MANHATTAN BRIDGE CAPITAL, INC (Form: 10-Q, Received: 07/28/2016 07:05:28)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

( Mark One)

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

For the quarterly period ended June 30, 2016

¨ 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)

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. x Yes ¨ No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files). x Yes ¨ No

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

Large accelerated filer	¨	Accelerated filer	¨

Non-accelerated filer	¨ (Do not check if a smaller reporting company)	Smaller reporting company	x

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

As of July 28, 2016, the Issuer had a total of 7,292,239 shares of Common Stock, $.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)

	Consolidated Balance Sheets as of June 30, 2016 and December 31, 2015	2

	Consolidated Statements of Operations for the Three and Six Month Periods Ended June 30, 2016 and 2015	3

	Consolidated Statements of Cash Flows for the Six Month Periods Ended June 30, 2016 and 2015	4

	Notes to Consolidated Financial Statements	5

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operation s	12

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	17

Item 4.	Controls and Procedures	17

Part II	OTHER INFORMATION

Item 5.	Other Information	18

Item 6.	Exhibits	18

SIGNATURES		19

EXHIBITS

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) we have limited operating history as a REIT; (ii) our loan origination activities, revenues and profits are limited by available funds (iii) we operate in a highly competitive market and competition may limit our ability to originate loans with favorable interest rates; (iv) our chief executive officer is critical to our business and our future success may depend on our ability to retain him; (v) if we overestimate the yields on our loans or incorrectly value the collateral securing the loan, we may experience losses; (vi) we may be subject to “lender liability” claims; (vii) our loan portfolio is illiquid; (viii) our due diligence may not uncover all of a borrower’s liabilities or other risks to its business; (ix) borrower concentration could lead to significant losses; (x) our management has no experience managing a REIT; and (xi) 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. 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. 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.

PART I. FINANCIAL INFORMATION

Item 1.

CONSOLIDATED FINANCIAL STATEMENTS

MANHATTAN BRIDGE CAPITAL, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	June 30, 2016			December 31, 2015
	(unaudited)			(audited)
Assets
Current assets:
Cash and cash equivalents	$	127,500		$	106,836
Cash - restricted		1,408,592			—
Short term loans receivable		23,293,500			20,199,000
Interest receivable on loans		300,365			382,572
Other current assets		59,595			32,865
Total current assets		25,189,552			20,721,273

Long term loans receivable		8,840,370			10,705,040
Property and equipment, net		8,492			8,771
Security deposit		6,816			6,816
Investment in privately held company		40,000			50,000
Deferred financing costs		80,275			164,510
Total assets	$	34,165,505		$	31,656,410

Liabilities and Stockholders’ Equity
Current liabilities:
Line of credit	$	9,469,589		$	11,821,099
Short term loans		—			1,095,620
Accounts payable and accrued expenses		89,586			99,643
Deferred origination fees		311,411			279,682
Dividends payable		—			617,443
Due to joint venture partners		378,875			—
Total current liabilities		10,249,461			13,913,487
Long term liabilities:
Senior secured note (net of deferred financing costs of $721,466)		5,278,534			—
Total liabilities		15,527,995			13,913,487

Commitments and contingencies
Stockholders’ equity:
Preferred shares - $.01 par value; 5,000,000 shares authorized; no shares issued		—			—
Common shares - $.001 par value; 25,000,000 authorized; 7,469,239 and 7,441,039 issued; 7,292,239 and 7,264,039 outstanding		7,469			7,441
Additional paid-in capital		18,607,753			18,500,524
Treasury stock, at cost – 177,000		(369,335	)		(369,335	)
Retained earnings (Accumulated deficit)		391,623			(395,707	)
Total stockholders’ equity		18,637,510			17,742,923
Total liabilities and stockholders’ equity	$	34,165,505		$	31,656,410

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

MANHATTAN BRIDGE CAPITAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015

Interest income from loans	$	973,934		$	764,329		$	1,888,243		$	1,521,079
Origination fees		191,959			147,625			382,240			302,636
Total Revenue		1,165,893			911,954			2,270,483			1,823,715

Operating costs and expenses:
Interest and amortization of debt service costs		208,750			150,721			388,300			333,777
Referral fees		1,894			1,115			3,262			2,312
General and administrative expenses		233,545			214,679			461,385			466,591
Total operating costs and expenses		444,189			366,515			852,947			802,680
Income from operations		721,704			545,439			1,417,536			1,021,035
Loss on write-down of investment in privately held company (Note 5)		(10,000	)		(15,000	)		(10,000	)		(15,000	)
Income before income tax expense		711,704			530,439			1,407,536			1,006,035
Income tax expense		(1,639	)		—			(2,146	)		—
Net income	$	710,065		$	530,439		$	1,405,390		$	1,006,035

Basic and diluted net income per common share outstanding:
—Basic	$	0.10		$	0.08		$	0.19		$	0.16
—Diluted	$	0.10		$	0.08		$	0.19		$	0.16

Weighted average number of common shares outstanding
—Basic		7,279,332			6,470,905			7,271,685			6,280,278
—Diluted		7,307,710			6,507,384			7,298,185			6,314,909

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

MANHATTAN BRIDGE CAPITAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

	Six Months Ended June 30,
	2016			2015
Cash flows from operating activities:
Net Income	$	1,405,390		$	1,006,035
Adjustments to reconcile net income to net cash provided by operating activities -
Amortization of deferred financing costs		39,433			15,460
Depreciation		1,778			3,200
Non cash compensation expense		6,794			6,832
Loss on write-down of investment in privately held company (Note 5)		10,000			15,000
Changes in operating assets and liabilities:
Interest receivable on loans		82,207			(99,892	)
Other current and non current assets		(26,730	)		(40,987	)
Accounts payable and accrued expenses		(10,057	)		(76,609	)
Deferred origination fees		31,729			(69,327	)
Net cash provided by operating activities		1,540,544			759,712

