10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2022

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____________________________________ to _____________________________

Commission File Number: 000-25991

MANHATTAN BRIDGE CAPITAL, INC.

(Exact name of registrant as specified in its charter)

New York	11-3474831
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

60 Cutter Mill Road, Great Neck, New York 11021

(Address of principal executive offices)

(516) 444-3400

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common shares, par value $.001	LOAN	Nasdaq Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

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

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

As of July 22, 2022, the Issuer had a total of 11,494,945 common shares, $.001 par value per share, outstanding.

MANHATTAN BRIDGE CAPITAL, INC.

TABLE OF CONTENTS

		Page Number
Part I	FINANCIAL INFORMATION
Item 1.	Consolidated Financial Statements (unaudited)	3
	Consolidated Balance Sheets as of June 30, 2022 and December 31, 2021	3
	Consolidated Statements of Operations for the Three and Six Month Periods Ended June 30, 2022 and 2021	4
	Consolidated Statements of Changes in Stockholders’ Equity for the Three and Six Month Periods Ended June 30, 2022 and 2021	5
	Consolidated Statements of Cash Flows for the Six Month Periods Ended June 30, 2022 and 2021	6
	Notes to Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	10
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	14
Item 4.	Controls and Procedures	15
Part II	OTHER INFORMATION
Item 1A.	Risk Factors	15
Item 6.	Exhibits	16
SIGNATURES		17
EXHIBITS

1

Forward Looking Statements

This report contains forward-looking statements within the meaning of section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements are typically identified by the words “believe,” “expect,” “intend,” “estimate” and similar expressions. Those statements appear in a number of places in this report and include statements regarding our intent, belief or current expectations or those of our directors or officers with respect to, among other things, trends affecting our financial condition and results of operations and our business and growth strategies. These forward-looking statements are not guarantees of future performance and involve risks and uncertainties. Actual results may differ materially from those projected, expressed or implied in the forward-looking statements as a result of various factors (such factors are referred to herein as “Cautionary Statements”), including but not limited to the following: (i) our loan origination activities, revenues and profits are limited by available funds; (ii) we operate in a highly competitive market and competition may limit our ability to originate loans with favorable interest rates; (iii) our Chief Executive Officer is critical to our business and our future success may depend on our ability to retain him; (iv) if we overestimate the yields on our loans or incorrectly value the collateral securing the loan, we may experience losses; (v) we may be subject to “lender liability” claims; (vi) our due diligence may not uncover all of a borrower’s liabilities or other risks to its business; (vii) borrower concentration could lead to significant losses; (viii) we may choose to make distributions in our own stock, in which case you may be required to pay income taxes in excess of the cash dividends you receive (ix) an increase in interest rates may impact our profitability, and (x) the effect of the COVID-19 pandemic on our business may be greater than anticipated. The accompanying information contained in this report, including the information set forth under “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” identifies important factors that could cause such differences. Further information on potential factors that could affect our business is described under the heading “Risk Factors” in Part I, Item 1A, of our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 (the “2021 Annual Report”). These forward-looking statements speak only as of the date of this report, and we caution potential investors not to place undue reliance on such statements. We undertake no obligation to update or revise any forward-looking statements. All subsequent written or oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the Cautionary Statements.

All references in this Form 10-Q to “Company,” “we,” “us,” or “our” refer to Manhattan Bridge Capital, Inc. and its wholly-owned subsidiary, MBC Funding II Corp., unless the context otherwise indicates.

2

PART I. FINANCIAL INFORMATION

Item 1. CONSOLIDATED FINANCIAL STATEMENTS

MANHATTAN BRIDGE CAPITAL, INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

	June 30, 2022			December 31, 2021
	(unaudited)			(audited)
Assets
Loans receivable	$	69,303,663		$	65,715,364
Interest receivable on loans		1,052,332			955,443
Cash		117,622			142,546
Other assets		129,536			64,745
Operating lease right-of-use asset, net		289,651			317,080
Deferred financing costs, net		29,902			10,539
Total assets	$	70,922,706		$	67,205,717
Liabilities and Stockholders’ Equity
Liabilities:
Line of credit	$	19,273,526		$	15,645,970
Senior secured notes (net of deferred financing costs of $284,698 and $322,241, respectively)		5,715,301			5,677,759
Deferred origination fees		712,627			580,461
Accounts payable and accrued expenses		185,320			154,169
Operating lease liability		299,135			324,248
Dividends payable		1,436,868			1,436,868
Total liabilities		27,622,777			23,819,475
Commitments and contingencies
Stockholders’ equity:
Preferred stock - $.01 par value; 5,000,000 shares authorized; none issued		—			—
Common shares - $.001 par value; 25,000,000 shares authorized; 11,757,058 issued; 11,494,945 outstanding		11,757			11,757
Additional paid-in capital		45,529,278			45,522,746
Treasury stock, at cost – 262,113 shares		(798,939	)		(798,939	)
Accumulated deficit		(1,442,167	)		(1,349,322	)
Total stockholders’ equity		43,299,929			43,386,242
Total liabilities and stockholders’ equity	$	70,922,706		$	67,205,717

The accompanying notes are an integral part of these consolidated financial statements.

3

MANHATTAN BRIDGE CAPITAL, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021
Interest income from loans	$	1,612,308		$	1,423,759		$	3,256,097		$	2,866,573
Origination fees		504,455			289,670			975,726			576,143
Total revenue		2,116,763			1,713,429			4,231,823			3,442,716
Operating costs and expenses:
Interest and amortization of deferred financing costs		376,383			316,915			708,236			634,101
Referral fees		1,958			2,643			3,320			4,394
General and administrative expenses		386,238			339,602			747,726			648,583
Total operating costs and expenses		764,579			659,160			1,459,282			1,287,078
Income from operations		1,352,184			1,054,269			2,772,541			2,155,638
Other income		4,500			4,500			9,000			9,000
Income before income tax expense		1,356,684			1,058,769			2,781,541			2,164,638
Income tax expense		(650	)		(647	)		(650	)		(647	)
Net income	$	1,356,034		$	1,058,122		$	2,780,891		$	2,163,991
Basic and diluted net income per common share outstanding:
—Basic	$	0.12		$	0.11		$	0.24		$	0.22
—Diluted	$	0.12		$	0.11		$	0.24		$	0.22
Weighted average number of common shares outstanding:
—Basic		11,494,945			9,619,945			11,494,945			9,619,945
—Diluted		11,494,945			9,619,945			11,494,945			9,619,945

The accompanying notes are an integral part of these consolidated financial statements.

4

MANHATTAN BRIDGE CAPITAL, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(unaudited)

FOR THE THREE MONTHS ENDED JUNE 30, 2022

	Common Shares				Additional Paid in		Treasury Stock					Accumulated
	Shares		Amount		Capital		Shares		Cost			Deficit			Totals
Balance, April 1, 2022		11,757,058	$	11,757	$	45,526,012		262,113	$	(798,939	)	$	(1,361,333	)	$	43,377,497
Non - cash compensation						3,266										3,266
Dividends declared and payable													(1,436,868	)		(1,436,868	)
Net income													1,356,034			1,356,034
Balance, June 30, 2022		11,757,058	$	11,757	$	45,529,278		262,113	$	(798,939	)	$	(1,442,167	)	$	43,299,929

FOR THE THREE MONTHS ENDED JUNE 30, 2021

	Common Shares				Additional Paid in		Treasury Stock					Retained
	Shares		Amount		Capital		Shares		Cost			Earnings			Totals
Balance, April 1, 2021		9,882,058	$	9,882	$	33,160,362		262,113	$	(798,939	)	$	702,020		$	33,073,325
Non - cash compensation						3,266										3,266
Dividends paid													(1,058,194	)		(1,058,194	)
Net income													1,058,122			1,058,122
Balance, June 30, 2021		9,882,058	$	9,882	$	33,163,628		262,113	$	(798,939	)	$	701,948		$	33,076,519

FOR THE SIX MONTHS ENDED JUNE 30, 2022

	Common Shares				Additional Paid in		Treasury Stock					Accumulated
	Shares		Amount		Capital		Shares		Cost			Deficit			Totals
Balance, January 1, 2022		11,757,058	$	11,757	$	45,522,746		262,113	$	(798,939	)	$	(1,349,322	)	$	43,386,242
Non - cash compensation						6,532										6,532
Dividends paid													(1,436,868	)		(1,436,868	)
Dividends declared and payable													(1,436,868	)		(1,436,868	)
Net income													2,780,891			2,780,891
Balance, June 30, 2022		11,757,058	$	11,757	$	45,529,278		262,113	$	(798,939	)	$	(1,442,167	)	$	43,299,929

FOR THE SIX MONTHS ENDED JUNE 30, 2021

	Common Shares				Additional Paid in		Treasury Stock					(Accumulated Deficit) Retained
	Shares		Amount		Capital		Shares		Cost			Earnings			Totals
Balance, January 1, 2021		9,882,058	$	9,882	$	33,157,096		262,113	$	(798,939	)	$	(403,849	)	$	31,964,190
Non - cash compensation						6,532										6,532
Dividends paid													(1,058,194	)		(1,058,194	)
Net income													2,163,991			2,163,991
Balance, June 30, 2021		9,882,058	$	9,882	$	33,163,628		262,113	$	(798,939	)	$	701,948		$	33,076,519

The accompanying notes are an integral part of these consolidated financial statements.

