Mustang Funding, LLC entered into a non-binding letter of intent to acquire Mill City Ventures III, Ltd. (NasdaqCM:MCVT) in a reverse merger transaction on December 6, 2022. Under the terms of the transaction, the owners of Mustang will receive a sufficient number of shares of Mill City common stock such that they would own 80% of the total number of issued and outstanding shares of Mill City common stock on a post-transaction basis. The transaction is subject to the signing of a definitive agreement, completion of due diligence, a financing-based condition which is consummation of a short-term loan by Mill City to Mustang, the approval of the owners of Mustang and the shareholders of Mill City, together with any related regulatory approvals that may be required, including any required approval by Nasdaq of the continued listing of Mill City common stock after any closing.

As on December 14, 2022, Mill City Ventures III entered into a $5 million short-term financing arrangement with Mustang in furtherance of the proposed merger, which satisfies the one of the conditions for the closing of the merger. The related short-term note is scheduled to mature on the ninth-month anniversary of the loan. As on September 11, 2023, Mill city extended an additional $1 million of short-term loan principal to Mustang Funding LLC and refinanced and extended earlier provided short-term loan principal which brings the total amount of capital committed to Mustang to $8 million.

The principal amount of all short-term loans made to Mustang accrues interest at the per annum rate of 15%, and becomes due and payable upon the earlier of May 31, 2024 or 90 days after any termination of discussions.