SUI Group Holdings Ltd.SUIGEarnings & Financial Report

We presently do not engage third parties to assist us with the assessment, identification or management of cybersecurity risks, or in evaluating the effectiveness of our existing approaches.

We are unaware of any material cybersecurity breaches during the year ended December 31, 2024, and given that we rely on relatively few and well known well capitalized larger third-party enterprises for certain of our data and information storage and communication needs, we do not believe that an overall material cybersecurity risk presently exists for our business.

ITEM 2 PROPERTIES Our executive offices are located at 1907 Wayzata Boulevard, Suite 205, Wayzata, Minnesota 55391, and our telephone number is: (952) 479-1923. We are party to an operating lease for office space expiring May 31, 2025.

The lease does not have significant lease escalations, rent abatements or concessions, leasehold improvements, or other build-out clauses; and they do not contain contingent-rent provisions. The lease does not include options to renew. We consider our current office space adequate for our current operations.

ITEM 3 LEGAL PROCEEDINGS There is no material litigation, arbitration or governmental proceeding currently pending against us or any members of our management team in their capacity as such. 15 Table of Contents PART II ITEM 5 MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is listed for trading on the Nasdaq under the symbol “MCVT”.

The transfer agent and registrar for our common stock is Pacific Stock Transfer Company, 6725 Via Austi Parkway, Suite 300, Las Vegas, NV 89119. The following table sets forth the high and low bid prices for our common stock as reported on the Nasdaq Capital Market.

Period Market Price (High/Low) 2024 Market Price (High/Low) 2023 First Quarter $ 2.27 – 3.01 $ 2.54-2.02 Second Quarter $ 2.50 - 3.01 $ 2.44 – 2.17 Third Quarter $ 2.25 – 3.56 $ 3.58 – 2.09 Fourth Quarter $ 1.79 – 2.26 $ 3.59 – 2.22 Holders As of the date of this filing, we had approximately 180 holders of record of our common stock and shares held in street name by approximately 655 non-objecting beneficial owners.

Dividends We do not expect that the Board of Directors will declare any cash dividends in the foreseeable future.

Securities Authorized for Issuance Under Equity Compensation Plans Plan category Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted-average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (a) (b) (c) Equity compensation plans approved by security holders 670,000 $ 2.11 30,000 Equity compensation plans not approved by security holders — — — Total 670,000 $ 2.11 30,000 16 Table of Contents The securities reflected in column (a) above were issued pursuant to the company’s 2022 Stock Incentive Plan.

Recent Sales of Unregistered Securities In November and December 2022, the Company issued options for the purchase of an aggregate of 870,000 shares of common stock to officers, directors and employees of, and consultants to, the Company contemporaneously with the adoption of a 2022 Stock Incentive Plan.

These option grants were made subject to subsequent shareholder approval of the 2022 Stock Incentive Plan in accordance with Nasdaq rules. The options were granted pursuant to Section 4(a)(2) of the Securities Act of 1933 and other applicable exemptions.

The shareholders of the company subsequently approved the 2022 Stock Incentive Plan on January 20, 2023 at a special meeting of shareholders called for that purpose. Options for 200,000 of these common shares were subsequently exercised, and the common shares issued, in September 2023. No options were exercised in 2024.

ITEM 7 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Our Management’s Discussion and Analysis of Financial Condition and Results of Operations set forth below should be read in conjunction with our audited financial statements, and notes thereto, filed together with this Form 10-K.

Cautionary Note Regarding Forward-Looking Statements Certain statements in this report may constitute “forward-looking statements” for purposes of federal securities laws. Our forward-looking statements include, but are not limited to, statements regarding our or our management team’s expectations, hopes, beliefs, intentions or strategies regarding the future.

In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements.

The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.

The forward-looking statements contained in this report are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated.

These forward-looking statements involve a number of risks, uncertainties or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements.

These risks and uncertainties include, but are not limited to, those factors described in the “Risk Factors” section of this report and those summarized below: · our being a company with little operating history; · our ability to select appropriate specialty finance investment opportunities; · our expectations around the performance of borrowers in which we invest; · our regulatory structure and the regulations that govern us; · the ability of significant borrowers to pay their obligations to us as they come due; · our success in retaining our officers and directors, or replacing them in the event we lose their services; · actual and potential conflicts of interest involving our directors or management team; · our ability to obtain additional financing, if needed and on acceptable terms; · our ability to source quality prospective borrowers for our specialty finance solutions; · our ability to consummate transactions due to the uncertainty resulting from unpredictable events such as terrorist attacks, natural disasters or other significant outbreaks of infectious diseases; · the dependence of our success on the general economy and its impact on the industries in which we invest; · the ability of our portfolio companies to achieve their objectives; · the adequacy of our cash resources and working capital; · the timing of cash flows, if any, we receive from our investments; · our overall financial performance and financial condition following this offering; · our public securities’ potential liquidity and trading price; · the lack of a market for our securities; and · the other risks and uncertainties discussed in “Risk Factors” and elsewhere in this report. 17 Table of Contents Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in our forward-looking statements.

