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Mill City Ventures III(MCVT) - 2022 Q4 - Annual Report
MCVTMill City Ventures III(MCVT)2023-04-17 14:40

Financial Performance - For the year ended December 31, 2022, the company earned 4,199,453ininterestincome,anincreasefrom4,199,453 in interest income, an increase from 2,656,201 in 2021, representing a growth of approximately 58%[97]. - The company's net investment gain for 2022 was 1,440,576,upfrom1,440,576, up from 1,301,450 in 2021, marking an increase of about 11%[106]. - The net increase in net assets resulting from operations was 577,737in2022,downfrom577,737 in 2022, down from 2,831,050 in 2021, a decrease of about 79.6%[138]. - The company reported a net realized gain on investments of 133,019in2022,adecreasefrom133,019 in 2022, a decrease from 4,118,001 in 2021[138]. - Basic and diluted net gain per common share for 2022 was 0.11,downfrom0.11, down from 0.59 in 2021[174]. - The total investment return for the year ended December 31, 2022, was 3.57%, a decrease from 24.07% in 2021[204]. Operating Expenses - Total operating expenses for the year ended December 31, 2022, were 2,758,877,comparedto2,758,877, compared to 1,354,751 in 2021, indicating an increase of about 104%[100]. - Legal and accounting expenses surged to 1,592,218in2022from1,592,218 in 2022 from 453,440 in 2021, reflecting an increase of approximately 251% due to costs associated with public offerings[102]. - Director's fees increased to 177,073in2022from177,073 in 2022 from 120,000 in 2021, largely due to a one-time stock bonus[104]. - The total rent expense for office facilities increased to 73,146in2022from73,146 in 2022 from 66,459 in 2021, reflecting an increase of approximately 10.1%[179]. - The company reported operating cash outflow from operating leases of 75,146in2022,comparedto75,146 in 2022, compared to 66,459 in 2021, indicating an increase of approximately 13.1%[182]. Cash Flow and Assets - Cash flows used by operating activities were (4,888,302)for2022,comparedto(4,888,302) for 2022, compared to (1,886,094) in 2021, indicating a significant increase in cash outflows[108]. - The company had a cash balance of 1,089,641attheendof2022,downfrom1,089,641 at the end of 2022, down from 1,936,148 at the end of 2021, representing a decrease of approximately 44%[108]. - Total assets rose to 18,565,569in2022,upfrom18,565,569 in 2022, up from 16,697,831 in 2021, indicating an increase of about 11.6%[132]. - The company's cash balance decreased to 1,089,641in2022from1,089,641 in 2022 from 1,936,148 in 2021, a decline of about 43.9%[132]. - The accumulated deficit as of December 31, 2022, was (1,159,665),unchangedfromthepreviousyear,indicatingstabilityinretainedearnings[145].Investments−Thefairvalueofthecompany′sinvestmentsincreasedto(1,159,665), unchanged from the previous year, indicating stability in retained earnings[145]. Investments - The fair value of the company's investments increased to 16,708,432 in 2022 from 13,662,500in2021,representingagrowthofapproximately22.413,662,500 in 2021, representing a growth of approximately 22.4%[125]. - Total investments as of December 31, 2022, were valued at 16,708,432, representing 91.09% of total assets, with total cash at 1,089,641,or5.941,089,641, or 5.94% of total assets[145]. - The company purchased investments totaling (23,558,458) in 2022, down from (27,029,292)in2021,indicatingareductionininvestmentactivity[143].−Thecompany’sinvestmentportfolioasofDecember31,2022,totaled(27,029,292) in 2021, indicating a reduction in investment activity[143]. - The company’s investment portfolio as of December 31, 2022, totaled 17,359,804 at amortized cost, with short-term non-banking loans comprising 89.2% of the total[187]. - The fair value of the investment portfolio as of December 31, 2022, was 16,708,432,withshort−termnon−bankingloansvaluedat16,708,432, with short-term non-banking loans valued at 15,285,932, representing 91.5% of the total fair value[187]. Financing Activities - The company raised 4,041,795fromapublicofferingin2022,whichwasanewfinancingactivitynotpresentin2021[143].−Thenetcashprovidedbyfinancingactivitiesin2022was4,041,795 from a public offering in 2022, which was a new financing activity not present in 2021[143]. - The net cash provided by financing activities in 2022 was 4,041,795, contrasting with (1,618,337)usedin2021,indicatingapositiveshiftinfinancing[143].−Thecompanyenteredintoa(1,618,337) used in 2021, indicating a positive shift in financing[143]. - The company entered into a 5 million revolving line of credit in January 2022, with an interest rate of 8% per annum, to support its short-term specialty finance business[108]. - The balance outstanding on the line of credit was 0asofDecember31,2022[198].ShareholderInformation−AsofDecember31,2022,thecompanyhad6,185,255sharesofcommonstockissuedandoutstanding,anincreasefrom4,795,739sharesasofDecember31,2021,representingagrowthofapproximately290 as of December 31, 2022[198]. Shareholder Information - As of December 31, 2022, the company had 6,185,255 shares of common stock issued and outstanding, an increase from 4,795,739 shares as of December 31, 2021, representing a growth of approximately 29%[182]. - The company completed a public offering of 1,250,000 common shares at 4.00 per share, resulting in gross proceeds of 5,000,000andnetproceedsofapproximately5,000,000 and net proceeds of approximately 4,041,000 after expenses[184]. - The company reported a net asset value at the end of 2022 of 2.97pershare,upfrom2.97 per share, up from 2.80 at the end of 2021, representing a 6.1% increase[204]. Tax and Compliance - The company reported a provision for income taxes of 178,869fortheyearendedDecember31,2022,significantlylowerthan178,869 for the year ended December 31, 2022, significantly lower than 1,054,698 in 2021[202]. - The company operates under the Investment Company Act of 1940, having previously been a business development company until December 2019[149]. - The company does not incur management and service fees, as investments are managed by the executive management team as part of their employment responsibilities[173].