SUI Group Holdings Ltd 10-Q for FY2022 Q1

SUI Group Holdings Ltd. (SUIG)

10-Q 2022-05-13 For: 2022-03-31

Added on April 06, 2026

About this 10-Q

SUI Group Holdings Ltd filed this 10-Q on May 13, 2022, covering the quarter ended March 31, 2022 (FY2022 Q1).

Headline figures

Quarter ended March 31, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Diluted EPS: $0.04; down 75.0% from $0.16 a year earlier

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Minnesota		90-0316651
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

1907 Wayzata Blvd, #205, Wayzata, Minnesota		55391
(Address of principal executive offices)		(Zip Code)


Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☒	Smaller reporting company ☒
	Emerging growth company ☐


PART I.	FINANCIAL INFORMATION		Page No.

Item 1.	Financial Statements (unaudited)

	Condensed Balance Sheets – March 31, 2022 and December 31, 2021		3

	Condensed Statements of Operations – Three months ended March 31, 2022 and March 31, 2021		4

	Condensed Statements of Shareholders’ Equity – Three months ended March 31, 2022 and March 31, 2021		5

	Condensed Statements of Cash Flows – Three months ended March 31, 2022 and March 31, 2021		6

	Condensed Schedule of Investments – March 31, 2022 and Schedule of Investments – December 31, 2021		7

	Condensed Notes to Financial Statements – March 31, 2022		9

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		19

Item 4.	Controls and Procedures		22

PART II.	OTHER INFORMATION

Item 6.	Exhibits		23

		SIGNATURES	24


	March 31, 2022
	(unaudited)			December 31, 2021
ASSETS
Investments, at fair value:	$	20,087,500	$	14,098,675
Non-control/non-affiliate investments (cost: $19,943,929 and $13,933,057 respectively)
Cash		71,020		1,936,148
Note receivable		250,000		250,000
Prepaid expenses		29,658		83,674
Interest and dividend receivables		562,993		324,350
Right-of-use lease asset		—		4,984
Total Assets	$	21,001,171	$	16,697,831

LIABILITIES
Line of credit	$	5,325,000	$	—
Accounts payable		104,911		64,028
Dividend payable		100		100
Payable for purchase of investments		—		1,900,000
Lease liability		—		5,654
Deferred interest income		272,000		—
Accrued income tax		1,434,000		1,269,000
Deferred taxes		39,000		45,000
Total Liabilities		7,175,011		3,283,782

SHAREHOLDERS EQUITY (NET ASSETS)
Common stock, par value $0.001 per share (250,000,000 authorized; 10,790,413 outstanding)		10,790		10,790
Additional paid-in capital		10,694,163		10,694,163
Accumulated deficit		(1,159,665)		(1,159,665)
Accumulated undistributed investment loss		(1,582,279)		(1,877,667)
Accumulated undistributed net realized gains on investment transactions		5,719,580		5,580,810
Net unrealized appreciation in value of investments		143,571		165,618
Total Shareholders’ Equity (net assets)		13,826,160		13,414,049
Total Liabilities and Shareholders’ Equity	$	21,001,171	$	16,697,831
Net Asset Value Per Common Share	$	1.28	$	1.24


	Three Months Ended
	March 31,		March 31,
	2022		2021
Investment Income
Interest income	$	1,000,206	$	546,842
Total Investment Income		1,000,206		546,842

Operating Expenses
Professional fees		198,518		142,808
Payroll		196,442		302,080
Insurance		30,097		24,279
Occupancy		16,812		16,689
Director’s fees		30,000		30,000
Interest expense		66,939		—
Other general and administrative		7,010		18,002
Total Operating Expenses		545,818		533,858
Net Investment Gain		454,388		12,984

