What changed in this filing

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Item 1. Financial Statements

2022-08-15 compared with 2022-05-13 · 150 added, 122 removed, 390 unchanged (41% of the section changed)

2 unchanged sentences

CONDENSED BALANCE SHEETS

March 31, 2022

June 30, 2022

December 31, 2021

11 unchanged sentences

Lease liability

Deferred interest income

Accrued income tax

1 unchanged sentence

Total Liabilities

Commitments and Contingencies

SHAREHOLDERS EQUITY (NET ASSETS)

Common stock, par value $ 0.001 per share ( 250,000,000 authorized;

10,790,413 outstanding )

10,855,413 and 10,790,413 outstanding)

Additional paid-in capital

14 unchanged sentences

Three Months Ended

Six Months Ended

Investment Income

8 unchanged sentences

Net Investment Gain

Realized and Unrealized Gain (Loss) on Investments

Net realized gain on investments

Net change in unrealized depreciation on investments

Realized and Unrealized Gain on Investments

Net realized gain (loss) on investments

Net change in unrealized appreciation (depreciation) on investments

Net Realized and Unrealized Gain on Investments

8 unchanged sentences

CONDENSED STATEMENTS OF SHAREHOLDERS’ EQUITY (UNAUDITED)

Undistributed

Net Unrealized

Undistributed

Net Realized Gain

Net Investment

(Loss) on Investments

Shareholders'

Three Months Ended June 30, 2022

Balance as of March 31, 2022

( 1,159,665 )

( 1,582,279 )

Common shares issued in stock based compensation

Undistributed net investment gain

Undistributed net realized loss on investment transactions

Appreciation in value of investments

Balance as of June 30, 2022

( 1,159,665 )

( 1,064,271 )

Undistributed

Net Unrealized

Undistributed

Net Realized Gain

Net Investment

on Investments

Shareholders'

Three Months Ended June 30, 2021

of Investments

Balance as of March 31, 2021

( 1,159,665 )

( 2,774,126 )

Common shares issued in consideration for expense payment

Undistributed net investment gain

Undistributed net realized gain on investment transactions

Appreciation in value of investments

Balance as of June 30, 2021

( 1,159,665 )

( 2,697,320 )

Net Unrealized

Undistributed

Net Realized Gain

(Depreciation)

2 unchanged sentences

Shareholders’

Three Months Ended March 31, 2022

Six Months Ended June 30, 2022

Balance as of December 31, 2021

1 unchanged sentence

( 1,877,667 )

Net investment gain, net of tax of $ 159,000

Net realized gain on investment transactions

Common shares issued in stock based compensation

Undistributed net investment gain

Undistributed net realized gain on investment transactions

Depreciation in value of investments

Balance as of March 31, 2022

Balance as of June 30, 2022

( 1,159,665 )

8 unchanged sentences

Shareholders’

Three Months Ended March 31, 2021

Six Months Ended June 30, 2021

Balance as of December 31, 2020

2 unchanged sentences

Issuance of shares

Net investment loss, net of tax of $ 662,691

Net realized gain on investment transactions

Undistributed net investment loss

Undistributed net realized gain on investment transactions

Depreciation in value of investments

Balance as of March 31, 2021

Balance as of June 30, 2021

( 1,159,665 )

3 unchanged sentences

CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)

Three Months Ended

March 31, 2022

March 31, 2021

Six Months Ended

June 30, 2022

June 30, 2021

Cash flows from operating activities:

Net increase in net assets resulting from operations

Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided (used) in operating activities:

Net change in unrealized depreciation on investments

Adjustments to reconcile net increase in net assets resulting from operations to net cash used in operating activities:

Net change in unrealized appreciation on investments

Net realized gain on investments

5 unchanged sentences

Deferred income taxes

( 1,073,758 )

Common shares issued as consideration for expense payment

Changes in operating assets and liabilities:

2 unchanged sentences

Receivable for investment sales

Accounts payable and other liabilities

Deferred interest income

Accrued income taxes

Payable for investment purchase

( 1,900,000 )

Accounts payable and other liabilities

Deferred interest income

Net cash used in operating activities

3 unchanged sentences

Proceeds from line of credit

Repayments on line of credit

( 4,000,000 )

Payments for common stock dividend

10 unchanged sentences

CONDENSED SCHEDULE OF INVESTMENTS

MARCH 31, 2022

JUNE 30, 2022

Investment / Industry

6 unchanged sentences

Financial - 12% secured loans

Litigation Financing - 23% secured loans

The Cross Law Firm, LLC

Real Estate - 15% secured loans

1 unchanged sentence

Real Estate - 48% secured loans

Alatus Development, LLC

Real Estate - 48% secured loans

Villas at 79th, LLC

7 unchanged sentences

Total Investments and Cash

See accompanying Notes to the Financial Statements

MILL CITY VENTURES III, LTD.