Cash flows from investing activities:
Issuance of short term loans		(14,869,500	)		(8,825,000	)
Collections received from loans		13,639,670			6,950,218
Purchase of fixed assets		(1,499	)		(684	)
Net cash used in investing activities		(1,231,329	)		(1,875,466	)

Cash flows from financing activities:
Repayments of lines of credit, net		(2,351,510	)		(706,389	)
Repayments of short-term loans, net		(1,095,620	)		(1,373,845	)
Cash restricted for reduction of line of credit		(1,408,592	)		—
Amount collected payable to joint venture partners		378,875			—
Deferred financing costs		—			(111,400	)
Proceeds from public offering, net		5,323,336			4,254,527
Proceeds from exercise of stock options and warrants		100,463			24,368
Dividend paid		(1,235,503	)		(973,822	)
Net cash (used in) provided by financing activities		(288,551	)		1,113,439

Net increase (decrease) in cash and cash equivalents		20,664			(2,315	)
Cash and cash equivalents, beginning of year		106,836			47,676
Cash and cash equivalents, end of period	$	127,500		$	45,361

Supplemental Cash Flow Information:
Taxes paid during the period	$	1,948		$	—
Interest paid during the period	$	348,443		$	318,317

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

MANHATTAN BRIDGE CAPITAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2016

THE COMPANY

The accompanying unaudited consolidated financial statements of Manhattan Bridge Capital, Inc. (“MBC”), a New York corporation founded in 1989, and its consolidated subsidiaries, DAG Funding Solutions, Inc. (“DAG Funding”), a New York corporation formed in May 2007, and 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, 2015 and the notes thereto included in the Company’s 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 amounts of revenues and expenses during the reporting period. Actual amounts could differ from those estimates.

The consolidated financial statements include the accounts of MBC, DAG Funding 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 and construction of properties located in the New York Metropolitan area.

The Company recognizes revenues in accordance with ASC 605, which provides guidance on the recognition, presentation and disclosure of revenue in financial statements. ASC 605 outlines the basic criteria that must be met to recognize revenue and provides guidance for disclosure related to revenue recognition policies. In general, the Company recognizes revenue when (i) persuasive evidence of an arrangement exists, (ii) delivery of the product has occurred or services have been rendered, (iii) the sales price charged is fixed or determinable, and (iv) collectability is reasonably assured.

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.

Costs incurred in connection with the Company’s line of credit (see Note 8) are being amortized over three years, using the straight-line method. Costs incurred in connection with the senior secured note issued by MBC Funding II (see Note 9) are being amortized over ten years, using the straight-line method.

RECENT TECHNICAL ACCOUNTING PRONOUNCEMENTS

In August 2015, the FASB issued ASU 2015-15, “Interest - Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements - Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting”. The ASU incorporates the SEC staff's announcement that clarifies the exclusion of line-of-credit arrangements from the scope of ASU 2015-03. Therefore, debt issuance costs related to line-of-credit arrangements can be deferred and presented as an asset that is subsequently amortized over the time of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. The ASU should be adopted concurrent with adoption of ASU 2015-03. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.

In November 2015, the FASB issued ASU 2015-17, “ Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes”. The ASU simplifies the presentation of deferred income taxes by requiring deferred tax liabilities and assets to be classified as noncurrent in a classified statement of financial position. This Update will align the presentation of deferred income tax assets and liabilities with International Financial Reporting Standards (IFRS). For public business entities, the ASU is effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. For all other entities, the ASU is effective for fiscal years beginning after December 15, 2017, and interim periods within fiscal years beginning after December 15, 2018. The adoption of this guidance is not expected to have a material impact on the Company’s consolidated financial statements.

In January 2016, the FASB issued ASU 2016-01, “Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities”. The ASU intends to provide users of financial statements with more useful information on the recognition, measurement, presentation, and disclosure of financial instruments. For public business entities, the ASU is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. For all other entities, the ASU is effective for fiscal years beginning after December 15, 2018, and for interim periods within fiscal years beginning after December 15, 2019. Early adoption is permitted for certain provisions. The adoption of this guidance is not expected to have a material impact on the Company’s consolidated financial statements.

In March 2016, the FASB issued ASU 2016-09, “ Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting ”. The ASU simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, statutory tax withholding requirements, and classification in the statement of cash flows . For public companies, the ASU is effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years . For private companies, the ASU is effective for fiscal years beginning after December 15, 2017, and interim periods within fiscal years beginning after December 15, 2018. Early adoption is permitted. The adoption of this guidance is not expected to have a material impact on the Company’s consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”. The ASU requires an organization to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, as well as reasonable and supportable forecasts. For public companies who file with the SEC, the ASU is effective for fiscal years beginning after December 15, 2019 , including interim periods within those fiscal years . For public business entities that are not SEC filers, the ASU is effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. For privately held companies, ASU 2016-13 is effective for fiscal years beginning after December 15, 2020, and for interim periods within fiscal years beginning after December 15, 2021. The adoption of this guidance is not expected to have a material impact on the Company’s consolidated financial statements.

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

CASH - RESTRICTED

Restricted cash represents collections received, pending clearance, from the Company’s commercial loans pledged to Webster Business Credit Corporation, and is primarily dedicated to the reduction of the Webster Credit Line (see Note 8). At June 30, 2016, restricted cash includes collections in the amount of $378,575, pending clearance, on behalf of the Company’s joint venture partners.

COMMERCIAL LOANS

Short Term 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. The loans are principally secured by collateral consisting of real estate and, generally, accompanied by personal guarantees from the principals of the businesses. 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, 2016, we were committed to an additional $3,115,000 in construction loans that can be drawn by the borrowers when certain conditions are met.

At June 30, 2016, no one entity has loans outstanding representing more than 10% of the total balance of the loans outstanding.

