Form 10-Q - Quarterly report [Sections 13 or 15(d)]

 

 

 

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 September 30, 2024

 

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)

 

[phone]

(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 October 23, 2024, the registrant had a total of 11,438,651 common shares, $.001 par value per share, outstanding.

 

 

 

 

 

MANHATTAN BRIDGE CAPITAL, INC.

TABLE OF CONTENTS

 

		Page Number
Part I	FINANCIAL INFORMATION
Item 1.	Condensed Consolidated Financial Statements (unaudited)
	Consolidated Balance Sheets as of September 30, 2024 and December 31, 2023 (audited)	4
	Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2024 and 2023	5
	Consolidated Statements of Changes in Stockholders’ Equity for the Three and Nine Months Ended September 30, 2024 and 2023	6
	Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2024 and 2023	7
	Notes to Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	12
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	16
Item 4.	Controls and Procedures	16
Part II	OTHER INFORMATION
Item 6.	Exhibits	16
SIGNATURES		17
EXHIBITS

 

2

 

 

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) an increase in interest rates may impact our profitability. 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, 2023. 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.

 

3

 

 

PART I. FINANCIAL INFORMATION

 

Item 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

MANHATTAN BRIDGE CAPITAL, INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

 

		September 30, 2024				December 31, 2023
		(unaudited)				(audited)
Assets
Loans receivable		$	68,711,438			$	73,048,403
Interest and other fees receivable on loans			1,536,643				1,395,905
Cash			167,863				104,222
Cash - restricted			—				1,587,773
Other assets			99,180				63,636
Right-of-use asset - operating lease, net			167,243				207,364
Deferred financing costs, net			19,636				27,583
Total assets		$	70,702,003			$	76,434,886
Liabilities and Stockholders’ Equity
Liabilities:
Line of credit		$	19,170,268			$	25,152,338
Senior secured notes (net of deferred financing costs of $115,756 and $172,069, respectively)			5,884,244				5,827,931
Deferred origination fees			618,812				719,019
Accounts payable and accrued expenses			211,786				295,292
Operating lease liability			180,529				220,527
Loan holdback			50,000				—
Dividends payable			1,315,445				1,287,073
Total liabilities			27,431,084				33,502,180
Commitments and contingencies
Stockholders’ equity:
Preferred shares - $.01 par value; 5,000,000 shares authorized; none issued			—				—
Common shares - $.001 par value; 25,000,000 shares authorized; 11,757,058 issued; 11,438,651 and 11,440,651 outstanding, respectively			11,757				11,757
Additional paid-in capital			45,558,674				45,548,876
Less: Treasury stock, at cost – 318,407 and 316,407 shares, respectively			(1,070,406	)			(1,060,606	)
Accumulated deficit			(1,229,106	)			(1,567,321	)
Total stockholders’ equity			43,270,919				42,932,706
Total liabilities and stockholders’ equity		$	70,702,003			$	76,434,886

 

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

 

4

 

 

MANHATTAN BRIDGE CAPITAL, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

 

		Three Months Ended September 30,								Nine Months Ended September 30,
		2024				2023				2024				2023
Revenue:
Interest income from loans		$	1,952,957			$	1,992,495			$	6,128,131			$	5,888,843
Origination fees			360,376				441,271				1,201,494				1,342,077
Total revenue			2,313,333				2,433,766				7,329,625				7,230,920
Operating costs and expenses:
Interest and amortization of deferred financing costs			537,218				614,389				1,831,037				1,856,079
Referral fees			847				361				1,847				1,652
General and administrative expenses			380,482				377,192				1,225,041				1,274,267
Total operating costs and expenses			918,547				991,942				3,057,925				3,131,998
Income from operations			1,394,786				1,441,824				4,271,700				4,098,922
Other income			4,500				4,500				13,500				29,380
Income before income tax expense			1,399,286				1,446,324				4,285,200				4,128,302
Income tax expense			—				—				(650	)			(650	)
Net income		$	1,399,286			$	1,446,324			$	4,284,550			$	4,127,652
Basic and diluted net income per common share outstanding:
—Basic		$	0.12			$	0.13			$	0.37			$	0.36
—Diluted		$	0.12			$	0.13			$	0.37			$	0.36
Weighted average number of common shares outstanding
—Basic			11,438,651				11,461,052				11,438,658				11,477,133
—Diluted			11,438,651				11,461,052				11,438,658				11,477,133

 

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

 

5

 

 

MANHATTAN BRIDGE CAPITAL, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(unaudited)

 

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2024

 

		Common Shares								Additional Paid in				Treasury Shares								Accumulated
		Shares				Amount				Capital				Shares				Cost				Deficit				Totals
Balance, July 1, 2024			11,757,058			$	11,757			$	45,555,408				318,407			$	(1,070,406	)		$	(1,312,947	)		$	43,183,812
Non-cash compensation											3,266																3,266
Dividends declared and payable																							(1,315,445	)			(1,315,445	)
Net income																							1,399,286				1,399,286
Balance, September 30, 2024			11,757,058			$	11,757			$	45,558,674				318,407			$	(1,070,406	)		$	(1,229,106	)		$	43,270,919

 

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2023

 

		Common Shares								Additional Paid in				Treasury Shares								Accumulated
		Shares				Amount				Capital				Shares				Cost				Deficit				Totals
Balance, July 1, 2023			11,757,058			$	11,757			$	45,542,343				295,473			$	(963,745	)		$	(1,786,337	)		$	42,804,018
Purchase of treasury shares															4,500				(20,885	)							(20,885	)
Non-cash compensation											3,266																3,266
Dividends declared and payable																							(1,288,753	)			(1,288,753	)
Net income																							1,446,324				1,446,324
Balance, September 30, 2023			11,757,058			$	11,757			$	45,545,609				299,973			$	(984,630	)		$	(1,628,766	)		$	42,943,970

 

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024

 

		Common Shares								Additional Paid in				Treasury Shares								Accumulated
		Shares				Amount				Capital				Shares				Cost				Deficit				Totals
Balance, January 1, 2024			11,757,058			$	11,757			$	45,548,876				316,407			$	(1,060,606	)		$	(1,567,321	)		$	42,932,706
Purchase of treasury shares															2,000				(9,800	)							(9,800	)
Non-cash compensation											9,798																9,798
Dividends paid																							(2,630,890	)			(2,630,890	)
Dividends declared and payable																							(1,315,445	)			(1,315,445	)
Net income																							4,284,550				4,284,550
Balance, September 30, 2024			11,757,058			$	11,757			$	45,558,674				318,407			$	(1,070,406	)		$	(1,229,106	)		$	43,270,919