We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

Results of Operations For the Year Ended December 31, 2024 2023 Investment Income: Interest Income $ 3,301,119 $ 3,298,635 Operating Expenses: General Operating Expenses 92,214 149,708 Legal and Accounting Expenses 550,248 761,525 Payroll 933,157 1,848,393 Insurance Expense 99,936 108,039 Director’s Fees 300,000 772,968 Interest Expense 320 78,000 Total Operating Expenses 1,975,875 3,718,633 Net Investment Gain (Loss) $ 1,325,244 $ (419,998 ) For the year ended December 31, 2024, we earned $2,758,744 from 10 different short-term loans; and an aggregate of $542,375 in related origination fees.

For the year ended December 31, 2023, we earned $2,836,060 from 26 different short-term loans; and an aggregate of $462,575 in related origination fees. As the table above indicates, we incurred operating expenses aggregating $1,975,875 for the year ended December 31, 2024, and $3,718,633 for the year ended December 31, 2023.

A summary of the various components of our operating expenses for these periods is set forth below. General Operating Expenses. Our general operating expenses were $92,214 for the year ended December 31, 2024 and $149,708 for the year ended December 31, 2023.

The decrease in the current period results primarily from higher fees we incurred in 2023 for the unused portion on our line of credit (see Liquidity and Capital Resources below for more information). Legal and Accounting Expenses. Our legal and accounting expenses were $550,248 for the year ended December 31, 2024 and $761,525 for the year ended December 31, 2023.

The decrease in the current period results primarily to a decreased need for legal and consulting services, and the decision to spend less on marketing. 18 Table of Contents Executive Management Compensation. Our executive management compensation was $933,157 for the year ended December 31, 2024 and $1,848,393 for the year ended December 31, 2023.

The decrease in the current period results from the absence of any stock-based compensation expense in the current period. Director’s Fees. Our director’s fees were $300,000 for the year ended December 31, 2024 and $722,968 for the year ended December 31, 2023.

The decrease in the current period is results from the absence of any stock-based compensation expense in the current period. Interest Expense. Our interest expense was $320 for the year ended December 31, 2024 and $78,000 for the year ended December 31, 2023.

The decrease in the current period results from our repayment in full and termination of the line of credit arrangement in January 2024. (see Liquidity and Capital Resources below for more information). For the year ended December 31, 2024 our net investment gain was $1,325,244. For the year ended December 31, 2023, our net investment loss was $419,998.

The increased net investment gain during 2024 results primarily from the absence of stock-based compensation expense in 2024 compared to significant stock-based compensation expense in 2023 from the issuance of stock options to our officers and directors. Financial Condition At December 31, 2024, we had an increase in net assets of $1,167,726 as compared to December 31, 2023.

This increase in net assets was primarily due to the overall reduction in operating expenses. Our net assets increased by $718,703 at December 31, 2023 as compared to December 31, 2022, due to the capitalized issuance and exercise of stock options, partially offset by the decrease in the fair value of our investments and reduced cash and cash equivalents.

Liquidity and Capital Resources Summary cash flow data is as follows: For the Year Ended December 31, 2024 2023 Cash flows provided (used) by: Operating activities $ 5,650,086 $ (1,137,617 ) Financing activities — 424,000 Net increase (decrease) in cash 5,650,086 (713,617 ) Cash, beginning of period 376,024 1,089,641 Cash, end of period $ 6,026,110 $ 376,024 On January 3, 2022, we entered into a Loan and Security Agreement (the “Loan Agreement”) with Eastman Investment, Inc., a Nevada corporation, and Lyle A.

Berman, as trustee of the Lyle A. Berman Revocable Trust. The Loan Agreement provided us with a $5 million revolving line of credit to use in the ordinary course of our short-term specialty finance business.

Amounts drawn under the Loan Agreement accrued interest at the per annum rate of 8%, and all our obligations under the Loan Agreement were secured by a grant of a collateral security interest in substantially all of our assets. In January 2024, we terminated the Loan Agreement after having earlier satisfied all amounts thereunder.

Any applicable fees for early termination of the Agreement were waived. During the course of 2023, the Loan Agreement, together with our cash and cash equivalents, were our primary sources of liquidity. With the termination of the Loan Agreement, however, our cash and cash equivalents are our remaining sources of liquidity.

In addition, we expect that some of our investment positions will mature, resulting in additional available cash. Management believes that these sources of liquidity, will be sufficient for the Company to fund its operations through the entirety of fiscal 2025.