Realized and Unrealized Gain (Loss) on Investments
Net realized gain on investments		138,770		2,907,999
Net change in unrealized depreciation on investments		(22,047)		(513,250)
Net Realized and Unrealized Gain on Investments		116,723		2,394,749
Net Increase in Net Assets Resulting from Operations Before Taxes	$	571,111	$	2,407,733
Provision for Income Taxes		159,000		662,691
Net Increase in Net Assets Resulting from Operations	$	412,111	$	1,745,042

Net Increase in Net Assets Resulting from Operations per share:
Basic and diluted	$	0.04	$	0.16
Weighted-average number of common shares outstanding - basic and diluted		10,790,413		10,785,913


										Accumulated		Net Unrealized
								Accumulated		Undistributed		Appreciation
				Additional				Undistributed		Net Realized Gain		(Depreciation)		Total
	Common			Paid In		Accumulated		Net Investment		on Investments		in Value of		Shareholders’
Three Months Ended March 31, 2022	Shares	Par Value		Capital		Deficit		Loss		Transactions		Investments		Equity
Balance as of December 31, 2021	10,790,413	$	10,790	$	10,694,163	$	(1,159,665)	$	(1,877,667)	$	5,580,810	$	165,618	$	13,414,049
Net investment gain, net of tax of $159,000	—		—		—		—		295,388		—		—		295,388
Net realized gain on investment transactions	—		—		—		—		—		138,770		—		138,770
Depreciation in value of investments	—		—		—		—		—		—		(22,047)		(22,047)
Balance as of March 31, 2022	10,790,413	$	10,790	$	10,694,163	$	(1,159,665)	$	(1,582,279)	$	5,719,580	$	143,571	$	13,826,160


	Three Months Ended
	March 31, 2022		March 31, 2021
Cash flows from operating activities:
Net increase in net assets resulting from operations	$	412,111	$	1,745,042

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		22,047		513,250
Net realized gain on investments		(138,770)		(2,907,999)
Purchases of investments		(7,025,000)		(9,430,664)
Proceeds from sales of investments		1,152,898		5,036,657
Deferred income taxes		(6,000)		662,691

Changes in operating assets and liabilities:
Prepaid expenses and other assets		59,000		(62,043)
Interest and dividends receivable		(238,643)		(144,136)
Receivable for investment sales		—		19,313
Accounts payable and other liabilities		35,229		21,763
Deferred interest income		272,000		144,000
Accrued income taxes		165,000		—
Payable for investment purchase		(1,900,000)		—
Net cash used in operating activities		(7,190,128)		(4,402,126)

Cash flows from financing activities:
Proceeds from line of credit		5,325,000		—
Payments for common stock dividend		—		(539,296)
Net cash provided (used) by financing activities		5,325,000		(539,296)
Net decrease in cash		(1,865,128)		(4,941,422)
Cash, beginning of period		1,936,148		5,440,579
Cash, end of period	$	71,020	$	499,157

Non-cash financing activities:
Common shares issued as consideration for investment	$	—	$	5,750


					Percentage
					of Net
Investment / Industry	Cost		Fair Value		Assets
Short-Term Non-banking Loans
Consumer - 15% secured loans
AirDog Supplies, Inc.	$	1,250,000	$	1,250,000	9.04	%
Intelligent Mapping, LLC		2,500,000		2,500,000	18.08	%
Financial - 33.33% secured loans
Benton Financial, LLC		1,125,000		1,125,000	8.14	%
Financial - 12% secured loans		500,000		500,000	3.61	%
Litigation Financing - 23% secured loans
The Cross Law Firm, LLC		1,805,750		1,800,000	13.02	%
Real Estate - 15% secured loans		600,000		600,000	4.34	%
Tailwinds, LLC		3,000,000		3,000,000	21.70	%
Real Estate - 12% secured loans
Alatus Development, LLC		3,900,000		3,900,000	28.21	%
Real Estate - 48% secured loans
Villas at 79th, LLC		3,400,000		3,400,000	24.59	%
Total Short-Term Non-Banking Loans		18,080,750		18,075,000	130.73	%