 

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023

 

		Common Shares								Additional Paid in				Treasury Shares								Accumulated
		Shares				Amount				Capital				Shares				Cost				Deficit				Totals
Balance, January 1, 2023			11,757,058			$	11,757			$	45,535,811				262,113			$	(798,939	)		$	(1,885,056	)		$	42,863,573
Purchase of treasury shares															37,860				(185,691	)							(185,691	)
Non-cash compensation											9,798																9,798
Dividends paid																							(2,582,609	)			(2,582,609	)
Dividends declared and payable																							(1,288,753	)			(1,288,753	)
Net income																							4,127,652				4,127,652
Balance, September 30, 2023			11,757,058			$	11,757			$	45,545,609				299,973			$	(984,630	)		$	(1,628,766	)		$	42,943,970

 

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

 

6

 

 

MANHATTAN BRIDGE CAPITAL, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

 

		Nine Months Ended September 30,
		2024				2023
Cash flows from operating activities:
Net income		$	4,284,550			$	4,127,652
Adjustments to reconcile net income to net cash provided by operating activities -
Amortization of deferred financing costs			66,427				71,449
Adjustment to right-of-use asset - operating lease and liability			121				1,636
Depreciation			3,480				3,001
Non-cash compensation expense			9,798				9,798
Changes in operating assets and liabilities:
Interest and other fees receivable on loans			(140,738	)			14,128
Other assets			(35,005	)			(38,381	)
Accounts payable and accrued expenses			(83,505	)			(53,682	)
Deferred origination fees			(100,207	)			1,167
Net cash provided by operating activities			4,004,921				4,136,768
Cash flows from investing activities:
Issuance of short-term loans			(29,362,922	)			(40,810,565	)
Collections received from loans			33,749,887				44,512,989
Purchase of fixed assets			(4,018	)			(5,085	)
Net cash provided by investing activities			4,382,947				3,697,339
Cash flows from financing activities:
Repayment of line of credit, net			(5,982,070	)			(3,561,140	)
Dividends paid			(3,917,963	)			(4,019,478	)
Purchase of treasury shares			(9,800	)			(185,691	)
Deferred financing costs incurred			(2,167	)			(38,191	)
Net cash used in financing activities			(9,912,000	)			(7,804,500	)
Net (decrease) increase in cash			(1,524,132	)			29,607
Cash and cash - restricted, beginning of period*			1,691,995				103,540
Cash, end of period		$	167,863			$	133,147
Supplemental Disclosure of Cash Flow Information:
Cash paid during the period for taxes		$	650			$	650
Cash paid during the period for interest		$	1,816,980			$	1,797,254
Cash paid during the period for operating leases		$	47,779			$	47,822
Supplemental Schedule of Noncash Financing Activities:
Dividend declared and payable		$	1,315,445			$	1,288,753
Loan holdback relating to mortgage receivable		$	50,000			$	—

 

*

At December 31, 2023, cash and restricted cash consisted of $1,587,773 of restricted cash.

 

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

 

7

 

 

MANHATTAN BRIDGE CAPITAL, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024

(unaudited)

 

1. THE DESCRIPTION OF COMPANY

 

The accompanying unaudited condensed 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 (“U.S. 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 U.S. GAAP for complete annual 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 condensed consolidated financial statements should be read in conjunction with the Company’s annual audited consolidated financial statements for the year ended December 31, 2023 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 Company offers short-term, secured, non–banking loans to real estate investors (also known as hard money loans) 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.

 

Summary of Significant Accounting Policies

 

The preparation of condensed consolidated financial statements in conformity with U.S. 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 condensed consolidated financial statements and the reported amount of revenues and expenses during the reporting period. Actual amounts could differ from those estimates.

 

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

 

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. RECENTLY ISSUED 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 condensed consolidated financial statements.

 

3. CASH – RESTRICTED

 

Restricted cash mainly represents collections received, pending clearance, from the Company’s commercial loans and is primarily dedicated to the reduction of the Webster Credit Line (as defined below), established pursuant to the Amended and Restated Credit Agreement (as defined below, 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 loans) to fund their acquisition and construction of properties located in the New York metropolitan area, including New Jersey and Connecticut, and in Florida. The loans are principally secured by collateral consisting of real estate and accompanied by personal guarantees from the principals of the borrowers. The loans are generally for a term of one year. The short-term loans are initially recorded, and carried thereafter, in the condensed consolidated 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.

 

8

 

 

At September 30, 2024, the Company was committed to $8,147,338 in construction loans that can be drawn by the borrowers when certain conditions are met.

 

At September 30, 2024, no entity had 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 September 30, 2024 and December 31, 2023:

  

Performing loans		Developers- Residential				Developers- Commercial				Developers-Mixed Use				Total outstanding loans
September 30, 2024		$	59,886,438			$	7,380,000			$	1,445,000			$	68,711,438
December 31, 2023 (audited)		$	64,729,403			$	7,300,000			$	1,019,000			$	73,048,403

 

At September 30, 2024, the Company’s loans receivable consisted of loans in the amount of $22,526, $1,760,250, $120,000, $4,995,000 and $14,738,817, originally due or committed to lend to borrowers in 2016, 2020, 2021, 2022 and 2023, respectively. The loans receivable also included loans in the amount of $16,575,000 originally due in the first nine months of 2024.

 

Generally, borrowers are paying their interest, and the Company receives a fee in connection with the extension of the loans. In all instances, the borrower has either signed an extension agreement or is in the process of signing the extension. Accordingly, at September 30, 2024, no loan impairments exist and there are no provisions for impairments of loans or recoveries thereof.

 

During February 2023, the Company sold one of its loans receivable at its face value of $485,000. Mr. Assaf Ran, the Company’s President and Chief Executive Officer, participated in such acquisition in the amount of $152,000. In addition, in June 2023, the Company filed a foreclosure lawsuit relating to one property, as a result of a deed transfer from a borrower to a buyer without the Company’s consent. In that instance, the buyer of the property on which the Company had a valid mortgage suffered a data breach which resulted in the failure of the buyer to remit the funds needed for the loan payoff. In October 2023, the Company received the entire payoff amount for the loan receivable, including all unpaid fees, to rectify the situation.

 

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, 2026, secured by assignments of mortgages and other collateral. The interest rates relating to the Webster Credit Line equal (i) the Secured Overnight Financing Rate (“SOFR”) plus a premium, which rate aggregated approximately 8.4%, including a 0.5% agency fee, as of September 30, 2024, or (ii) a Base Rate (as defined in the Amended and Restated Credit Agreement) plus 2.00% and a 0.5% agency fee, as chosen by the Company for each drawdown.