5

MANHATTAN BRIDGE CAPITAL, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

	Six Months Ended June 30,
	2022			2021
Cash flows from operating activities:
Net income	$	2,780,891		$	2,163,991
Adjustments to reconcile net income to net cash provided by operating activities -
Amortization of deferred financing costs		53,999			45,294
Adjustment to operating lease right-of-use asset and liability		2,316			2,060
Depreciation		972			1,153
Non-cash compensation expense		6,532			6,532
Changes in operating assets and liabilities:
Interest receivable on loans		(96,889	)		(88,502	)
Other assets		(63,871	)		(56,768	)
Accounts payable and accrued expenses		31,151			(35,028	)
Deferred origination fees		132,166			(9,885	)
Net cash provided by operating activities		2,847,267			2,028,847
Cash flows from investing activities:
Issuance of short term loans		(37,953,007	)		(15,567,677	)
Collections received from loans		34,364,708			20,279,776
Purchase of fixed assets		(1,893	)		—
Net cash (used in) provided by investing activities		(3,590,192	)		4,712,099
Cash flows from financing activities:
Proceeds from (repayment of) line of credit, net		3,627,556			(4,911,758	)
Dividends paid		(2,873,736	)		(2,116,388	)
Deferred financing costs incurred		(35,819	)		—
Pre-offering costs incurred		—			(18,750	)
Net cash provided by (used in) financing activities		718,001			(7,046,896	)
Net decrease in cash		(24,924	)		(305,950	)
Cash and restricted cash*, beginning of year		142,546			459,137
Cash and restricted cash*, end of period	$	117,622		$	153,187
Supplemental Cash Flow Information:
Taxes paid during the period	$	650		$	647
Interest paid during the period	$	608,902		$	603,869
Operating leases paid during the period	$	31,786		$	31,719
Supplemental Information – Noncash Information:
Dividend declared and payable	$	1,436,868		$	—

* At January 1, 2021, cash and restricted cash included $327,483 of restricted cash. No other periods above included restricted cash.

The accompanying notes are an integral part of these consolidated financial statements.

6

MANHATTAN BRIDGE CAPITAL, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2022

1. THE COMPANY

The accompanying unaudited consolidated financial statements of Manhattan Bridge Capital, Inc. (“MBC”), a New York corporation founded in 1989, and its consolidated subsidiary, MBC Funding II Corp. (“MBC Funding II”), a New York corporation formed in December 2015 (collectively referred to herein as the “Company”) have been prepared by the Company in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. However, in the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The accompanying unaudited consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2021 and the notes thereto included in the Company’s Annual Report on Form 10-K. Results of consolidated operations for the interim period are not necessarily indicative of the operating results to be attained in the entire fiscal year.

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual amounts could differ from those estimates.

The consolidated financial statements include the accounts of MBC and MBC Funding II. All significant intercompany balances and transactions have been eliminated in consolidation.

The Company offers short-term, secured, non–banking loans to real estate investors (also known as hard money) to fund their acquisition, renovation, rehabilitation or development of residential or commercial properties located in the New York metropolitan area, including New Jersey and Connecticut, and in Florida.

Interest income from commercial loans is recognized, as earned, over the loan period.

Origination fee revenue on commercial loans is amortized over the term of the respective note.

2. RECENT TECHNICAL ACCOUNTING PRONOUNCEMENTS

Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s consolidated financial statements.

3. COMMERCIAL LOANS

Loans Receivable

The Company offers short-term secured non–banking loans to real estate investors (also known as hard money) to fund their acquisition and construction of properties located in the New York metropolitan area, including New Jersey and Connecticut, and in Florida. The loans are principally secured by collateral consisting of real estate and accompanied by personal guarantees from the principals of the borrowers. The loans are generally for a term of one year. The short term loans are initially recorded, and carried thereafter, in the financial statements at cost. Most of the loans provide for receipt of interest only during the term of the loan and a balloon payment at the end of the term.

At June 30, 2022, the Company was committed to $9,618,525 in construction loans that can be drawn by the borrowers when certain conditions are met.

At June 30, 2022, no one entity has loans outstanding representing more than 10% of the total balance of the loans outstanding.

The Company generally grants loans for a term of one year. When a performing loan reaches its maturity and the borrower requests an extension, the Company may extend the term of the loan beyond one year. Prior to granting an extension of any loan, the Company reevaluates the underlying collateral.

7

Credit Risk

Credit risk profile based on loan activity as of June 30, 2022 and December 31, 2021:

Performing loans	Developers- Residential		Developers- Commercial		Developers- Mixed Use		Total outstanding loans
June 30, 2022	$	56,995,663	$	9,819,000	$	2,489,000	$	69,303,663
December 31, 2021	$	57,432,364	$	5,819,000	$	2,464,000	$	65,715,364

At June 30, 2022, the Company’s loans receivable consisted of loans in the amount of $310,411, $582,400, $974,000, $3,820,250 and $8,512,475, originally due in 2016, 2017, 2019, 2020 and 2021, respectively. The receivable also includes loans in the amount of $4,487,000 originally due during the first six months of 2022.

In all instances the borrowers are currently paying their interest and, generally, the Company receives a fee in connection with the extension of the loans. In all instances the borrower has either signed an extension agreement or are in the process of signing the extension. At June 30, 2022, no loan impairments exist and there are no provisions for impairments of loans or recoveries thereof.

Subsequent to the balance sheet date, $300,000 of the loans receivable at June 30, 2022 were paid off.

4. LINE OF CREDIT

The Company executed an Amended and Restated Credit and Security Agreement, as amended (the “Amended and Restated Credit Agreement”), with Webster Business Credit Corporation (“Webster”), Flushing Bank (“Flushing”) and Mizrahi Tefahot Bank Ltd (“Mizrahi” and together with Webster and Flushing, the “Lenders”), which established the Company’s credit line (the “Webster Credit Line”). Currently, the Webster Credit Line provides the Company with a credit line of $32.5 million in the aggregate until February 28, 2023, secured by assignments of mortgages and other collateral. The Webster Credit Line contains various covenants and restrictions including, among other covenants and restrictions, limiting the amount that the Company can borrow relative to the value of the underlying collateral, maintaining various financial ratios and limitations on the terms of loans the Company makes to its customers, limiting the Company’s ability to pay dividends under certain circumstances, and limiting the Company’s ability to repurchase its common shares, sell assets, engage in mergers or consolidations, grant liens, and enter into transactions with affiliates. In addition, the Webster Credit Line contains a cross default provision which will deem any default under any indebtedness owed by us or our subsidiary, MBC Funding II, as a default under the credit line.

The interest rates relating to the Webster Credit Line equal (i) LIBOR plus a premium, which rate aggregated approximately 5.79%, including a 0.5% agency fee, as of June 30, 2022, or (ii) a Base Rate (as defined in the Amended and Restated Credit Agreement) plus 2.25% plus a 0.5% agency fee, as chosen by the Company for each drawdown. Under the Amended and Restated Credit Agreement, the Company may repurchase, redeem or otherwise retire its equity securities in an amount not to exceed ten percent of our annual net income from the prior fiscal year. Further, the Company may issue up to $20 million in bonds through its subsidiary, of which not more than $10 million of such bonds may be secured by mortgage notes receivable, and provided that the terms and conditions of such bonds are approved by Webster, subject to its reasonable discretion. In addition, Mr. Ran has provided a personal guaranty to the Webster Credit Line, which shall not exceed the sum of $500,000 plus any costs relating to the enforcement of the personal guaranty.

On March 7, 2022, the Company entered into a Waiver Agreement (the “Waiver”), with respect to the Amended and Restated Credit Agreement, with the Lenders and Mr. Ran, as guarantor, to provide the Company with a waiver of its covenant with respect to maintaining its fixed charge coverage ratio for the period ended December 31, 2021. In addition, the Waiver also provided that an amount of $700,000 of distributions and/or dividends paid during the quarter ended December 31, 2021 shall be excluded from the calculation of fixed charge coverage ratio for the fiscal quarters ending March 31, 2022, June 30, 2022 and September 30, 2022.

8

On April 25, 2022, the Company entered into an amendment (the “2022 Amendment”), with respect to the Amended and Restated Credit Agreement with the Lenders and Mr. Ran, as guarantor. Pursuant to the terms of the 2022 Amendment, each of the Company and the Lenders agreed to amend the Amended and Restated Credit Agreement to provide as follows: (i) to increase the limit on individual loans from $1 million to $2 million; (ii) to increase the concentration of any mortgagor (together with guarantors and other related entities and affiliates) from $2.5 million to $5 million; and (iii) to permit the Company to originate loans in the state of Florida in any county south of, and including, Palm Beach and Lee counties, in an amount up to $4.875 million.

Except as set forth in the preceding paragraphs, the Company was in compliance with all covenants of the Webster Credit Line, as amended, as of June 30, 2022. At June 30, 2022, the outstanding amount under the Amended Credit Agreement was $19,273,526. The interest rate on the amount outstanding fluctuates daily. The rate, including a 0.5% Agency Fee, was approximately 5.79% as of June 30, 2022.

