SUI Group Holdings Ltd 10-Q for FY2022 Q2

SUI Group Holdings Ltd. (SUIG)

10-Q 2022-08-15 For: 2022-06-30

Added on April 06, 2026

About this 10-Q

SUI Group Holdings Ltd filed this 10-Q on August 15, 2022, covering the quarter ended June 30, 2022 (FY2022 Q2).

Headline figures

Quarter ended June 30, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Diluted EPS: $0.05; down 28.6% from $0.07 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 ☐


		Page No.
PART I.	FINANCIAL INFORMATION

Item 1.	Financial Statements (unaudited)

	Condensed Balance Sheets – June 30, 2022 and December 31, 2021	2

	Condensed Statements of Operations – Three and six months ended June 30, 2022 and June 30, 2021	3

	Condensed Statements of Shareholders’ Equity – Three and six months ended June 30, 2022 and June 30, 2022	4

	Condensed Statements of Cash Flows – Six months ended June 30, 2022 and June 30, 2021	5

	Condensed Schedule of Investments – June 30, 2022 and Schedule of Investments – December 31, 2021	6

	Condensed Notes to Financial Statements – June 30, 2022	9

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

Item 4.	Controls and Procedures	23

PART II.	OTHER INFORMATION

Item 6.	Exhibits	23

SIGNATURES		24


	June 30, 2022
	(unaudited)			December 31, 2021
ASSETS
Investments, at fair value:	$	15,341,080	$	14,098,675
Non-control/non-affiliate investments (cost: $15,191,759 and $13,933,057 respectively)
Cash		629,572		1,936,148
Note receivable		250,000		250,000
Prepaid expenses		133,613		83,674
Interest and dividend receivables		439,422		324,350
Right-of-use lease asset		26,804		4,984
Total Assets	$	16,820,491	$	16,697,831

LIABILITIES
Line of credit	$	2,075,000	$	—
Accounts payable		51,783		64,028
Dividend payable		—		100
Payable for purchase of investments		—		1,900,000
Lease liability		26,859		5,654
Accrued income tax		201,242		1,269,000
Deferred taxes		39,000		45,000
Total Liabilities		2,393,884		3,283,782
Commitments and Contingencies

SHAREHOLDERS EQUITY (NET ASSETS)
Common stock, par value $0.001 per share (250,000,000 authorized; 10,855,413 and 10,790,413 outstanding)		10,855		10,790
Additional paid-in capital		10,776,537		10,694,163
Accumulated deficit		(1,159,665)		(1,159,665)
Accumulated undistributed investment loss		(1,064,271)		(1,877,667)
Accumulated undistributed net realized gains on investment transactions		5,713,830		5,580,810
Net unrealized appreciation in value of investments		149,321		165,618
Total Shareholders’ Equity (Net Assets)		14,426,607		13,414,049
Total Liabilities and Shareholders’ Equity	$	16,820,491	$	16,697,831
Net Asset Value Per Common Share	$	1.33	$	1.24


	Three Months Ended				Six Months Ended
	June 30,		June 30,		June 30,		June 30,
	2022		2021		2022		2021
Investment Income
Interest income	$	1,236,505	$	675,549	$	2,236,711	$	1,222,391
Total Investment Income		1,236,505		675,549		2,236,711		1,222,391

Operating Expenses
Professional fees		197,591		77,539		392,989		220,347
Payroll		114,542		85,346		310,984		387,426
Insurance		26,979		27,854		57,076		52,133
Occupancy		19,141		16,337		35,953		33,026
Director’s fees		87,073		30,000		117,073		60,000
Interest expense		47,794		—		117,853		—
Other general and administrative		9,135		13,080		16,145		31,082
Total Operating Expenses		502,255		250,156		1,048,073		784,014
Net Investment Gain		734,250		425,393		1,188,638	$	438,377

Realized and Unrealized Gain on Investments
Net realized gain (loss) on investments		(5,750)		621,600		133,020		3,529,599
Net change in unrealized appreciation (depreciation) on investments		5,750		83,100		(16,297)		(430,150)
Net Realized and Unrealized Gain on Investments		—		704,700		116,723		3,099,449
Net Increase in Net Assets Resulting from Operations Before Taxes	$	734,250	$	1,130,093	$	1,305,361	$	3,537,826
Provision for Income Taxes		216,242		348,587		375,242		1,011,278
Net Increase in Net Assets Resulting from Operations	$	518,008	$	781,506	$	930,119		2,526,548