 

9

 

 

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. 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, the terms of the personal guaranty provided by Mr. Ran were amended such that the potential sums owed under such guaranty will not exceed the sum of $1,000,000 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 September 30, 2024. At September 30, 2024, the outstanding amount under the Amended Credit Agreement was $19,170,268. The interest rate on the amount outstanding fluctuates daily. The rate, including a 0.5% agency fee, was approximately 8.4% as of September 30, 2024.

 

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. The redemption price will be equal to the outstanding principal amount of the Notes redeemed plus the accrued but unpaid interest thereon up to, but not including, the date of redemption, without penalty or premium. No Notes were redeemed by MBC Funding II as of September 30, 2024.

 

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

 

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

 

10

 

 

The Company’s principal executive officers consist of Assaf Ran, who serves as its Chief Executive Officer and President, and Vanessa Kao, who serves as its Chief Financial Officer. As of September 30, 2024, each of Mr. Ran and Ms. Kao own an aggregate of $704,000 and $288,000 of our Notes, respectively.

 

7. STOCKHOLDERS’ EQUITY

 

The Company adopted a share buyback program on April 11, 2023, for the repurchase of up to 100,000 of the Company’s common shares. Before this program expired on April 10, 2024, the Company had purchased an aggregate of 56,294 common shares at an aggregate cost of $271,468, including 2,000 common shares repurchased during the first quarter of 2024 at an aggregate cost of $9,800.

 

8. EARNINGS PER COMMON SHARE

 

Basic and diluted earnings per share are calculated in accordance with Accounting Standards Codification (“ASC”) Topic 260, “Earnings Per Share” (“ASC Topic 260”). Under ASC Topic 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.

 

9. STOCK–BASED COMPENSATION

 

Stock-based compensation expense recognized under ASC Topic 718, “Compensation-Stock Compensation,” for each of the three-month periods ended September 30, 2024 and 2023 of $3,266, and for each of the nine-month periods ended September 30, 2024 and 2023, of $9,798 represents the amortization of the fair value of 1,000,000 restricted shares granted to the Company’s Chief Executive Officer on September 9, 2011 of $195,968, after adjusting for the effect on the fair value of the stock options related to this transaction. The fair value is being amortized over 15 years. At September 30, 2024, all 1,000,000 shares remained restricted, and the remaining unrecognized stock-based compensation amounted to $25,040. One third of such restricted shares shall vest on each of September 9, 2026, September 9, 2027, and September 9, 2028, respectively.

 

10. COMMITMENT

 

In accordance with the dividend declared by the Company’s Board of Directors on July 29, 2024, a cash dividend of $0.115 per share in an aggregate amount of $1,315,445 was paid on October 15, 2024, to all shareholders of record on October 8, 2024.

 

********

 

11

 

 

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 condensed consolidated financial statements and notes thereto included in this Quarterly Report on Form 10-Q. The discussion and analysis contain forward-looking statements based on current expectations that involve risks and uncertainties. Actual results and the timing of certain events may differ significantly from those projected in such forward-looking statements.

 

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

 

The properties securing the loans are generally classified as residential or commercial real estate and, typically, are not income producing. Our loans are generally 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 in the past seven years ranged from $40,000 to a maximum of $3.6 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) $4 million. Our loans typically have a maximum initial term of 12 months and bear interest at a fixed rate of 9% to 13.5% 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 our business in 2007, except as set forth below, we have never foreclosed on a property, although sometimes we have renewed or extended the term of a loan to enable the borrower to avoid premature sale or refinancing of the property. When we renew or extend a loan, we generally receive additional “points” and other fees. In June 2023, we filed a foreclosure lawsuit relating to one property, as a result of a deed transfer from the borrower to a buyer without our consent. In that instance, the buyer of the property on which we had a valid mortgage suffered a data breach which resulted in the failure of the buyer to remit the funds needed for the loan payoff. In October 2023, we received the entire payoff amount for the loan receivable, including all unpaid fees, to rectify the situation.

 

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, fund loans secured by first mortgages on residential and commercial real estate held for investment located in the New York metropolitan area, including New Jersey and Connecticut, and in Florida, and to carefully manage and service our portfolio in a manner designed to generate attractive risk-adjusted returns across a variety of market conditions and economic cycles. We believe that current market dynamics specifically the demand/supply imbalance for relatively small real estate loans, presents opportunities for us to selectively originate high-quality first mortgage loans and we believe that these market conditions 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 and ability to structure loans that address the needs of our 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 advertising. Finally, our Chief Executive Officer also spends a significant portion of his time on new business development. We rely on our own employees, independent legal counsel, and other independent professionals to verify titles and ownership, to file liens and to consummate the transactions. Outside appraisers are used to assist us in evaluating the worth of collateral, when deemed necessary by management. We also use construction inspectors.

 

For the nine month periods ended September 30, 2024 and 2023, the total amounts of $29,362,922 and $40,810,565, respectively, have been lent, offset by collections received from borrowers, under our commercial loans of $33,749,887 and $44,512,989, respectively.

 

At September 30, 2024, we were committed to $8,147,338 in construction loans that can be drawn by our borrowers when certain conditions are met.

 

To date, none of the loans previously made have been non-collectable, although no assurances can be given that existing or future loans may not prove to be non-collectible or foreclosed 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 September 30, 2024 compared to three months ended September 30, 2023

 

Revenue

 

Total revenues for the three months ended September 30, 2024 were approximately $2,313,000 compared to approximately $2,434,000 for the three months ended September 30, 2023, a decrease of $121,000 or 5.0%. The decrease in revenue was due to a reduction in loans receivable, period over period, and reduced origination fees, which were impacted by a slowdown in new loan originations, partially offset by higher interest rates charged on our commercial loans. For the three months ended September 30, 2024 and 2023, approximately $1,953,000 and $1,992,000, respectively, of our revenues were attributable to interest income on secured commercial loans that we offer to real estate investors, and approximately $360,000 and $441,000, 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 September 30, 2024 were approximately $537,000 compared to approximately $614,000 for the three months ended September 30, 2023, a decrease of $77,000, or 12.5%. The decrease is primarily attributable to the decrease in interest expense due to a reduction in borrowed amounts related to the use of the Webster Credit Line. (See Note 5 to the condensed consolidated financial statements included elsewhere in this quarterly report on Form 10-Q).

 

General and administrative expenses

 

General and administrative expenses for the three months ended September 30, 2024 were approximately $380,000 compared to approximately $377,000 for the three months ended September 30, 2023, an increase of $3,000. The increase is primarily due to higher salaries, partially offset by reductions in marketing expenses and legal fees.

