Sui Group Holdings Limited

rather than a breakdown in the system. Unlike prior cycles, particularly 2022, this volatility was not driven by institutional failures or misconduct. We believe the underlying infrastructure performed as intended. Stablecoin markets, now a record scale of over $300 billion, remain functional and institutional participation across ETFs, treasury strategies, and regulated derivatives provided a stabilizing presence that has not existed in previous downturns. We believe the long-term use case for digital assets is resilient. Regulatory clarity is improving, institutional engagement is increasing, and the asset class is entering a more mature phase of development. Periods like this tend to reward disciplined capital allocation conviction in the asset, and a long-term perspective. Our decision to anchor Sui Group's strategy around the Sui blockchain reflects that mindset. We believe Sui represents a meaningful advancement in blockchain architecture. Its object-centric design and the use of the move programming language enable parallel transaction execution, allowing the network to process transactions simultaneously rather than sequentially. This results in sub-second finality, horizontal scalability, and performance characteristics that are well suited for real-world applications at scale. These capabilities are already being validated by growing activity across decentralized finance, gaming, artificial intelligence, and stablecoin infrastructure. Sui Group is uniquely positioned within the ecosystem as the only publicly traded company with an official relationship with the Sui Foundation. That positioning provides differentiated access, credibility, and the ability to deploy capital alongside ecosystem growth. We are not approaching this as passive holders of an asset. We are building an operating platform that participates directly in the expansion of the network. Our objective is to grow SUI per share for our shareholders by actively deploying capital into high quality opportunities within the ecosystem. This includes supporting leading protocols, providing liquidity, and helping scale infrastructure that generates on-chain economic activity. We have established a scalable framework that aligns our balance sheet with the growth of high impact protocols and emerging financial infrastructure. The early initiatives we have taken are intended to demonstrate how this model can be expanded over time with an emphasis on consistency, selectivity, and long-term value creation. To bring this together, the volatility we have seen in recent months has reinforced several key aspects of our strategy. Institutional infrastructure is proving more resilient. On-chain utility continues to grow through cycles The latest foray of crypto hacks are a short and medium-term headwind. Disciplined capital deployment during periods of dislocation can create meaningful long-term value. SUI Group aims to be at the center of that opportunity. We hold a treasury of over 108 million SUI tokens and are actively deploying it within the ecosystem to build partnerships with protocols that are creating durable utility on one of the most scalable blockchain platforms in the market today. We are committed to increasing SUI per share in a disciplined, transparent manner with a long-term orientation that reflects the nature of this asset class. With that, I'll turn the call over to Stephen to walk through our first quarter operational performance.

Thank you, Marius, and good afternoon, everyone. I want to begin with an update on our SUI treasury position. As of May the 4th, 2026, we hold approximately 108.7 million SUI, including digital asset loans. The majority of this position is actively staked, generating roughly 5,200 SUI per day. Since initiating our treasury strategy in July 2025, staking and lending activity have generated approximately 1.3 million SUI in cumulative income. While this base yield is important, we view it as the foundation of our return profile, not the upper bound. Our strategy is focused on deploying capital that can generate returns above the native staking rate. We partner with institutional quality teams across the SUI ecosystem, structure transactions that produce incremental yield to nominated, and build a portfolio of protocol linked economics designed to compound alongside network growth. Our work with Bluefin and Ember Protocol, along with our role in launching the SUI-USDE stablecoin infrastructure, are clear examples of this approach in action. Each initiative is designed to outperform passive staking while expanding our participation in the ecosystem's financial layer. The ecosystem itself continues to evolve in meaningful ways. Total value locked on SUI increased significantly. In February, SUI became the fifth digital asset accessible through a spot exchange traded product joining Bitcoin and Ethereum in regulated investment vehicles, as well as recently launched trading on the CME. In March, the network introduced Hashi, a Bitcoin native lending and borrowing protocol developed by Miston Labs with participation from leading institutional players. This initiative is designed to bring institutional grade BTC collateral into on-chain credit markets. These developments reflect a rapidly maturing ecosystem with increasing institutional relevance. I also want to detail why we believe SUI is particularly well positioned for what may be the next major phase of on-chain activity, which is agentic artificial intelligence. By the end of this year, we expect that a significant majority of enterprises will invest in autonomous software systems capable of planning, transacting, and coordinating with limited human input. These systems require a settlement layer with specific characteristics, including sub-second finality, parallel execution, programmable access controls, and reliable stablecoin infrastructure. SUI was designed with these capabilities in mind. We are already seeing practical applications emerge. Autonomous trading systems that operate across decentralized markets require the ability to process concurrent transactions without delay, which is enabled by SUI's parallel execution model. More complex financial workflows where software agents manage capital allocation and supplements across multiple protocols require clear state management and predictable execution. So it's object centric architecture provides that foundation. In addition, native tools such as seal for programmable data access and walrus for decentralized storage support the memory and coordination requirements of these systems. Stablecoin transfer volume on SUI surpassed 1 trillion in the first quarter, which highlights the level of settlement activity that these applications can build upon. We believe SUI Group is positioned at the intersection of these trends. We hold a scaled and productive treasury on a network that is rapidly building out both financial and computational infrastructure. We are deploying that treasury into the protocols driving the most meaningful activity within the ecosystem. and we are doing so with a clear objective of compounding SUI per share over time through disciplined and transparent capital allocation. I'll now turn the call over to Doug Polinski to provide an update on our specialty finance operations.