Net Increase in Net Assets Resulting from Operations per share:
Basic and diluted	$	0.05	$	0.07	$	0.09	$	0.23
Weighted-average number of common shares outstanding - basic and diluted		10,847,556		10,790,413		10,819,142		10,788,175


										Accumulated
								Accumulated		Undistributed		Net Unrealized
				Additional				Undistributed		Net Realized Gain		Appreciation		Total
	Common	Par		Paid In		Accumulated		Net Investment		(Loss) on Investments		in value of		Shareholders'
Three Months Ended June 30, 2022	Shares	Value		Capital		Deficit		Loss		Transactions		Investments		Equity
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
Common shares issued in stock based compensation	65,000		65		82,374		—		—		—		—		82,439
Undistributed net investment gain	—		—		—		—		518,008		—		—		518,008
Undistributed net realized loss on investment transactions	—		—		—		—		—		(5,750)		—		(5,750)
Appreciation in value of investments	—		—		—		—		—		—		5,750		5,750
Balance as of June 30, 2022	10,855,413	$	10,855	$	10,776,537	$	(1,159,665)	$	(1,064,271)	$	5,713,830	$	149,321	$	14,426,607


	Six Months Ended
	June 30, 2022		June 30, 2021
Cash flows from operating activities:
Net increase in net assets resulting from operations	$	930,119	$	2,526,548

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		16,297		430,150
Net realized gain on investments		(133,020)		(3,529,599)
Purchases of investments		(9,103,580)		(13,250,664)
Proceeds from sales of investments		7,977,898		9,889,827
Deferred income taxes		(1,073,758)		1,011,278
Common shares issued as consideration for expense payment		82,439		15,403

Changes in operating assets and liabilities:
Prepaid expenses and other assets		(39,772)		(135,934)
Interest and dividends receivable		(115,072)		(265,504)
Receivable for investment sales		—		(75,465)
Payable for investment purchase		(1,900,000)		—
Accounts payable and other liabilities		(23,127)		(2,318)
Deferred interest income		—		—
Net cash used in operating activities		(3,381,576)		(3,386,278)

Cash flows from financing activities:
Proceeds from line of credit		6,075,000		—
Repayments on line of credit		(4,000,000)		—
Payments for common stock dividend		—		(539,296)
Net cash provided (used) by financing activities		2,075,000		(539,296)
Net decrease in cash		(1,306,576)		(3,925,574)
Cash, beginning of period		1,936,148		5,440,579
Cash, end of period	$	629,572	$	1,515,005

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	$	400,000	$	400,000	2.77	%
AirDog Supplies, Inc.		1,250,000		1,250,000	8.66	%
Intelligent Mapping, LLC		2,900,000		2,900,000	20.10	%
Financial - 53.02% secured loans
Benton Financial, LLC		598,580		598,580	4.15	%
Financial - 12% secured loans		500,000		500,000	3.46	%
Real Estate - 15% secured loans		1,280,000		1,280,000	8.87	%
Tailwinds, LLC		3,000,000		3,000,000	20.79	%
Real Estate - 48% secured loans
Villas at 79th, LLC		3,400,000		3,400,000	23.57	%
Total Short-Term Non-Banking Loans		13,328,580		13,328,580	92.37	%

Preferred Stock
Consumer
Wisdom Gaming, Inc		900,000		900,000	6.24	%
Information Technology		150,000		300,000	2.08	%
Total Other Equity		1,050,000		1,200,000	8.32	%

Warrants
Healthcare		679		—	0.00	%

Other Equity
Consumer		212,500		212,500	1.47	%
Financial		600,000		600,000	4.16	%
Total Other Equity		812,500		812,500	5.63	%

Total Investments	$	15,191,759	$	15,341,080	106.32	%

Total Cash		629,572		629,572	4.36	%

Total Investments and Cash	$	15,821,331	$	15,970,652	110.68	%


	As of June 30, 2022
	Investments at		Percentage of		Investments at		Percentage of
	Amortized Cost		Amortized Cost		Fair Value		Fair Value
Short-term Non-banking Loans	$	13,328,580	87.7	%	$	13,328,580	86.9	%
Preferred Stock		1,050,000	6.9			1,200,000	7.8
Warrants		679	—			—	—
Other Equity		812,500	5.4			812,500	5.3
Total	$	15,191,759	100.0	%	$	15,341,080	100.0	%


