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Mill City Ventures III(MCVT) - 2023 Q4 - Annual Report
MCVTMill City Ventures III(MCVT)2024-04-02 16:15

Financial Performance - For the year ended December 31, 2023, the company earned 3,298,635ininterestincome,adecreaseofapproximately21.53,298,635 in interest income, a decrease of approximately 21.5% from 4,199,453 in 2022[91]. - The company reported a net investment loss of 419,998for2023,contrastingwithanetinvestmentgainof419,998 for 2023, contrasting with a net investment gain of 800,576 in 2022[100]. - The company reported a net investment loss of 1,165,506fortheyearendedDecember31,2023,comparedtoanetincreaseof1,165,506 for the year ended December 31, 2023, compared to a net increase of 106,958 in 2022, indicating a significant decline in performance[129]. - The total investment return for 2023 was -7.27%, compared to 1.43% in 2022[205]. - For the year ended December 31, 2023, the net increase in net assets resulting from operations was (1,165,506),adecreasefrom(1,165,506), a decrease from 106,958 in 2022[136]. Operating Expenses - Total operating expenses for 2023 were 3,718,633,anincreaseofabout9.43,718,633, an increase of about 9.4% compared to 3,398,877 in 2022[93]. - The ratio of operating expenses to average net assets was -19.94% in 2023, compared to -21.73% in 2022[205]. - Rent expense for office facilities decreased from 73,146in2022to73,146 in 2022 to 68,421 in 2023[172]. - The company recorded operating lease costs of 21,975andvariableleasecostsof21,975 and variable lease costs of 19,572 for the year ended December 31, 2023[173]. Cash Flow and Liquidity - Cash flows from operating activities were (1,137,617)in2023,animprovementfrom(1,137,617) in 2023, an improvement from (4,888,302) in 2022[102]. - The company had a net decrease in cash of 713,617for2023,comparedtoadecreaseof713,617 for 2023, compared to a decrease of 846,507 in 2022[102]. - The company expects its current liquidity sources to be sufficient to fund operations through fiscal 2024, following the termination of its 5millionrevolvinglineofcredit[104].−Thecompanyreportedanetcashdecreaseof5 million revolving line of credit[104]. - The company reported a net cash decrease of (713,617) for the year, with cash at the end of the period totaling 376,024,downfrom376,024, down from 1,089,641 at the end of 2022[136]. Investments - The company made new investments totaling 12,900,500in2023andrefinancedinvestmentsamountingto12,900,500 in 2023 and refinanced investments amounting to 10,857,500[105]. - As of December 31, 2023, the company's investments at fair value totaled 17,284,676,anincreasefrom17,284,676, an increase from 16,708,432 in 2022, reflecting a growth of approximately 3.4%[123]. - Total investments as of December 31, 2023, amounted to 18,577,481,withafairvalueof18,577,481, with a fair value of 17,284,676, representing 92.97% of total assets[139]. - The company’s investment in Mustang Litigation Funding was 10,000,000,withafairvalueof10,000,000, with a fair value of 10,069,354, accounting for 54.16% of total assets[139]. - The company’s investment in Intelligent Mapping, LLC was 2,900,000,withafairvalueof2,900,000, with a fair value of 2,906,464, representing 15.63% of total assets[139]. - The company’s investment in short-term non-banking loans increased to 16,961,766asofDecember31,2023,from16,961,766 as of December 31, 2023, from 15,285,932 in 2022[186]. Assets and Liabilities - Total assets increased to 19,106,697in2023from19,106,697 in 2023 from 18,734,790 in 2022, representing a growth of about 2%[126]. - The company’s total liabilities decreased to 516,434in2023from516,434 in 2023 from 863,230 in 2022, a reduction of about 40%[126]. - The net asset value per common share slightly increased to 2.91in2023from2.91 in 2023 from 2.89 in 2022[126]. - The net assets at the end of 2023 were 18,590,263,anincreasefrom18,590,263, an increase from 17,871,560 in 2022[205]. Management and Compensation - Executive management compensation rose to 1,848,393in2023,up96.41,848,393 in 2023, up 96.4% from 941,590 in 2022, primarily due to stock option issuance[98]. - The company recognized stock-based compensation expense of 1,460,209forstockoptionsfortheyearendedDecember31,2023[194].−Thecompanydidnotincurmanagementandservicefees,asinvestmentsaremanagedbytheexecutivemanagementteamaspartoftheiremploymentresponsibilities[168].Taxation−Thecompanyhadaprovisionforincometaxesof−1,460,209 for stock options for the year ended December 31, 2023[194]. - The company did not incur management and service fees, as investments are managed by the executive management team as part of their employment responsibilities[168]. Taxation - The company had a provision for income taxes of -454,554 in 2023, compared to 9,648in2022[200].−Thecurrentfederaltaxwas9,648 in 2022[200]. - The current federal tax was 83,402 in 2023, down from 268,803in2022[200].−Thedeferredtaxassetincreasedto268,803 in 2022[200]. - The deferred tax asset increased to 757,000 in 2023 from 201,000in2022[204].StockandShareholderInformation−Thetotalnumberofcommonsharesissuedandoutstandingincreasedfrom6,185,255atDecember31,2022,to6,385,255atDecember31,2023[175].−Thecompanycompletedapublicofferingof1,250,000commonsharesat201,000 in 2022[204]. Stock and Shareholder Information - The total number of common shares issued and outstanding increased from 6,185,255 at December 31, 2022, to 6,385,255 at December 31, 2023[175]. - The company completed a public offering of 1,250,000 common shares at 4.00 per share, generating gross proceeds of 5,000,000,withnetproceedsofapproximately5,000,000, with net proceeds of approximately 4,041,000 after expenses[177]. - During 2023, the company issued 200,000 shares related to the exercise of stock options, while 1,389,516 shares were issued in 2022[179]. - The company had 30,000 shares available for issuance under the 2022 Stock Incentive Plan as of December 31, 2023[191].