Accordingly, at present we have no definitive plans to obtain other sources of liquidity through borrowing or otherwise. 19 Table of Contents Investment Activity In 2024, we made new investments aggregating $5,665,526, and refinanced or otherwise extended the term to maturity of investments aggregating $17,795,000.

Of these amounts, $5 million in principal amount was initially loaned to Mustang Funding, LLC in 2023, while another $5 million in principal amount (earlier been loaned in 2022) was refinanced, such that we had an aggregate of $10 million invested in Mustang Funding, LLC at December 31, 2024, all of which is currently due to mature at March 28, 2027.

In 2024, we also recognized as worthless one of our preferred stock investments. This investment had been de-valued in previous years by $635,000, and we recognized an additional loss in 2024 of $265,000. We also settled through litigation on one of our short-term loans and recognized a loss of $100,000.

This was offset by $500,000 of valuation losses recorded in prior years, resulting in a net gain of $400,000 in 2024.

The write-offs were offset by an increase in market valuations of our remaining short-term loan portfolio as well as market changes in our common stock and other equity holdings, resulting in a net change in unrealized depreciation of $1,029,277 as reflected in the statement of operations.

Capital Expenditures We did not have any material commitments for capital expenditures in fiscal 2024 and we do not anticipate any such capital expenditures for fiscal 2025.

Off-Balance Sheet Arrangements We do not have any off-balance sheet arrangements, nor are we a party to any contract or other obligation not included on its balance sheet that has, or is reasonably likely to have, a current or future effect on our financial condition.

Critical Accounting Policies Critical accounting policies are policies that are both most important to the portrayal of the Company’s financial condition and results, and that require management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.

Our critical accounting policies relate to investment valuation and interest and dividend income as an investment company. Investment Valuation Investment transactions are recorded on the trade date.

Realized gains or losses are measured by the difference between the net proceeds from the repayment or sale and the amortized cost basis of the investment without regard to unrealized gains or losses previously recognized, and include investments charged off during the period, net of recoveries.

Unrealized gains or losses primarily reflect the change in investment values, including the reversal of previously recorded unrealized gains or losses when gains or losses are realized. Investments for which market quotations are readily available are typically valued at such market quotations.

In order to validate market quotations, we look at a number of factors to determine if the quotations are representative of fair value, including the source and nature of the quotations.

Debt and equity securities that are not publicly traded or whose market prices are not readily available are valued at fair value as determined in good faith by our Board of Directors, based on, among other things, the input of our executive management, the Audit Committee of our Board of Directors and any independent third-party valuation expert that may be engaged by management to assist in the valuation of our portfolio investments.

Valuation determinations are in all cases made in conformity with the written valuation policies and procedures respecting the valuation of company investments. Use of Estimates Our financial statements are prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP.

The application of GAAP requires that we make estimates that affect our reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of investment income and expenses during the reporting period.

We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. We evaluate our estimates and assumptions on an ongoing basis.

Our actual results may differ significantly from these estimates. 20 Table of Contents ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Item Page Reports of Independent Registered Public Accounting Firm (PCAOB ID: 542) F-2 Balance Sheets — December 31, 2024 and December 31, 2023 F-4 Statements of Operations — Years ended December 31, 2024 and December 31, 2023 F-5 Statements of Shareholders’ Equity — Years ended December 31, 2024 and December 31, 2023 F-6 Statements of Cash Flows — Years ended December 31, 2024 and December 31, 2023 F-7 Investment Schedules — December 31, 2024 and December 31, 2023 F-8 Notes to Financial Statements F-10 F-1 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Shareholders’ of Mill City Ventures III, Ltd.

Opinion on the Financial Statements We have audited the accompanying balance sheets of Mill City Ventures III, Ltd.

(the Company) as of December 31, 2024 and 2023, including the investment schedules and the related statements of operations, shareholders’ equity, and cash flows for each of the years in the two-year period ended December 31, 2024, and the related notes (collectively referred to as the financial statements).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Emphasis of Matter – Investment Valuation As explained in Note 6 to the financial statements, the accompanying financial statements include investments valued at $13,006,231 and $17,284,676 as of December 31, 2024 and 2023, respectively, whose fair values have been estimated by management in absence of readily determinable fair values.

Such estimates are based on financial and other information provided by management of its portfolio companies and pertinent market and industry data. The investments are valued based on unobservable inputs as of December 31, 2024 and 2023.

Because such valuations, and particularly valuations of private investments and private companies, are inherently uncertain, they may fluctuate significantly over short periods of time. These determinations of fair value could differ materially from the values that would have been utilized had a ready market for these investments existed.

Critical Audit Matters The critical audit matters communicated below are matters arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgements.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

F-2 Table of Contents Valuation of investments which utilize significant unobservable inputs Description of the Matter At December 31, 2024, the balances of the Company’s investments, at fair value, categorized as Level 3 within the fair value hierarchy totaled $13,006,231.