	As of December 31, 2021
	Investments at		Percentage of		Investments at		Percentage of
	Amortized Cost		Amortized Cost		Fair Value		Fair Value
Short-term Non-banking Loans	$	11,655,750	83.7	%	$	11,650,000	82.6	%
Preferred Stock		1,050,000	7.5			1,200,000	8.5
Common Stock		414,128	3.0			436,175	3.1
Warrants		679	—			—	—
Other Equity		812,500	5.8			812,500	5.8
Total	$	13,933,057	100.0	%	$	14,098,675	100.0	%


	As of June 30, 2022
	Level 1		Level 2		Level 3		Total
Short-term Non-banking Loans	$	—	$	—	$	13,328,580	$	13,328,580
Preferred Stock		—		—		1,200,000		1,200,000
Other Equity		—		—		812,500		812,500
Total	$	—	$	—	$	15,341,080	$	15,341,080


	For the six months ended June 30, 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		9,103,580		—		—		—		—
Sales and redemptions		(7,425,000)		—		—		—		—
Net realized loss		—		—		—		—		—
Balance as of June 30, 2021	$	13,328,580	$	1,200,000	$	—	$	—	$	812,500


Security Type	6/30/22 FMV		Valuation Technique	Unobservable Inputs	Range
ST Non-banking Loans	$	13,328,580	discounted cash flow	determining private company interest rate based on credit	12-53	%
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
	$	15,341,080


	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


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


Operating Lease
Right-of-use assets	$	26,804

Operating Lease Liability	$	26,859
Less: short term portion		(23,832)
Long term portion	$	3,027


	Operating
	Leases
2022	$	12,715
2023		14,859
Total lease payments		27,574
Less: interest		(715)
Present value of lease liabilities	$	26,859


	Six Months Ended June 30,
	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)		0.11		0.04		0.01		(0.03)		(0.02)
Net realized and unrealized gains (losses)		0.01		0.28		0.02		0.02		0.09
Provision for income taxes		(0.04)		(0.09)		0.00		0.00		0.00
Stock based compensation		0.01		0.00		0.00		0.00		0.00
Repurchase of common stock		0.00		0.00		0.02		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	$	1.33		1.31		0.96		0.96		0.94

Ratio / Supplemental Data
Per share market value of investments at end of period	$	1.41		1.22		0.65		0.70		0.82
Shares outstanding at end of period		10,855,413		10,790,413		10,696,735		11,067,402		11,067,402
Average weighted shares outstanding for the period		10,819,142		10,788,175		10,974,721		11,067,402		11,067,402
Net assets at end of period	$	14,426,607		14,188,588		10,221,718		10,588,689		11,278,889
Average net assets ⁽²⁾	$	13,888,938		13,073,718		10,025,622		12,304,975		9,955,674
Total investment return		6.45	%	21.30	%	3.30	%	(5.88)	%	8.05	%
Portfolio turnover rate (3)		65.55	%	75.65	%	11.90	%	7.11	%	11.55	%
Ratio of operating expenses to average net assets ⁽³⁾		(14.63)	%	(11.72)	%	(9.41)	%	(7.70)	%	(6.98)	%
Ratio of net investment income (loss) to average net assets ⁽³⁾		18.01	%	6.88	%	3.02	%	(6.40)	%	(5.53)	%
Ratio of realized gains (losses) to average net assets ⁽³⁾		1.94	%	61.92	%	4.06	%	57.36	%	(12.79)	%


	For the Three Months Ended
	June 30,
	2022		2021
Numerator: Net increase in net assets resulting from operations	$	518,008	$	781,506
Denominator: Weighted-average number of common shares outstanding		10,847,556		10,790,413
Basic and diluted net gain per common share	$	0.05	$	0.07


	For the Six Months Ended
	June 30,
	2022		2021
Numerator: Net increase in net assets resulting from operations	$	930,119	$	2,526,548
Denominator: Weighted-average number of common shares outstanding		10,819,142		10,788,175
Basic and diluted net gain per common share	$	0.09	$	0.23


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: August 15, 2022	By:	/s/ Douglas M. Polinsky
		DOUGLAS M. POLINSKY
		Chief Executive Officer


Date: August 15, 2022	By:	/s/ Joseph A. Geraci, II
		JOSEPH A. GERACI, II
		Chief Financial Officer

Date: August 15, 2022		/s/ Douglas M. Polinsky
		Chief Executive Officer

Date: August 15, 2022		/s/ Joseph A. Geraci, II
		Chief Financial Officer