately 44 million SUI tokens at a discounted price equal to 85% of the twenty-four-hour time-weighted average price on July 31, 2025[306]. - The company entered into a digital currency loan agreement with Galaxy Digital LLC, lending 961,550 SUI tokens at a fee of 4.5% per annum[307]. - The company reported a net portfolio investment at amortized cost of $17.5 million, with commercial business loans comprising 57.3% of the portfolio[316]. - Digital asset loan receivables at fair value amounted to $1,305,342 as of December 31, 2025, compared to $0 in 2024, indicating the company's entry into digital lending[360]. - The fair value of the Company's portfolio investments as of December 31, 2025, was $14,613,844, with $3,413,975 classified under Level 3[431]. Cash Flow and Liquidity - Cash and cash equivalents increased to $21.9 million as of December 31, 2025, up from $6.0 million in 2024[338]. - Net cash used in operating activities was $8.2 million for 2025, compared to $5.7 million provided in 2024[334]. - Net cash used in investing activities was $195.5 million in 2025, primarily for purchases of SUI tokens[335]. - Net cash provided in financing activities was $219.5 million in 2025, related to proceeds from a Private Placement[336]. - As of December 31, 2025, approximately 99% of SUI holdings are staked, which may limit liquidity access[339]. Accounting and Taxation - The Company has adopted ASU 2023-08 for digital assets, accounting for them under ASC 350, with fair value changes recognized in net income[378]. - The effective income tax rate for the year ended December 31, 2025, was (0.28%), primarily due to state taxes and the application of a valuation allowance against deferred tax assets[465]. - As of December 31, 2025, the company had a net deferred tax asset of $0, down from $770,000 in 2024[467]. - The company concluded that it is more likely than not that its deferred tax assets will not be realized due to insufficient positive evidence[468]. Strategic Developments - The company’s strategy aims to maximize the value of SUI per share and support the growth of the Sui ecosystem through scalable and transparent value creation strategies[299]. - The company continues to monitor developments in the Sui ecosystem, which are expected to support the intrinsic value of its SUI holdings[312]. - The Company began SUI staking activities in August 2025, intending for staking to become a primary revenue generation strategy in the upcoming fiscal year[404]. - The company changed its name to Sui Group Holdings Limited on August 26, 2025, reflecting a strategic shift towards digital assets[368].