5. SENIOR SECURED NOTES

On April 25, 2016, in an initial public offering, MBC Funding II issued 6% senior secured notes, due April 22, 2026 (the “Notes”) in the aggregate principal amount of $6,000,000 under the Indenture, dated April 25, 2016, among MBC Funding II, as Issuer, the Company, as Guarantor, and Worldwide Stock Transfer LLC, as Indenture Trustee (the “Indenture”). The Notes, having a principal amount of $1,000 each, are listed on the NYSE American and trade under the symbol “LOAN/26”. Interest accrues on the Notes commencing on May 16, 2016. The accrued interest is payable monthly in cash, in arrears, on the 15th day of each calendar month commencing June 2016.

Under the terms of the Indenture, the aggregate outstanding principal balance of the mortgage loans held by MBC Funding II, together with MBC Funding II’s cash on hand, must always equal at least 120% of the aggregate outstanding principal amount of the Notes at all times. To the extent the aggregate principal amount of the mortgage loans owned by MBC Funding II plus MBC Funding II’s cash on hand is less than 120% of the aggregate outstanding principal balance of the Notes, MBC Funding II is required to repay, on a monthly basis, the principal amount of the Notes equal to the amount necessary such that, after giving effect to such repayment, the aggregate principal amount of all mortgage loans owned by MBC Funding II plus, MBC Funding II’s cash on hand at such time is equal to or greater than 120% of the outstanding principal amount of the Notes. For this purpose, each mortgage loan is deemed to have a value equal to its outstanding principal balance, unless the borrower is in default of its obligations.

MBC Funding II may redeem the Notes, in whole or in part, at any time after April 22, 2019 upon at least 30 days prior written notice to the Noteholders. The redemption price will be equal to the outstanding principal amount of the Notes redeemed plus the accrued but unpaid interest thereon up to, but not including, the date of redemption, without penalty or premium. No Notes were redeemed by MBC Funding II as of June 30, 2022.

MBC Funding II is obligated to offer to redeem the Notes if there occurs a “change of control” with respect to MBC Funding II or the Company or if MBC Funding II or the Company sell any assets unless, in the case of an asset sale, the proceeds are reinvested in the business of the seller. The redemption price in connection with a “change of control” will be 101% of the principal amount of the Notes redeemed plus accrued but unpaid interest thereon up to, but not including, the date of redemption. The redemption price in connection with an asset sale will be the outstanding principal amount of the Notes redeemed plus accrued but unpaid interest thereon up to, but not including, the date of redemption.

The Company guaranteed MBC Funding II’s obligations under the Notes, which are secured by its pledge of 100% of the outstanding common shares of MBC Funding II that it owns.

Our principal executive officers consist of Assaf Ran, who serves as our Chief Executive Officer and President, and Vanessa Kao, who serves as our Chief Financial Officer. Each of Mr. Ran and Ms. Kao own an aggregate of $704,000 and $288,000 of our Notes.

6. EARNINGS PER COMMON SHARE

Basic and diluted earnings per share are calculated in accordance with Accounting Standards Codification (“ASC”) 260, “Earnings Per Share” (“ASC 260”). Under ASC 260, basic earnings per share is computed by dividing income available to common shareholders by the weighted-average number of common shares outstanding for the period. The computation of diluted earnings per share is similar to basic earnings per share, except that the denominator is increased to include the potential dilution from the exercise of stock options and warrants for common shares using the treasury stock method. The numerator in calculating both basic and diluted earnings per common share for each period is the reported net income.

The denominator is based on the following weighted average number of common shares:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Basic weighted average common shares outstanding		11,494,945		9,619,945		11,494,945		9,619,945
Incremental shares for assumed exercise of warrants		—		—		—		—
Diluted weighted average common shares outstanding		11,494,945		9,619,945		11,494,945		9,619,945

Vested warrants to purchase 33,612 common shares, that expired August 2021, were not included in the diluted earnings per share calculation for the three and six months ended June 30, 2021 because the warrants were not in the money.

7. STOCK – BASED COMPENSATION

Stock based compensation expense recognized under ASC 718, “Compensation – Stock Compensation,” for each of the six month periods ended June 30, 2022 and 2021 of $6,532 represents the amortization of the fair value of 1,000,000 restricted shares granted to the Company’s Chief Executive Officer on September 9, 2011 of $195,968, after adjusting for the effect on the fair value of the stock options related to this transaction. The fair value is being amortized over 15 years. At June 30, 2022, all 1,000,000 shares remain restricted, and the remaining unrecognized stock based compensation amounted to $54,436.

8. COVID-19

To date, the Company has not been materially impacted by the COVID-19 pandemic and will continue to closely monitor the impact of the COVID-19 pandemic on all aspects of its business. If the COVID-19 pandemic worsens in the geographic areas in which the Company operates, the pandemic could materially affect its financial and operational results.

9. SUBSEQUENT EVENT

In accordance with the dividend declared by the Company’s Board of Directors on April 15, 2022, a cash dividend of $0.125 per share in an aggregate amount of $1,436,868 was paid on July 15, 2022 to all shareholders of record on July 8, 2022.

********

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Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited consolidated financial statements and notes thereto included in this Quarterly Report on Form 10-Q. The discussion and analysis contains forward-looking statements based on current expectations that involve risks and uncertainties. Actual results and the timing of certain events may differ significantly from those projected in such forward-looking statements.

We are a New York-based real estate finance company that specializes in originating, servicing and managing a portfolio of first mortgage loans. We offer short-term, secured, non-banking loans (sometimes referred to as “hard money” loans), which we may renew or extend on, before or after their initial term expires, to real estate investors to fund their acquisition, renovation, rehabilitation or development of residential or commercial properties located in the New York metropolitan area, including New Jersey and Connecticut, and in Florida.

The properties securing the loans are generally classified as residential or commercial real estate and, typically, are not income producing. Each loan is secured by a first mortgage lien on real estate. In addition, each loan is personally guaranteed by the principal(s) of the borrower, which guarantee may be collaterally secured by a pledge of the guarantor’s interest in the borrower. The face amount of the loans we originated during the past seven years ranged from $30,000 to a maximum of $3 million. Our lending policy limits the maximum amount of any loan to the lower of (i) 9.9% of the aggregate amount of our loan portfolio (not including the loan under consideration) and (ii) $3 million. Our loans typically have a maximum initial term of 12 months and bear interest at a fixed rate of 8.25% to 12% per year. In addition, we usually receive origination fees or “points” ranging from 0% to 2% of the original principal amount of the loan as well as other fees relating to underwriting and funding the loan. Interest is always payable monthly, in arrears. In the case of acquisition financing, the principal amount of the loan usually does not exceed 75% of the value of the property (as determined by an independent appraiser) and in the case of construction financing, it is typically up to 80% of construction costs. More recently, as a result of an increase in interest rates in general, our interest rate expenses, as they relate to our Webster Credit Line, have increased as well and, as a result, we are making efforts to increase the interest rates charged on our commercial loans to offset the impact on our net income.

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Since commencing this business in 2007, we have made approximately 1,090 loans and never foreclosed on a property. We currently manage approximately 125 loans. In addition, none of our loans have ever gone into default although sometimes we have renewed or extended our loans to enable the borrower to avoid premature sale or refinancing of the property. When we renew or extend a loan, we receive additional “points” and other fees.

Our primary business objective is to grow our loan portfolio while protecting and preserving capital in a manner that provides for attractive risk-adjusted returns to our shareholders over the long term through dividends. We intend to achieve this objective by continuing to selectively originate loans and carefully manage our portfolio of first mortgage real estate loans in a manner designed to generate attractive risk-adjusted returns across a variety of market conditions and economic cycles. We believe that the demand for relatively small loans secured by residential and commercial real estate held for investment around the New York metropolitan market, including New Jersey and Connecticut, and in the Florida market remains relatively strong, but weakened due to the COVID-19 pandemic. Our ability to close deals quickly has created an opportunity for non-bank “hard money” real estate lenders like us to selectively originate high-quality first mortgage loans and we anticipate that this condition may persist for a number of years. However, we have observed more intense competition in our industry from both small and large lenders, which has resulted in more liquidity in the real estate markets in the geographic areas in which we operate. We also believe that certain of our business competitors will not survive the COVID-19 pandemic if it continues for an extended period.

To date, we have not been materially impacted by the COVID-19 pandemic and will continue to closely monitor the impact of the COVID-19 pandemic on all aspects of our business. We expect the significance of the COVID-19 pandemic, including the extent of its effect on our financial and operational results, to be dictated by, among other things, its duration, the success of efforts to contain it and the impact of actions taken in response. For instance, government action to provide substantial financial support to businesses has provided helpful mitigation for us and certain of our borrowers; its ultimate impact, however, is not yet clear.

We have built our business on a foundation of intimate knowledge of the New York metropolitan area real estate market combined with a disciplined credit and due diligence culture that is designed to protect and preserve capital. We believe that our flexibility in terms of meeting the needs of borrowers without compromising our standards on credit risk, our expertise, our intimate knowledge of the New York metropolitan area real estate market and our focus on newly originated first mortgage loans, has defined our success until now and should enable us to continue to achieve our objectives.

A principal source of new transactions has been repeat business from prior customers and their referral of new business to us. We also receive leads for new business from banks, brokers and a limited amount of advertising. Finally, our Chief Executive Officer also spends a significant portion of his time on new business development. We rely on our own employees, independent legal counsel, and other independent professionals to verify titles and ownership, to file liens and to consummate the transactions. Outside appraisers are used to assist us in evaluating the worth of collateral, when deemed necessary by management. We also use construction inspectors.

