Manhattan Bridge Capital(LOAN) - 2025 Q2 - Quarterly Report

Forward Looking Statements This report contains forward-looking statements, involving inherent risks and uncertainties that may cause actual results to differ materially - This report contains forward-looking statements, identified by words like "believe," "expect," "intend," and "estimate," which involve inherent risks and uncertainties. Actual results may differ materially due to factors such as limitations on loan origination, market competition, reliance on the CEO, potential losses from overestimated yields or incorrect collateral valuation, "lender liability" claims, incomplete due diligence, borrower concentration, stock distributions, interest rate impacts, and the ability to extend or refinance credit lines and notes[9] Part I This section presents unaudited condensed consolidated financial statements and management's analysis of financial condition Item 1. Condensed Consolidated Financial Statements (unaudited) These unaudited condensed consolidated financial statements present the company's financial position, performance, equity, and cash flows Consolidated Balance Sheets This section presents the company's consolidated balance sheets, detailing assets, liabilities, and equity | Metric | June 30, 2025 (unaudited) | December 31, 2024 (audited) | Change (Absolute) | Change (%) | | :------------------------------------- | :-------------------------- | :-------------------------- | :---------------- | :--------- | | Assets | | | | | | Loans receivable, net | $65,217,737 | $65,405,731 | $(187,994) | -0.29% | | Interest and other fees receivable | $1,877,218 | $1,521,033 | $356,185 | 23.42% | | Cash | $208,767 | $178,012 | $30,755 | 17.28% | | Total assets | $67,594,582 | $67,360,816 | $233,766 | 0.35% | | Liabilities | | | | | | Line of credit | $16,523,205 | $16,427,874 | $95,331 | 0.58% | | Senior secured notes, net | $5,940,557 | $5,903,015 | $37,542 | 0.64% | | Dividends payable | $1,315,445 | $1,315,445 | $0 | 0.00% | | Total liabilities | $24,167,711 | $24,095,689 | $72,022 | 0.30% | | Stockholders' Equity | | | | | | Total stockholders' equity | $43,426,871 | $43,265,127 | $161,744 | 0.37% | | Total liabilities and stockholders' equity | $67,594,582 | $67,360,816 | $233,766 | 0.35% | Consolidated Statements of Operations This section presents consolidated statements of operations, detailing revenues and expenses for the specified periods | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change (Absolute) | Change (%) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change (Absolute) | Change (%) | | :------------------------------------- | :------------------------------- | :------------------------------- | :---------------- | :--------- | :----------------------------- | :----------------------------- | :---------------- | :--------- | | Interest income from loans | $1,899,403 | $2,032,687 | $(133,284) | -6.56% | $3,733,317 | $4,175,174 | $(441,857) | -10.58% | | Origination fees | $455,833 | $410,528 | $45,305 | 11.04% | $895,632 | $841,119 | $54,513 | 6.48% | | Total revenue | $2,355,236 | $2,443,215 | $(87,979) | -3.60% | $4,628,949 | $5,016,293 | $(387,344) | -7.72% | | Interest and amortization of deferred financing costs | $506,250 | $603,230 | $(96,980) | -16.08% | $957,615 | $1,293,819 | $(336,204) | -26.00% | | General and administrative expenses | $437,785 | $434,282 | $3,503 | 0.81% | $891,355 | $844,560 | $46,795 | 5.54% | | Net income | $1,412,968 | $1,409,053 | $3,915 | 0.28% | $2,786,102 | $2,885,264 | $(99,162) | -3.44% | | Basic and diluted net income per common share | $0.12 | $0.12 | $0.00 | 0.00% | $0.24 | $0.25 | $(0.01) | -4.00% | Consolidated Statements of Changes in Stockholders' Equity This section presents consolidated statements of changes in stockholders' equity for the three and six-month periods | Metric | June 30, 2025 (Six Months) | June 30, 2024 (Six Months) | Change (Absolute) | Change (%) | | :------------------------------------- | :------------------------- | :------------------------- | :---------------- | :--------- | | Balance, January 1 | $43,265,127 | $42,932,706 | $332,421 | 0.77% | | Non-cash compensation | $6,532 | $6,532 | $0 | 0.00% | | Dividends paid | $(1,315,445) | $(1,315,445) | $0 | 0.00% | | Dividends declared and payable | $(1,315,445) | $(1,315,445) | $0 | 0.00% | | Net income | $2,786,102 | $2,885,264 | $(99,162) | -3.44% | | Balance, June 30 | $43,426,871 | $43,183,812 | $243,059 | 0.56% | - The company declared and paid dividends of $1,315,445 for both the three and six-month periods ended June 30, 2025 and 2024[19][21][23][25] - Non-cash compensation expense was $3,266 for the three-month periods and $6,532 for the six-month periods ended June 30, 2025 and 2024[19][21][23][25] Consolidated Statements of Cash Flows This section presents consolidated statements of cash flows, detailing operating, investing, and financing activities | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change (Absolute) | Change (%) | | :------------------------------------- | :----------------------------- | :----------------------------- | :---------------- | :--------- | | Net cash provided by operating activities | $2,407,080 | $2,425,248 | $(18,168) | -0.75% | | Net cash provided by investing activities | $136,359 | $6,409,999 | $(6,273,640) | -97.87% | | Net cash used in financing activities | $(2,535,559) | $(10,421,313) | $7,885,754 | -75.67% | | Net increase (decrease) in cash | $7,880 | $(1,586,066) | $1,593,946 | -100.50% | | Cash and restricted cash, end of period | $209,642 | $105,929 | $103,713 | 97.91% | - Cash paid for interest decreased from $1,297,587 in 2024 to $903,251 in 2025 for the six-month period[27] - Dividends paid were $2,630,890 in 2025 and $2,602,518 in 2024 for the six-month period[27] Notes to Condensed Consolidated Financial Statements These notes provide essential details on the company's accounting policies, financial instruments, and significant financial information 1. Description of the Company This section describes Manhattan Bridge Capital, Inc. as a hard money lender for real estate investors - Manhattan Bridge Capital, Inc. (MBC) and its subsidiary, MBC Funding II Corp., provide short-term, secured, non-banking loans (hard money loans) to real estate investors for property acquisition, renovation, rehabilitation, or development in the New York metropolitan area (including New Jersey and Connecticut) and Florida[30][31] - The condensed consolidated financial statements are unaudited, prepared in accordance with U.S. GAAP for interim financial information, and include normal recurring accruals[30] - Interest income from commercial loans is recognized as earned over the loan period, and loans receivable are presented at cost, net of deferred origination and other fees amortized over the loan term[34] 2. Recently Issued Technical Accounting Pronouncements This section addresses the anticipated impact of recently issued accounting standards on the company's financials - Management does not anticipate any material effect on the Company's condensed consolidated financial statements from recently issued, but not yet effective, accounting standards[35] 3. Cash – Restricted This section details the nature and amount of the company's restricted cash balances - Restricted cash primarily consists of collections from commercial loans, pending clearance, and is mainly allocated to reduce the Webster Credit Line[36] | Metric | June 30, 2025 | December 31, 2024 | | :------------- | :------------ | :---------------- | | Restricted Cash | $875 | $23,750 | 4. Commercial Loans This section details the company's commercial loan portfolio, including terms, collateral, and concentrations - The Company provides short-term (generally one-year) secured loans to real estate investors in the New York metropolitan area and Florida, primarily secured by real estate collateral and personal guarantees[38] - As of June 30, 2025, the Company was committed to $6,286,256 in construction loans, subject to certain borrower conditions[38] - A single individual holds at least a fifty percent interest in four different entities that collectively owe $7,889,500, representing 12.0% of the loan portfolio, with no affiliation to company officers or directors[39] | Loan Type | June 30, 2025 | December 31, 2024 (audited) | | :---------------- | :------------ | :-------------------------- | | Residential | $56,645,610 | $56,149,265 | | Commercial | $7,880,000 | $7,380,000 | | Mixed Use | $1,325,000 | $2,445,000 | | Total outstanding loans | $65,850,610 | $65,974,265 | - No loan impairments or provisions for impairment credit losses existed as of June 30, 2025, as borrowers are generally paying interest and signing extension agreements[42] - Subsequent to June 30, 2025, approximately $1,480,000 of loans receivable were paid down or paid off[43] 5. Line of Credit This section outlines the company's Webster Credit Line, including terms, interest rates, covenants, and balances - The Company has a $32.5 million Webster Credit Line with Webster Business Credit Corporation, Flushing Bank, and Mizrahi Tefahot Bank Ltd, secured by mortgages and other collateral, expiring February 28, 2026[44] - The interest rate on the Webster Credit Line is SOFR plus a premium (approximately 7.9% including a 0.5% agency fee as of June 30, 2025) or a Base Rate plus 2.00% and a 0.5% agency fee[44] - The credit line includes covenants limiting borrowing amounts, requiring financial ratio maintenance, restricting dividend payments, and limiting share repurchases[45] - As of June 30, 2025, the Company was in compliance with all covenants, with an outstanding amount of $16,523,205[47] - The CEO, Assaf Ran, provides a personal guarantee for up to $1,000,000 plus enforcement costs for the Webster Credit Line[46] 6. Senior Secured Notes This section details the company's senior secured notes, including issuance terms, covenants, and ownership - MBC Funding II issued $6,000,000 in 6% senior secured notes, due April 22, 2026, listed on the NYSE American under "LOAN/26", with monthly cash interest payments[48] - The Indenture requires the aggregate outstanding principal balance of mortgage loans held by MBC Funding II plus cash on hand to be at least 120% of the Notes' aggregate outstanding principal amount[49] - The Notes can be redeemed by MBC Funding II after April 22, 2019, at par plus accrued interest, without penalty or