The fair values of these investments are determined by management using the valuation techniques and significant unobservable inputs described in Notes 5 and 6 to the financial statements.

Auditing the fair value of the Company’s investments categorized as Level 3 within the fair value hierarchy was complex and involved a high degree of auditor subjectivity and judgement due to the estimation uncertainty resulting from the unobservable nature of the inputs used in the valuations and the limited number of comparable market transactions for the same or similar investments.

How We Addressed the Matter in Our Audit We obtained an understanding and evaluated the design of controls over the Company’s valuation process, including management’s assessment of the significant inputs and estimates used in the fair value measurements.

We performed the following procedures, among others, for the Company’s Level 3 investments: · We evaluated the valuation techniques used by the Company and considered the consistency in application of the valuation techniques to each subject investment and investment class. · We assigned senior, more experienced audit team members to perform audit procedures related to the valuation of investments. · We evaluated the reasonableness of the significant unobservable inputs by comparing the inputs used by the Company to third-party sources, if available, such as market indexes or other market data. · We considered the other information obtained during the audit that corroborated or contradicted the Company’s inputs or fair value measurements. · For investments sold during the year or subsequent to year-end, we compared the transaction price to the Company’s fair value estimate to assess the reasonableness of management’s fair value estimates. /s/ Boulay PLLP We have served as the Company’s auditor since 2019.

Minneapolis, Minnesota March 7, 2025 F-3 Table of Contents Mill City Ventures III, Ltd.

Balance Sheets December 31, 2024 December 31, 2023 ASSETS Investments, at fair value (cost: $13,717,089 and $18,577,481, respectively) $ 13,453,561 $ 17,284,676 Cash 6,026,110 376,024 Note receivable, related party — 250,000 Prepaid expenses 31,848 165,301 Interest and dividend receivables 191,917 264,413 Right-of-use operating lease asset — 9,283 Deferred taxes 770,000 757,000 Total Assets $ 20,473,436 $ 19,106,697 LIABILITIES Accounts payable $ 41,105 $ 71,702 Accrued payroll liabilities 527,142 435,449 Operating lease liability — 9,283 Accrued income tax 147,200 — Total Liabilities 715,447 516,434 Commitments and Contingencies SHAREHOLDERS EQUITY (NET ASSETS) Common stock, par value $0.001 per share (111,111,111 authorized; 6,385,255 issued and outstanding) 6,385 6,385 Additional paid-in capital 15,473,121 15,473,121 Additional paid-in capital - stock options 1,460,209 1,460,209 Accumulated deficit (1,159,665 ) (1,159,665 ) Accumulated undistributed investment loss (152,389 ) (1,052,183 ) Accumulated undistributed net realized gains on investment transactions 4,393,855 5,155,200 Net unrealized depreciation in value of investments (263,527 ) (1,292,804 ) Total Shareholders’ Equity (Net Assets) 19,757,989 18,590,263 Total Liabilities and Shareholders’ Equity $ 20,473,436 $ 19,106,697 Net Asset Value Per Common Share $ 3.09 $ 2.91 The accompanying notes are an integral part of these financial statements.

F-4 Table of Contents Mill City Ventures III, Ltd.

Statements of Operations Year Ended December 31, 2024 December 31, 2023 Investment Income Interest income $ 3,301,119 $ 3,298,635 Total Investment Income 3,301,119 3,298,635 Operating Expenses Professional fees 550,248 761,525 Payroll 933,157 1,848,393 Insurance 99,936 108,039 Occupancy 50,125 68,421 Director’s fees 300,000 772,968 Interest expense 320 78,000 Other general and administrative 42,089 81,287 Total Operating Expenses 1,975,875 3,718,633 Net Investment Gain (Loss) 1,325,244 (419,998 ) Realized and Unrealized Gain (Loss) on Investments Net realized loss on investments (761,345 ) (558,629 ) Net change in unrealized appreciation (depreciation) on investments 1,029,277 (641,433 ) Net Realized and Unrealized Gain (Loss) on Investments 267,932 (1,200,062 ) Net Increase (Decrease) in Net Assets Resulting from Operations Before Taxes 1,593,176 (1,620,060 ) Provision For (Benefit From) Income Taxes 425,450 (454,554 ) Net Increase (Decrease) in Net Assets Resulting from Operations $ 1,167,726 $ (1,165,506 ) Net Increase (Decrease) in Net Assets Resulting from Operations per share: Basic $ 0.18 $ (0.19 ) Diluted $ 0.18 $ (0.19 ) Weighted-average number of common shares outstanding - basic 6,385,255 6,249,913 Weighted-average number of common shares outstanding - diluted 6,492,275 6,249,913 The accompanying notes are an integral part of these financial statements.