 

Net income

 

Net income for the three months ended September 30, 2024 was approximately $1,399,000 compared to approximately $1,446,000 for the three months ended September 30, 2023, a decrease of $47,000, or 3.3%. This decrease is primarily attributable to the decrease in revenue, partially offset by the decrease in interest expense.

 

Nine months ended September 30, 2024 compared to nine months ended September 30, 2023

 

Revenue

 

Total revenues for the nine months ended September 30, 2024 were approximately $7,330,000 compared to approximately $7,231,000 for the nine months ended September 30, 2023, an increase of $99,000, or 1.4%. The increase in revenue was due to higher interest rates charged on our commercial loans, partially offset by a reduction in loans receivable, period over period, and reduced origination fees, which were impacted by a slowdown in new loan originations. For the nine months ended September 30, 2024 and 2023, revenues of approximately $6,128,000 and $5,889,000, respectively, were attributable to interest income on the secured commercial loans that we offer to real estate investors, and approximately $1,201,000 and $1,342,000, 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 nine months ended September 30, 2024 were approximately $1,831,000 compared to approximately $1,856,000 for the nine months ended September 30, 2023, a decrease of $25,000, or 1.3%. The decrease is primarily attributable to the decrease in interest expense due to a reduction in borrowed amounts related to the use of the Webster Credit Line. (See Note 5 to the condensed consolidated financial statements included elsewhere in this quarterly report on Form 10-Q).

 

13

 

 

General and administrative expenses

 

General and administrative expenses for the nine months ended September 30, 2024 were approximately $1,225,000 compared to approximately $1,274,000 for the nine months ended September 30, 2023, a decrease of $49,000, or 3.8%. The decrease is primarily due to a special bonus awarded to officers in 2023 for extending the Webster Credit Line and a reduction in marketing expenses, partially offset by higher salaries and costs related to the filing of our registration statement on Form S-3 incurred in 2024.

 

Net income

 

Net income for the nine months ended September 30, 2024 was approximately $4,285,000 compared to approximately $4,128,000 for the nine months ended September 30, 2023, an increase of $157,000, or 3.8%. This increase is primarily attributable to the increase in interest income from loans, partially offset by the decrease in origination fees.

 

Liquidity and Capital Resources

 

At September 30, 2024, we had cash of approximately $168,000, compared to cash of approximately $104,000 at December 31, 2023.

 

For the nine months ended September 30, 2024, net cash provided by operating activities was approximately $4,005,000, compared to approximately $4,137,000 for the nine months ended September 30, 2023. The decrease in net cash provided by operating activities primarily resulted from the increase in interest and other fees receivable on loans and the decrease in deferred origination fees, partially offset by the increase in net income.

 

For the nine months ended September 30, 2024, net cash provided by investing activities was approximately $4,383,000, compared to approximately $3,697,000 for the nine months ended September 30, 2023. Net cash provided by investing activities for the nine months ended September 30, 2024 mainly consisted of the collection of our commercial loans of approximately $33,750,000 (not including a $50,000 holdback), offset by the issuance of commercial loans of approximately $29,363,000. Net cash provided by investing activities for the nine months ended September 30, 2023, mainly consisted of the collection of our commercial loans of approximately $44,513,000, offset by the issuance of commercial loans of approximately $40,811,000.

 

For the nine months ended September 30, 2024, net cash used in financing activities was $9,912,000, compared to approximately $7,805,000 for the nine months ended September 30, 2023. Net cash used in financing activities for the nine months ended September 30, 2024 reflects the partial repayment of the Webster Credit Line of approximately $5,982,000, dividend payments of approximately $3,918,000, repurchase of treasury shares of approximately $10,000 and deferred financing costs of approximately $2,000. Net cash used in financing activities for the nine months ended September 30, 2023 reflects the partial repayment of the Webster Credit Line of approximately $3,561,000, dividend payments of approximately $4,019,000, repurchase of treasury shares of approximately $186,000 and deferred financing costs of approximately $38,000.

 

Our Amended and Restated Credit and Security Agreement with Webster, Flushing Bank and Mizrahi provides for the Webster Credit Line. Currently, the Webster Credit Line provides us with a credit line of $32.5 million in the aggregate until February 28, 2026, secured by assignments of mortgages and other collateral. The interest rates relating to the Webster Credit Line equal (i) SOFR plus a premium, which rate aggregated approximately 8.4%, including a 0.5% agency fee, as of September 30, 2024, or (ii) a Base Rate (as defined in the Amended and Restated Credit Agreement) plus 2.00% and a 0.5% agency fee, as chosen by the Company for each drawdown.

 

The Webster Credit Line contains various covenants and restrictions including covenants limiting the amount that the Company can borrow relative to the value of the underlying collateral, maintaining various financial ratios and limitations on the terms of loans the Company makes to its customers, limiting the Company’s ability to pay dividends under certain circumstances, and limiting the Company’s ability to repurchase its common shares, sell assets, engage in mergers or consolidations, grant liens, and enter into transactions with affiliates. In addition, the Webster Credit Line contains a cross default provision which will deem any default under any indebtedness owed by us or our subsidiary, MBC Funding II, as a default under the credit line. 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, the terms of the personal guaranty provided by Mr. Ran were amended such that the potential sums owed under such guaranty will not exceed the sum of $1,000,000 plus any costs relating to the enforcement of the personal guaranty.

 

14

 

 

We were in compliance with all covenants of the Webster Credit Line, as amended, as of September 30, 2024. At September 30, 2024, the outstanding amount under the Amended and Restated Credit Agreement was $19,170,268. The interest rate on the amount outstanding fluctuates daily. The rate, including a 0.5% agency fee, was approximately 8.4% as of September 30, 2024.

 

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

 

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

 

The Notes are secured by a first priority lien on all of MBC Funding II’s assets, including, primarily, mortgage notes, mortgages and other transaction documents entered into in connection with first mortgage loans originated and funded by us, which MBC Funding II acquired from MBC pursuant to an asset purchase agreement. MBC Funding II may redeem the Notes, in whole or in part, at any time after April 22, 2019 upon at least 30 days prior written notice to the noteholders. The redemption price will be equal to the outstanding principal amount of the Notes redeemed plus the accrued but unpaid interest thereon up to, but not including, the date of redemption, without penalty or premium. No Notes were redeemed by MBC Funding II as of September 30, 2024.