At June 30, 2016, one of the loans in the Company’s portfolio was jointly funded by the Company and an unrelated entity, for an aggregate loan of $460,000. The accompanying balance sheet at June 30, 2016 includes the Company’s portion of the loans in the amount of $230,000.

The Company generally grants loans for a term of one year. When a performing loan reaches its maturity and the borrower requests an extension we may extend the term of the loan beyond one year and reclassify it as part of long term loans receivable. Prior to granting an extension of any loan, we reevaluate the underlying collateral.

Long Term Loans Receivable

Long term loans receivable is comprised of the loans that were extended beyond the original maturity dates, unless it is clear that the loan will be paid back by June 30, 2017. At June 30, 2016, the Company’s loan portfolio consists of $23,293,500 short term loans receivable and $8,840,370 long term loans receivable.

Credit Risk

Credit risk profile based on loan activity as of June 30, 2016 and 2015:

Performing loans	Developers- Residential		Developers- Commercial		Developers Mixed Used		Other		Total outstanding loans
June 30, 2016	$	29,291,370	$	—	$	2,842,500	$	—	$	32,133,870
June 30, 2015	$	24,500,040	$	1,400,000	$	—	$	7,218	$	25,907,258

At June 30, 2016, the Company’s long term loans receivable includes loans in the amount of $179,050, $100,000, $225,000, $1,525,000 and $4,871,320 originally due in 2009, 2010, 2013, 2014 and 2015, respectively. 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. Accordingly, at June 30, 2016, no loan impairments exist and there are no provisions for impairments of loans or recoveries thereof included in operations.

Subsequent to the balance sheet date, $1,160,000 of the loans receivable at June 30, 2016 were paid off.

Investment in Privately Held Company

The Company had an original investment in a privately held Israeli-based company in the amount of $100,000. The privately held company offers surgeons and radiologists the ability to detect cancer in real time. Due to the fact that the privately held company has experienced delays in executing its business plan, the Company determined to write down the value of its investment to $65,000 at December 31, 2013 and to $50,000 at June 30, 2015. The Company further wrote down the value of its investment to $40,000 at June 30, 2016, resulting in a charge to the statement of operations of $10,000 for the three-month and six-month periods ended June 30, 2016.

EARNINGS PER SHARE OF COMMON STOCK

Basic and diluted earnings per share are calculated in accordance with ASC 260 “Earnings Per Share”. 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,
	2016		2015		2016		2015
Basic		7,279,332		6,470,905		7,271,685		6,280,278
Incremental shares for assumed conversion of options		28,378		36,479		26,500		34,631
Diluted		7,307,710		6,507,384		7,298,185		6,314,909

For the three and six month periods ended June 30, 2016, 99,341, and 101,219, stock options and warrants were not included in the diluted earnings per share calculation, respectively, because their effect would have been anti-dilutive.

For the three and six month periods ended June 30, 2015, 26,521, and 28,369, stock options and warrants were not included in the diluted earnings per share calculation, respectively, because their effect would have been anti-dilutive.

STOCK – BASED COMPENSATION

The Company measures and recognizes compensation awards for all stock option grants made to employees and directors, based on their fair value in accordance with ASC 718 “Compensation - Stock Compensation”, which establishes standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services. A key provision of this statement is to measure the cost of employee services received in exchange for an award of equity instruments (including stock options) based on the grant-date fair value of the award. The cost will be recognized over the service period during which an employee is required to provide service in exchange for the award (i.e., the requisite service period or vesting period). The Company accounts for equity instruments issued to non-employees in accordance with the provisions of ASC 718 and ASC 505-50, “Equity Based Payment to Non-Employees”. All transactions with non-employees, in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more appropriately measurable.

The share based compensation expense includes the amortization of the fair value of 1,000,000 restricted shares granted to the Company’s CEO 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 will be amortized over 15 years.

Share based compensation expense recognized under ASC 718 for the three and six months ended June 30, 2016 were $3,397 and $6,794, respectively. Share based compensation expense recognized under ASC 718 for the three and six months ended June 30, 2015 were $3,416 and $6,832, respectively.

The exercise price of options granted under the Company’s stock option plan (the “Plan”) may not be less than the fair market value on the date of grant. Stock options under the Plan may be awarded to officers, key-employees, consultants and non-employee directors of the Company. Historically, until the year ended December 31, 2014, each non-employee director of the Company was granted an option for 7,000 common shares upon first taking office, and received an annual option grant for an additional 7,000 common shares for each additional year in office. Generally, options outstanding vest over periods not exceeding four years and are exercisable for up to five years from the grant date.

The objectives of the Plan include attracting and retaining key personnel, providing for additional performance incentives and promoting the success of the Company by increasing the efforts of such officers, employees, consultants and directors. The Plan is the only plan that the Company has adopted with stock options available for grant.

No activity occurred during the six month period ended June 30, 2016. The following summ arizes stock options outstanding (all vested and exercisable) at June 30, 2016:

		Shares				Weighted Average Exercise Price				Weighted Average Remaining Contractual Term (in years)				Aggregate Intrinsic Value
Outstanding at June 30, 2016			35,000			$	1.92				1.85			$	24,876

On July 31, 2014, in connection with the Company’s public offering in July 2014, the Company issued warrants to purchase 87,719 common shares, with an exercise price of $3.5625 per common share, to the representative of the underwriters of the offering. The warrants are exercisable at any time, and from time to time, in whole or in part, commencing on July 28, 2015 and expire on July 28, 2019. The fair value of these warrants, using the Black-Scholes option pricing model, on the date of issuance was $42,224. At June 30, 2016, 41,969 warrants are outstanding and exercisable.