From our inception until December 13, 2012, we were a development-stage company involved in the gaming and entertainment industry. In 2013, we elected to become a business development company (“BDC”) under the Investment Company Act of 1940 (the “1940 Act”). We operated as a BDC until we withdrew our BDC election on December 27, 2019.

Since that time, we have engaged in the business of providing short-term specialty finance solutions primarily to private businesses, micro- and small-cap public companies and high-net-worth individuals.

To avoid again becoming subject to regulation under the 1940 Act, we generally seek to structure our short-term loans such that they do not constitute “securities” under federal securities law, and we monitor our holdings as a whole to ensure that no more than 40% of our total assets may consist of “investment securities,” as that term is defined and understood under the 1940 Act.

The principal specialty finance solutions we provide are high-interest short-term lending arrangements. Typically, these lending arrangements involve us obtaining collateral as security for the borrower’s repayment of funds to us, the right to seek and obtain such collateral, or personal guarantees from the principals or affiliates of the borrower.

In some circles, short-term high-interest collateralized lending is referred to as “hard-money lending.” We believe we are generally able to charge high interest for our specialty finance solutions because: (i) banks and other traditional providers of credit may have neither the expertise nor the infrastructure needed to evaluate creditworthiness and risks in a timeframe suitable for a potential borrower, preferring instead to process transactions and structures that present few novel issues or risks; and (ii) we will often be able to devote time and attention to transactions involving a smaller dollar amount than an institutional lender will view as worthwhile.

These beliefs essentially explain why we refer to our business as “specialty finance”— financing that may involve structures that are unique, creative, and often bespoke; and that may involve dollar amounts that are not suitable for institutional lenders. We generally seek to provide specialty finance solutions that are short-term in nature.

By this, we mean lending arrangements that mature or come due within nine months of the lending date. We view the provision of short-term finance as desirable for two principal reasons: (i) it helps minimize the risk of non-performance; and (ii) it helps minimize regulatory risk.

In terms of non-performance risk, short-term lending requires us to focus upon, and a potential borrower to identify to us, a near-term source of liquidity for repayment of the funds they borrow from us.

This permits us to evaluate that source of repayment clearly and carefully, thus helping identify the potential risks involved in a particular transaction and how we may be able to include structural terms, such as specific collateral and collateral-related arrangements, guarantees, or other types of covenants or arrangements that mitigate those risks.

In terms of regulatory risk, we believe that short-term lending permits us to avail ourselves of a court-recognized exception for treating promissory notes (evidencing a loan) as “securities” under federal securities law. This exception generally applies to promissory notes with short-term maturities of nine months or less.

Our ability to avail ourselves of this exception, and to more generally structure our transactions in such a way to avoid them being properly considered as “securities” under federal securities laws, is important because we believe that it enables us to avoid once again becoming subject to regulation under the 1940 Act.

Below we discuss in further detail our process for evaluating transactional terms and structures with a view to remaining outside of the regulatory regime of the 1940 Act (please refer to “Investment Process” below).

Examples of the kinds of the specialty finance solutions we have considered or provided to date, and may continue to provide in the future, include: · Short-term secured loans for real estate development; · Short-term unsecured loans (with an option to acquire collateral security) to a business; · Short-term secured loans to a business for operating capital; and · Short-term secured loans to an individual owed a forthcoming tax refund 3 Table of Contents In addition, we occasionally explore and evaluate our ability to enter into other kinds of short-term specialty finance transactions.

Examples include the expansion of our efforts to purchase adjudicated settlements, the purchase (at discounted rates) of receivables owing to professionals on account of certain workers’ compensation claim, and short-term consumer finance lending.

Sourcing Transactions We believe that our management’s strong combination of experience and contacts in the securities and investment finance sector, including the experience and contacts of our independent directors, should be sufficient to continue attracting suitable prospective investment opportunities.

To date, the network of contacts of our management and directors has been successful in sourcing all of the transactions in which we have participated. Accordingly, we presently do not have any plans to hire any business development professionals to assist us with transactional volume.

Competition The market for specialty finance is competitive, largely as a result of the participation of various types of professionally managed pooled investment funds such as private equity and private credit funds, including secured, non-secured debt and mezzanine-debt funds, and other types of professional finance companies seeking the high returns that are possible in specialty finance and hard-money lending.

Nevertheless, we believe we are well positioned to compete successfully in this market because of our entrepreneurial, creative and flexible approach to specialty finance opportunities, and our management’s experience in entrepreneurial ventures and finance.

Throughout our history and in particular after ceasing to be a BDC, we have approached investment opportunities flexibly and creatively in terms of transactional structures and terms. In part, we are able to be flexible and creative because we are not subject to many of the regulatory restrictions that govern our other more traditional or institutional competitors.

Those competitors are often subject to limitations on the type transactions they undertake, the amount that may be invested in a specific transaction or a particular type of transaction, the markets in which they operate, the maturity or time horizon of their investment, uses of proceeds, or otherwise.