1 unchanged sentence

DECEMBER 31, 2021

Investment / Industry

Short-Term Non-banking Loans

18 unchanged sentences

Total Investments and Cash

MILL CITY VENTURES III, LTD.

NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

March 31, 2022

NOTE 1 – ORGANIZATION

4 unchanged sentences

In 2013, we elected to become a business development company (“BDC”) under the Investment Company Act of 1940 (the “1940 Act”).

We operated as a BDC until we withdrew our BDC election on December 27, 2019.

As of the time of this filing, we remain a public reporting company that files periodic reports with the SEC.

We offer short-term specialty finance solutions primarily to private businesses, small-cap public companies and high-net-worth individuals.

To avoid regulation under the 1940 Act, we generally seek to structure our investments so they do not constitute “investment securities” for purposes of federal securities law, and we monitor our investments as a whole to ensure that no more than 40 % of our total assets may consist of investment securities.

We operated as a BDC until we withdrew our BDC election at the end of December 2019.

Since that time, we have remained a public reporting company that files periodic reports with the SEC.

We engaged in the business of providing short-term specialty finance solutions primarily to small businesses, both private and public, and high-net-worth individuals.

To avoid regulation under the 1940 Act, we generally seek to structure our investments so they do not constitute “securities” for purposes of federal securities laws, and we monitor our investments as a whole to ensure that no more than 40 % of our total assets consist of “investment securities” as defined under the 1940 Act.

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES

3 unchanged sentences

In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included.

Operating results for the quarter ended March 31, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022.

Operating results for the quarter ended June 30, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022.

The condensed balance sheet as of December 31, 2021 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by GAAP for complete financial statements.

4 unchanged sentences

For more information, see the “Valuation of portfolio investments” caption below, and “Note 4 – Fair Value of Financial Instruments” below.

The Company is an investment company following accounting and reporting guidance in ASC 946.

For purposes of its financial statement presentation, the Company is an investment company following accounting and reporting guidance in ASC 946.

Cash deposits:

8 unchanged sentences

If we were required to liquidate a portfolio investment in a forced or liquidation sale, we could realize significantly less than the value at which we have recorded it.

MILL CITY VENTURES III, LTD.

NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

March 31, 2022

Accounting guidance establishes a hierarchal disclosure framework that prioritizes and ranks the level of market price observability of inputs used in measuring investments at fair value.

7 unchanged sentences

Unobservable inputs that reflect an entity’s own assumptions about what inputs a market participant would use in pricing the asset or liability based on the best information available in the circumstances.

Our valuation policy and procedures :

Under our valuation policies and procedures, we evaluate the source of inputs, including any markets in which our investments are trading, and then apply the resulting information in determining fair value.

3 unchanged sentences

These policies and procedures generally require that we value our Level 3 equity investments at cost plus any accrued interest, unless circumstances warrant a different approach.

Our Valuation Policy and Procedures provide examples of these circumstances, such as when a portfolio company has engaged in a subsequent financing of more than a de minimis size involving sophisticated investors (in which case we may use the price involved in that financing as a determinative input absent other known factors), or when a portfolio company is engaged in the process of a transaction that we determine is reasonably likely to occur (in which case we may use the price involved in the pending transaction as a determinative input absent other known factors).

An example of such circumstances may include a situation in which a portfolio company has engaged in a subsequent financing of more than a de minimis size involving sophisticated investors (in which case we may use the price involved in that financing as a determinative input absent other known factors), or when a portfolio company is engaged in the process of a transaction that we determine is reasonably likely to occur (in which case we may use the price involved in the pending transaction as a determinative input absent other known factors).