On May 29, 2015, in connection with the Company’s public offering in May 2015, the Company issued warrants to purchase 50,750 common shares, with an exercise price of $5.4875 per common share, to the representative of the underwriters of the offering. The warrants are exercisable at any time, and from time to time, in whole or in part, commencing on May 22, 2016 and expire on May 22, 2020. The fair value of these warrants, using the Black-Scholes option pricing model, on the date of issuance was $54,928.

LOANS AND LINE OF CREDIT

Short Term Loans

In April 2016, the Company repaid in full all of its short-term loans, outstanding at March 31, 2016, in the aggregate of $860,620, which bore interest at rates ranging from 8% to 10% per annum.

Line of Credit

On February 27, 2015, the Company entered into a Line of Credit Agreement with Webster Business Credit Corporation (“Webster”) pursuant to which it may borrow up to $14 million until February 27, 2018 (the “Webster Credit Line”) against assignments of mortgages and other collateral. The Webster Credit Line provides for an interest rate of either LIBOR plus 4.75% or the base commercial lending rate of Webster plus 3.25% as chosen by the Company for each drawdown. 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. Mr. Ran has personally guaranteed all of the Company’s obligations to Webster. Total costs to establish the Webster Credit Line were approximately $144,000. These costs are being amortized over three years, using the straight-line method. The amortization costs for the six months ended June 30, 2016 and 2015 were $24,083 and $15,460, respectively.

The Webster Credit Line replaced the $7.7 million credit facility (the “Sterling Credit Line”) with Sterling National Bank (“Sterling”). The Company paid off the entire balance due to Sterling with proceeds from the Webster Credit Line and terminated the Sterling Credit Line on February 27, 2015. In addition, the Company utilized the Webster Credit Line to repay in full loans from Mr. Ran in the aggregate amount of $1,100,000, as well as two short-term loans, outstanding at December 31, 2014, in the aggregate amount of $1,000,000, which bore interest at the rate of 12% per annum. At June 30, 2016, the outstanding amount under the Webster Credit Line was $9,469,589. The interest rate on the amount outstanding fluctuates daily. The rate for June 30, 2016 was 5.2103%.

PUBLIC OFFERING

On April 25, 2016, MBC Funding II completed a firm commitment underwritten public offering of 6% senior secured notes due April 22, 2026 (the “Notes”). The Company guaranteed MBC Funding II’s obligations under the Notes, which are secured by a pledge by the Company of 100% of the outstanding common shares of MBC Funding II it owns. The gross proceeds to MBC Funding II from this offering were $6,000,000, and the net proceeds were approximately $5,300,000, after deducting the underwriting discounts and commissions and other offering expenses. MBC Funding II utilized the proceeds to purchase a pool of mortgage loans from MBC, which the Company in turn used to pay down the Webster Credit Line (see Note 8).

10.

COMMITMENTS AND CONTINGENCIES

Operating Lease

On June 9, 2011, the Company entered into a new lease agreement (the “Lease’) to relocate its corporate headquarters to 60 Cutter Mill Road, Great Neck, New York. The Lease is for a term of five years and two months commencing June 2011 and ending August 2016. The rent increases annually during the term and ranges from approximately $2,800 per month during the first year to approximately $3,200 per month during the fifth year.

11.

SUBSEQUENT EVENT

On July 21, 2016, the Company amended the lease agreement (the “Lease Amendment”) for its corporate headquarters, located at 60 Cutter Mill Road, Great Neck, New York 11021, to extend the term of the Lease for an additional five-years, through September 30, 2021. Among other things, the Lease Amendment provides for gradual rent increases annually from approximately $3,500 per month during the first year to $3,900 per month during the fifth year of the extension term.

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. We are organized and conduct our operations to qualify as a REIT for federal income tax purposes. We elected to be taxed as a REIT commencing with our taxable year ended December 31, 2014. As a REIT, we are required to distribute at least 90% of our taxable income to our shareholders on an annual basis.

The properties securing our loans are generally classified as residential or commercial real estate and, typically, are held for resale or investment 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 guaranty, which guaranty may be collaterally secured by a pledge of the guarantor’s interest in the borrower. The face amounts of the loans we originate historically have ranged from $14,000 to a maximum of $1,475,000. Our Board established a policy limiting 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) $2 million. Our loans typically have a maximum initial term of 12 months and bear interest at a fixed rate of 12% to 15% per year. In addition, we usually receive origination fees, or “points,” ranging from 1% to 3% of the original principal amount of the loan as well as other fees relating to underwriting, funding and managing 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, up to 80% of construction costs.

Since commencing this business in 2007, we have made over 445 loans, have never foreclosed on a property and 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 in the New York metropolitan market is significant and growing and that traditional lenders, including banks and other financial institutions, that usually address this market are unable to satisfy this demand. This demand/supply imbalance has created an opportunity for non-bank “hard money” real estate lenders like us to selectively originate high-quality first mortgage loans on attractive terms and that this condition should persist for a number of years. 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. We also receive leads for new business from banks, brokers and a limited amount of newspaper advertising and direct mail. 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 independent construction inspectors.

For the six month periods ended June 30, 2016 and 2015 the total amounts of $14,869,500 and $8,825,000 have been lent, offset by collections received from borrowers, under our commercial loans of $13,639,670 and $6,950,218, respectively.

At June 30, 2016, we were committed to an additional $3,115,000 in construction loans that can be drawn by the borrower when certain conditions are met.

In July 2014, we completed a public offering of 1,754,386 common shares. The gross proceeds from the offering were $5.0 million and the net proceeds were approximately $4.3 million, after deducting our underwriting discounts and commissions and offering expenses. As a result of this offering, we satisfied all of the requirements to be taxed as a REIT. We elected to be taxed as a REIT commencing with our taxable year ended December 31, 2014. In order to maintain our qualification 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 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.