Thank you, Stephen, and thank you all for joining today's call. Our legacy specialty finance platform continues to serve an important role within SUI Group, even as our strategic focus has shifted toward digital assets. As we had discussed in prior periods, this business was built on a foundation of selective underwriting and structured lending. We continue to focus on opportunities where we have strong visibility into collateral, cash flow, and borrower quality while maintaining a conservative posture on how we deploy the capital. At the same time, the relative contribution of this segment to our overall financial profile has evolved. As our SUI treasury strategy has scaled, digital asset related activities have become the primary driver of both our balance sheet and our forward-looking strategy. The legacy portfolio remains in place, but is now intended as a complementary component rather than the core engine of the business. The specialty finance platform is designed to provide a base level of cash generation, while our digital asset strategy offers exposure to higher growth opportunities within the SUI ecosystem. Though this quarter saw increased credit risk and uncertainty regarding borrower delinquencies, we believe the specialty finance platform can help create a balanced framework as we continue to transition SUI Group toward a more integrated digital asset platform. While we are opportunistic in specialty finance, our strategic center of gravity is firmly aligned with building a differentiated, institutionally oriented digital asset treasury platform anchored to the SUI blockchain. With that, I'd like to turn the call over to our Chief Financial Officer, Joseph Geraci, to take you through our financial results.

Joe? Thank you, Doug. A quick reminder as we review our first quarter financial results, all comparisons and variance commentary refer to the prior year quarter sales unless otherwise specified. Due to our strategic shift on July 31st, 2025 from our specialty finance business toward blockchain native treasury management, our historical financial condition and results of operations for the period presented may not be comparable. Total adjusted revenue, including investment income and other income for the first quarter of 2026 increased to 1.4 million compared to approximately 778,000 in quarter one of 2025. This increase was primarily driven by the generation of staking revenue and digital lending interest income from our SUI digital asset treasury strategy, which had not yet commenced in the first quarter of 2025. Our first quarter 2026 results include approximately $71 million of non-cash losses on digital assets and receivables. The unrealized loss reflects mark-to-market adjustments driven primarily by a decline in the price of SUI during the period. The realized loss relates to the transfer of SUI tokens to Galaxy Digital in its capacity as our asset manager, resulting in the recognition of the assets and recognition of the difference between carrying value and fair value at the time of transfer. These US GAAP required accounting treatments reflect changes in estimated fair value and strategic deployment of digital assets and do not represent an actual cash outflow or impact our liquidity. As a result, total operating expenses, including net realized and unrealized gain on investments in quarter one, 2026 were $61.1 million compared to approximately $217,000 in quarter one, Excluding the aforementioned unrealized and realized non-cash losses on digital assets and stock-based compensation, operating expense for the first quarter of 2026 were $5.6 million. Net loss for the first quarter of 2026 was $71 million or 88 cents per diluted share compared to net income of approximately $452,000 or 7 cents per diluted share in the quarter one, 2025. As of March 31, 2026, cash and cash equivalents were $15 million compared to 21.9 million as of December 31st, 2025. This concludes our prepared remarks. We will now open it up for questions from those participating in the call. Operator, back to you.

Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up their handset before pressing the star keys. One moment, please, while we poll for questions. Our first question comes from the line of Brian Kesslinger with Alliance Global Partners. Please proceed with your question.

Hi, guys. Thanks for taking my questions. First, a couple of numbers questions, if I could. Could you tell us at the end of the quarter what cash was, what the first quarter cash used from operations and the share count was?

Hey, Brad and Marissa. Yeah. um the share count including pre-funded uh warrants is approximately 80.9 million shares uh total cash including all stable coins was approximately 15 million dollars um and income from operations was approximately 1.6 million dollars

That was 1.6 million was the, sorry, 1.6 million. So when you add, you're saying when you add back the unrealized losses, it was an income of $1.6 million.

The unrealized, the 1.6 million was separate to the unrealized losses. Yeah. That was from income derived from staking and from the specialized finance business. Got it. Okay.

And then can you discuss any developments either on Google's AP2 or any other exciting development activity that is either already improving transaction volumes on the SWE blockchain or that you expect to?

Hi, Brian. This is Steven. I can answer that question. So I think at, you know, SUI Live today in Miami, Adeni, the chief product officer of SUI, announced a really compelling vision for how SUI is going to be the home of agentic finance. And there are a few really interesting developments that are related to your question. The first was, you know, Adeni's keynote introducing payment intents, which is really exciting. This is about tackling really complex atomic transactions on chain, which is very different from like the crypto UX that we have today where users must kind of choose chains, bridge assets, hold gas, understand swaps, manage slippage. find various transactions. You know, payment intent removes this complexity entirely. And the inspiration for payment intent comes from the team's background at Facebook. WhatsApp made messaging free for everyone around the world. And Sui wants to do the same with payments, for payments to be free and to be really scalable everywhere in the world. So they introduced payment intent. And why this is agents is because you can really scale a machine readable economic layer that, as I mentioned, kind of deals with atomic transactions through Sui's novel architecture and programmable transaction blocks. and allows for verifiability using a very core kind of infrastructure development that was also released in the past couple of weeks, which was called MWOL, which is related to the Walrus Protocol. And this is a really exciting development that is specifically designed targeted on genetic workflows. And it kind of lives within the Walross flagship decentralized data storage protocol built on the SUI network. And it allows for context and reasoning retention, multi-agent collaboration, and most importantly, verifiable and programmable data such that, you know, agents can use storage to really scale complex agentic workflows. I, you know, did notice a lot of very interesting industry partners like the Google team that were there today and, you know, development is continuing and it's a very exciting time.

Great. Last, I know your goal is to increase the yield Maybe you can provide a pipeline on what kind of deals you're reviewing. Are there dozens? Are there only a couple? And maybe what you hope to exit 2026, what the yield might look like.

Yeah, so look, broad merits there. um that's an interesting question so first of all let's just deal with d5 at the moment um it's well documented there's been over i believe 18 d5 protocols which have had hacks or have been penetrated in the last few weeks so we feel that you know having spoken deeply with the market and the whole sui team this is across all different protocols the major hacks were on uh on rba and drift which are EVM-based protocols. There's definitely a notion here where hackers and nefarious actors are learning to use AI to identify potential breaches across the way. We took the precaution to remove all our SUI that were in DeFi ecosystems directly onto DeFi protocols. out of an abundance of caution as we don't want any losses here for extra yield. We've always taken a risk-based approach here. So that we did over the last few weeks and we did immediately as soon as we saw these hacks coming through. We expect to end the year at approximately 3% to 4%. We had planned to end the year probably slightly higher um but we there have been you know significant changes in the d5 ecosystems at the moment and we uh we're constantly monitoring that uh from a yield perspective great i think from an investment perspective uh from an investment perspective we are constantly looking at uh different investments i think the bluefin uh land that we did was very well structured and we continue to an excellent yield out of that land and we're looking to advance uh a few other lens on that basis so we hope to announce a few things in the coming quarters of similar types of transactions um and then we are looking at making um some equity investments, which will not be material in terms of the greater balance sheet, but we believe that could move the needle. And those relate to the, you know, in the AI sector, which we believe is the greatest unlock for blockchains. Great. Thanks, Stephen.