Preferred Stock
Consumer
Wisdom Gaming, Inc		900,000		900,000	6.51	%
Information Technology		150,000		300,000	2.17	%
Total Other Equity		1,050,000		1,200,000	8.68	%

Warrants
Healthcare		679		—	0.00	%

Other Equity
Consumer		212,500		212,500	1.54	%
Financial		600,000		600,000	4.34	%
Total Other Equity		812,500		812,500	5.88	%

Total Investments	$	19,943,929	$	20,087,500	145.29	%

Total Cash		71,020		71,020	0.51	%

Total Investments and Cash	$	20,014,949	$	20,158,520	145.80	%


	Investments at		Percentage of		Investments at		Percentage of
	Amortized Cost		Amortized Cost		Fair Value		Fair Value
Short-term Non-banking Loans	$	18,080,750	90.6	%	$	18,075,000	90.0	%
Preferred Stock		1,050,000	5.3			1,200,000	5.9
Warrants		679	—			—	—
Other Equity		812,500	4.1			812,500	4.1
Total	$	19,943,929	100.0	%	$	20,087,500	100.0	%


	As of March 31, 2022
	Investments at		Percentage of
	Fair Value		Fair Value
Consumer	$	4,862,500	24.2	%
Financial		4,025,000	20.0
Information Technology		300,000	1.5
Real Estate		10,900,000	54.3
Total	$	20,087,500	100.0	%


	As of December 31, 2021
	Investments at		Percentage of
	Fair Value		Fair Value
Consumer	$	2,362,500	16.8	%
Financial		3,836,175	27.2
Information Technology		300,000	2.1
Real Estate		7,600,000	53.9
Total	$	14,098,675	100.0	%


	As of March 31, 2022
	Level 1		Level 2		Level 3		Total
Short-term Non-banking Loans	$	—	$	—	$	18,075,000	$	18,075,000
Preferred Stock		—		—		1,200,000		1,200,000
Other Equity		—		—		812,500		812,500
Total	$	—	$	—	$	20,087,500	$	20,087,500


	For the three months ended March 31, 2022
	ST Non-banking				Common
	Loans		Preferred Stock		Stock		Warrants		Other Equity
Balance as of January 1, 2022	$	11,650,000	$	1,200,000	$	—	$	—	$	812,500
Net change in unrealized appreciation		—		—		—		—		—
Purchases and other adjustments to cost		7,025,000		—		—		—		—
Sales and redemptions		(600,000)		—		—		—		—
Net realized loss		—		—		—		—		—
Balance as of March 31, 2022	$	18,075,000	$	1,200,000	$	—	$	—	$	812,500


Security Type	3/31/22 FMV		Valuation Technique	Unobservable Inputs	Range
ST Non-banking Loans	$	18,075,000	discounted cash flow	determining private company credit rating	12-48	%
Other Equity		812,500	last secured funding known by company	economic changes since last funding
Preferred Stock		1,200,000	last funding secured by company	economic changes since last funding
	$	20,087,500


	For the year ended December 31, 2021
	ST
	Non-banking		Preferred		Common
	Loans		Stock		Stock		Warrants		Other Equity
Balance as of January 1, 2021	$	2,789,000	$	300,000	$	—	$	—	$	278,897
Net change in unrealized appreciation		—		—		—		—		—
Purchases and other adjustments to cost		24,765,333		900,000		—		—		812,500
Sales and redemptions		(15,904,333)		—		—		—		(278,897)
Net realized loss		—		—		—		—		—
Balance as of December 31, 2021	$	11,650,000	$	1,200,000	$	—	$	—	$	812,500


	Operating
	Leases
2022	$	18,164
2023		14,859
Total lease payments		33,023
Less: interest		(1,035)
Present value of lease liabilities	$	31,988