For the six months ended June 30, 2022 and 2021, the total amounts of $37,953,007 and $15,567,677, respectively, have been lent, offset by collections received from borrowers, under our commercial loans of $34,364,708 and $20,279,776, respectively.

At June 30, 2022, we were committed to $9,618,525 in construction loans that can be drawn by the borrowers when certain conditions are met.

To date, we have not experienced any defaults and none of the loans previously made have been non-collectable, although no assurances can be given that existing or future loans may not go into default or prove to be non-collectible in the future.

We satisfied all of the requirements to be taxed as a real estate investment trust (“REIT”) and elected to be taxed as a REIT commencing with our taxable year ended December 31, 2014. In order to maintain our qualification for taxation as a REIT and avoid any excise tax on our net taxable income, we are required to distribute each year at least 90% of our REIT taxable income. If we distribute less than 100% of our taxable income (but more than 90%), the undistributed portion will be taxed at the regular corporate income tax rates. As a REIT, we may also be subject to federal excise taxes and minimum state taxes.

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Results of Operations

Three months ended June 30, 2022 compared to three months ended June 30, 2021

Revenue

Total revenues for the three months ended June 30, 2022 were approximately $2,117,000 compared to approximately $1,713,000 for the three months ended June 30, 2021, an increase of $404,000, or 23.6%. The increase in revenue was due to an increase in lending operations. For the three months ended June 30, 2022 and 2021, approximately $1,612,000 and $1,424,000, respectively, of our revenues were attributable to interest income on secured commercial loans that we offer to real estate investors, and approximately $504,000 and $290,000, respectively, of our revenues were attributable to origination fees on such loans. The loans are principally secured by collateral consisting of real estate and accompanied by personal guarantees from the principals of the borrowers.

Interest and amortization of deferred financing costs

Interest and amortization of deferred financing costs for the three months ended June 30, 2022 were approximately $376,000 compared to approximately $317,000 for the three months ended June 30, 2021, an increase of $59,000, or 18.6%. The increase is primarily attributable to the increase in interest expense due to higher LIBOR rates relating to the use of the Webster Credit Line in order to support our ability to increase loan originations (See Note 4 to the consolidated financial statements included elsewhere in this quarterly report).

General and administrative expenses

General and administrative expenses for the three months ended June 30, 2022 were approximately $386,000 compared to approximately $340,000 for the three months ended June 30, 2021, an increase of $46,000, or 13.5%. The increase is primarily attributable to increases in payroll, advertising, public relations, travel and Nasdaq listing expenses, partially offset by a decrease in legal fees.

Net income

Net income for the three months ended June 30, 2022 was approximately $1,356,000 compared to approximately $1,058,000 for the three months ended June 30, 2021, an increase of $298,000, or 28.2%. This increase is primarily attributable to the increase in revenue, partially offset by the increases in interest expense and in general and administrative expenses.

Six months ended June 30, 2022 compared to six months ended June 30, 2021

Revenue

Total revenues for the six months ended June 30, 2022 were approximately $4,232,000 compared to approximately $3,443,000 for the six months ended June 30, 2021, an increase of $789,000, or 22.9%. The increase in revenue was due to an increase in lending operations. For the six months ended June 30, 2022 and 2021, revenues of approximately $3,256,000 and $2,867,000, respectively, were attributable to interest income on secured commercial loans that we offer to real estate investors, and approximately $976,000 and $576,000, respectively, were attributable to origination fees on such loans. The loans are principally secured by collateral consisting of real estate and accompanied by personal guarantees from the principals of the borrowers.

Interest and amortization of deferred financing costs

Interest and amortization of deferred financing costs for the six months ended June 30, 2022 were approximately $708,000 compared to approximately $634,000 for the six months ended June 30, 2021, an increase of $74,000, or 11.7%. The increase is primarily attributable to the increase in interest expense due to higher LIBOR rates relating to the use of the Webster Credit Line in order to support our ability to increase loan originations (See Note 4 to the consolidated financial statements included elsewhere in this quarterly report).

General and administrative expenses

General and administrative expenses for the six months ended June 30, 2022 were approximately $748,000 compared to approximately $649,000 for the six months ended June 30, 2021, an increase of $99,000, or 15.3%. The increase is primarily attributable to increases in payroll, advertising, appraisal, travel and Nasdaq listing expenses.

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Net income

Net income for the six months ended June 30, 2022 was approximately $2,781,000 compared to approximately $2,164,000 for the six months ended June 30, 2021, an increase of $617,000, or 28.5%. This increase is primarily attributable to the increase in revenue, partially offset by the increases in interest expense and in general and administrative expenses.

Liquidity and Capital Resources

At June 30, 2022, we had cash of approximately $118,000, compared to approximately $143,000 at December 31, 2021.

For the six months ended June 30, 2022, net cash provided by operating activities was approximately $2,847,000, compared to approximately $2,029,000 for the six months ended June 30, 2021. The increase in net cash provided by operating activities primarily resulted from the increases in net income and in deferred origination fees.

For the six months ended June 30, 2022, net cash used in investing activities was approximately $3,590,000, compared to approximately $4,712,000 of net cash provided by investing activities for the six months ended June 30, 2021. Net cash used in investing activities for the six months ended June 30, 2022 mainly consisted of the issuance of commercial loans of approximately $37,953,000, offset by the collection of our commercial loans of approximately $34,365,000. Net cash provided by investing activities for the six months ended June 30, 2021 consisted of the collection of our commercial loans of approximately $20,280,000, offset by the issuance of commercial loans of approximately $15,568,000.

For the six months ended June 30, 2022, net cash provided by financing activities was approximately $718,000, compared to approximately $7,047,000 of net cash used in financing activities for the six months ended June 30, 2021. Net cash provided by financing activities for the six months ended June 30, 2022 reflects the net proceeds from the Webster Credit Line of approximately $3,628,000, offset by dividend payments of approximately $2,874,000 and deferred financing costs of approximately $36,000. Net cash used in financing activities for the six months ended June 30, 2021 reflects the repayment of the Webster Credit Line of an aggregate of approximately $4,912,000, the dividend payments of approximately $2,116,000 and pre-offering costs of approximately $19,000 relating to our July 2021 public offering.

Our Amended and Restated Credit and Security Agreement with Webster, Flushing Bank and Mizrahi provides for the Webster Credit Line. Currently, the Webster Credit Line provides us with a credit line of $32.5 million in the aggregate until February 28, 2023, secured by assignments of mortgages and other collateral. The Webster Credit Line contains various covenants and restrictions including covenants limiting the amount that the Company can borrow relative to the value of the underlying collateral, maintaining various financial ratios and limitations on the terms of loans the Company makes to its customers, limiting the Company’s ability to pay dividends under certain circumstances, and limiting the Company’s ability to repurchase its common shares, sell assets, engage in mergers or consolidations, grant liens, and enter into transactions with affiliates. In addition, the Webster Credit Line contains a cross default provision which will deem any default under any indebtedness owed by us or our subsidiary, MBC Funding II, as a default under the credit line.

The interest rates relating to the Webster Credit Line equal (i) LIBOR plus a premium, which rate aggregated approximately 5.79%, including a 0.5% agency fee, as of June 30, 2022, or (ii) a Base Rate (as defined in the Amended and Restated Credit Agreement) plus 2.25% plus a 0.5% agency fee, as chosen by the Company for each drawdown. Under the Amended and Restated Credit Agreement, the Company may repurchase, redeem or otherwise retire its equity securities in an amount not to exceed ten percent of our annual net income from the prior fiscal year. Further, the Company may issue up to $20 million in bonds through its subsidiary, of which not more than $10 million of such bonds may be secured by mortgage notes receivable, and provided that the terms and conditions of such bonds are approved by Webster, subject to its reasonable discretion. In addition, Mr. Ran has provided a personal guaranty to the Webster Credit Line, which shall not exceed the sum of $500,000 plus any costs relating to the enforcement of the personal guaranty.

On March 7, 2022, we entered into the Waiver, with respect to the Amended and Restated Credit Agreement, with the Lenders and Mr. Ran, as guarantor, providing the Company with a waiver of its covenant with respect to maintaining its fixed charge coverage ratio for the period ended December 31, 2021. In addition, the Waiver also provided that an amount of $700,000 of distributions and/or dividends paid during the quarter ended December 31, 2021 shall be excluded from the calculation of fixed charge coverage ratio for the fiscal quarters ending March 31, 2022, June 30, 2022 and September 30, 2022.

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On April 25, 2022, we entered into an amendment, with respect to the Amended and Restated Credit Agreement with the Lenders and Mr. Ran, as guarantor, pursuant to which the parties agreed to amend the Amended and Restated Credit Agreement to provide as follows: (i) to increase the limit on individual loans from $1 million to $2 million; (ii) to increase the concentration of any mortgagor (together with guarantors and other related entities and affiliates) from $2.5 million to $5 million; and (iii) to permit us to originate loans in the state of Florida in any county south of, and including, Palm Beach and Lee counties, in an amount up to $4.875 million.

Except as set forth in the preceding paragraphs, we were in compliance with all covenants of the Webster Credit Line, as amended, as of June 30, 2022. At June 30, 2022, the outstanding amount under the Amended and Restated Credit Agreement was $19,273,526. The interest rate on the amount outstanding fluctuates daily. The rate, including a 0.5% agency fee, was approximately 5.79% as of June 30, 2022.