Other situations identified in our valuation policy and procedures that may serve as input supporting a change in the valuation of our Level 3 equity investments include (i) a third-party valuation conducted by an independent and qualified professional, (ii) changes in the performance of long-term financial prospects of the portfolio company, (iii) a subsequent financing that changes the distribution rights associated with the equity security we hold, or (iv) sale transactions involving comparable companies, but only if further supported by a third-party valuation conducted by an independent and qualified professional.

7 unchanged sentences

The fair value for short-term non-banking loans is determined as the present value of future contractual cash flows discounted at an interest rate that reflects the risks inherent to those cash flows.

The discount ranges from 12 % to 48 % and approximate rates currently observed in publicly traded debt markets for debt of similar terms to companies with comparable credit risk.

MILL CITY VENTURES III, LTD.

NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

March 31, 2022

On a quarterly basis, our management provides members of our Board of Directors with (i) valuation updates for each portfolio investment;

The applied discount ranges from 12 % to 53 % and approximate rates currently observed in publicly traded debt markets for debt of similar terms issued by companies with comparable credit risk.

On a quarterly basis, our management provides members of our Board of Directors with (i) valuation updates for each investment and loan we hold;

(ii) Mill City Ventures’ bank and other statements pertaining to our cash and cash equivalents;

(iii) quarter- or period-end statements from our custodial firms holding any of our portfolio investments;

and (iv) recommendations to change any existing valuations of our portfolio investments or hierarchy levels for purposes of determining the fair value of such investments based upon the foregoing.

(iii) quarter- or period-end statements from custodial firms holding any of our investments;

and (iv) recommendations to change any existing valuations of our investments or loans, or hierarchy levels, for purposes of determining the fair value of such investments or loans based upon the foregoing.

The board then discusses these materials and, consistent with the policies and approaches outlined above, makes final determinations respecting the valuation and hierarchy levels of our portfolio investments.

8 unchanged sentences

federal jurisdiction and various state jurisdictions.

We do not believe there will be any material changes in its unrecognized tax positions over the next 12 months.

Our evaluation was performed for the tax years ended December 31, 2019 through 2021, which are the tax years that remain subject to examination by major tax jurisdictions as of March 31, 2022.

We do not believe there will be any material changes in our unrecognized tax positions over the next 12 months.

Our evaluation was performed for the tax years ended December 31, 2019 through 2021, which were the tax years that remain subject to examination by major tax jurisdictions as of June 30, 2022.

Revenue recognition :

18 unchanged sentences

All income, gains, losses, deductions and credits for any investment are allocated in a manner proportionate to the shares owned.

MILL CITY VENTURES III, LTD.

NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

March 31, 2022

Management and service fees:

1 unchanged sentence

Our executive management team manages our investments as part of their employment responsibilities.

NOTE 3 – INVESTMENTS

The following table shows the composition of our investment portfolio by major class, at amortized cost and fair value, as of March 31, 2022 (together with the corresponding percentage of the fair value of our total portfolio of investments):

NOTE 3 – INVESTMENTS AND LOANS

The following table shows the composition of our investments and loans by major class, at amortized cost and fair value, as of June 30, 2022 (together with the corresponding percentage of the fair value of our total investments):

As of June 30, 2022

Investments at

6 unchanged sentences

Preferred Stock

The following table shows the composition of our investment portfolio by major class, at amortized cost and fair value, as of December 31, 2021 (together with the corresponding percentage of the fair value of our total portfolio of investments):

The following table shows the composition of our investments by major class, at amortized cost and fair value, as of December 31, 2021 (together with the corresponding percentage of the fair value of our total investments):

As of December 31, 2021

Investments at

6 unchanged sentences

Preferred Stock

The following table shows the composition of our investment portfolio by industry grouping, based on fair value as of March 31, 2022:

As of March 31, 2022

The following table shows the composition of our investments and loans by industry grouping, based on fair value as of June 30, 2022:

As of June 30, 2022

Investments at

1 unchanged sentence

Information Technology

The following table shows the composition of our investment portfolio by industry grouping, based on fair value as of December 31, 2021:

The following table shows the composition of our investments by industry grouping, based on fair value as of December 31, 2021:

As of December 31, 2021

2 unchanged sentences

Information Technology

MILL CITY VENTURES III, LTD.

NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

March 31, 2022

NOTE 4 – FAIR VALUE OF FINANCIAL INSTRUMENTS

Level 3 valuation information :

Due to the inherent uncertainty in the valuation process, the estimate of the fair value of our investment portfolio as of March 31, 2022 may differ materially from values that would have been used had a readily available market for those investments existed.

The following table presents the fair value measurements of our portfolio investments by major class, as of March 31, 2022, according to the fair value hierarchy:

As of March 31, 2022

Due to the inherent uncertainty in the valuation process, the estimate of the fair value of our investments and loans as of June 30, 2022 may differ materially from values that would have been used had a readily available market for the investments and loans existed.

The following table presents the fair value measurements of our investments and loans by major class, as of June 30, 2022, according to the fair value hierarchy:

As of June 30, 2022

Short-term Non-banking Loans

Preferred Stock

The following table presents the fair value measurements of our portfolio investments by major class, as of December 31, 2021, according to the fair value hierarchy:

The following table presents the fair value measurements of our investments and loans by major class, as of December 31, 2021, according to the fair value hierarchy:

As of December 31, 2021

1 unchanged sentence

Preferred Stock

The following table presents a reconciliation of the beginning and ending fair value balances for our Level 3 portfolio investment assets for the three months ended March 31, 2022:

For the three months ended March 31, 2022

The following table presents a reconciliation of the beginning and ending fair value balances for our Level 3 investment and loan assets for the six months ended June 30, 2022:

For the six months ended June 30, 2022

ST Non-banking

4 unchanged sentences

Sales and redemptions

( 7,425,000 )

Net realized loss

Balance as of March 31, 2022

The net change in unrealized depreciation for the three months ended March 31, 2022 attributable to Level 3 portfolio investments still held as of March 31, 2022 was $ 0 .

MILL CITY VENTURES III, LTD.

NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

March 31, 2022

The following table lists our Level 3 investments held as of March 31, 2022 and the unobservable inputs used to determine their valuation:

Balance as of June 30, 2021

The net change in unrealized appreciation for the six months ended June 30, 2022 attributable to Level 3 investments and loans still held as of June 30, 2022 is $ 0 , and is included in net change in unrealized appreciation (depreciation) on investments on the statement of operations.

The following table lists our Level 3 investments held as of June 30, 2022 and the unobservable inputs used to determine their valuation:

Security Type

3 unchanged sentences

discounted cash flow

determining private company credit rating

determining private company interest rate based on credit

last secured funding known by company

3 unchanged sentences

economic changes since last funding

The following table presents a reconciliation of the beginning and ending fair value balances for our Level 3 portfolio investment assets for the period ended December 31, 2021:

The following table presents a reconciliation of the beginning and ending fair value balances for our Level 3 investment and loan assets for the year ended December 31, 2021:

For the year ended December 31, 2021

6 unchanged sentences

Balance as of December 31, 2021

The net change in unrealized depreciation for the year ended December 31, 2021 attributable to Level 3 portfolio investments still held as of December 31, 2021 was $ 0 .

The net change in unrealized depreciation for the year ended December 31, 2021 attributable to Level 3 investments and loans still held as of December 31, 2021 is $ 0 , and is included in net change in unrealized appreciation (depreciation) on investments on the statement of operations.

The following table lists our Level 3 investments held as of December 31, 2021 and the unobservable inputs used to determine their valuation:

10 unchanged sentences

economic changes since last funding

MILL CITY VENTURES III, LTD.

NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

March 31, 2022

NOTE 5 – RELATED-PARTY TRANSACTIONS

1 unchanged sentence

Nevertheless, from time to time we may hold investments in portfolio companies in which certain members of our management, our Board of Directors, or significant shareholders of ours, are also directly or indirectly invested.

In this regard, during the period covered by this report we entered into the following related-party transactions:

In this regard, we entered into the following related-party transactions:

● On August 10, 2018, we entered into a loan transaction with Elizabeth Zbikowski who, along with her husband Scott Zbikowski, owned and continues to own approximately 1,765,000 shares of our common stock.

In the transaction, we obtained a two-year promissory note in the principal amount of $ 250,000 , which was subsequently amended such that the note presently matures in August 2022.

In the transaction, we obtained a two-year promissory note in the principal amount of $ 250,000 , which was subsequently amended such that the note presently matures in December 2022.

The promissory note bears interest payable monthly at the rate of 10 % per annum.

