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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, 2021

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 23, 2021, 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)  
     
  Consolidated Balance Sheets as of June 30, 2021 and December 31, 2020 3
     
  Consolidated Statements of Operations for the Three and Six Month Periods Ended June 30, 2021 and 2020 4
     
  Consolidated Statements of Changes in Stockholders’ Equity for the Three and Six Month Periods Ended June 30, 2021 and 2020 5
     
  Consolidated Statements of Cash Flows for the Six Month Periods Ended June 30, 2021 and 2020 6
     
  Notes to Consolidated Financial Statements 7
     
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 11
     
Item 3. Quantitative and Qualitative Disclosures about Market Risk 16
     
Item 4. Controls and Procedures 16
     
Part II OTHER INFORMATION 16
     
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 and (ix) if the effect of the COVID-19 pandemic on our business is 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, 2020. 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, 2021     December 31, 2020  
 

(unaudited)

   

(audited)

 
Assets                
Loans receivable   $ 53,385,871     $ 58,097,970  
Interest receivable on loans     915,738       827,236  
Cash     153,187       131,654  
Cash - restricted     —       327,483  
Other assets     140,932       66,566  
Operating lease right-of-use asset, net     343,566       369,699  
Deferred financing costs, net     15,056       22,807  
Total assets   $ 54,954,350     $ 59,843,415  
             
Liabilities and Stockholders’ Equity            
Liabilities:            
Line of credit   $ 15,397,115     $ 20,308,873  
Senior secured notes (net of deferred financing costs of $359,784 and $397,327, respectively)     5,640,216       5,602,673  
Deferred origination fees     357,753       367,638  
Accounts payable and accrued expenses     133,912       168,940  
Operating lease liability     348,835       372,907  
Dividends payable     —       1,058,194  
Total liabilities     21,877,831       27,879,225  
                 
Commitments and contingencies     -          
Stockholders’ equity:                
Preferred stock - $.01 par value; 5,000,000 shares authorized; none issued     —       —  
Common stock - $.001 par value; 25,000,000 shares authorized; 9,882,058 issued; 9,619,945 outstanding     9,882       9,882  
Additional paid-in capital     33,163,628       33,157,096  
Treasury stock, at cost – 262,113 shares     (798,939 )     (798,939 )
Retained earnings (accumulated deficit)     701,948       (403,849 )
Total stockholders’ equity     33,076,519       31,964,190  
Total liabilities and stockholders’ equity   $ 54,954,350     $ 59,843,415  

 

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

 

3
 

 

MANHATTAN BRIDGE CAPITAL, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

 

    2021     2020     2021     2020  
    Three Months Ended
June 30, 		    Six Months Ended
June 30, 		 
    2021     2020     2021     2020  
Interest income from loans   $ 1,423,759     $ 1,490,395     $ 2,866,573     $ 2,963,940  
Origination fees     289,670       250,791       576,143       488,233  
Total revenue     1,713,429       1,741,186       3,442,716       3,452,173  
                                 
Operating costs and expenses:                                
Interest and amortization of deferred financing costs     316,915       326,247       634,101       678,689  
Referral fees     2,643       1,386       4,394       1,928  
General and administrative expenses     339,602       318,726       648,583       663,507  
Total operating costs and expenses     659,160       646,359       1,287,078       1,344,124  
Income from operations     1,054,269       1,094,827       2,155,638       2,108,049  
Other income     4,500       3,000       9,000       6,000  
Income before income tax expense     1,058,769       1,097,827       2,164,638       2,114,049  
Income tax expense     (647 )     (645 )     (647 )     (645 )
Net income   $ 1,058,122     $ 1,097,182     $ 2,163,991     $ 2,113,404  
                                 
Basic and diluted net income per common
share outstanding: 		                               
—Basic   $ 0.11     $ 0.11     $ 0.22     $ 0.22  
—Diluted   $ 0.11     $ 0.11     $ 0.22     $ 0.22  
                                 
Weighted average number of common shares outstanding:                                
—Basic     9,619,945       9,628,405       9,619,945       9,640,146  
—Diluted     9,619,945       9,628,405       9,619,945       9,640,146  

 

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, 2021

 

    Common Shares Shares     Common Shares Amount     Additional Paid in Capital     Treasury Stock Shares     Treasury Stock Cost     Retained Earnings     Totals  
    Common Shares     Additional Paid in Capital     Treasury Stock     Retained Earnings     Totals  
    Shares     Amount           Shares     Cost              
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 THREE MONTHS ENDED JUNE 30, 2020

 