On May 29, 2015, we completed another public offering of 1,015,000 common shares. In June 2015, the underwriter partially exercised its over-allotment option for an additional 105,000 common shares. The gross proceeds from the offering, including the partial exercise of the over-allotment option, were approximately $4.9 million and the net proceeds were approximately $4.2 million, after deducting our underwriting discounts and commissions and offering expenses.

On February 27, 2015, we repaid and terminated our Sterling Credit Line, as described in “Liquidity and Capital Resources” below, and replaced it with the Webster Credit Line, as described in “Liquidity and Capital Resources” below, pursuant to which we may borrow up to $14 million during the next three years. The Webster Credit Line provides for an interest rate of either LIBOR plus 4.75% or Webster’s base commercial lending rate plus 3.25%, as chosen by us for each drawdown, and expires on February 27, 2018. The Webster Credit Line is secured by assignment of mortgages and other collateral and is guaranteed by Assaf Ran, our chief executive officer.

On April 25, 2016, MBC Funding II Corp., a New York corporation (“MBC Funding II”), our wholly owned subsidiary, completed a firm commitment underwritten public offering of 6% senior secured notes due April 22, 2026 (the “Notes”). We guaranteed 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 we own. The gross proceeds to MBC Funding II from this offering were $6.0 million, and the net proceeds were approximately $5.3 million, after deducting the underwriting discounts and commissions and other offering expenses. MBC Funding II utilized the proceeds to purchase a pool of mortgage loans from us, which we in turn used to pay down the Webster Credit Line.

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.

Results of Operations

Three Months Ended June 30, 2016 compared to Three Months Ended June 30, 2015

Revenue

Total revenues for the three month period ended June 30, 2016 were approximately $1,166,000 compared to approximately $912,000 for the three month period ended June 30, 2015, an increase of $254,000, or 27.9%. The increase in revenue represents an increase in lending operations. For the three month periods ended June 30, 2016 and 2015, approximately $974,000 and $764,000, respectively, of our revenues were attributable to interest income on the secured commercial loans that we offer to small businesses, and approximately $192,000 and $148,000, respectively, of our revenues were attributable to origination fees on such loans. Our loans are principally secured by collateral consisting of real property and, generally, accompanied by personal guarantees.

Interest and amortization of debt service costs

Interest and amortization of debt service costs for the three month period ended June 30, 2016 were approximately $209,000 compared to approximately $151,000 for the three month period ended June 30, 2015, an increase of $58,000, or 38.4%. The increase in interest and amortization of debt service costs was primarily attributable to the issuance of the Notes (See Note 9 to the financial statements included elsewhere in this report).

General and administrative expenses

General and administrative expenses for the three month period ended June 30, 2016 were approximately $234,000 compared to approximately $215,000 for the three month period ended June 30, 2015, an increase of $19,000, or 8.8%. The increase is primarily attributable to increases in payroll expenses, public relation expenses and director compensation, offset by a decrease in consulting fees.

Write-down of investment in privately held company

Write-down of investment in privately held company for the three month periods ended June 30, 2016 and 2015 was $10,000 and $15,000, respectively. We wrote down the value of our investment in a privately held company due to the fact that it has experienced delays in executing its business plan. (See Note 5 to the financial statements included elsewhere in this report).

Net income

Net income for the three month period ended June 30, 2016 was approximately $710,000 compared to approximately $530,000 for the three month period ended June 30, 2015, an increase of $180,000, or 34.0%. The increase is primarily attributable to the increase in revenue, offset by the increase in interest and amortization of debt service costs.

Six Months Ended June 30, 2016 compared to Six Months Ended June 30, 2015

Revenue

Total revenues for the six month period ended June 30, 2016 were approximately $2,270,000 compared to approximately $1,824,000 for the six month period ended June 30, 2015, an increase of $446,000, or 24.5%. The increase in revenue represents an increase in lending operations. For the six month periods ended June 30, 2016 and 2015, revenues of approximately $1,888,000 and $1,521,000, respectively, were attributable to interest income on the secured commercial loans that we offer to small businesses, and approximately $382,000 and $303,000, respectively, were attributable to origination fees on such loans. Our loans are principally secured by collateral consisting of real property and, generally, accompanied by personal guarantees.

Interest and amortization of debt service costs

Interest and amortization of debt service costs for the six month period ended June 30, 2016 were approximately $388,000 compared to approximately $334,000 for the six month period ended June 30, 2015, an increase of $54,000, or 16.2%. The increase in interest and amortization of debt service costs was primarily attributable to the establishment and use of the Webster Credit Line, and the issuance of the Notes (See Notes 8 and 9 to the financial statements included elsewhere in this report) in order to increase our ability to make loans.

General and administrative expense

General and administrative expenses for the six month period ended June 30, 2016 were approximately $461,000 compared to approximately $467,000 for the six month period ended June 30, 2015, a decrease of $6,000. The decrease is primarily attributable to a special bonus to officers in 2015 for establishing the Webster Credit Line (See Note 8 to the financial statements included elsewhere in this report) and a decrease in consulting fees, offset by increases in bank fees, legal fees and director compensation.

Write-down of investment in privately held company

Write-down of investment in privately held company for the six month periods ended June 30, 2016 and 2015 was $10,000 and $15,000, respectively. We wrote down the value of our investment in a privately held company due to the fact that it has experienced delays in executing its business plan. (See Note 5 to the financial statements included elsewhere in this report).

Net income

Net income for the six month period ended June 30, 2016 was approximately $1,405,000 compared to approximately $1,006,000 for the six month period ended June 30, 2015, an increase of $399,000, or 39.7%. The increase is primarily attributable to the increase in revenue, offset by the increase in interest and amortization of debt service costs.

Liquidity and Capital Resources

At June 30, 2016, we had cash and cash equivalents of approximately $128,000 and working capital of approximately $14,940,000 compared to cash and cash equivalents of approximately $107,000 and working capital of approximately $6,808,000 at December 31, 2015. The increase in working capital is primarily attributable to decreases in the line of credit and short term loans, mainly resulting from the issuance of the Notes (as described above), and no dividends accrual at June 30, 2016.