premium. No Notes were redeemed as of June 30, 2025[50] - The Company guarantees MBC Funding II's obligations under the Notes, secured by a pledge of 100% of MBC Funding II's common shares. The Company plans to refinance the Notes before maturity[52] - CEO Assaf Ran and CFO Vanessa Kao own $704,000 and $288,000 of the Notes, respectively, as of June 30, 2025[53] 7. Earnings Per Common Share This section explains the calculation of basic and diluted earnings per common share - Basic and diluted earnings per share are calculated according to ASC Topic 260, dividing income available to common shareholders by the weighted-average number of common shares outstanding, with diluted EPS including potential dilution from stock options and warrants[54] 8. Stock–Based Compensation This section details the company's stock-based compensation expense and related restricted share grants - Stock-based compensation expense was $3,266 for the three-month periods and $6,532 for the six-month periods ended June 30, 2025 and 2024[55] - This expense relates to the amortization of the fair value of 1,000,000 restricted shares granted to the CEO on September 9, 2011, amortized over 15 years[55] - As of June 30, 2025, all 1,000,000 shares remain restricted, with $15,242 in unrecognized compensation, vesting in thirds on September 9, 2026, 2027, and 2028[55] 9. Stockholders' Equity This section discusses the company's share buyback program and its impact on stockholders' equity - The Company's share buyback program, authorized on April 11, 2023, for up to 100,000 common shares, expired on April 10, 2024[56] - Under the program, 56,294 common shares were repurchased at an aggregate cost of $271,468, including 2,000 shares for $9,800 in Q1 2024[56] 10. Segment Reporting This section clarifies that the company operates as a single reportable segment in commercial lending - The Company operates as a single reportable segment, focusing on originating, servicing, and managing short-term secured commercial loans to real estate investors[57] - Management evaluates performance on a consolidated basis, as all loans share similar risk profiles, underwriting standards, and operational processes[57] | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Lending revenue | $2,355,236 | $2,443,215 | $4,628,949 | $5,016,293 | | Net income | $1,412,968 | $1,409,053 | $2,786,102 | $2,885,264 | 11. Subsequent Events This section reports significant events that occurred after the balance sheet date - A cash dividend of $0.115 per share, totaling $1,315,445, was paid on July 15, 2025, to shareholders of record on July 8, 2025, as declared by the Board on April 17, 2025[59] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's financial performance, condition, operational strategies, and liquidity Business Overview This section provides an overview of Manhattan Bridge Capital's business model as a real estate finance company - Manhattan Bridge Capital, Inc. is a New York-based real estate finance company specializing in originating, servicing, and managing first mortgage loans, offering short-term, secured, non-banking loans to real estate investors[62] - Loans are typically secured by a first mortgage lien on real estate and personally guaranteed by the borrower's principals, with initial terms of 12 months and fixed interest rates of 9% to 12% per year[63] - The Company generally receives origination fees (0% to 2% of principal) and other fees, with interest payable monthly in arrears[63] - The Company has not foreclosed on a property since 2007, except for one instance in June 2023 due to a deed transfer without consent, which was rectified by October 2023 with full loan payoff[64] - New business primarily comes from repeat customers, referrals, banks, brokers, and the CEO's business development efforts[66] Results of Operations This section analyzes the company's financial performance for the three and six-month periods Three Months Ended June 30, 2025 vs. 2024 This section compares the company's financial results for the three-month periods ended June 30, 2025 and 2024 | Metric | Q2 2025 | Q2 2024 | Change (Absolute) | Change (%) | | :------------------------------------- | :---------- | :---------- | :---------------- | :--------- | | Total revenue | $2,355,000 | $2,443,000 | $(88,000) | -3.6% | | Interest income from loans | $1,899,000 | $2,033,000 | $(134,000) | -6.6% | | Origination fees | $456,000 | $411,000 | $45,000 | 11.0% | | Interest & amortization of deferred financing costs | $506,000 | $603,000 | $(97,000) | -16.1% | | General and administrative expenses | $438,000 | $434,000 | $4,000 | 0.9% | | Net income | $1,413,000 | $1,409,000 | $4,000 | 0.3% | Six Months Ended June 30, 2025 vs. 2024 This section compares the company's financial results for the six-month periods ended June 30, 2025 and 2024 | Metric | H1 2025 | H1 2024 | Change (Absolute) | Change (%) | | :------------------------------------- | :---------- | :---------- | :---------------- | :--------- | | Total revenue | $4,629,000 | $5,016,000 | $(387,000) | -7.7% | | Interest income from loans | $3,733,000 | $4,175,000 | $(442,000) | -10.6% | | Origination fees | $896,000 | $841,000 | $55,000 | 6.5% | | Interest & amortization of