MBC Funding II has $6,000,000 of outstanding principal amount of Notes. The Notes mature on April 22, 2026, unless redeemed earlier, and accrue interest at a rate of 6% per annum commencing on May 16, 2016 and will be payable monthly, in arrears, in cash, on the 15th day of each calendar month, commencing June 2016.

Under the terms of the Indenture, the aggregate outstanding principal balance of the mortgage loans held by MBC Funding II, together with its cash on hand, must always equal at least 120% of the aggregate outstanding principal amount of the Notes at all times. To the extent the aggregate principal amount of the mortgage loans owned by MBC Funding II plus its cash on hand is less than 120% of the aggregate outstanding principal balance of the Notes, MBC Funding II is required to repay, on a monthly basis, the principal amount of the Notes equal to the amount necessary such that, after giving effect to such repayment, the aggregate principal amount of all mortgage loans owned by it plus, its cash on hand at such time is equal to or greater than 120% of the outstanding principal amount of the Notes. For this purpose, each mortgage loan is deemed to have a value equal to its outstanding principal balance, unless the borrower is in default of its obligations.

The Notes are secured by a first priority lien on all of MBC Funding II’s assets, including, primarily, mortgage notes, mortgages and other transaction documents entered into in connection with first mortgage loans originated and funded by us, which MBC Funding II acquired from MBC pursuant to an asset purchase agreement. MBC Funding II may redeem the Notes, in whole or in part, at any time after April 22, 2019 upon at least 30 days prior written notice to the noteholders. The redemption price will be equal to the outstanding principal amount of the Notes redeemed plus the accrued but unpaid interest thereon up to, but not including, the date of redemption, without penalty or premium. No Notes were redeemed by MBC Funding II as of June 30, 2022.

MBC Funding II is obligated to offer to redeem the Notes if there occurs a “change of control” with respect to us or MBC Funding II or if we or MBC Funding II sell any assets unless, in the case of an asset sale, the proceeds are reinvested in the business of the seller. The redemption price in connection with a “change of control” will be 101% of the principal amount of the Notes redeemed plus accrued but unpaid interest thereon up to, but not including, the date of redemption. The redemption price in connection with an asset sale will be the outstanding principal amount of the Notes redeemed plus accrued but unpaid interest thereon up to, but not including, the date of redemption.

We guarantee MBC Funding II’s obligations under the Notes, which are secured by our pledge of 100% of the outstanding common shares of MBC Funding II that we own.

We anticipate that our current cash balances and the Amended and Restated Credit Agreement, as described above, together with our cash flows from operations will be sufficient to fund our operations for the next 12 months. In addition, from time to time, we receive short term unsecured loans from our executive officers and others in order to provide us with the flexibility necessary to maintain a steady deployment of capital. However, we expect our working capital requirements to increase over the next 12 months as we continue to strive for growth.

As a result of the COVID-19 pandemic, at times, we experienced a slowdown in the deployment of capital and lower demand for new loans. However, to date, we have not been materially impacted by the COVID-19 pandemic and have not experienced any material disruptions in our business operations. We will continue to closely monitor the impact of the COVID-19 pandemic on all aspects of our business, as it could materially affect our financial and operational results.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a smaller reporting company, we are not required to provide the information required by this Item.

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Item 4. CONTROLS AND PROCEDURES

(a) Evaluation and Disclosure Controls and Procedures

Our management, with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of June 30, 2022 (the “Evaluation Date”). Based upon that evaluation, the chief executive officer and the chief financial officer concluded that, as of the Evaluation Date, our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act (i) are recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms and (ii) are accumulated and communicated to our management, including its chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

(b) Changes in Internal Control Over Financial Reporting

There was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) or 15d-15(f) under the Exchange Act) during the fiscal quarter ended June 30, 2022 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II OTHER INFORMATION

Item 1A. RISK FACTORS

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our 2021 Annual Report, which could materially affect our business, financial condition or future results.

There have been no material changes from the risk factors previously disclosed in our 2021 Annual Report, except as noted below.

We suffered a cybersecurity incident. While we did not suffer any financial loss as a result, some of our clients’ records may have been obtained. While we are implementing protocols to prevent future incidents, these protocols may not prevent future incidents and any significant similar future incidents could have a negative impact on our business.

During June 2022, we experienced a cybersecurity incident in which one of our unused computer servers as well as one of our executive’s personal computers were hacked and rendered inoperable. We did not suffer any financial loss as a result of the cybersecurity incident, though it is possible that unauthorized individuals did obtain copies of our clients’ records. As a result of this incident, we immediately launched an investigation into the incident, and intend to hire the services of a cybersecurity investigation firm to fully access the incident.

To date, the cybersecurity incident has not had any effect on our ability to meet our financial obligations, including our ability to carry out our operations and business activities.

We are constantly exploring new and advanced security protection measures to prevent future cybersecurity incidents. These steps may include working with a cybersecurity consultant as well as potential additional measures. We continually assess cybersecurity threats and make investments to increase internal protection, detection, and response capabilities to address this risk. To date, we have not experienced any material impact to the business or operations resulting from information or cybersecurity attacks, including the incident mentioned above; however, because of the frequently changing attack techniques, along with the increased volume and sophistication of the attacks, there is the potential for us to be adversely impacted. This impact could result in reputational, competitive, operational or other business harm as well as financial costs and regulatory action.

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Item 6. EXHIBITS

Exhibit No.	Description
10.1	Amendment No. 5 to Amended and Restated Security Agreement, dated April 25, 2022 (incorporated by reference to Exhibit 10.1 of our Current Report on Form 8-K filed on April 25, 2022).
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	XBRL Instance Document
101.CAL	Inline XBRL Taxonomy Extension Schema Document
101.SCH	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
104	Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101).

* Furnished, not filed, in accordance with item 601(32)(ii) of Regulation S-K.

16

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Manhattan Bridge Capital, Inc. (Registrant)
Date: July 22, 2022	By:	/s/ Assaf Ran
		Assaf Ran, President and Chief Executive Officer
		(Principal Executive Officer)
Date: July 22, 2022	By:	/s/ Vanessa Kao
		Vanessa Kao, Chief Financial Officer
		(Principal Financial and Accounting Officer)

17

EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, Assaf Ran, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Manhattan Bridge Capital, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: July 22, 2022
	/s/ Assaf Ran
	Assaf Ran
	President and Chief Executive Officer
	(Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, Vanessa Kao, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Manhattan Bridge Capital, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: July 22, 2022
	/s/ Vanessa Kao
	Vanessa Kao
	Chief Financial Officer
	(Principal Financial and Accounting Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

In connection with the Quarterly Report on Form 10-Q of Manhattan Bridge Capital, Inc. (the “Company”) for the period ended June 30, 2022 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Assaf Ran, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. ss. 1350, that, to my knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: July 22, 2022

/s/ Assaf Ran

Assaf Ran

President and Chief Executive Officer

(Principal Executive Officer)

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

In connection with the Quarterly Report on Form 10-Q of Manhattan Bridge Capital, Inc. (the “Company”) for the period ended June 30, 2022 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Vanessa Kao, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. ss. 1350, that, to my knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: July 22, 2022

/s/ Vanessa Kao

Vanessa Kao

Chief Financial Officer

(Principal Financial and Accounting Officer)

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	Jun. 30, 2022	Jul. 22, 2022
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Document Period End Date	Jun. 30, 2022
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2022
Current Fiscal Year End Date	--12-31
Entity File Number	000-25991
Entity Registrant Name	MANHATTAN BRIDGE CAPITAL, INC.
Entity Central Index Key	0001080340
Entity Tax Identification Number	11-3474831
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Entity Address, Address Line One	60 Cutter Mill Road
Entity Address, City or Town	Great Neck
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	11021
City Area Code	(516)
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Title of 12(b) Security	Common shares, par value $.001
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Entity Common Stock, Shares Outstanding		11,494,945

XML

Consolidated Balance Sheets - USD ($)	Jun. 30, 2022	Dec. 31, 2021
Assets
Loans receivable	$ 69,303,663	$ 65,715,364
Interest receivable on loans	1,052,332	955,443
Cash	117,622	142,546
Other assets	129,536	64,745
Operating lease right-of-use asset, net	289,651	317,080
Deferred financing costs, net	29,902	10,539
Total assets	70,922,706	67,205,717
Liabilities:
Line of credit	19,273,526	15,645,970
Senior secured notes (net of deferred financing costs of $284,698 and $322,241, respectively)	5,715,301	5,677,759
Deferred origination fees	712,627	580,461
Accounts payable and accrued expenses	185,320	154,169
Operating lease liability	299,135	324,248
Dividends payable	1,436,868	1,436,868
Total liabilities	27,622,777	23,819,475
Commitments and contingencies
Stockholders’ equity:
Preferred stock - $.01 par value; 5,000,000 shares authorized; none issued
Common shares - $.001 par value; 25,000,000 shares authorized; 11,757,058 issued; 11,494,945 outstanding	11,757	11,757
Additional paid-in capital	45,529,278	45,522,746
Treasury stock, at cost – 262,113 shares	(798,939)	(798,939)
Accumulated deficit	(1,442,167)	(1,349,322)
Total stockholders’ equity	43,299,929	43,386,242
Total liabilities and stockholders’ equity	$ 70,922,706	$ 67,205,717

