Financial Performance - For the year ended December 31, 2023, the company earned $3,298,635 in interest income, a decrease of approximately 21.5% from $4,199,453 in 2022[91]. - The company reported a net investment loss of $419,998 for 2023, contrasting with a net investment gain of $800,576 in 2022[100]. - The company reported a net investment loss of $1,165,506 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), a decrease from $106,958 in 2022[136]. Operating Expenses - Total operating expenses for 2023 were $3,718,633, 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 $73,146 in 2022 to $68,421 in 2023[172]. - The company recorded operating lease costs of $21,975 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) in 2023, an improvement from $(4,888,302) in 2022[102]. - The company had a net decrease in cash of $713,617 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 $5 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, down from $1,089,641 at the end of 2022[136]. Investments - The company made new investments totaling $12,900,500 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, 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, 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, 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, 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 $16,961,766 as of December 31, 2023, from $15,285,932 in 2022[186]. Assets and Liabilities - Total assets increased to $19,106,697 in 2023 from $18,734,790 in 2022, representing a growth of about 2%[126]. - The company’s total liabilities decreased to $516,434 in 2023 from $863,230 in 2022, a reduction of about 40%[126]. - The net asset value per common share slightly increased to $2.91 in 2023 from $2.89 in 2022[126]. - The net assets at the end of 2023 were $18,590,263, an increase from $17,871,560 in 2022[205]. Management and Compensation - Executive management compensation rose to $1,848,393 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 $1,460,209 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 $9,648 in 2022[200]. - The current federal tax was $83,402 in 2023, down from $268,803 in 2022[200]. - The deferred tax asset increased to $757,000 in 2023 from $201,000 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, 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].
Mill City Ventures III(MCVT) - 2023 Q4 - Annual Report