9 unchanged sentences

Presently, we are a C-corporation for tax purposes and have booked an income tax provision for the periods described below.

As of March 31, 2022 and December 31, 2021, we have a net deferred tax liability of $ 39,000 and $ 45,000 , respectively.

As of June 30, 2022 and December 31, 2021, we had a net deferred tax liability of $ 39,000 and $ 45,000 , respectively.

Our determination of the realizable deferred tax assets and liabilities requires the exercise of significant judgment, based in part on business plans and expectations about future outcomes.

1 unchanged sentence

We will continue to assess the need for a valuation allowance in future periods.

As of March 31, 2022 and December 31, 2021 we had accrued income taxes of $ 1,434,000 and $ 1,269,000 , respectively.

We recorded income taxes of $ 159,000 ( 28 percent effective tax rate) and $ 662,691 ( 29 percent effective tax rate) during the three months ended March 31, 2022 and March 31, 2021, respectively.

$ 1,362,000 of federal and state tax payments were made after March 31, 2022.

As of June 30, 2022 and December 31, 2021 we had accrued income taxes of $ 201,242 and $ 1,269,000 , respectively.

The change in accrued income taxes was driven by $ 1,449,000 of federal and state tax payments made shortly after quarter one of 2022 ended.

We recorded income taxes of $ 216,242 ( 29 percent effective tax rate) and $ 348,587 ( 29 percent effective tax rate) during the three months ended June 30, 2022 and June 30, 2021, respectively.

As of December 31, 2020, we had a federal NOL of approximately $ 350,000 .

The remaining federal NOL was used in its entirety to offset taxable income during the 2021 tax year.

At March 31, 2022, we have no federal or state NOLs available to offset taxable income, all NOLs have been exhausted.

At June 30, 2022, we have no federal or state NOLs available to offset taxable income, as all NOLs have been exhausted.

Due to tax reform enacted in 2017, any newly created NOLs will carry forward indefinitely.

MILL CITY VENTURES III, LTD.

NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

March 31, 2022

NOTE 7 – LINE OF CREDIT

14 unchanged sentences

The Loan Agreement grants the Lenders piggyback registration rights subject to customary terms, conditions and exceptions.

At March 31, 2022, the balance outstanding on the line was $ 5,325,000 with a maturity date of January 3, 2027 .

At June 30, 2022, the balance outstanding on the line was $ 2,075,000 with a maturity date of January 3, 2027 .

NOTE 8 – SHAREHOLDERS’ EQUITY

At March 31, 2022, we had 10,790,413 shares of common stock issued and outstanding .

At June 30, 2022, we had 10,855,413 shares of common stock issued and outstanding .

On April 11, 2022, we issued 15,000 shares of restricted common stock to each of our three independent directors, and 10,000 shares of restricted common stock to our two non-independent directors.

The shares are subject to forfeiture in the event the recipients are terminated from their board positions or employment, if applicable, on or prior to January 23, 2023.

NOTE 9 – PER-SHARE INFORMATION

2 unchanged sentences

For the Three Months Ended

Net increase (decrease) in net assets resulting from operations

Net increase in net assets resulting from operations

Weighted-average number of common shares outstanding

Basic and diluted net gain (loss) per common share

Basic and diluted net gain per common share

For the Six Months Ended

Net increase in net assets resulting from operations

Weighted-average number of common shares outstanding

Basic and diluted net gain per common share

NOTE 10 – OPERATING LEASES

We were subject to two non-cancelable operating leases for office space which expired March 31, 2022.

The leases did not have significant lease escalations, holidays, concessions, leasehold improvements, or other build-out clauses.

Further, the leases did not contain contingent rent provisions.

We are subject to two non-cancelable operating leases for office space expiring April 2, 2023.

These leases do not have significant lease escalations, holidays, concessions, leasehold improvements, or other build-out clauses.

Further, the leases do not contain contingent rent provisions.

The leases do not include options to renew.

Because our lease does not provide an implicit rate, we use our incremental borrowing rate in determining the present value of the lease payments.

The incremental borrowing rate represents an estimate of the interest rate we would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of a lease.

The weighted average discount rate as of December 31, 2021 was 4.5 %.

MILL CITY VENTURES III, LTD.

NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

March 31, 2022

Under ASC 840, rent expense for office facilities for the three months ended March 31, 2022 and March 31, 2021 was $ 16,812 and $ 16,689 , respectively.

