SUI Group Holdings Ltd.

In addition to the risk factors set forth below, you should carefully consider the factors discussed in “Item 1A. Risk Factors” in our Annual Report and in our Quarterly Report. The risks described below and in those documents are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially adversely affect our business, financial condition and/or operating results.

Risks Related to Our Investments

We have made, and may continue to make, loans to and minority investments in the digital asset, financial technology and artificial intelligence sectors, which subject us to distinct operational, regulatory, valuation, and liquidity risks that are separate from, and in addition to, the risks associated with our digital asset treasury strategy.

In addition to our digital asset treasury strategy, we selectively allocate capital to loans to and minority equity investments in private digital asset, financial technology and artificial intelligence entities that we believe are complementary to our broader investment thesis. These investments diversify our capital allocation but differ in nature and risk profile from our digital asset treasury and staking strategy, and there can be no assurance that these investments will perform in a manner consistent with, or will enhance the value of, our SUI treasury strategy.

Digital assets, financial technology and artificial intelligence are dynamic sectors, each subject to its own rapidly evolving and unsettled regulatory landscape. Financial technology entities in which we invest may be subject to evolving money transmission, banking, consumer protection, and other financial services regulation that varies by jurisdiction. Artificial intelligence entities in which we invest are subject to a separate and equally unsettled body of law, including emerging AI-specific legislation such as the European Union's Artificial Intelligence Act and a growing number of U.S. state AI laws, the application and enforcement of which remain difficult to predict. Changes in, or new interpretations of, the laws and regulations applicable to either sector could materially and adversely affect the business, financial condition, or prospects of the entities in which we invest, and in turn, the value of our investments.

Because these are minority investments, we generally do not, and may not in the future, control the management, strategic direction, development, or commercialization of the underlying technologies or businesses. While we may seek to negotiate board observer rights, information rights, or other protective provisions in connection with such investments, there is no assurance that we will obtain such rights, or that any rights we do obtain will be sufficient to protect our investment or allow us to meaningfully influence the entity's strategic or operational decisions. Other investors in these entities may have business goals and interests that differ from, or conflict with, our own.

These entities are frequently early-stage, unproven, and face significant competition, and their technologies may never be successfully developed, commercialized, or adopted by the market. Our investments in these entities are illiquid and non-marketable at the time of investment, are typically subject to transfer restrictions, and generally have no public trading market. Any return of, or return on, our capital depends on the performance of the technology and the operating company and may depend on a future liquidity event — such as an initial public offering, acquisition, or follow-on financing at a higher valuation — that may never occur, or that may occur on terms less favorable than we anticipate. If any entity in which we hold a minority investment is unable to obtain additional financing, fails to achieve commercial success, or ceases operations, we could lose all or a substantial portion of our invested capital.

As our capital allocated to non-digital-asset investments increases, we may also become subject to additional risks under the Investment Company Act of 1940, as described in the Risk Factor included in our Annual Report and titled “If we were deemed to be an investment company under the 1940 Act, applicable restrictions likely would make it impractical for us to continue segments of our business as currently contemplated.”

Risks Related to Agentic Artificial Intelligence

The rapid development and deployment of AI models capable of autonomous decision-making, task execution, and interaction with external systems with limited or no human oversight—known as agentic artificial intelligence (“agentic AI”)— pose significant and evolving risks to our financial condition and results of operations.

We, our contract counterparties, entities we invest in, or our service providers may integrate agentic AI tools into our operations, including in connection with trading, compliance monitoring, cybersecurity and blockchain analytics. While these tools may enhance efficiency, because these systems operate with reduced human supervision relative to traditional software and earlier AI applications, they also introduce novel and potentially significant risks, including risks related to model accuracy and reliability, unintended actions, data security and privacy, third-party system dependencies, intellectual property, regulatory compliance, and potential liability for outcomes produced or actions taken by such systems. Agentic AI may take actions that are unintended, erroneous, or inconsistent with our policies, risk tolerances, or applicable legal and regulatory requirements. Errors or unintended behaviors may propagate rapidly and at scale before they are detected and corrected, potentially resulting in material financial losses, regulatory violations or reputational harm.

Agentic AI may also significantly enhance the offensive capabilities of malicious actors targeting our systems or infrastructure. Unlike traditional cyberattacks that require sustained human direction, agentic AI can autonomously identify vulnerabilities, adapt attack strategies in real time, and coordinate complex, multi-stage intrusions across various attack surfaces, such as smart contracts, cross-chain protocols and third-party integrations, with minimal human involvement. These AI-driven offensive capabilities may lower the cost and technical expertise required to launch attacks, broaden the pool of potential threat actors, and enable attacks of a speed, scale, and complexity that exceed the capacity of our existing security infrastructure. As a result, traditional perimeter controls and static security rules are no longer the most effective security mechanisms. As agentic AI tools become more widely accessible, we anticipate that the frequency, sophistication, and severity of AI-powered attacks will increase, and there can be no assurance that our defensive measures will keep pace.