For the six month periods ended June 30, 2016 and 2015, net cash provided by operating activities were approximately $1,541,000 and $760,000, respectively. The increase in net cash provided by operating activities primarily results from increases in net income and in deferred origination fees, and a decrease in interest receivable on loans.

Net cash used in investing activities was approximately $1,231,000 for the six month period ended June 30, 2016, compared to approximately $1,875,000 for the same period ended June 30, 2015. Net cash used in investing activities for the six month period ended June 30, 2016 consisted of the issuance of our short term commercial loans of approximately $14,870,000, offset by collection of these loans of approximately $13,640,000. In the period ended June 30, 2015, net cash used in investing activities consisted of the issuance of our short term commercial loans of $8,825,000, offset by collection of these loans of approximately $6,950,000.

Net cash used in financing activities for the six month period ended June 30, 2016 was approximately $289,000, compared to $1,113,000 provided by financing activities for the six month period ended June 30, 2015. Net cash used in financing activities for the six month period ended June 30, 2016 reflects the repayments of the line of credit and short term loans in the net amount of approximately $3,447,000, cash restricted for reduction of line of credit of approximately $1,409,000, the dividend payment of approximately $1,236,000, offset by the net proceeds from the public offering of approximately $5,323,000 (including pertinent expenses of approximately $60,000 paid during 2015), the payable to our joint venture partners of approximately $379,000, the proceeds from the exercise of warrants of approximately $100,000. In the period ended June 30, 2015, net cash provided by financing activities reflects the net proceeds from the public offering of approximately $4,255,000 and the proceeds from the exercise of stock options and warrants of approximately $24,000, offset by the repayments of short-term loans and lines of credit in the net amount of approximately $2,080,000, the dividend payment of approximately $974,000, and the deferred financing costs on the establishment of the Webster Credit Line (as described below) of approximately $111,000.

On February 27, 2015, we entered into a Credit and Security Agreement with Webster Business Credit Corporation (“Webster”) pursuant to which we may borrow up to $14 million until February 27, 2018 (the “Webster Credit Line”) against assignments of mortgages and other collateral. The Webster Credit Line provides for an interest rate of either LIBOR plus 4.75% or the base commercial lending rate of Webster plus 3.25% as chosen by us for each drawdown. The Webster Credit Line contains various covenants and restrictions, including limiting the amount that we can borrow relative to the value of the underlying collateral, maintaining various financial ratios and limitations on the terms of loans we make to our customers. Mr. Ran, has personally guaranteed all of our obligations to Webster.

The Webster Credit Line replaced the $7.7 million credit facility (the “Sterling Credit Line”) with Sterling National Bank (“Sterling”). We paid off the entire balance due to Sterling with proceeds from the Webster Credit Line and terminated the Sterling Credit Line on February 27, 2015. In addition, we utilized the Webster Credit Line to repay in full loans from Mr. Ran in the aggregate amount of $1,100,000, as well as two short-term loans, outstanding at December 31, 2014, in the aggregate amount of $1,000,000, bearing interest at the rate of 12% per annum. At June 30, 2016, the outstanding amount under the Webster Credit Line was $9,469,589. The interest rate on the amount outstanding fluctuates daily. The rate for June 30, 2016 was 5.2103%.

Until our initial public offering in 1999, our principal source of funds was cash flow from operations, which funded both our working capital needs and capital expenditures. In May 1999 we completed our initial public offering in which we raised net proceeds of approximately $6.4 million.

In July 2014, we completed a public offering of 1,754,386 common shares, which raised gross proceeds of $5.0 million and the net proceeds of approximately $4.3 million, after deducting our underwriting discounts and commissions and offering expenses. As a result of this offering, we satisfied all of the requirements to be taxed as a REIT and elected to be taxed as a REIT commencing with our taxable year ended December 31, 2014.

In order to maintain our qualification 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 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.

On April 25, 2016, MBC Funding II completed an underwritten public offering of the Notes. We guaranteed 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 we own. The gross proceeds to MBC Funding II from this offering were $6.0 million, and the net proceeds were approximately $5.3 million, after deducting the underwriting discounts and commissions and other offering expenses. MBC Funding II utilized the proceeds to purchase a pool of mortgage loans from us, which we in turn used to pay down the Webster Credit Line.

We anticipate that our current cash balances and the Webster Credit Line, as described above, together with our cash flows from operations will be sufficient to fund our operations for the next 12 months. However, we expect our working capital requirements to increase over the next 12 months as we continue to strive for growth.

Changes to Critical Accounting Policies and Estimates

Our critical accounting policies and estimates are set forth in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015.

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.

Item 4.

CONTROLS AND PROCEDURES

(a)

Evaluation and Disclosure Controls and Procedures

Our management, including 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, 2016 (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 SEC’s rules and forms and (ii) are accumulated and communicated to our management, including our 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) identified in connection with the evaluation required by Rules 13a-15(d) or 15d-15(d) that occurred during the fiscal quarter ended June 30, 2016 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II OTHER INFORMATION

Item 5.

OTHER INFORMATION

On July 21, 2016, we amended the lease agreement (the “Lease Amendment”) for our corporate headquarters, located at 60 Cutter Mill Road, Great Neck, New York 11021, to extend the term of the lease for an additional five-years, through September 30, 2021. Among other things, the Lease Amendment provides for gradual rent increases annually from approximately $3,500 per month during the first year to $3,900 per month during the fifth year of the extension term.

The foregoing summary of the Lease Amendment is qualified in its entirety by reference to the complete text of the Lease Amendment, which is filed herewith as Exhibit 10.7 to this Report, and is incorporated, herein by reference.

Item 6.