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Consolidated Balance Sheets (Parenthetical) - USD ($)	Jun. 30, 2022	Dec. 31, 2021
Statement of Financial Position [Abstract]
Senior secured notes, deferred financing costs	$ 284,698	$ 322,241
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	0	0
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	25,000,000	25,000,000
Common stock, shares issued	11,757,058	11,757,058
Common stock, shares outstanding	11,494,945	11,494,945
Treasury stock, shares	262,113	262,113

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Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Income Statement [Abstract]
Interest income from loans	$ 1,612,308	$ 1,423,759	$ 3,256,097	$ 2,866,573
Origination fees	504,455	289,670	975,726	576,143
Total revenue	2,116,763	1,713,429	4,231,823	3,442,716
Operating costs and expenses:
Interest and amortization of deferred financing costs	376,383	316,915	708,236	634,101
Referral fees	1,958	2,643	3,320	4,394
General and administrative expenses	386,238	339,602	747,726	648,583
Total operating costs and expenses	764,579	659,160	1,459,282	1,287,078
Income from operations	1,352,184	1,054,269	2,772,541	2,155,638
Other income	4,500	4,500	9,000	9,000
Income before income tax expense	1,356,684	1,058,769	2,781,541	2,164,638
Income tax expense	(650)	(647)	(650)	(647)
Net income	$ 1,356,034	$ 1,058,122	$ 2,780,891	$ 2,163,991
Basic and diluted net income per common share outstanding:
—Basic	$ 0.12	$ 0.11	$ 0.24	$ 0.22
—Diluted	$ 0.12	$ 0.11	$ 0.24	$ 0.22
Weighted average number of common shares outstanding:
—Basic	11,494,945	9,619,945	11,494,945	9,619,945
—Diluted	11,494,945	9,619,945	11,494,945	9,619,945

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Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($)	Common Stock [Member]	Additional Paid-in Capital [Member]	Treasury Stock [Member]	Retained Earnings [Member]	Total
Beginning balance, value at Dec. 31, 2020	$ 9,882	$ 33,157,096	$ (798,939)	$ (403,849)	$ 31,964,190
Beginning balance, shares at Dec. 31, 2020	9,882,058		262,113
Non - cash compensation		6,532			6,532
Net income				2,163,991	2,163,991
Dividends paid				(1,058,194)	(1,058,194)
Ending balance, value at Jun. 30, 2021	$ 9,882	33,163,628	$ (798,939)	701,948	33,076,519
Ending balance, shares at Jun. 30, 2021	9,882,058		262,113
Beginning balance, value at Mar. 31, 2021	$ 9,882	33,160,362	$ (798,939)	702,020	33,073,325
Beginning balance, shares at Mar. 31, 2021	9,882,058		262,113
Non - cash compensation		3,266			3,266
Net income				1,058,122	1,058,122
Dividends paid				(1,058,194)	(1,058,194)
Ending balance, value at Jun. 30, 2021	$ 9,882	33,163,628	$ (798,939)	701,948	33,076,519
Ending balance, shares at Jun. 30, 2021	9,882,058		262,113
Beginning balance, value at Dec. 31, 2021	$ 11,757	45,522,746	$ (798,939)	(1,349,322)	43,386,242
Beginning balance, shares at Dec. 31, 2021	11,757,058		262,113
Non - cash compensation		6,532			6,532
Dividends declared and payable				(1,436,868)	(1,436,868)
Net income				2,780,891	2,780,891
Dividends paid				(1,436,868)	(1,436,868)
Ending balance, value at Jun. 30, 2022	$ 11,757	45,529,278	$ (798,939)	(1,442,167)	43,299,929
Ending balance, shares at Jun. 30, 2022	11,757,058		262,113
Beginning balance, value at Mar. 31, 2022	$ 11,757	45,526,012	$ (798,939)	(1,361,333)	43,377,497
Beginning balance, shares at Mar. 31, 2022	11,757,058		262,113
Non - cash compensation		3,266			3,266
Dividends declared and payable				(1,436,868)	(1,436,868)
Net income				1,356,034	1,356,034
Ending balance, value at Jun. 30, 2022	$ 11,757	$ 45,529,278	$ (798,939)	$ (1,442,167)	$ 43,299,929
Ending balance, shares at Jun. 30, 2022	11,757,058		262,113

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Consolidated Statements of Cash Flows (Unaudited) - USD ($)		6 Months Ended
		Jun. 30, 2022	Jun. 30, 2021
Cash flows from operating activities:
Net income		$ 2,780,891	$ 2,163,991
Adjustments to reconcile net income to net cash provided by operating activities -
Amortization of deferred financing costs		53,999	45,294
Adjustment to operating lease right-of-use asset and liability		2,316	2,060
Depreciation		972	1,153
Non-cash compensation expense		6,532	6,532
Changes in operating assets and liabilities:
Interest receivable on loans		(96,889)	(88,502)
Other assets		(63,871)	(56,768)
Accounts payable and accrued expenses		31,151	(35,028)
Deferred origination fees		132,166	(9,885)
Net cash provided by operating activities		2,847,267	2,028,847
Cash flows from investing activities:
Issuance of short term loans		(37,953,007)	(15,567,677)
Collections received from loans		34,364,708	20,279,776
Purchase of fixed assets		(1,893)
Net cash (used in) provided by investing activities		(3,590,192)	4,712,099
Cash flows from financing activities:
Proceeds from (repayment of) line of credit, net		3,627,556	(4,911,758)
Dividends paid		(2,873,736)	(2,116,388)
Deferred financing costs incurred		(35,819)
Pre-offering costs incurred			(18,750)
Net cash provided by (used in) financing activities		718,001	(7,046,896)
Net decrease in cash		(24,924)	(305,950)
Cash and restricted cash, beginning of year	[1]	142,546	459,137
Cash and restricted cash, end of period	[1]	117,622	153,187
Supplemental Cash Flow Information:
Taxes paid during the period		650	647
Interest paid during the period		608,902	603,869
Operating leases paid during the period		31,786	31,719
Supplemental Information – Noncash Information:
Dividend declared and payable		$ 1,436,868

[1] At January 1, 2021, cash and restricted cash included $327,483 of restricted cash. No other periods above included restricted cash.

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Consolidated Statements of Cash Flows (Unaudited) (Parenthetical)	Jan. 01, 2021 USD ($)
Statement of Cash Flows [Abstract]
Restricted cash	$ 327,483

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THE COMPANY

6 Months Ended

Jun. 30, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

THE COMPANY

1. THE COMPANY

The accompanying unaudited consolidated financial statements of Manhattan Bridge Capital, Inc. (“MBC”), a New York corporation founded in 1989, and its consolidated subsidiary, MBC Funding II Corp. (“MBC Funding II”), a New York corporation formed in December 2015 (collectively referred to herein as the “Company”) have been prepared by the Company in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. However, in the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The accompanying unaudited consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2021 and the notes thereto included in the Company’s Annual Report on Form 10-K. Results of consolidated operations for the interim period are not necessarily indicative of the operating results to be attained in the entire fiscal year.

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual amounts could differ from those estimates.

The consolidated financial statements include the accounts of MBC and MBC Funding II. All significant intercompany balances and transactions have been eliminated in consolidation.

The Company offers short-term, secured, non–banking loans to real estate investors (also known as hard money) to fund their acquisition, renovation, rehabilitation or development of residential or commercial properties located in the New York metropolitan area, including New Jersey and Connecticut, and in Florida.

Interest income from commercial loans is recognized, as earned, over the loan period.

Origination fee revenue on commercial loans is amortized over the term of the respective note.

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RECENT TECHNICAL ACCOUNTING PRONOUNCEMENTS

6 Months Ended

Jun. 30, 2022

Accounting Changes and Error Corrections [Abstract]

RECENT TECHNICAL ACCOUNTING PRONOUNCEMENTS

2. RECENT TECHNICAL ACCOUNTING PRONOUNCEMENTS

Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s consolidated financial statements.

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COMMERCIAL LOANS

6 Months Ended

Jun. 30, 2022

Receivables [Abstract]

COMMERCIAL LOANS

3. COMMERCIAL LOANS

Loans Receivable

The Company offers short-term secured non–banking loans to real estate investors (also known as hard money) to fund their acquisition and construction of properties located in the New York metropolitan area, including New Jersey and Connecticut, and in Florida. The loans are principally secured by collateral consisting of real estate and accompanied by personal guarantees from the principals of the borrowers. The loans are generally for a term of one year. The short term loans are initially recorded, and carried thereafter, in the financial statements at cost. Most of the loans provide for receipt of interest only during the term of the loan and a balloon payment at the end of the term.

At June 30, 2022, the Company was committed to $9,618,525 in construction loans that can be drawn by the borrowers when certain conditions are met.

At June 30, 2022, no one entity has loans outstanding representing more than 10% of the total balance of the loans outstanding.

The Company generally grants loans for a term of one year. When a performing loan reaches its maturity and the borrower requests an extension, the Company may extend the term of the loan beyond one year. Prior to granting an extension of any loan, the Company reevaluates the underlying collateral.