These limitations are often imposed by the agreements and documents governing the pooled investment vehicles, or otherwise self-imposed in order to facilitate the investment vetting and due-diligence process, and the documentation and structuring process. More rarely, these limitations may arise from governing regulations or interpretations thereof.

For our part, we believe that approaching investment opportunities flexibly expands our overall transactional opportunities, diversifies our risk by avoiding dependence in any material way on a particular borrower, type of transaction, or market or industry niche, and permits us to avail ourselves of the maximum number of relationships from which we source investment opportunities.

Moreover, we believe that this flexible approach to structuring our transactions and investments will facilitate the development of positive long-term relationships with our borrowers. We believe that the only significant limitation on our ability to flexibly structure transactions arises from our desire to remain outside the regulation of the 1940 Act.

In order to meet this goal, we intend and aim to structure the vast majority of our transactions (by dollar amount) in ways such that they are not properly considered “securities” under federal securities laws, including the 1940 Act.

For our investors, the freedom afforded to us through the lack of substantive regulation governing the types of transactions we enter into and our methods of operation permits us to allocate our resources, at any given point in time, to those types of transactions that we believe may lead to the highest risk-adjusted returns or the steadiest stream of such returns.

Our management team and Board of Directors has significant experience in a variety of entrepreneurial ventures, including service as management and directors for small and large public companies, private businesses, start-up and development-stage businesses, and the securities and finance industries.

As a result of this diverse general experience and particular experience in transactional finance, we believe we are able to manage the evaluation and due-diligence process involved in our investment opportunities swiftly and efficiently, by collaborating with our professional advisers and focusing on high-level and material issues. 4 Table of Contents Other Matters In general, we do not believe that we are dependent in any material way on any particular borrower, type of specialty finance transaction, or industry.

At this time, however, we have a significant amount invested in a particular borrower, Mustang Funding, LLC (a provider of litigation finance), as a result of a potential strategic combination transaction that was ultimately abandoned in August 2024.

The failure of this combination transaction to occur resulted in our need to restructure our loan to Mustang Funding in a way that ensured the maximum collateral security we could reasonably obtain, consistent with prevailing market-based commercial lending terms, while acceding to the requirements of their senior lender in respect of a subordination and intercreditor agreement and an extension of the maturity date for our loan.

We do not own or use through license any patents, trademarks, or other intellectual properties and we do not believe that any such assets would be material to our business. Sometimes the types of transactions we engage in are governed by particular laws, regulations, or rules.

For example, lending transactions in which high-net-worth individuals (as opposed to entities) are the borrower will nearly always involve state law usury limitations. Transactions in which we seek and obtain collateral as security for obligations owed to us involve legal issues arising under the Uniform Commercial Code or its various state law iterations.

To date, we have not engaged in transactions that require us to obtain licensure or a permit prior to entering into the transaction—e.g., brokering transactions or engaging in licensed consumer finance activities.

Pending the consummation of transactions and deployment of cash, we generally keep the majority of our assets in cash, cash equivalents such as money-market investments, U.S. government securities or high-quality debt securities maturing in one year or less from the time of investment.

Our Investment Process We have identified several criteria that we believe are important general guidelines for us to meet our financial objectives. These criteria are, however, only general guidelines for our investment decisions and, in the case of some transactions in which we invest, fewer than all—or even none—of these criteria will be met. · Existing Liquidity Source .

Because the vast majority of our transactions involve short-term maturities, we typically seek to identify a liquidity source for the borrower to repay us.

Examples of sources of potential liquidity may include accounts receivable, another valuable asset, or a pending payment (e.g., a tax refund, or a litigation judgment or settlement payment) or pending transaction, that is reasonably expected to close and pay out prior to the maturity of the credit we provide. · Collateral Value .

We will often, but not always, seek to collateralize the obligations owing to us. Our ability to identify valuable collateral is a significant factor in our credit analysis and determination of the attractiveness of a potential transaction.

This analysis will often involve legal counsel, both to assist in the identification of potential collateral assets, and to better understand the ease with a security interest in the collateral may be granted, perfected and, if necessary, foreclosed upon and the relevant jurisdiction(s) involved. · Experienced and Capable Management .

In transactions involving business borrowers, we seek businesses that have an experienced, knowledgeable and capable management team. · Competitive Position . In transactions involving business borrowers, we will seek to invest in transactions with businesses that have developed, or appear poised to develop, a strong competitive position within their respective industry sector or niche. · Cash Flow .

In transactions involving business borrowers, we will seek to invest in businesses that are profitable or nearly profitable on an operating cash flow basis, principally so that the business’ operating cash flow may serve as another source of liquidity from which we may ultimately be repaid. 5 Table of Contents If we believe a potential transaction generally meets the characteristics described above or if we otherwise determine that a potential transaction may be desirable to enter into, we may perform a more rigorous due-diligence examination of the prospective borrower, the likely source or sources of liquidity for their repayment to us, and other aspects of the borrower or its assets (e.g., assets of the borrower that may serve as collateral security for the obligations that may be owing to us).