 

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 April 11, 2023, our board of directors authorized a share buyback program for the repurchase of up to 100,000 of our common shares. Before this program expired on April 10, 2024, we had purchased an aggregate of 56,294 common shares at an aggregate cost of approximately $271,000.

 

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

 

15

 

 

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 September 30, 2024 (the “Evaluation Date”). Based upon that evaluation, the chief executive officer and the chief financial officer concluded that, as of the Evaluation Date, our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act (i) are recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms and (ii) are accumulated and communicated to our management, including its chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

 

(b) Changes in Internal Control Over Financial Reporting

 

There was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) or 15d-15(f) under the Exchange Act) during the fiscal quarter ended September 30, 2024 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
31.1		Chief Executive Officer Certification under Rule 13a-14
31.2		Chief Financial Officer Certification under Rule 13a-14
32.1*		Chief Executive Officer Certification pursuant to 18 U.S.C. section 1350
32.2*		Chief Financial Officer Certification pursuant to 18 U.S.C. section 1350
101.INS		Inline XBRL Instance Document
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: October 23, 2024	By:	/s/ Assaf Ran
		Assaf Ran, President and Chief Executive Officer
		(Principal Executive Officer)
Date: October 23, 2024	By:	/s/ Vanessa Kao
		Vanessa Kao, Chief Financial Officer
		(Principal Financial and Accounting Officer)

 

17

 

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: October 23, 2024
	/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: October 23, 2024
	/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 September 30, 2024 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: October 23, 2024

 

/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 September 30, 2024 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: October 23, 2024

 

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

 

 

Cover - $ / shares	9 Months Ended
	Sep. 30, 2024	Oct. 23, 2024
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Sep. 30, 2024
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2024
Current Fiscal Year End Date	--12-31
Entity File Number	000-25991
Entity Registrant Name	MANHATTAN BRIDGE CAPITAL, INC.
Entity Central Index Key	0001080340
Entity Tax Identification Number	11-3474831
Entity Incorporation, State or Country Code	NY
Entity Address, Address Line One	60 Cutter Mill Road
Entity Address, City or Town	Great Neck
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	11021
City Area Code	(516)
Local Phone Number	444-3400
Title of 12(b) Security	Common shares, par value $.001
Trading Symbol	LOAN
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		11,438,651
Entity Listing, Par Value Per Share	$ 0.001

Consolidated Balance Sheets - USD ($)	Sep. 30, 2024	Dec. 31, 2023
Assets
Loans receivable	$ 68,711,438	$ 73,048,403
Interest and other fees receivable on loans	1,536,643	1,395,905
Cash	167,863	104,222
Cash - restricted		1,587,773
Other assets	99,180	63,636
Right-of-use asset - operating lease, net	167,243	207,364
Deferred financing costs, net	19,636	27,583
Total assets	70,702,003	76,434,886
Liabilities:
Line of credit	19,170,268	25,152,338
Senior secured notes (net of deferred financing costs of $115,756 and $172,069, respectively)	5,884,244	5,827,931
Deferred origination fees	618,812	719,019
Accounts payable and accrued expenses	211,786	295,292
Operating lease liability	180,529	220,527
Loan holdback	50,000
Dividends payable	1,315,445	1,287,073
Total liabilities	27,431,084	33,502,180
Commitments and contingencies
Stockholders’ equity:
Preferred shares - $.01 par value; 5,000,000 shares authorized; none issued
Common shares - $.001 par value; 25,000,000 shares authorized; 11,757,058 issued; 11,438,651 and 11,440,651 outstanding, respectively	11,757	11,757
Additional paid-in capital	45,558,674	45,548,876
Less: Treasury stock, at cost – 318,407 and 316,407 shares, respectively	(1,070,406)	(1,060,606)
Accumulated deficit	(1,229,106)	(1,567,321)
Total stockholders’ equity	43,270,919	42,932,706
Total liabilities and stockholders’ equity	$ 70,702,003	$ 76,434,886

Consolidated Balance Sheets (Parenthetical) - USD ($)	Sep. 30, 2024	Dec. 31, 2023
Statement of Financial Position [Abstract]
Senior secured notes, deferred financing costs	$ 115,756	$ 172,069
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	0	0
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	25,000,000	25,000,000
Common stock, shares issued	11,757,058	11,757,058
Common stock, shares outstanding	11,438,651	11,440,651
Treasury stock, shares	318,407	316,407

Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Revenue:
Interest income from loans	$ 1,952,957	$ 1,992,495	$ 6,128,131	$ 5,888,843
Origination fees	360,376	441,271	1,201,494	1,342,077
Total revenue	2,313,333	2,433,766	7,329,625	7,230,920
Operating costs and expenses:
Interest and amortization of deferred financing costs	537,218	614,389	1,831,037	1,856,079
Referral fees	847	361	1,847	1,652
General and administrative expenses	380,482	377,192	1,225,041	1,274,267
Total operating costs and expenses	918,547	991,942	3,057,925	3,131,998
Income from operations	1,394,786	1,441,824	4,271,700	4,098,922
Other income	4,500	4,500	13,500	29,380
Income before income tax expense	1,399,286	1,446,324	4,285,200	4,128,302
Income tax expense			(650)	(650)
Net income	$ 1,399,286	$ 1,446,324	$ 4,284,550	$ 4,127,652
Basic and diluted net income per common share outstanding:
—Basic	$ 0.12	$ 0.13	$ 0.37	$ 0.36
—Diluted	$ 0.12	$ 0.13	$ 0.37	$ 0.36
Weighted average number of common shares outstanding
—Basic	11,438,651	11,461,052	11,438,658	11,477,133
—Diluted	11,438,651	11,461,052	11,438,658	11,477,133

Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($)	Common Stock [Member]	Additional Paid-in Capital [Member]	Treasury Stock, Common [Member]	Retained Earnings [Member]	Total
Balance at Dec. 31, 2022	$ 11,757	$ 45,535,811	$ (798,939)	$ (1,885,056)	$ 42,863,573
Balance, shares at Dec. 31, 2022	11,757,058		262,113
Non-cash compensation		9,798			9,798
Dividends declared and payable				(1,288,753)	(1,288,753)
Net income				4,127,652	4,127,652
Purchase of treasury shares			$ (185,691)		(185,691)
Purchase of treasury stock, shares			37,860
Dividends paid				(2,582,609)	(2,582,609)
Balance at Sep. 30, 2023	$ 11,757	45,545,609	$ (984,630)	(1,628,766)	42,943,970
Balance, shares at Sep. 30, 2023	11,757,058		299,973
Balance at Jun. 30, 2023	$ 11,757	45,542,343	$ (963,745)	(1,786,337)	42,804,018
Balance, shares at Jun. 30, 2023	11,757,058		295,473
Non-cash compensation		3,266			3,266
Dividends declared and payable				(1,288,753)	(1,288,753)
Net income				1,446,324	1,446,324
Purchase of treasury shares			$ (20,885)		(20,885)
Purchase of treasury stock, shares			4,500
Balance at Sep. 30, 2023	$ 11,757	45,545,609	$ (984,630)	(1,628,766)	42,943,970
Balance, shares at Sep. 30, 2023	11,757,058		299,973
Balance at Dec. 31, 2023	$ 11,757	45,548,876	$ (1,060,606)	(1,567,321)	42,932,706
Balance, shares at Dec. 31, 2023	11,757,058		316,407
Non-cash compensation		9,798			9,798
Dividends declared and payable				(1,315,445)	(1,315,445)
Net income				4,284,550	4,284,550
Purchase of treasury shares			$ (9,800)		(9,800)
Purchase of treasury stock, shares			2,000
Dividends paid				(2,630,890)	(2,630,890)
Balance at Sep. 30, 2024	$ 11,757	45,558,674	$ (1,070,406)	(1,229,106)	43,270,919
Balance, shares at Sep. 30, 2024	11,757,058		318,407
Balance at Jun. 30, 2024	$ 11,757	45,555,408	$ (1,070,406)	(1,312,947)	43,183,812
Balance, shares at Jun. 30, 2024	11,757,058		318,407
Non-cash compensation		3,266			3,266
Dividends declared and payable				(1,315,445)	(1,315,445)
Net income				1,399,286	1,399,286
Balance at Sep. 30, 2024	$ 11,757	$ 45,558,674	$ (1,070,406)	$ (1,229,106)	$ 43,270,919
Balance, shares at Sep. 30, 2024	11,757,058		318,407

Consolidated Statements of Cash Flows (Unaudited) - USD ($)		9 Months Ended
		Sep. 30, 2024	Sep. 30, 2023
Cash flows from operating activities:
Net income		$ 4,284,550	$ 4,127,652
Adjustments to reconcile net income to net cash provided by operating activities -
Amortization of deferred financing costs		66,427	71,449
Adjustment to right-of-use asset - operating lease and liability		121	1,636
Depreciation		3,480	3,001
Non-cash compensation expense		9,798	9,798
Changes in operating assets and liabilities:
Interest and other fees receivable on loans		(140,738)	14,128
Other assets		(35,005)	(38,381)
Accounts payable and accrued expenses		(83,505)	(53,682)
Deferred origination fees		(100,207)	1,167
Net cash provided by operating activities		4,004,921	4,136,768
Cash flows from investing activities:
Issuance of short-term loans		(29,362,922)	(40,810,565)
Collections received from loans		33,749,887	44,512,989
Purchase of fixed assets		(4,018)	(5,085)
Net cash provided by investing activities		4,382,947	3,697,339
Cash flows from financing activities:
Repayment of line of credit, net		(5,982,070)	(3,561,140)
Dividends paid		(3,917,963)	(4,019,478)
Purchase of treasury shares		(9,800)	(185,691)
Deferred financing costs incurred		(2,167)	(38,191)
Net cash used in financing activities		(9,912,000)	(7,804,500)
Net (decrease) increase in cash		(1,524,132)	29,607
Cash and cash - restricted, beginning of period	[1]	1,691,995	103,540
Cash, end of period		167,863	133,147
Supplemental Disclosure of Cash Flow Information:
Cash paid during the period for taxes		650	650
Cash paid during the period for interest		1,816,980	1,797,254
Cash paid during the period for operating leases		47,779	47,822
Supplemental Schedule of Noncash Financing Activities:
Dividend declared and payable		1,315,445	1,288,753
Loan holdback relating to mortgage receivable		$ 50,000
[1] At December 31, 2023, cash and restricted cash consisted of $1,587,773 of restricted cash.

Consolidated Statements of Cash Flows (Unaudited) (Parenthetical)	Dec. 31, 2023 USD ($)
Statement of Cash Flows [Abstract]
Restricted Cash and Cash Equivalents	$ 1,587,773

THE DESCRIPTION OF COMPANY	9 Months Ended
	Sep. 30, 2024
Accounting Policies [Abstract]
THE DESCRIPTION OF COMPANY	1. THE DESCRIPTION OF COMPANY   The accompanying unaudited condensed 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 (“U.S. 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 U.S. GAAP for complete annual 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 condensed consolidated financial statements should be read in conjunction with the Company’s annual audited consolidated financial statements for the year ended December 31, 2023 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 Company offers short-term, secured, non–banking loans to real estate investors (also known as hard money loans) 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.   Summary of Significant Accounting Policies   The preparation of condensed consolidated financial statements in conformity with U.S. 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 condensed consolidated financial statements and the reported amount of revenues and expenses during the reporting period. Actual amounts could differ from those estimates.   The condensed consolidated financial statements include the accounts of MBC and MBC Funding II. All significant intercompany balances and transactions have been eliminated in consolidation.   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.

RECENTLY ISSUED TECHNICAL ACCOUNTING PRONOUNCEMENTS	9 Months Ended
	Sep. 30, 2024
Accounting Changes and Error Corrections [Abstract]
RECENTLY ISSUED TECHNICAL ACCOUNTING PRONOUNCEMENTS	2. RECENTLY ISSUED 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 condensed consolidated financial statements.

CASH – RESTRICTED	9 Months Ended
	Sep. 30, 2024
Receivables [Abstract]
CASH – RESTRICTED	3. CASH – RESTRICTED   Restricted cash mainly represents collections received, pending clearance, from the Company’s commercial loans and is primarily dedicated to the reduction of the Webster Credit Line (as defined below), established pursuant to the Amended and Restated Credit Agreement (as defined below, see Note 5).