EXHIBITS

Exhibit No.		Description
10.1		Indenture, dated as of April 25, 2016, among Manhattan Bridge Capital, Inc., MBC Funding II Corp and Worldwide Stock Transfer, LLC (1)
10.2		Asset Purchase agreement, dated as of April 25, 2016, between Manhattan Bridge Capital, Inc. and MBC Funding II Corp (1)
10.3		Continuing Guaranty of Manhattan Bridge Capital Inc. dated April 25, 2016. (1)
10.4		Pledge Agreement, dated as of April 25, 2016, between Manhattan Bridge Capital and Worldwide Stock Transfer, LLC (1)
10.5		Amendment No. 2, dated as of April 25, 2016, among Manhattan Bridge Capital, Inc., DAG Funding Solutions Inc. and Webster Business Credit Corporation (1)
10.6		Lease Agreement between the Company and Majestic Neck Corp. for the premises located at 60 Cutter Mill Road, Great Neck, New York 11201
10.7		Amendment of Lease, dated July 21, 2016, between the Company and Philips Cutter Mill Owner LLC for the premises located at 60 Cutter Mill Road, Great Neck, New York 11201
31.1		Chief Executive Officer Certification as required under section 302 of the Sarbanes Oxley Act
31.2		Chief Financial Officer Certification as required under section 302 of the Sarbanes Oxley Act
32.1*		Chief Executive Officer Certification pursuant to 18 U.S.C. section 1350 as adopted pursuant to section 906 of the Sarbanes Oxley Act
32.2*		Chief Financial Officer Certification pursuant to 18 U.S.C. section 1350 as adopted pursuant to section 906 of the Sarbanes Oxley Act
101.INS		XBRL Instance Document
101.CAL		XBRL Taxonomy Extension Schema Document
101.SCH		XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB		XBRL Taxonomy Extension Label Linkbase Document
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document

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

(1)

Previously filed on April 27, 2016 as an exhibit to the Company’s Current Report on Form 8-K and incorporated herein by reference.

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 28, 2016	By: /s/ Assaf Ran
	Assaf Ran, President and Chief Executive Officer
	(Principal Executive Officer)

Date: July 28, 2016	By: /s/ Vanessa Kao
	Vanessa Kao, Chief Financial Officer
	(Principal Financial and Accounting Officer)

Exhibit 10.6

Exhibit 10.7

AMENDMENT OF LEASE

AMENDMENT OF LEASE (this “Amendment”), made as of July 21, 2016 between Philips Cutter Mill Owner LLC ("Landlord") and Manhattan Bridge Capital, Inc. ("Tenant").

WITNESSETH:

WHEREAS, Landlord's predecessor-in-interest and Tenant entered into that certain lease dated May 31, 2011 (as amended, the "Lease") for certain premises (the "Demised Premises") in the building known as 60 Cutter mill Road, Great Neck, NY, as more particularly set forth in the Lease; and

WHEREAS, the term of the Lease expires on September 30, 2016; and

WHEREAS, the parties wish to amend the Lease upon the terms and conditions hereafter set forth.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, it is agreed as follows:

1. The term of the Lease is extended for a period beginning on October 1, 2016 and ending on September 30, 2021 (the “Extension Term”). Tenant has no right to extend the term of the Lease beyond the Extension Term. Tenant shall lease the Demised Premises during the Extension Term in its “AS-IS” condition with no work to be performed by Landlord in connection therewith.

2. During the Extension Term:

(i) the Basic Rent payable by Tenant shall be as follows:

October 1, 2016 through September 30, 2017: $42,000.00 per annum ($3,500.00 per month)

October 1, 2017 through September 30, 2018: $43,056.00 per annum ($3,588.00 per month)

October 1, 2018 through September 30, 2019: $44,352.00 per annum ($3,696.00 per month)

October 1, 2019 through September 30, 2020: $45,684.00 per annum ($3,807.00 per month)

October 1, 2020 through September 30, 2021: $47,052.00 per annum ($3,921.00 per month)

(ii) Additional Rent for electricity shall remain at a rate of $3,961.80 per annum ($330.15 per month)

3. The address for notices to Landlord under the Lease is hereby changed to c/o Philips International Holding Corp., 295 Madison Avenue, New York, NY 10017, Attention: Exec. Vice President and a copy to General Counsel.

4. Section 21(b) of the Lease is amended to read in its entirety as follows: “If Tenant shall fail to pay any rent within ten (10) days of the day it is payable under the terms of this Lease, a 4% late charge shall be paid by Tenant to Landlord as Additional Rent at the time of payment of the delinquent sum and if any such rent remains unpaid for thirty (30) days after its due date then interest at the 10% per annum shall accrue on said rent until paid in full."

5. Section 48 of the Lease is revised by inserting the following provision at the end thereof: “Tenant shall be liable to Landlord, as additional rent, for the sum of $150.00 per day for each day beyond ten (10) days from receipt of Landlord’s written notice that Tenant has not furnished any statement requested by Landlord under this Section 48".


Landlord			Tenant

Page 1 of 3

6. Within thirty (30) days of the date that any improvements to the Demised Premises performed by or on behalf are substantially complete, Tenant shall deliver to Landlord (i) a copy of the certificate of occupancy, certificate of completion or such comparable certificate as is issued in the jurisdiction where the Demised Premises are located confirming that such work has been performed in accordance with filed plans and in accordance with all applicable laws, and (ii) evidence reasonably satisfactory to Landlord that any and all permits and applications relating thereto Tenant's Work and occupancy have been completely closed out by the applicable authorities. Tenant shall be liable to Landlord, as Additional Rent, for the sum of $250.00 per day for each day beyond the foregoing 30-day period that Tenant does not furnish such items to Landlord.