Credit Risk

Credit risk profile based on loan activity as of June 30, 2022 and December 31, 2021:

Performing loans	Developers- Residential		Developers- Commercial		Developers- Mixed Use		Total outstanding loans
June 30, 2022	$	56,995,663	$	9,819,000	$	2,489,000	$	69,303,663
December 31, 2021	$	57,432,364	$	5,819,000	$	2,464,000	$	65,715,364

At June 30, 2022, the Company’s loans receivable consisted of loans in the amount of $310,411, $582,400, $974,000, $3,820,250 and $8,512,475, originally due in 2016, 2017, 2019, 2020 and 2021, respectively. The receivable also includes loans in the amount of $4,487,000 originally due during the first six months of 2022.

In all instances the borrowers are currently paying their interest and, generally, the Company receives a fee in connection with the extension of the loans. In all instances the borrower has either signed an extension agreement or are in the process of signing the extension. At June 30, 2022, no loan impairments exist and there are no provisions for impairments of loans or recoveries thereof.

Subsequent to the balance sheet date, $300,000 of the loans receivable at June 30, 2022 were paid off.

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LINE OF CREDIT

6 Months Ended

Jun. 30, 2022

Debt Disclosure [Abstract]

LINE OF CREDIT

4. LINE OF CREDIT

The Company executed an Amended and Restated Credit and Security Agreement, as amended (the “Amended and Restated Credit Agreement”), with Webster Business Credit Corporation (“Webster”), Flushing Bank (“Flushing”) and Mizrahi Tefahot Bank Ltd (“Mizrahi” and together with Webster and Flushing, the “Lenders”), which established the Company’s credit line (the “Webster Credit Line”). Currently, the Webster Credit Line provides the Company with a credit line of $32.5 million in the aggregate until February 28, 2023, secured by assignments of mortgages and other collateral. The Webster Credit Line contains various covenants and restrictions including, among other covenants and restrictions, limiting the amount that the Company can borrow relative to the value of the underlying collateral, maintaining various financial ratios and limitations on the terms of loans the Company makes to its customers, limiting the Company’s ability to pay dividends under certain circumstances, and limiting the Company’s ability to repurchase its common shares, sell assets, engage in mergers or consolidations, grant liens, and enter into transactions with affiliates. In addition, the Webster Credit Line contains a cross default provision which will deem any default under any indebtedness owed by us or our subsidiary, MBC Funding II, as a default under the credit line.

The interest rates relating to the Webster Credit Line equal (i) LIBOR plus a premium, which rate aggregated approximately 5.79%, including a 0.5% agency fee, as of June 30, 2022, or (ii) a Base Rate (as defined in the Amended and Restated Credit Agreement) plus 2.25% plus a 0.5% agency fee, as chosen by the Company for each drawdown. Under the Amended and Restated Credit Agreement, the Company may repurchase, redeem or otherwise retire its equity securities in an amount not to exceed ten percent of our annual net income from the prior fiscal year. Further, the Company may issue up to $20 million in bonds through its subsidiary, of which not more than $10 million of such bonds may be secured by mortgage notes receivable, and provided that the terms and conditions of such bonds are approved by Webster, subject to its reasonable discretion. In addition, Mr. Ran has provided a personal guaranty to the Webster Credit Line, which shall not exceed the sum of $500,000 plus any costs relating to the enforcement of the personal guaranty.

On March 7, 2022, the Company entered into a Waiver Agreement (the “Waiver”), with respect to the Amended and Restated Credit Agreement, with the Lenders and Mr. Ran, as guarantor, to provide the Company with a waiver of its covenant with respect to maintaining its fixed charge coverage ratio for the period ended December 31, 2021. In addition, the Waiver also provided that an amount of $700,000 of distributions and/or dividends paid during the quarter ended December 31, 2021 shall be excluded from the calculation of fixed charge coverage ratio for the fiscal quarters ending March 31, 2022, June 30, 2022 and September 30, 2022.

On April 25, 2022, the Company entered into an amendment (the “2022 Amendment”), with respect to the Amended and Restated Credit Agreement with the Lenders and Mr. Ran, as guarantor. Pursuant to the terms of the 2022 Amendment, each of the Company and the Lenders agreed to amend the Amended and Restated Credit Agreement to provide as follows: (i) to increase the limit on individual loans from $1 million to $2 million; (ii) to increase the concentration of any mortgagor (together with guarantors and other related entities and affiliates) from $2.5 million to $5 million; and (iii) to permit the Company to originate loans in the state of Florida in any county south of, and including, Palm Beach and Lee counties, in an amount up to $4.875 million.

Except as set forth in the preceding paragraphs, the Company was in compliance with all covenants of the Webster Credit Line, as amended, as of June 30, 2022. At June 30, 2022, the outstanding amount under the Amended Credit Agreement was $19,273,526. The interest rate on the amount outstanding fluctuates daily. The rate, including a 0.5% Agency Fee, was approximately 5.79% as of June 30, 2022.

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SENIOR SECURED NOTES

6 Months Ended

Jun. 30, 2022

Debt Disclosure [Abstract]

SENIOR SECURED NOTES

5. SENIOR SECURED NOTES

On April 25, 2016, in an initial public offering, MBC Funding II issued 6% senior secured notes, due April 22, 2026 (the “Notes”) in the aggregate principal amount of $6,000,000 under the Indenture, dated April 25, 2016, among MBC Funding II, as Issuer, the Company, as Guarantor, and Worldwide Stock Transfer LLC, as Indenture Trustee (the “Indenture”). The Notes, having a principal amount of $1,000 each, are listed on the NYSE American and trade under the symbol “LOAN/26”. Interest accrues on the Notes commencing on May 16, 2016. The accrued interest is payable monthly in cash, in arrears, on the 15th day of each calendar month commencing June 2016.

Under the terms of the Indenture, the aggregate outstanding principal balance of the mortgage loans held by MBC Funding II, together with MBC Funding II’s cash on hand, must always equal at least 120% of the aggregate outstanding principal amount of the Notes at all times. To the extent the aggregate principal amount of the mortgage loans owned by MBC Funding II plus MBC Funding II’s cash on hand is less than 120% of the aggregate outstanding principal balance of the Notes, MBC Funding II is required to repay, on a monthly basis, the principal amount of the Notes equal to the amount necessary such that, after giving effect to such repayment, the aggregate principal amount of all mortgage loans owned by MBC Funding II plus, MBC Funding II’s cash on hand at such time is equal to or greater than 120% of the outstanding principal amount of the Notes. For this purpose, each mortgage loan is deemed to have a value equal to its outstanding principal balance, unless the borrower is in default of its obligations.

MBC Funding II may redeem the Notes, in whole or in part, at any time after April 22, 2019 upon at least 30 days prior written notice to the Noteholders. The redemption price will be equal to the outstanding principal amount of the Notes redeemed plus the accrued but unpaid interest thereon up to, but not including, the date of redemption, without penalty or premium. No Notes were redeemed by MBC Funding II as of June 30, 2022.

MBC Funding II is obligated to offer to redeem the Notes if there occurs a “change of control” with respect to MBC Funding II or the Company or if MBC Funding II or the Company sell any assets unless, in the case of an asset sale, the proceeds are reinvested in the business of the seller. The redemption price in connection with a “change of control” will be 101% of the principal amount of the Notes redeemed plus accrued but unpaid interest thereon up to, but not including, the date of redemption. The redemption price in connection with an asset sale will be the outstanding principal amount of the Notes redeemed plus accrued but unpaid interest thereon up to, but not including, the date of redemption.

The Company guaranteed MBC Funding II’s obligations under the Notes, which are secured by its pledge of 100% of the outstanding common shares of MBC Funding II that it owns.

Our principal executive officers consist of Assaf Ran, who serves as our Chief Executive Officer and President, and Vanessa Kao, who serves as our Chief Financial Officer. Each of Mr. Ran and Ms. Kao own an aggregate of $704,000 and $288,000 of our Notes.

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EARNINGS PER COMMON SHARE

6 Months Ended

Jun. 30, 2022

Basic and diluted net income per common share outstanding:

EARNINGS PER COMMON SHARE

6. EARNINGS PER COMMON SHARE

Basic and diluted earnings per share are calculated in accordance with Accounting Standards Codification (“ASC”) 260, “Earnings Per Share” (“ASC 260”). Under ASC 260, basic earnings per share is computed by dividing income available to common shareholders by the weighted-average number of common shares outstanding for the period. The computation of diluted earnings per share is similar to basic earnings per share, except that the denominator is increased to include the potential dilution from the exercise of stock options and warrants for common shares using the treasury stock method. The numerator in calculating both basic and diluted earnings per common share for each period is the reported net income.

The denominator is based on the following weighted average number of common shares:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Basic weighted average common shares outstanding		11,494,945		9,619,945		11,494,945		9,619,945
Incremental shares for assumed exercise of warrants		—		—		—		—
Diluted weighted average common shares outstanding		11,494,945		9,619,945		11,494,945		9,619,945

Vested warrants to purchase 33,612 common shares, that expired August 2021, were not included in the diluted earnings per share calculation for the three and six months ended June 30, 2021 because the warrants were not in the money.

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STOCK – BASED COMPENSATION

6 Months Ended

Jun. 30, 2022

Share-Based Payment Arrangement [Abstract]

STOCK – BASED COMPENSATION

7. STOCK – BASED COMPENSATION

Stock based compensation expense recognized under ASC 718, “Compensation – Stock Compensation,” for each of the six month periods ended June 30, 2022 and 2021 of $6,532 represents the amortization of the fair value of 1,000,000 restricted shares granted to the Company’s Chief Executive Officer on September 9, 2011 of $195,968, after adjusting for the effect on the fair value of the stock options related to this transaction. The fair value is being amortized over 15 years. At June 30, 2022, all 1,000,000 shares remain restricted, and the remaining unrecognized stock based compensation amounted to $54,436.