Our due-diligence examination for each transaction will necessarily be unique and tailored to the specific transaction, but will generally be undertaken in light of the following facts and circumstances: · our familiarity with the borrower (or, in the case of a business borrower, our familiarity with management or other persons such as directors involved with the borrower); · in the case of a business borrower, our review and assessment of the potential borrower’s financing history, overall capitalization, existing senior and secured lending positions, existing affiliated lending positions, as well as the likely need for additional financings after our transaction; · the industry in which the borrower operates, our knowledge and familiarity with that industry, our assessment of the complexity of the business, any regulatory matters or other unique aspects presenting special risks, and the competitive landscape faced by the borrower; · the amount of dollars involved in the potential transaction; · where the borrower is located, how it is organized as an entity, as well as its management and ownership structure and profile; · whether we might have been involved with a transaction of the same or similar kind before; · the ease with which we can evaluate the borrower’s source or sources of liquidity; · the ease with which we can apprehend the process involved with taking collateral security in some or all of the borrower’s assets; and · the ease with which we could realize on that collateral if repayment were not otherwise forthcoming.

The assessments described above outlines our general approach for our investment decisions, although not all of such activities will be followed in each instance, or some may be stressed more so than others depending on facts and circumstances.

Upon successful completion of this preliminary evaluation, we will typically (1) evaluate our own regulatory concerns (i.e., to what extent the potential transaction may properly be considered an investment in a “security” for purposes of the 1940 Act and, if necessary, consider alternative structures to alleviate any risks to our company relating thereto), and (2) decide whether to move forward towards negotiating a letter of intent and, thereafter, definitive documentation for our transaction.

Depending on timing, we may not use a letter of intent and will instead proceed directly to definitive documentation.

As indicated above, to avoid becoming subject to the regulatory requirements of the 1940 Act, we monitor our investment holdings as a whole with a view towards ensuring that investments and other holdings which may be considered “investment securities” do not comprise more than 40% of our total assets.

We undertake this analysis (1) at least on a quarterly basis and in connection with the review and preparation of our financial statements filed as part of our quarterly and annual reports with the SEC, and (2) at other times when we are considering how to structure a new transaction that is of a significant size—with “significance” largely based on the outcome of our most recent quarterly review.

This review is generally undertaken by our Chief Financial Officer and may involve our outside legal counsel, in particular in a case where we are considering the structure of a potential new transaction. 6 Table of Contents In general, our analysis starts with the length or duration of a potential new transaction.

Although federal securities laws generally define “securities” in such a way as to include promissory notes, the U.S. Supreme Court held in Reves v. Ernst & Young , 110 S. Ct. 945 (1990), that certain kinds of promissory notes are not properly considered securities.

Over time, court precedent has developed to identify these kinds of promissory notes as generally not constituting securities: · notes that mature in nine months or less; · notes secured by a mortgage or lien on a home; · notes secured by a small business or business assets; · so-called “character loans” made to a bank customer; · notes delivered or borrowings entered into through consumer finance; · commercial loans made to businesses; · loans secured by accounts receivable (e.g., factoring); In addition to the “types” of financing arrangements noted above, court precedent indicates that there may be facts and circumstances surrounding a transaction that may cause a promissory note to not be considered a “security” under federal securities laws.

For example, while it is presumed that a promissory note that matures in more than nine months is a “security,” this presumption may be rebutted (with the conclusion that such a promissory note is not a properly considered a security) upon an evaluation of the following factors: · whether the borrower’s motivation is to raise money for general business use, and whether the lender’s motivation is to make a profit, including interest; · whether the borrower’s plan of distribution for the promissory note resembles the plan of distribution of a security; · whether the investing public, or the parties to the transaction, reasonably expects that the note is a security; and · whether there is a regulatory scheme that protects the investor other than the securities laws (e.g., Federal Deposit Insurance).

While the application of these factors can be helpful in some instances, often the factors and the proper manner of weighting them are unclear. As a result, the analyses we periodically undertake focuses on the more bright-line types of lending arrangements enumerated above—i.e., promissory notes maturing in nine months or less, etc. Our Management and Employees Currently, Mr. Douglas M.

Polinsky, the Chief Executive Officer and Chairman of our Board of Directors, and Joseph A. Geraci, II, our Chief Financial Officer and a director of the company, serve as our senior management team. These are also the only two persons employed by our company that have a management role. There are three persons in total employed by our company.

ITEM 1A RISK FACTORS You should consider the following risk factors, in addition to the other information presented or incorporated by reference into this Annual Report on Form 10-K, in evaluating our business and any investment decision relating to our securities. We have a relatively short operating history upon which to evaluate our current business.