Thanks, Marius.

Thank you. Our next question comes from the line of Devin Ryan with Citizens Bank. Please proceed with your question.

Hey, guys. Neo Elof on here for Devon. Would kind of, I guess, love to talk about just what you were mentioning on partnerships. Do you guys give us some more insights on maybe how you decide on these partnerships and what kind of goes into that decision-making process? And then, I guess, beyond, I guess, the AI target, are there any other, like, specific parts of the chain that you're looking to invest in, whether that be loans or...

of various other aspects yeah sure so i think first of all when we look at passion partnerships the fundamental is risk right looking at the risk how much risk we're taking what the risk of losses are what the risk of you know the right risk reward profile is and how it fits strategically into the uh business on a long-term basis So, you know, where are we looking at loans? We're constantly looking at loans, but we've taken a risk-based approach. We still do have some institutional loans to institutional clients where we've taken counter-party risk and that are not in the DeFi ecosystems. And those continue to yield well. And we've even, with some of them, got parent guarantees where we lower the rate. So it's always on a risk-based approach. And we continue to look to expand that part of the business. From an equity investment perspective, I think we're looking at things that are being built in the ecosystem, but I think there are four main sectors that we're looking at. One, AI, two, stable coins, three, prediction markets, and four, real world tokenization. I think that those are going to be the four main areas that advance and are key fundamentals of the blockchain sector going forward. In terms of how we invest, we're obviously looking for things that are going to, you know, be bold and going to not just another protocol that's going to be there. So I think, you know, in AI, we're looking at not only investing in AI, but investing in companies that are AI-centric and we can even bring them to blockchain and they can build on the blockchain and how they integrate with the blockchain. So looking, you know, into the future and how that can evolve because we've always felt that long-term investment the promise of the sector is that there's not Web 3 and Web 2, that it's another technology and how it's integrated into the real world together.

Thanks. Maybe I guess the second question just related to policy. Obviously, kind of the big movement is the Clarity Act. So just if you guys give us some thoughts on how you expect that to be a catalyst maybe for the industry and for SUI particularly. Yeah.

Steve, do you want to answer that? Yeah. Hi, this is Stephen. I can answer that question. So I think, you know, the industry is definitely, you know, anticipating a really huge kind of development with clarity passing the Senate Banking Committee. And I do believe it's kind of a matter of kind of the industry pulling together and getting it signed while there's an opportunity now and not for it to be kind of pushed out into the future. I believe that there's huge institutional participation coming from asset managers, from the sell side investment banks. And I experienced that specifically in the form of Bitcoin Hashi. So Bitcoin Hashi is a really exciting protocol that was introduced by the SUI team this year. It's basically for, you know, institutions and qualified custodians to, you know, essentially put their Bitcoin to work by using NPC technology and ZK technology on the SUI blockchain and the SUI validator set running actually, you know, a Bitcoin-like client and node such that stablecoins can be minted against. Bitcoin holdings in qualified custody. And the amount of institutional participation that I've seen for this particular protocol, which is trying to really tackle the fact that only 1% of Bitcoin is used in DeFi through wrapped Bitcoin, which is also not just a security issue, but is also a taxable event. And so the Bitcoin Hashi introduction, that was really well received by the institutional community and continues to be you know, eagerly anticipated here, for example, at SUI Live in Miami is a testament to the anticipation that many stakeholders in the industry have around clarity. I think that in regard to kind of price appreciation, in the token you know following the kind of liquidation cascade of 1010 last year and also with the Bitcoin price kind of peaking in October um and many of the kind of the four-year cycle believers there is definitely um some expectation that that altcoins and Bitcoin um can reprice to the upside at some point in 2026 but I think that it might take you know a couple of months for us to start building momentum. So, you know, we're kind of cautiously optimistic. But, you know, we look at all the data and all the right signals to kind of make, you know, interesting investments from the CBG balance sheet.

Awesome. Appreciate it, guys. Thanks.

Thank you. And we have reached the end of the question and answer session. And this also concludes today's conference. You may disconnect your lines at this time, and we thank you for your participation. Thank you, and have a great day.