    Common Shares     Additional Paid in Capital     Treasury Stock     Retained Earnings     Totals  
    Shares     Amount           Shares     Cost              
Balance, April 1, 2020     9,882,058     $ 9,882     $ 33,147,298       249,823     $ (750,724 )   $ 425,414     $ 32,831,870  
Purchase of treasury shares                             5,390       (20,835 )             (20,835 )
Non - cash compensation                     3,266                               3,266  
Dividends paid                                             (1,059,546 )     (1,059,546 )
Net income                                             1,097,182       1,097,182  
Balance, June 30, 2020     9,882,058     $ 9,882     $ 33,150,564       255,213     $ (771,559 )   $ 463,050     $ 32,851,937  

 

FOR THE SIX MONTHS ENDED JUNE 30, 2021

 

    Common Shares     Additional Paid in Capital     Treasury Stock     Accumulated Deficit (Retained Earnings)     Totals  
    Shares     Amount           Shares     Cost              
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  

 

FOR THE SIX MONTHS ENDED JUNE 30, 2020

 

    Common Shares     Additional Paid in Capital     Treasury Stock     Accumulated Deficit (Retained Earnings)     Totals  
    Shares     Amount           Shares     Cost              
Balance, January 1, 2020     9,882,058     $ 9,882     $ 33,144,032       223,214     $ (619,688 )   $ (590,808 )   $ 31,943,418  
Non - cash compensation                     6,532                               6,532  
Purchase of treasury shares                             31,999       (151,871 )             (151,871 )
Dividends paid                                             (1,059,546 )     (1,059,546 )
Net income                                             2,113,404       2,113,404  
Balance, June 30, 2020     9,882,058     $ 9,882     $ 33,150,564       255,213     $ (771,559 )   $ 463,050     $ 32,851,937  

 

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)

 

    2021     2020  
   

Six Months Ended June 30,

 
    2021     2020  
Cash flows from operating activities:                
Net income   $ 2,163,991     $ 2,113,404  
Adjustments to reconcile net income to net cash provided by operating activities -                
Amortization of deferred financing costs     45,294       50,256  
Adjustment to operating lease right-of-use asset and liability     2,060       (200 )
Depreciation     1,153       548  
Non-cash compensation expense     6,532       6,532  
Changes in operating assets and liabilities:                
Interest receivable on loans     (88,502 )     (124,303 )
Other assets     (56,768 )     (65,316 )
Accounts payable and accrued expenses     (35,028 )     (32,015 )
Deferred origination fees     (9,885 )     39,513  
Net cash provided by operating activities     2,028,847       1,988,419  
                 
Cash flows from investing activities:                
Issuance of short term loans     (15,567,677 )     (21,798,160 )
Collections received from loans     20,279,776       19,455,628  
Release of loan holdback relating to mortgage receivable     —       (15,000 )
Purchase of fixed assets     —       (923 )
Net cash provided by (used in) investing activities     4,712,099       (2,358,455 )
                 
Cash flows from financing activities:                
(Repayment of) proceeds from line of credit, net     (4,911,758 )     2,843,235  
Dividends paid     (2,116,388 )     (2,218,607 )
Pre-offering costs incurred     (18,750 )     —  
Purchase of treasury shares     —       (151,871 )
Deferred financing costs incurred     —       (27,102 )
Net cash (used in) provided by financing activities     (7,046,896 )     445,655  
                 
Net (decrease) increase in cash     (305,950 )     75,619  
Cash and restricted cash, beginning of year     459,137       118,407  
Cash and restricted cash, end of period   $ 153,187     $ 194,026  
                 
Supplemental Cash Flow Information:                
Taxes paid during the period   $ 647     $ 645  
Interest paid during the period   $ 603,869     $ 650,130  
Operating leases paid during the period   $ 31,719     $ 27,227  
                 
Supplemental Information – Noncash Information:                
Interest receivable converted to loans receivable in connection with forbearance agreements   $ —     $ 29,671  

 

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, 2021

 

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, 2020 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. CASH - RESTRICTED

 

Restricted cash mainly represents collections received, pending check clearance, from the Company’s commercial loans and is primarily dedicated to the reduction of the Company’s Webster Credit Line established pursuant to the Amended and Restated Credit Agreement (see Note 5).

 

4. 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, generally, 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, 2021, the Company was committed to $5,386,053 in construction loans that can be drawn by the borrowers when certain conditions are met.