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COVID-19

6 Months Ended

Jun. 30, 2022

Unusual or Infrequent Items, or Both [Abstract]

COVID-19

8. COVID-19

To date, the Company has not been materially impacted by the COVID-19 pandemic and will continue to closely monitor the impact of the COVID-19 pandemic on all aspects of its business. If the COVID-19 pandemic worsens in the geographic areas in which the Company operates, the pandemic could materially affect its financial and operational results.

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SUBSEQUENT EVENT

6 Months Ended

Jun. 30, 2022

Subsequent Events [Abstract]

SUBSEQUENT EVENT

9. SUBSEQUENT EVENT

In accordance with the dividend declared by the Company’s Board of Directors on April 15, 2022, a cash dividend of $0.125 per share in an aggregate amount of $1,436,868 was paid on July 15, 2022 to all shareholders of record on July 8, 2022.

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COMMERCIAL LOANS (Tables)

6 Months Ended

Jun. 30, 2022

Receivables [Abstract]

SCHEDULE OF CREDIT RISK

Credit risk profile based on loan activity as of June 30, 2022 and December 31, 2021:

Performing loans	Developers- Residential		Developers- Commercial		Developers- Mixed Use		Total outstanding loans
June 30, 2022	$	56,995,663	$	9,819,000	$	2,489,000	$	69,303,663
December 31, 2021	$	57,432,364	$	5,819,000	$	2,464,000	$	65,715,364

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EARNINGS PER COMMON SHARE (Tables)

6 Months Ended

Jun. 30, 2022

Basic and diluted net income per common share outstanding:

SCHEDULE OF WEIGHTED AVERAGE NUMBER OF COMMON SHARES

The denominator is based on the following weighted average number of common shares:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Basic weighted average common shares outstanding		11,494,945		9,619,945		11,494,945		9,619,945
Incremental shares for assumed exercise of warrants		—		—		—		—
Diluted weighted average common shares outstanding		11,494,945		9,619,945		11,494,945		9,619,945

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SCHEDULE OF CREDIT RISK (Details) - USD ($)	Jun. 30, 2022	Dec. 31, 2021
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]
Total outstanding loans	$ 69,303,663	$ 65,715,364
Developers-Residential [Member]
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]
Total outstanding loans	56,995,663	57,432,364
Developers-Commercial [Member]
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]
Total outstanding loans	9,819,000	5,819,000
Developers Mixed Used [Member]
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]
Total outstanding loans	$ 2,489,000	$ 2,464,000

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COMMERCIAL LOANS (Details Narrative)	6 Months Ended
	Jun. 30, 2022 USD ($)
Accounts, Notes, Loans and Financing Receivable [Line Items]
Debt instrument term	1 year
Loans receivable paid off	$ 300,000
Originally Due In 2016 [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans receivable	310,411
Originally Due in 2017 [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans receivable	582,400
Originally Due in 2019 [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans receivable	974,000
Originally Due in 2020 [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans receivable	3,820,250
Originally Due in 2021 [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans receivable	8,512,475
Originally Due in the First Quarter of 2022 [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans receivable	$ 4,487,000
Minimum [Member] | Accounts Receivable [Member] | Credit Concentration Risk [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loan outstanding percentage	10.00%
Construction Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Short term borrowings	$ 9,618,525

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LINE OF CREDIT (Details Narrative) - USD ($)	3 Months Ended	6 Months Ended
	Dec. 31, 2021	Jun. 30, 2022	Jun. 30, 2021	Apr. 25, 2022
Debt Instrument [Line Items]
Subsidiary bonds issued up to		$ 20,000,000
Dividends paid		2,873,736	$ 2,116,388
Line of credit outstanding amount		$ 19,273,526
Debt agency fee rate		0.50%
Interest rate percentage		5.79%
Amended and Restated Credit Agreement [Member]
Debt Instrument [Line Items]
Line of credit facility, interest rate at period end		2.25%
Percentage of agency fee		0.50%
Waiver Agreement [Member]
Debt Instrument [Line Items]
Dividends paid	$ 700,000
Credit Agreement [Member] | Minimum [Member]
Debt Instrument [Line Items]
Line of credit maximum borrowing capacity				$ 1,000,000
Line of credit increasing borrowing capacity				2,500,000
Credit Agreement [Member] | Maximum [Member]
Debt Instrument [Line Items]
Line of credit maximum borrowing capacity				2,000,000
Line of credit increasing borrowing capacity				$ 5,000,000
Webster Credit Line [Member]
Debt Instrument [Line Items]
Line of credit maximum borrowing capacity		$ 32,500,000
Line of credit, expiration date		Feb. 28, 2023
Line of credit facility, interest rate description		The interest rates relating to the Webster Credit Line equal (i) LIBOR plus a premium, which rate aggregated approximately 5.79%, including a 0.5% agency fee, as of June 30, 2022, or (ii) a Base Rate (as defined in the Amended and Restated Credit Agreement) plus 2.25% plus a 0.5% agency fee, as chosen by the Company for each drawdown
Webster Credit Line [Member] | Amended and Restated Credit Agreement [Member]
Debt Instrument [Line Items]
Mortgage notes receivable, description		the Company may issue up to $20 million in bonds through its subsidiary, of which not more than $10 million of such bonds may be secured by mortgage notes receivable, and provided that the terms and conditions of such bonds are approved by Webster, subject to its reasonable discretion.
Webster Credit Line [Member] | Amended and Restated Credit Agreement [Member] | Mr. Ran [Member]
Debt Instrument [Line Items]
Debt guaranteed amount		$ 500,000
Webster Credit Line [Member] | London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument [Line Items]
Line of credit facility, interest rate at period end		5.79%
Percentage of agency fee		0.50%

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SENIOR SECURED NOTES (Details Narrative) - USD ($)	Apr. 25, 2016	Jun. 30, 2022
Mr. Ran [Member]
Short-Term Debt [Line Items]
Senior notes		$ 704,000
Mr Kao [Member]
Short-Term Debt [Line Items]
Senior notes		$ 288,000
MBC Funding II Corp [Member]
Short-Term Debt [Line Items]
Debt instrument description	Under the terms of the Indenture, the aggregate outstanding principal balance of the mortgage loans held by MBC Funding II, together with MBC Funding II’s cash on hand, must always equal at least 120% of the aggregate outstanding principal amount of the Notes at all times. To the extent the aggregate principal amount of the mortgage loans owned by MBC Funding II plus MBC Funding II’s cash on hand is less than 120% of the aggregate outstanding principal balance of the Notes, MBC Funding II is required to repay, on a monthly basis, the principal amount of the Notes equal to the amount necessary such that, after giving effect to such repayment, the aggregate principal amount of all mortgage loans owned by MBC Funding II plus, MBC Funding II’s cash on hand at such time is equal to or greater than 120% of the outstanding principal amount of the Notes. For this purpose, each mortgage loan is deemed to have a value equal to its outstanding principal balance, unless the borrower is in default of its obligations.
Debt instrument collateral, percentage	120.00%
Debt instrument, redemption price, percentage	100.00%
MBC Funding II Corp [Member] | Change of Control [Member]
Short-Term Debt [Line Items]
Debt instrument, redemption price, percentage	101.00%
Senior Secured Notes [Member]
Short-Term Debt [Line Items]
Principal amount of each note	$ 1,000
Senior Secured Notes [Member] | Indenture [Member]
Short-Term Debt [Line Items]
Debt instrument interest rate	6.00%
Debt instrument face amount	$ 6,000,000
Debt instrument maturity date	Apr. 25, 2016

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SCHEDULE OF WEIGHTED AVERAGE NUMBER OF COMMON SHARES (Details) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Basic and diluted net income per common share outstanding:
Basic weighted average common shares outstanding	11,494,945	9,619,945	11,494,945	9,619,945
Incremental shares for assumed exercise of warrants
Diluted weighted average common shares outstanding	11,494,945	9,619,945	11,494,945	9,619,945

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EARNINGS PER COMMON SHARE (Details Narrative)	3 Months Ended
	Mar. 31, 2021 shares
Vested Warrants [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities	33,612

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STOCK – BASED COMPENSATION (Details Narrative) - USD ($)		6 Months Ended
	Sep. 09, 2011	Jun. 30, 2022	Jun. 30, 2021
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items]
Stock based compensation		$ 6,532	$ 6,532
Stock issued during period shares restricted stock award gross		1,000,000
Employee service share based compensation		$ 54,436
Chief Executive Officer [Member]
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items]
Stock issued during period shares restricted stock award gross	1,000,000
Stock issued during period value restricted stock award gross	$ 195,968
Fair value restricted shares amortization period	15 years

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SUBSEQUENT EVENT (Details Narrative) - USD ($)	Apr. 15, 2022	Jun. 30, 2022	Dec. 31, 2021
Subsequent Events [Abstract]
Dividends payable, per share	$ 0.125
Dividends payable	$ 1,436,868	$ 1,436,868	$ 1,436,868
Dividends payable, date to be paid	Jul. 15, 2022