Our competitors and other participants in the cryptocurrency industry may also deploy agentic AI in ways that could adversely affect us, including through AI-driven trading strategies that increase market volatility, which could materially and adversely impact the value of our digital assets and our revenues. We may also face increased liability and litigation risk arising from the actions or outputs of agentic AI, and the legal and regulatory frameworks governing autonomous AI-driven actions are unsettled and evolving rapidly. Furthermore, the market for AI talent is highly competitive, and our inability to attract and retain personnel with the specialized expertise necessary to oversee agentic AI or counteract these threats could further impair our ability to manage these risks.

No assurance can be given that we will be able to effectively anticipate, manage, or mitigate the risks associated with agentic AI. The failure to do so could have a material adverse effect on our business, financial condition and results of operations.

Our $10 million in principal amount loan to Mustang Funding, LLC is subordinated to Senior Lenders in right of payment, in respect of our exercise of rights and remedies, and in right of collateral, with the result that we could lose a significant portion or all of our investment.

On December 12, 2022, contemporaneously with our entry into a non-binding letter of intent with Mustang Funding, LLC (“Mustang”) contemplating a combination or merger transaction, we entered into a lending agreement with Mustang pursuant to which we loaned Mustang the principal amount of $5 million maturing in September 2023. Among other things, our related loan agreement with Mustang requires us to consent to any additional indebtedness Mustang may incur, subject to certain limitations and exceptions.

Although our loan to Mustang was not secured at the time that it was made, we negotiated for and obtained the right in the governing documents to seek and obtain collateral in the event that there were a default by Mustang or our negotiations for a combination transaction were to break down. At that time, we believed it was important to obtain this right because (i) Mustang was contemporaneously seeking a senior secured lending facility with whom we had no previous working experience, and (ii) any breakdown in combination negotiations, combined with our anticipated subordination (discussed below) could mean that we would need to extend the terms of this loan beyond nine months. In sum, as a creditor, we believed that we needed to secure our loan on more traditional commercial lending terms in order to better protect our investment.

On December 28, 2022, we entered into a subordination agreement with Orion Pip LLC, in its capacity as administrative and collateral agent for itself and other senior lenders (the “Senior Lenders”) under a senior secured lending agreement with Mustang, pursuant to which we subordinated our right to payment (subject to certain exceptions) and our right to exercise rights and remedies, to Mustang’s prior repayment in full of all amounts owing to the Senior Lenders. The subordination agreement prohibited the Senior Lenders or Mustang from extending the stated maturity of amounts owing under the senior secured lending agreement beyond December 2026. The Senior Lenders are owed $15.675 million in principal amount under the senior secured lending agreement as of December 31, 2025.

In June, August and September 2023, we advanced additional principal to Mustang as we continued working with them on a potential definitive merger agreement and related deliverables. These additional principal advances resulted in the loan principal growing to an aggregate of $10 million. In connection with these advances, the maturity date of our loan was ultimately extended to June 2024. In April 2024, we agreed to a final extension of the maturity date to the earlier of December 31, 2024, or 90 days after the termination of negotiations for our combination transaction with Mustang.

On August 20, 2024, we terminated the non-binding letter of intent with Mustang. As a result, amounts owing under our $10 million loan to Mustang were to mature on November 18, 2024. Nevertheless, the subordination agreement with the Senior Lenders effectively worked to prohibit Mustang’s payment, and our collection, of our loan. Accordingly, at that time we invoked our right to obtain collateral security from Mustang for our loan for the purpose of protecting our investment and essentially converting our loan position from a short-term unsecured loan to a longer-term loan involving standard commercial lending terms, including terms relating to collateral security. Ultimately, in late January 2025 we were able to enter into an amendment to our loan agreement with Mustang that extended the maturity date of our loan to March 2027 and increased the interest rate on our loan principal to 20% per annum (with 15% per annum remaining payable in cash on a monthly basis, and the additional 5% per annum being payable upon maturity), and also enter into an amended and restated subordination agreement with Orion Pip LLC that subordinated our right to collateral on customary and negotiated terms and conditions.

On April 2, 2026, we received from a Senior Lender a notice of foreclosure and public sale of all or a material portion of Mustang’s assets. This notice of foreclosure has been extended multiple times since then. Presently, we understand that the foreclosure has been postponed pending further negotiations between Mustang and its creditors. The timing and outcome of any such foreclosure, restructuring, insolvency or similar proceeding are uncertain and may be protracted, contested and costly. If a foreclosure or other enforcement action continues, or if there is no improvement in Mustang’s financial or business condition, we may lose a substantial portion or all of our investment in Mustang or be required to accept cash or securities with a value that is significantly less than the carrying value of the loan, any of which could result in significant losses and have a material adverse effect on our business, financial condition and results of operations.

We have not received interest payments when due under our loan agreement with Mustang since February 2026, and, based on Mustang’s current financial condition and the foreclosure action described above, we do not expect to receive the overdue or any future interest payments in the foreseeable future. Continued non-payment could adversely affect our revenues, results of operations and financial condition.