We withdrew our election to be treated as a BDC under the 1940 Act at the end of 2019, and during the years since that time have refocused our business on providing short-term specialty finance solutions to private businesses, small-cap public companies and high-net-worth individuals.

Given that our current business has been developed and pursued over the five years prior to this filing, investors have a relatively limited means to evaluate our performance, its evolution, and the likelihood of our future success. 7 Table of Contents We may need to raise additional capital to fund our operations, and such capital may not be available to us in sufficient amounts or on acceptable terms.

For the time being, management believes that our current cash is sufficient to continue operations for the foreseeable future. Nevertheless, various future developments may cause us to seek or require additional financing. In addition, we may determine to seek additional financing in order to avail ourselves of additional opportunities to provide specialty finance solutions to borrowers.

Alternatively, we may seek additional financing in the event that a material portion of our investments default, leaving us with diminished means to pay for our operations and continue making investments.

In any event, additional financing could be sought from a number of sources, including but not limited to sales of additional equity or debt securities, or loans from financial institutions or our affiliates. We cannot, however, be certain that any such financing will be available on terms favorable or acceptable to us if at all.

If additional funds are raised by the issuance of our equity securities, such as through the issuance of stock, convertible securities, or the issuance and exercise of warrants, then the ownership interest of our existing shareholders will be diluted.

If additional funds are raised by the issuance of debt or other equity instruments, we may become subject to certain operational limitations, and such securities may have rights senior to the rights of our common shareholders. If adequate funds are not available on acceptable terms, we may be unable to consummate acquisitions or investments desired by our management and board.

If we are unable to maintain diverse and robust sources of capital, our growth prospects, business, financial condition and results of operations could be adversely affected. Our business depends in part on maintaining diverse and robust sources of capital to originate our short-term loans.

In January 2022, we entered into a Loan and Security Agreement (the “Loan Agreement”) with Eastman Investment, Inc., a Nevada corporation, and Lyle A. Berman, as trustee of the Lyle A. Berman Revocable Trust (collectively, the “Lenders”). Mr. Berman is a director of our company.

Under the Loan Agreement, the Lenders made available to us a $5 million revolving line of credit for us to use in the ordinary course of our short-term specialty finance business.

Amounts drawn under the Loan Agreement accrued interest at the per annum rate of 8%, and all our obligations under the Loan Agreement were secured by a grant of a collateral security interest in substantially all of our assets. As a Lender, Mr. Berman was obligated to furnish only one-half of the aggregate $5 million available under the Loan Agreement.

The Loan Agreement had a five-year term ending on January 3, 2027, at which time all amounts owing under the Loan Agreement were to become due and payable; subject, however, to each Lender’s right, including Mr. Berman, to terminate the Loan Agreement, solely with respect to such Lender’s obligation to provide further credit, at any time after January 3, 2023.

See “Certain Relationships and Related Transactions.” In January 2024, we terminated the Loan Agreement having earlier satisfied all of our obligations thereunder.

If we were to borrow money in the future, events of default or breaches of financial, performance or other covenants, or worse than expected performance of one or more of our short-term loans, could reduce or terminate our future access to funding.

The availability and capacity of sources of capital also depends on many factors that are outside of our control, such as credit market volatility and regulatory reforms.

In the event that we do not maintain adequate sources of capital, we may not be able to maintain the necessary levels of funding to retain current loan volume, which could adversely affect our business, financial condition and results of operations.

Although we have identified general guidelines that we believe are important in evaluating prospective investment opportunities, we may enter into transactions with borrowers that do not meet such guidelines, increasing the risk that the price of our common stock could be volatile.

Although we have identified general guidelines for evaluating prospective investment opportunities, it is possible that a borrower with which we enter into a transaction will not have all, or any, of the attributes outlined in those guidelines.

If we complete transactions with borrowers that do not meet some or any of these guidelines, it is possible that such an investment may not be as successful as an alternative opportunity that were to satisfy some or all of those guidelines.

Investments that do not perform as well as imagined, or as well as they otherwise might have, in combination with the public knowledge that we may stray, or have strayed, from strict implementation of our investment guidelines, could affect the volatility of the trading price of our common stock. 8 Table of Contents We may provide specialty finance solutions to early-stage companies, financially unstable businesses, or a borrower lacking an established record of revenue or earnings, which could adversely affect the price of our common stock.

While we believe that being entrepreneurial in our approach to specialty finance is a strength, we may complete investments with an early-stage company, a financially unstable business or an entity lacking an established record of revenues, cash flows or earnings.

These kinds of transactions present numerous risks associated with investing in a business without a proven business model and with limited historical financial data, volatile revenues, cash flows or earnings and difficulties in obtaining and retaining key personnel.