COMMERCIAL LOANS	9 Months Ended
	Sep. 30, 2024
Receivables [Abstract]
COMMERCIAL LOANS	4. COMMERCIAL LOANS   Loans Receivable   The Company offers short-term secured non–banking loans to real estate investors (also known as hard money loans) to fund their acquisition and construction of properties located in the New York metropolitan area, including New Jersey and Connecticut, and in Florida. The loans are principally secured by collateral consisting of real estate and accompanied by personal guarantees from the principals of the borrowers. The loans are generally for a term of one year. The short-term loans are initially recorded, and carried thereafter, in the condensed consolidated 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 September 30, 2024, the Company was committed to $8,147,338 in construction loans that can be drawn by the borrowers when certain conditions are met.   At September 30, 2024, no entity had 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 September 30, 2024 and December 31, 2023:    Performing loans   Developers- Residential     Developers- Commercial     Developers-Mixed Use     Total outstanding loans   September 30, 2024   $ 59,886,438     $ 7,380,000     $ 1,445,000     $ 68,711,438   December 31, 2023 (audited)   $ 64,729,403     $ 7,300,000     $ 1,019,000     $ 73,048,403     At September 30, 2024, the Company’s loans receivable consisted of loans in the amount of $22,526, $1,760,250, $120,000, $4,995,000 and $14,738,817, originally due or committed to lend to borrowers in 2016, 2020, 2021, 2022 and 2023, respectively. The loans receivable also included loans in the amount of $16,575,000 originally due in the first nine months of 2024.   Generally, borrowers are paying their interest, and the Company receives a fee in connection with the extension of the loans. In all instances, the borrower has either signed an extension agreement or is in the process of signing the extension. Accordingly, at September 30, 2024, no loan impairments exist and there are no provisions for impairments of loans or recoveries thereof.   During February 2023, the Company sold one of its loans receivable at its face value of $485,000. Mr. Assaf Ran, the Company’s President and Chief Executive Officer, participated in such acquisition in the amount of $152,000. In addition, in June 2023, the Company filed a foreclosure lawsuit relating to one property, as a result of a deed transfer from a borrower to a buyer without the Company’s consent. In that instance, the buyer of the property on which the Company had a valid mortgage suffered a data breach which resulted in the failure of the buyer to remit the funds needed for the loan payoff. In October 2023, the Company received the entire payoff amount for the loan receivable, including all unpaid fees, to rectify the situation.

LINE OF CREDIT	9 Months Ended
	Sep. 30, 2024
Debt Disclosure [Abstract]
LINE OF CREDIT	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, 2026, secured by assignments of mortgages and other collateral. The interest rates relating to the Webster Credit Line equal (i) the Secured Overnight Financing Rate (“SOFR”) plus a premium, which rate aggregated approximately 8.4%, including a 0.5% agency fee, as of September 30, 2024, or (ii) a Base Rate (as defined in the Amended and Restated Credit Agreement) plus 2.00% and a 0.5% agency fee, 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. 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. 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, the terms of the personal guaranty provided by Mr. Ran were amended such that the potential sums owed under such guaranty will not exceed the sum of $1,000,000 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 September 30, 2024. At September 30, 2024, the outstanding amount under the Amended Credit Agreement was $19,170,268. The interest rate on the amount outstanding fluctuates daily. The rate, including a 0.5% agency fee, was approximately 8.4% as of September 30, 2024.

SENIOR SECURED NOTES	9 Months Ended
	Sep. 30, 2024
Debt Disclosure [Abstract]
SENIOR SECURED NOTES	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. The redemption price will be equal to the outstanding principal amount of the Notes redeemed plus the accrued but unpaid interest thereon up to, but not including, the date of redemption, without penalty or premium. No Notes were redeemed by MBC Funding II as of September 30, 2024.   MBC Funding II is obligated to offer to redeem the Notes if there occurs a “change of control” with respect to MBC Funding II or the Company or if MBC Funding II or the Company sell any assets unless, in the case of an asset sale, the proceeds are reinvested in the business of the seller. The redemption price in connection with a “change of control” will be 101% of the principal amount of the Notes redeemed plus accrued but unpaid interest thereon up to, but not including, the date of redemption. The redemption price in connection with an asset sale will be the outstanding principal amount of the Notes redeemed plus accrued but unpaid interest thereon up to, but not including, the date of redemption.   The Company guaranteed MBC Funding II’s obligations under the Notes, which are secured by its pledge of 100% of the outstanding common shares of MBC Funding II that it owns.     The Company’s principal executive officers consist of Assaf Ran, who serves as its Chief Executive Officer and President, and Vanessa Kao, who serves as its Chief Financial Officer. As of September 30, 2024, each of Mr. Ran and Ms. Kao own an aggregate of $704,000 and $288,000 of our Notes, respectively.

STOCKHOLDERS’ EQUITY	9 Months Ended
	Sep. 30, 2024
Equity [Abstract]
STOCKHOLDERS’ EQUITY	7. STOCKHOLDERS’ EQUITY   The Company adopted a share buyback program on April 11, 2023, for the repurchase of up to 100,000 of the Company’s common shares. Before this program expired on April 10, 2024, the Company had purchased an aggregate of 56,294 common shares at an aggregate cost of $271,468, including 2,000 common shares repurchased during the first quarter of 2024 at an aggregate cost of $9,800.

EARNINGS PER COMMON SHARE	9 Months Ended
	Sep. 30, 2024
Basic and diluted net income per common share outstanding:
EARNINGS PER COMMON SHARE	8. EARNINGS PER COMMON SHARE   Basic and diluted earnings per share are calculated in accordance with Accounting Standards Codification (“ASC”) Topic 260, “Earnings Per Share” (“ASC Topic 260”). Under ASC Topic 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.

STOCK–BASED COMPENSATION	9 Months Ended
	Sep. 30, 2024
Share-Based Payment Arrangement [Abstract]
STOCK–BASED COMPENSATION	9. STOCK–BASED COMPENSATION   Stock-based compensation expense recognized under ASC Topic 718, “Compensation-Stock Compensation,” for each of the three-month periods ended September 30, 2024 and 2023 of $3,266, and for each of the nine-month periods ended September 30, 2024 and 2023, of $9,798 represents the amortization of the fair value of 1,000,000 restricted shares granted to the Company’s Chief Executive Officer on September 9, 2011 of $195,968, after adjusting for the effect on the fair value of the stock options related to this transaction. The fair value is being amortized over 15 years. At September 30, 2024, all 1,000,000 shares remained restricted, and the remaining unrecognized stock-based compensation amounted to $25,040. One third of such restricted shares shall vest on each of September 9, 2026, September 9, 2027, and September 9, 2028, respectively.

COMMITMENT	9 Months Ended
	Sep. 30, 2024
Commitments and Contingencies Disclosure [Abstract]
COMMITMENT	10. COMMITMENT   In accordance with the dividend declared by the Company’s Board of Directors on July 29, 2024, a cash dividend of $0.115 per share in an aggregate amount of $1,315,445 was paid on October 15, 2024, to all shareholders of record on October 8, 2024.