The components of our operating lease were as follows for the three months ended March 31, 2022 and 2021:

The weighted-average discount rate as of December 31, 2021 was 4.5 % and the weighted-average remaining lease term is one year .

Under ASC 840, rent expense for office facilities for the three months ended June 30, 2022 and June 30, 2021 was $ 19,141 and $ 16,337 , respectively.

The components of our operating lease were as follows for the three and six months ended June 30, 2022:

Three Months Ended

March 31, 2022

March 31, 2021

Six Months Ended

June 30, 2022

Operating lease costs

1 unchanged sentence

Short-term lease cost

On March 22, 2022, we signed an extension to our operating lease for office space which begins April 2, 2022 and expires October 2, 2023.

The lease does not have significant lease escalations, holidays, concessions, leasehold improvements, or other build-out clauses.

Further, the lease does not contain contingent rent provisions.

Maturity analysis under this lease extension agreement consists of the following as of March 31, 2022:

Supplemental balance sheet information consisted of the following at June 30, 2022:

Operating Lease

Right-of-use assets

Operating Lease Liability

short term portion

Long term portion

Maturity analysis under lease agreements consisted of the following as of June 30, 2022:

Total lease payments

Present value of lease liabilities

MILL CITY VENTURES III, LTD.

NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

March 31, 2022

NOTE 11 – FINANCIAL HIGHLIGHTS

The following is a schedule of financial highlights for the three months ended March 31, 2022 through 2018:

Three Months Ended March 31,

The following is a schedule of financial highlights for the six months ended June 30, 2022 through 2018:

Six Months Ended June 30,

Per Share Data (1)

3 unchanged sentences

Provision for income taxes

Stock based compensation

Repurchase of common stock

Payment of common stock dividend

15 unchanged sentences

NOTE 12 – Subsequent Events

On April 11, 2022, we issued 15,000 shares of restricted common stock to each of our three independent directors, and 10,000 shares of restricted common stock to our two non-independent directors.

The shares are subject to forfeiture in the event the recipients are terminated from their board positions or employment, if applicable, on or prior to January 23, 2023.

On April 12, 2022 we received $ 3,900,000 in advanced principal repayment of a short-term loan that had a maturity date of September 27, 2022.

The note bore interest at a rate of 12 %.

On April 18, 2022 we received $ 1,800,000 in advanced principal repayment of a short-term loan that had a maturity date of September 30, 2022.

The note bore interest at a rate of 23 %.

On April 26, 2022, we filed a registration statement on Form S-1 with the U.S.

Securities and Exchange Commission seeking to register an offer and sale of shares of our common stock in a firm-commitment underwritten offering.

On August 9, 2022, the Company effected a stock combination (reverse stock split) of its common shares on a 1-for-2.25 basis such that every 2.25 shares of common stock issued and outstanding on that date were combined into one share of common stock.

Any fractional share resulting from the reverse stock split was rounded up to the nearest whole share.

The reverse stock split was approved by the Company’s board of directors in accordance with Minnesota law, and resulted in a proportionate reduction in the number of authorized shares of capital stock available for issuance under the Company's articles of incorporation.

This reduction was effected pursuant to the filing of articles of amendment with the Minnesota Secretary of State indicating that the Company, on a post-reverse-split basis, is authorized to issue up to 111,111,111 shares of capital stock.

The condensed financial statements included herein have not been adjust for the August 9, 2022 reverse stock split.

Also on August 9, 2022, the Company’s common stock was listed and began trading on the Nasdaq Capital Market under the same ticker symbol MCVT.

On August 11, 2022, the Company completed its public offer and sale of 1,250,000 common shares pursuant to a registration statement filed with the SEC and declared effective on August 9, 2022.

Shares were sold by the Company at $ 4.00 per share, resulting in gross proceeds of $ 5,000,000 .

As part of the registered public offering, the Company granted the underwriters a 45 -day option to purchase up to 187,500 additional common shares at the offering price, less underwriting discounts.

In connection with the offering, the Company issued the underwriter a five-year warrant to purchase up to 75,000 common shares at the per-share price of $ 5.00 .

Net proceeds to the Company after the payment of underwriting discounts, underwriting expenses, and the Company’s own offering-related expenses were approximately $ 4,041,000 .

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements