MILL CITY VENTURES III, LTD: entering into a material definitive agreement, creating a direct financial obligation or obligation under an off-balance sheet arrangement of a holder, financial statements and exhibits (Form 8- K)

Item 1.01 Conclusion of a Material Definitive Agreement.

At January 3, 2022, Mill City Ventures III, Ltd. (“Mill City”) has entered into a loan and guarantee agreement (the “Loan Agreement”) with Eastman Investment, Inc., a Nevada company, and Lyle A. Berman, as trustee of Lyle A. Berman Revocable Trust (collectively, the “Lenders”). Under the loan agreement, the lenders made available to Mill City a $ 5 million revolving line of credit for Mill City for use in the normal course of its specialized short-term financing activities. Amounts drawn under the loan agreement will bear interest at the annual rate of 8%, and all of Mill City’s obligations under the loan agreement are secured by the granting of security over substantially all of Mill City assets.

Each lender is required to provide only half of the whole $ 5 million
available as part of the loan agreement. The loan agreement has a term of five years ending on January 3, 2027, the date on which all amounts due under the Loan Agreement will become due and payable; subject, however, to the right of each lender to terminate the loan agreement, only with respect to that lender’s obligation to provide additional credit, at any time after January 3, 2023. In the event that a lender terminates its loan obligations, the loan agreement requires Mill City to repay that lender, by the five-year maturity date, with the proceeds of the specified investments.

The loan agreement provides that Mill City pay an unused quarterly commitment fee equal to one-quarter of one percent of the amount of credit available but not used under the loan agreement, and requires Mill City to pay this. commission in the form of shares of Mill City ordinary shares based on the net asset value per Mill City share on the last day of the applicable fiscal quarter. The Loan Agreement grants Piggyback Registration Rights to Lenders subject to customary terms and conditions.

The loan agreement contains other provisions, such as representations, guarantees, terms and conditions, which are customary for revolving credit facilities. Promissory Notes, evidencing the amounts due under the Loan Agreement and in accordance with the terms and conditions of the Loan Agreement, have also been executed by Mill City and delivered to the Lenders in accordance with the Loan Agreement.

 Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
           Off-Balance Sheet Arrangement of a Registrant.

The information in section 1.01 above is incorporated by reference in this section.

Item 9.01 Financial statements and supporting documents.

 (d) Exhibits.

  Item     Description
    10.1     Loan and Security Agreement, dated January 3, 2022, among Mill City
           Ventures III, Ltd., Eastman Investment, Inc. and Lyle A. Berman, as
           trustee of the Lyle A. Berman Revocable Trust (filed herewith)
  104      Cover Page Interactive Data File (embedded within the Inline XBRL

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