COMMERCIAL LOANS (Tables)	9 Months Ended
	Sep. 30, 2024
Receivables [Abstract]
SCHEDULE OF CREDIT RISK	Credit risk profile based on loan activity as of September 30, 2024 and December 31, 2023:    Performing loans   Developers- Residential     Developers- Commercial     Developers-Mixed Use     Total outstanding loans   September 30, 2024   $ 59,886,438     $ 7,380,000     $ 1,445,000     $ 68,711,438   December 31, 2023 (audited)   $ 64,729,403     $ 7,300,000     $ 1,019,000     $ 73,048,403

COMMERCIAL LOANS (Details Narrative) - USD ($)	1 Months Ended	6 Months Ended	9 Months Ended
	Feb. 28, 2023	Jun. 30, 2024	Sep. 30, 2024
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loan term		1 year
Proceeds from sale of notes receivable	$ 485,000
Assaf Ran [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Related-party transactions	$ 152,000
Originally Due in 2016 [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans receivable			$ 22,526
Originally Due in 2020 [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans receivable			1,760,250
Originally Due in 2021 [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans receivable			120,000
Originally Due in 2022 [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans receivable			4,995,000
Originally Due in 2023 [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans receivable			14,738,817
Originally Due in First Nine Months of 2024 [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans receivable			16,575,000
Construction Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Principal amount committed in construction loans			$ 8,147,338
Loan outstanding percentage			10.00%

SCHEDULE OF CREDIT RISK (Details) - USD ($)	Sep. 30, 2024	Dec. 31, 2023
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total outstanding loans	$ 68,711,438	$ 73,048,403
Developers-Residential [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total outstanding loans	59,886,438	64,729,403
Developers-Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total outstanding loans	7,380,000	7,300,000
Developers-Mixed Used [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total outstanding loans	$ 1,445,000	$ 1,019,000

LINE OF CREDIT (Details Narrative)	9 Months Ended
	Sep. 30, 2024 USD ($)
Line of Credit Facility [Line Items]
Debt agency fee rate	0.50%
Line of credit outstanding amount	$ 19,170,268
Interest rate percentage	8.40%
Webster Credit Line [Member]
Line of Credit Facility [Line Items]
Maximum borrowing capacity	$ 32,500,000
Line of credit facility, interest rate description	The interest rates relating to the Webster Credit Line equal (i) the Secured Overnight Financing Rate (“SOFR”) plus a premium, which rate aggregated approximately 8.4%, including a 0.5% agency fee, as of September 30, 2024, or (ii) a Base Rate (as defined in the Amended and Restated Credit Agreement) plus 2.00% and a 0.5% agency fee, as chosen by the Company for each drawdown.
Line of credit facility, interest rate at period end	2.00%
Debt agency fee rate	0.50%
Mortgage notes receivable, description	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, the terms of the personal guaranty provided by Mr. Ran were amended such that the potential sums owed under such guaranty will not exceed the sum of $1,000,000 plus any costs relating to the enforcement of the personal guaranty.
Webster Credit Line [Member] | Secured Overnight Financing Rate [Member]
Line of Credit Facility [Line Items]
Line of credit facility, interest rate at period end	8.40%
Debt agency fee rate	0.50%

SENIOR SECURED NOTES (Details Narrative) - USD ($)	Apr. 25, 2016	Sep. 30, 2024	Dec. 31, 2023
Short-Term Debt [Line Items]
Secured notes		$ 5,884,244	$ 5,827,931
Mr. Ran [Member]
Short-Term Debt [Line Items]
Secured notes		704,000
Mr. Kao [Member]
Short-Term Debt [Line Items]
Secured notes		$ 288,000
MBC Funding II Corp [Member]
Short-Term Debt [Line Items]
Debt instrument description	Under the terms of the Indenture, the aggregate outstanding principal balance of the mortgage loans held by MBC Funding II, together with MBC Funding II’s cash on hand, must always equal at least 120% of the aggregate outstanding principal amount of the Notes at all times. To the extent the aggregate principal amount of the mortgage loans owned by MBC Funding II plus MBC Funding II’s cash on hand is less than 120% of the aggregate outstanding principal balance of the Notes, MBC Funding II is required to repay, on a monthly basis, the principal amount of the Notes equal to the amount necessary such that, after giving effect to such repayment, the aggregate principal amount of all mortgage loans owned by MBC Funding II plus, MBC Funding II’s cash on hand at such time is equal to or greater than 120% of the outstanding principal amount of the Notes. For this purpose, each mortgage loan is deemed to have a value equal to its outstanding principal balance, unless the borrower is in default of its obligations.
Debt instrument collateral, percentage	120.00%
Common stock outstanding percentage	100.00%
MBC Funding II Corp [Member] | Change of Control [Member]
Short-Term Debt [Line Items]
Debt instrument, redemption price, percentage	101.00%
Senior Secured Notes [Member]
Short-Term Debt [Line Items]
Principal amount of each note	$ 1,000
Senior Secured Notes [Member] | Indenture [Member]
Short-Term Debt [Line Items]
Debt instrument interest rate	6.00%
Debt instrument maturity date	Apr. 22, 2026
Debt instrument principal amount	$ 6,000,000

STOCKHOLDERS’ EQUITY (Details Narrative) - Common Stock [Member] - USD ($)		3 Months Ended	12 Months Ended
	Apr. 11, 2023	Mar. 31, 2024	Apr. 10, 2024
Accumulated Other Comprehensive Income (Loss) [Line Items]
Number of shares purchased		2,000	56,294
Number of shares purchased, value		$ 9,800	$ 271,468
Maximum [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Number of shares repurchased	100,000

STOCK–BASED COMPENSATION (Details Narrative) - USD ($)		3 Months Ended		9 Months Ended
	Sep. 09, 2011	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Share based compensation		$ 3,266	$ 3,266	$ 9,798	$ 9,798
Remaining shares of restricted stock, shares				1,000,000
Unrecognized stock-based compensation		$ 25,040		$ 25,040
Vesting term				One third of such restricted shares shall vest on each of September 9, 2026, September 9, 2027, and September 9, 2028, respectively.
Chief Executive Officer [Member]
Fair value of restricted shares granted, shares	1,000,000
Fair value of restricted shares granted	$ 195,968
Fair value of restricted shares amortization period	15 years

COMMITMENT (Details Narrative) - USD ($)	Jul. 29, 2024	Sep. 30, 2024	Dec. 31, 2023
Dividends Payable [Line Items]
Cash dividend, per share	$ 0.115
Dividend payable value	$ 1,315,445	$ 1,315,445	$ 1,287,073
Dividend Paid [Member]
Dividends Payable [Line Items]
Dividends payable, declared date	Jul. 29, 2024
Dividends payable, date to be paid	Oct. 15, 2024
Dividend payable record date	Oct. 08, 2024

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