deferred financing costs | $958,000 | $1,294,000 | $(336,000) | -26.0% | | General and administrative expenses | $891,000 | $845,000 | $46,000 | 5.4% | | Net income | $2,786,000 | $2,885,000 | $(99,000) | -3.4% | - Total revenue decreased by 3.6% for the three months and 7.7% for the six months ended June 30, 2025, primarily due to lower interest income from a reduction in loans receivable, partially offset by increased origination fees[70][74] - Interest and amortization of deferred financing costs decreased by 16.1% for the three months and 26.0% for the six months ended June 30, 2025, mainly due to lower SOFR rates and reduced Webster Credit Line borrowings[71][75] - General and administrative expenses saw a slight increase of 0.8% for the three months and 5.4% for the six months, driven by higher payroll and NYSE American listing fees, partially offset by reduced legal and travel expenses[72][76] - Net income remained relatively stable for the three months (up 0.28%) but decreased by 3.4% for the six months ended June 30, 2025, primarily due to lower interest income, partially offset by decreased interest expense[73][77] Liquidity and Capital Resources This section discusses the company's liquidity, cash flows, and capital resources | Metric | June 30, 2025 | December 31, 2024 | Change (Absolute) | Change (%) | | :------------------------------------- | :------------ | :---------------- | :---------------- | :--------- | | Cash | $209,000 | $178,000 | $31,000 | 17.42% | | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change (Absolute) | Change (%) | | :------------------------------------- | :----------------------------- | :----------------------------- | :---------------- | :--------- | | Net cash provided by operating activities | $2,407,000 | $2,425,000 | $(18,000) | -0.74% | | Net cash provided by investing activities | $136,000 | $6,410,000 | $(6,274,000) | -97.88% | | Net cash used in financing activities | $(2,536,000) | $(10,421,000) | $7,885,000 | -75.66% | - The decrease in net cash from operating activities was due to lower net income and a larger increase in interest and other fees receivable, partially offset by increased deferred origination fees[79] - Net cash from investing activities significantly decreased due to a smaller net difference between loan collections ($23.6M) and issuances ($23.5M) in 2025 compared to 2024 (collections $25.9M vs. issuances $19.5M)[80] - Net cash used in financing activities decreased significantly, primarily reflecting lower net repayments of the Webster Credit Line in 2025 compared to 2024[81] - The Webster Credit Line provides $32.5 million until February 28, 2026, with an outstanding balance of $16,523,205 at June 30, 2025, and an interest rate of approximately 7.9%[82][84] - The Company expects current cash, the Webster Credit Line, and cash flows from operations to be sufficient for the next 12 months and plans to refinance the Senior Secured Notes before maturity[90] Item 3. Quantitative and Qualitative Disclosures about Market Risk As a smaller reporting company, the company is exempt from detailed market risk disclosures - The Company is not required to provide quantitative and qualitative disclosures about market risk as it is a smaller reporting company[91] Item 4. Controls and Procedures Management evaluated the effectiveness of disclosure controls and procedures, concluding they are effective (a) Evaluation and Disclosure Controls and Procedures This section details management's evaluation and conclusion on the effectiveness of disclosure controls - Management, including the CEO and CFO, assessed the effectiveness of disclosure controls and procedures as of June 30, 2025, and determined them to be effective[92] (b) Changes in Internal Control Over Financial Reporting This section reports on any material changes in internal control over financial reporting - No changes in internal control over financial reporting occurred during the quarter ended June 30, 2025, that materially affected or are reasonably likely to materially affect these controls[93] Part II This section includes other required information not covered in the financial statements or management's discussion Item 6. Exhibits This section lists all exhibits filed with the Form 10-Q, including officer certifications and XBRL documents | Exhibit No. | Description | | :---------- | :---------------------------------------------------- | | 31.1 | Chief Executive Officer Certification under Rule 13a-14 | | 31.2 | Chief Financial Officer Certification under Rule 13a-14 | | 32.1* | Chief Executive Officer Certification pursuant to 18 U.S.C. section 1350 | | 32.2* | Chief Financial Officer Certification pursuant to 18 U.S.C. section 1350 | | 101.INS | Inline XBRL Instance Document | | 104 | Cover Page Interactive Data File | - Exhibits include certifications from the CEO and CFO under Rule 13a-14 and 18 U.S.C. section 1350, along with various Inline XBRL documents for financial data[95] SIGNATURES This section contains the required signatures of the company's principal executive and financial officers - The report was signed on July 22, 2025, by Assaf Ran, President and Chief Executive Officer, and Vanessa Kao, Chief Financial Officer[99]