 

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At June 30, 2021, 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, 2021 and December 31, 2020:

 

Performing loans  

Developers-

Residential

   

Developers-

Commercial

   

Developers-

Mixed Used

    Total outstanding loans  
June 30, 2021   $ 48,126,871     $ 3,175,000     $ 2,084,000     $ 53,385,871  
December 31, 2020   $ 55,119,107     $ 1,564,863     $ 1,414,000     $ 58,097,970  

 

At June 30, 2021, the Company’s loans receivable consisted of loans in the amount of $367,500, $1,052,400, $1,120,000, $2,854,000 and $10,266,025, originally due in 2016, 2017, 2018, 2019 and 2020, 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. At June 30, 2021, no loan impairments exist and there are no provisions for impairments of loans or recoveries thereof.

 

Subsequent to the balance sheet date, approximately $2,011,000 of the loans receivable at June 30, 2021 were paid off, including $705,000 originally due in 2020.

 

5. 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 4.1%, including a 0.5% agency fee, as of June 30, 2021, 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.

 

The Company was in compliance with all covenants of the Webster Credit Line, as amended, as of June 30, 2021. At June 30, 2021, the outstanding amount under the Amended Credit Agreement was $15,397,115. The interest rate on the amount outstanding fluctuates daily. The rate, including a 0.5% Agency Fee, as of June 30, 2021, was approximately 4.1%.

 

On July 2, 2021, the Company entered into a consent and amendment letter agreement, with respect to the Amended and Restated Credit Agreement, with the Lenders and Assaf Ran, as guarantor, to amend the definition of “Change of Control” to provide that Mr. Ran would be required to own at least 20%, instead of 27%, of the equity interests of the Company, on a fully diluted basis.

 

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6. 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. No Notes were redeemed by MBC Funding II as of June 30, 2021.

 

Each Noteholder had the right to cause MBC Funding II to redeem his, her or its Notes on April 22, 2021 by notifying MBC Funding II in writing, no earlier than November 22, 2020 and no later than January 22, 2021. No Noteholder exercised such right during the required time frame and as such the Notes are no longer redeemable by the Noteholders.

 

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.

 

7. EARNINGS PER SHARE OF COMMON SHARES

 

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, 		 
    2021     2020     2021     2020  
Basic weighted average common shares outstanding     9,619,945       9,628,405       9,619,945       9,640,146  
Incremental shares for assumed exercise of warrants     —       —       —       —  
Diluted weighted average common shares outstanding     9,619,945       9,628,405       9,619,945       9,640,146  

  

For each of the three and six months ended June 30, 2021 and 2020, vested warrants to purchase 33,612 common shares were not included in the diluted earnings per share calculation because their effect would have been anti-dilutive.

 

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8. STOCK – BASED COMPENSATION

 

Stock based compensation expense recognized under ASC 718, “Compensation – Stock Compensation,” for each of the six month periods ended June 30, 2021 and 2020 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.

 

On August 15, 2016, in connection with a public offering of the Company’s common stock, the Company issued warrants to purchase up to 33,612 common shares, with an exercise price of $7.4375 per common share, to the representative of the underwriters of the offering (the “August 2016 Representative Warrants”). The warrants are exercisable at any time, and from time to time, in whole or in part, commencing on August 9, 2017 and expire on August 9, 2021. The fair value of these warrants, using the Black-Scholes option pricing model, on the date of issuance was $47,020. At June 30, 2021, all of the August 2016 Representative Warrants were outstanding.

 

9. SUBSEQUENT EVENT

 

On July 9, 2021, the Company completed an underwritten public offering of 1,875,000 of its common shares at a public offering price of $7.20 per share (the “Offering”). The gross proceeds raised by the Company from the Offering were $13,500,000 before deducting underwriting discounts and commissions and other estimated offering expenses. The total net proceeds from the Offering of approximately $12,354,000 were used to reduce the outstanding balance of the Webster Credit Line. The Company granted the underwriters a 30-day option to purchase up to an additional 281,250 common shares to cover over-allotments, if any.

 

10. COVID-19

 

As a result of the COVID-19 pandemic, the Company may experience difficulties collecting monthly interest on time from its borrowers, property values may decline and certain of the Company’s originated loans may need to be extended. Since the onset of the COVID-19 pandemic, the Company has continued to originate loans as well as continued to service its existing loans, though the Company has observed lower demand for new loans. 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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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-bank 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 improvement of 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 $2.5 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 9% to 14% 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.

 

Since commencing this business in 2007, we have made approximately 960 loans and never foreclosed on a property. We believe that we maintain a lower debt-to-equity ratio, compared to our peers. We currently manage a portfolio of approximately 110 loans secured primarily by residential properties. 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 and stock price appreciation. 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 subject to volatility due to the COVID-19 pandemic. We believe that 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 currently anticipate this operating environment to continue 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.

