Financial Performance - For the year ended December 31, 2022, the company earned $4,199,453 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, up from $1,301,450 in 2021, marking an increase of about 11%[106]. - The net increase in net assets resulting from operations was $577,737 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 $133,019 in 2022, a decrease from $4,118,001 in 2021[138]. - Basic and diluted net gain per common share for 2022 was $0.11, 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, compared to $1,354,751 in 2021, indicating an increase of about 104%[100]. - Legal and accounting expenses surged to $1,592,218 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 $177,073 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 $73,146 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 $75,146 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) for 2022, compared to $(1,886,094) in 2021, indicating a significant increase in cash outflows[108]. - The company had a cash balance of $1,089,641 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 $18,565,569 in 2022, up from $16,697,831 in 2021, indicating an increase of about 11.6%[132]. - The company's cash balance decreased to $1,089,641 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), 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 $13,662,500 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, or 5.94% of total assets[145]. - The company purchased investments totaling $(23,558,458) in 2022, down from $(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, 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 $4,041,795 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) 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 $0 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 $5,000,000 and net proceeds of approximately $4,041,000 after expenses[184]. - The company reported a net asset value at the end of 2022 of $2.97 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 $178,869 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].
Mill City Ventures III(MCVT) - 2022 Q4 - Annual Report