7. Landlord shall not be obligated to consider any request by Tenant to any proposed assignment of the Lease (as hereby amended) or sublet of the Demised Premises unless each such request by Tenant is accompanied by a non-refundable fee in the amount of $1,000.00 payable to Landlord for the costs incurred by Landlord in connection with such review and approval. Tenant’s payment of the foregoing amounts shall not be construed to impose any obligation whatsoever upon Landlord to consent to Tenant’s request.

8. Tenant agrees that all sums paid on account of rent, additional rent, and other charges under the Lease and all such items paid to, billed by or otherwise due to Landlord (and its predecessors and agents and their predecessors) from the beginning of the term (including, without limitation, all charges calculated based on "Tenant's Share" or similar concepts, e.g. increases in Taxes) were and are valid and correct.

9. Landlord shall have the right, on 60 days' written notice to Tenant (the "Relocation Notice"), to relocate Tenant from the Demised Premises to other space in the Building (the "Substituted Space"). The Substituted Space shall be at least equal in area to the original Demised Premises and with the same or more amount/total size of windows. This Lease shall continue in full force and shall apply to the Substituted Space with the same force and effect as though the Substituted Space had originally been designated as the Demised Premises in this Lease, except the leasable area of the Demised Premises shall be the leasable area of the Substituted Space and all references herein and elsewhere in this Lease to the Demised Premises shall refer to such Substituted Space. In the event of a substitution of space, Tenant upon ten (10) days' notice shall execute an amendment to this Lease setting forth such substitution of space. If Landlord exercises its rights under this Article, Landlord shall reimburse Tenant for the actual, reasonable costs of preparing the Substituted Space so that it is comparable to the original Demised Premises and of relocating thereto.

10. The security deposit currently held by Landlord pursuant to the terms of the Lease is $6,816.25.

11. Tenant shall remain liable for any rent, additional rent or any other charges payable under the terms of the Lease being extended which have not yet been paid but which are due and payable for the prior term, whether the same is billed or unbilled, and any failure by Tenant to pay the same shall constitute a default in the payment of rent for which Landlord reserves all rights and remedies.

12. Except as herein modified, all other terms and conditions of said Lease shall remain in full force and effect. All capitalized terms used herein which are not otherwise defined herein shall have the respective meanings ascribed to them in the Lease. The terms and conditions of the Lease, as hereby amended, shall bind and inure to the benefit of Landlord and Tenant and their respective permitted successors, transferees, and assigns.

13. Each party Tenant represents to the other that it has dealt with no broker or other intermediary in connection with this transaction other than Philips International Holding Corp. and Majestic Property Affiliates ("Broker"), who shall be paid by Landlord pursuant to separate agreement. Each party shall save, defend and hold harmless the other and its agents from any and all claims or demands by any other brokers, agents or finders with whom the indemnifying party may have dealt in connection with this Amendment. The provision of this Article shall survive the expiration or sooner termination of this Amendment.


Landlord			Tenant

Page 2 of 3

14. Tenant represents and warrants that (a) neither Tenant nor any person who owns any controlling interest in Tenant, is on the list maintained by the United States Department of Treasury, Office of Foreign Assets Control (commonly known as the OFAC list) or otherwise qualifies as a person with whom business by a United States citizen or resident is prohibited, and (b) neither Tenant nor any person who owns any controlling interest in Tenant is in violation of any anti-money laundering or anti-terrorism statute, including, without limitation, the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, U.S. Public Law 107-56 (commonly known as the USA Patriot Act), and the related regulations issues thereunder, all as amended from time to time. Landlord represents and warrants that (a) neither Landlord nor any person who owns any controlling interest in Landlord, is on the list maintained by the United States Department of Treasury, Office of Foreign Assets Control (commonly known as the OFAC list) or otherwise qualifies as a person with whom business by a United States citizen or resident is prohibited, and (b) neither Landlord nor any person who owns any controlling interest in Landlord is in violation of any anti-money laundering or anti-terrorism statute, including, without limitation, the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, U.S. Public Law 107-56 (commonly known as the USA Patriot Act), and the related regulations issues thereunder, all as amended from time to time.

15. This Amendment may be executed in several counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument. A facsimile, PDF or electronic copy of a signed original of this Amendment shall be deemed sufficient to bind the parties, and shall have the same legal effect as, and may be used as, an original for all purposes.

IN WITNESS WHEREOF, the parties have executed this Amendment as of the date first written above.

LANDLORD:		TENANT:

Philips International Holding Corp.,		Manhattan Bridge Capital, Inc.
as agent for Philips Cutter Mill Owner LLC


By:	/s/ Michael Pilevsky	By:	/s/ Assaf Ran
	Michael Pilevsky	Name: Assaf Ran
	Co-President	Title: President and CEO

Witness: /s/ Sam Worth		Witness: /s/ Vanessa Kao
Printed name: Sam Worth		Printed name: Vanessa Kao


Landlord			Tenant

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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:

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;

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;

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

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):

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

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 28, 2016

	/s/ Assaf Ran
	Assaf Ran
	President and Chief Executive Officer
	(Principal Executive Officer)

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.;

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 28, 2016

	/s/ Vanessa Kao
	Vanessa Kao
	Chief Financial Officer
	(Principal Financial and Accounting Officer)

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Manhattan Bridge Capital, Inc. (the "Company") for the period ended June 30, 2016 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, as adopted pursuant to § 906 of the Sarbanes Oxley Act, that:

(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 28, 2016

/s/ Assaf Ran*
Assaf Ran
President and Chief Executive Officer
(Principal Executive Officer)

* A signed original of this written statement required by Section 906 has been provided to us and will be retained by us and furnished to the Securities and Exchange Commission or its staff upon request.

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Manhattan Bridge Capital, Inc. (the "Company") for the period ended June 30, 2016 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, as adopted pursuant to § 906 of the Sarbanes Oxley Act, that:

(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 28, 2016

/s/ Vanessa Kao*
Vanessa Kao
Chief Financial Officer
(Principal Financial and Accounting Officer)