 

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Since the onset of the COVID-19 pandemic, we have continued to originate loans as well as continued to service our existing loans, though we have observed lower demand for new loans. In addition, we may experience difficulties collecting the monthly interest on time, property values may decline and certain of our originated loans may need to be extended, though to date we have not experienced many borrowers requiring such accommodations. In addition, due to market conditions and intense competition in the market, we have begun to charge our customers lower interest rates and origination fees charged on loans. We have also seen a lower demand of new loans resulting from the COVID-19 pandemic. 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. While we are not able at this time to estimate the future impact of the COVID-19 pandemic on our financial and operational results, it could be material.

 

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 select advertising. Additionally, 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 as well as mortgage brokers and deal initiators.

 

For the six months ended June 30, 2021 and 2020, the total amounts of $15,567,677 and $21,798,160, respectively, have been lent, offset by collections received from borrowers, under our commercial loans of $20,279,776 and $19,455,628, respectively.

 

At June 30, 2021, we were committed to $5,386,053 in construction loans that can be drawn by the borrowers when certain conditions are met.

 

Since our inception, 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.

 

12
 

 

Results of Operations

 

Three months ended June 30, 2021 compared to three months ended June 30, 2020

 

Revenue

 

Total revenues for the three months ended June 30, 2021 were approximately $1,713,000 compared to approximately $1,741,000 for the three months ended June 30, 2020, a decrease of $28,000, or 1.6%. The decrease in revenue was primarily attributable to lower interest rates charged on loans due to market conditions and intense competition from other lenders. For the three months ended June 30, 2021 and 2020, approximately $1,424,000 and $1,490,000, respectively, of our revenues were attributable to interest income on secured commercial loans that we offer to real estate investors, and approximately $290,000 and $251,000, 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, 2021 were approximately $317,000 compared to approximately $326,000 for the three months ended June 30, 2020, a decrease of $9,000, or 2.8%. The decrease was primarily attributable to decreased interest expense due to lower LIBOR rates (See Note 5 to the financial statements included elsewhere in this quarterly report).

 

General and administrative expenses

 

General and administrative expenses for the three months ended June 30, 2021 were approximately $340,000 compared to approximately $319,000 for the three months ended June 30, 2020, an increase of $21,000, or 6.6%. The increase is primarily attributable to increases in appraisal, travel and meal expenses, partially offset by a decrease in legal fees.

 

Net income

 

Net income for the three months ended June 30, 2021 was approximately $1,058,000 compared to approximately $1,097,000 for the three months ended June 30, 2020, a decrease of $39,000, or 3.6%. The decrease is primarily attributable to the decrease in interest income from loans.

 

Six months ended June 30, 2021 compared to six months ended June 30, 2020

 

Revenue

 

Total revenues for the six months ended June 30, 2021 were approximately $3,443,000 compared to approximately $3,452,000 for the six months ended June 30, 2020, a decrease of $9,000. The decrease in revenue was primarily attributable to lower interest rates charged on loans due to market conditions and intense competition from other lenders, offset by an increase in origination fees. For the six months ended June 30, 2021 and 2020, revenues of approximately $2,867,000 and $2,964,000, respectively, were attributable to interest income on secured commercial loans that we offer to real estate investors, and approximately $576,000 and $488,000, 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, 2021 were approximately $634,000 compared to approximately $679,000 for the six months ended June 30, 2020, a decrease of $45,000, or 6.6%. The decrease was primarily attributable to decreased interest expense due to lower LIBOR rates (See Note 5 to the financial statements included elsewhere in this quarterly report).

 

General and administrative expenses

 

General and administrative expenses for the six months ended June 30, 2021 were approximately $649,000 compared to approximately $664,000 for the six months ended June 30, 2020, a decrease of $15,000, or 2.3%. The decrease is primarily attributable to decreases in payroll expenses, as well as a special bonus paid to our Chief Financial Officer in 2020, offset by increases in appraisal, insurance and travel expenses.

 

13
 

 

Net income

 

Net income for the six months ended June 30, 2021 was approximately $2,164,000 compared to approximately $2,113,000 for the six months ended June 30, 2020, an increase of $51,000, or 2.4%. This increase is primarily attributable to the decrease in interest expense.

 

Liquidity and Capital Resources

 

At June 30, 2021, we had cash of approximately $153,000 compared to cash of approximately $132,000 at December 31, 2020 (not including restricted cash, which mainly represents collections received, pending check clearance, from the Company’s commercial loans and is primarily dedicated to the reduction of the Webster Credit Line).

