Mill City Ventures III, Ltd. reported a net investment gain of $1.3 million for the fiscal year ending December 31, 2024, a significant recovery from a net loss of $420,000 in the previous year. The company generated $3.3 million in interest income, slightly up from $3.3 million in 2023, while total operating expenses decreased to $2 million from $3.7 million, primarily due to reduced legal and accounting fees and a significant drop in director's fees. The company's net assets increased to approximately $19.8 million, reflecting a net asset value per share of $3.09, up from $2.91 in 2023.
In terms of operational changes, Mill City Ventures focused on short-term specialty finance solutions, primarily through secured loans. The company made new investments totaling $5.7 million and refinanced $17.8 million in existing loans, with a notable concentration in Mustang Funding, LLC, which accounted for $10 million of its portfolio. The company also recognized a loss of $265,000 on a previously held preferred stock investment, but this was offset by gains from other investments, resulting in a net change in unrealized depreciation of $1 million.
The company’s strategic direction has shifted since it withdrew its election to be treated as a business development company (BDC) in 2019, allowing it to operate with greater flexibility in its lending practices. Mill City Ventures has maintained a lean operational structure, with only three employees, and has no plans to hire additional business development professionals. The management team, led by CEO Douglas M. Polinsky and CFO Joseph A. Geraci, has extensive experience in finance and investment, which they leverage to source and evaluate lending opportunities.
Looking ahead, Mill City Ventures expressed confidence in its liquidity position, with cash reserves of $6 million at year-end, which management believes will be sufficient to fund operations through 2025. The company has terminated its revolving line of credit, relying instead on its cash and cash equivalents for liquidity. However, it remains cautious about potential market conditions that could impact its borrowers' ability to repay loans, which could affect future financial performance. The company continues to monitor its investment portfolio closely to ensure compliance with regulatory requirements and to mitigate risks associated with its lending activities.
About Mill City Ventures III, Ltd
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