	Three Months Ended March 31,
	2022			2021		2020		2019		2018
Per Share Data ⁽¹⁾
Net asset value at beginning of period	$	1.24		1.08		0.91		1.02		0.87
Net investment income (loss)		0.04		0.00		0.00		(0.02)		(0.01)
Net realized and unrealized gains (losses)		0.01		0.22		(0.03)		0.12		0.06
Provision for income taxes		(0.01)		(0.06)		0.00		0.00		0.00
Payment of common stock dividend		0.00		0.00		0.00		(0.05)		0.00
Net asset value at end of period	$	1.28		1.24		0.88		1.07		0.92

Ratio / Supplemental Data
Per share market value of investments at end of period	$	1.86		1.25		0.41		0.78		0.76
Shares outstanding at end of period		10,790,413		10,786,913		11,067,402		11,067,402		11,067,402
Average weighted shares outstanding for the period		10,790,413		10,785,913		11,067,402		11,067,402		11,863,392
Net assets at end of period	$	13,826,160		13,391,679		9,786,615		11,890,188		9,783,191
Average net assets ⁽²⁾	$	13,620,104		12,516,283		9,927,574		12,911,895		9,770,410
Total investment return		3.23	%	14.81	%	(3.30)	%	4.90	%	5.75	%
Portfolio turnover rate (3)		8.46	%	40.24	%	0.75	%	0.93	%	0.80	%
Ratio of operating expenses to average net assets ⁽³⁾		(15.28)	%	(16.20)	%	(7.82)	%	(6.06)	%	(7.52)	%
Ratio of net investment income (loss) to average net assets ⁽³⁾		14.24	%	0.42	%	0.87	%	(4.87)	%	(6.16)	%
Ratio of realized gains (losses) to average net assets ⁽³⁾		4.20	%	133.32	%	1.00	%	137.57	%	2.17	%


Security Type	12/31/21 FMV		Valuation Technique	Unobservable Inputs	Range
ST Non-banking Loans	$	11,650,000	discounted cash flow	determining private company credit rating	12-44	%
Other Equity		812,500	last secured funding known by company	economic changes since last funding
Preferred Stock		1,200,000	last funding secured by company	economic changes since last funding
	$	13,662,500


	For the Three Months Ended
	March 31,
	2022		2021
Numerator: Net increase (decrease) in net assets resulting from operations	$	412,111	$	1,745,042
Denominator: Weighted-average number of common shares outstanding		10,790,413		10,785,913
Basic and diluted net gain (loss) per common share	$	0.04	$	0.16


	Three Months Ended
	March 31, 2022		March 31, 2021
Operating lease costs	$	4,779	$	4,779
Variable lease cost		4,601		4,478
Short-term lease cost		7,432		7,432
Total	$	16,812	$	16,689


Exhibit Number		Description
3.1		Amended and Restated Articles of Incorporation (incorporated by reference to Exhibit 3.1 to the registrant’s Current Report on Form 8-K filed January 23, 2013)
3.2		Amended and Restated Bylaws of Mill City Ventures III, Ltd. (incorporated by reference to Exhibit 3.2 to the registrant’s registration statement on Form 10-SB filed on January 29, 2008)
31.1	*	Section 302 Certification of the Chief Executive Officer
31.2	*	Section 302 Certification of the Chief Financial Officer
32.1	*	Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. §1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	*	Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH	*	Inline XBRL Taxonomy Extension Schema Document
101.CAL	*	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	*	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	*	Inline XBRL Taxonomy Extension Labels Linkbase Document
101.PRE	*	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	*	Cover Page Interactive Data File (Embedded within the Inline XBRL document and included in Exhibit)


	MILL CITY VENTURES III, LTD.

Date: May 13, 2022	By:	/s/ Douglas M. Polinsky
		DOUGLAS M. POLINSKY
		Chief Executive Officer


Date: May 13, 2022	By:	/s/ Joseph A. Geraci, II
		JOSEPH A. GERACI, II
		Chief Financial Officer