 

For the six months ended June 30, 2021, net cash provided by operating activities was approximately $2,029,000, compared to approximately $1,988,000 for the six months ended June 30, 2020. The increase in net cash provided by operating activities primarily resulted from an increase in net income.

 

For the six months ended June 30, 2021, net cash provided by investing activities was approximately $4,712,000, compared to net cash used in investing activities of approximately $2,358,000 for the six months ended June 30, 2020. 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. During the period ended June 30, 2020, net cash used in investing activities mainly consisted of the issuance of commercial loans of approximately $21,798,000 and the release of loan holdback of $15,000, offset by the collection of our commercial loans of approximately $19,456,000.

 

For the six months ended June 30, 2021, net cash used in financing activities was approximately $7,047,000, compared to net cash provided by financing activities of approximately $446,000 for the six months ended June 30, 2020. 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 public offering, as described below. Net cash provided by financing activities for the six months ended June 30, 2020 reflects the net proceeds from the Webster Credit Line of an aggregate of approximately $2,843,000, offset by the dividend payments of approximately $2,219,000, the purchase of treasury shares of approximately $152,000 and deferred financing costs of approximately $27,000.

 

We maintain the Webster Credit Line which currently 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. On August 8, 2017, we entered into the Amended and Restated Credit Agreement, which provides for the current Webster Credit Line.

 

The interest rates relating to Webster Credit Line equal (i) LIBOR plus a premium, which rate aggregated approximately 4.1%, including a 0.5% agency fee, as of June 30, 2021, 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.

 

We were in compliance with all covenants of the Webster Credit Line, as amended, as of June 30, 2021. At June 30, 2021, the outstanding amount under the Amended and Restated Credit Agreement was $15,397,115. The interest rate on the amount outstanding fluctuates daily. The rate, including a 0.5% agency fee, at June 30, 2021 was approximately 4.1%.

 

As of June 30, 2021, 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.

 

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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. No Notes were redeemed by MBC Funding II as of June 30, 2021.

 

Each Noteholder had the right to cause MBC Funding II to redeem his, her or its Notes on April 22, 2021 by notifying MBC Funding II in writing, no earlier than November 22, 2020 and no later than January 22, 2021. No Noteholder exercised such right during the required time frame and as such the Notes are no longer redeemable by the Noteholders.

 

In addition, 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.

 

On July 2, 2021, we entered into a consent and amendment letter agreement with respect to the Amended and Restated Credit Agreement with the Lenders and Assaf Ran, as guarantor, to amend the definition of “Change of Control” to provide that Mr. Ran would be required to own at least 20%, instead of 27%, of the equity interests of the Company, on a fully diluted basis.

 

On July 9, 2021, we completed an underwritten public offering of 1,875,000 of our common shares at a public offering price of $7.20 per share (the “Offering”). The gross proceeds raised by us in the Offering were $13,500,000 before deducting underwriting discounts and commissions and other estimated offering expenses. The total net proceeds from the Offering of approximately $12,354,000 were used to reduce the outstanding balance of the Webster Credit Line. We granted the underwriters a 30-day option to purchase up to an additional 281,250 of our common shares to cover over-allotments, if any.

 

We anticipate that our current cash balances, the proceeds of the Offering, 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, we have 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. If the COVID-19 pandemic worsens in the New York area in which we operate, the pandemic could materially affect our financial and operational results.

 

Off-Balance Sheet Arrangements

 

We have not entered into any off-balance sheet transactions, arrangements or other relationships with unconsolidated entities or other persons that are likely to affect liquidity or the availability of our requirements for capital resources.

 

15
 

 

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, 2020.

 

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, 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, 2021 (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 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, 2021 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

PART II OTHER INFORMATION

 

Item 6. EXHIBITS

 

Exhibit No.   Description
10.1   Consent and Amendment Letter Agreement by and among Manhattan Bridge Capital Inc., Webster Business Credit Corporation, Flushing Bank and Mizrahi Tefahot Bank Ltd., dated July 2, 2021.
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 23, 2021 By: /s/ Assaf Ran
    Assaf Ran, President and Chief Executive Officer
    (Principal Executive Officer)

 

Date: July 23, 2021 By: /s/ Vanessa Kao
    Vanessa Kao, Chief Financial Officer
    (Principal Financial and Accounting Officer)

 

17

 

 

Exhibit 10.1

 

 

 

 

 

 

 

 

 

 

 

 

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 23, 2021

 

  /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.;

 

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 23, 2021

 

  /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

 

In connection with the Quarterly Report on Form 10-Q of Manhattan Bridge Capital, Inc. (the “Company”) for the period ended June 30, 2021 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 23, 2021

 

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

 

 

 

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, 2021 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 23, 2021

 

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