MANHATTAN BRIDGE CAPITAL, INC

Previous wording

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Current wording

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

Previous wording

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.

Current wording

The following discussion and analysis of our consolidated 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.

Previous wording

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% per year, except for one loan issued in June 2024, which had an initial interest rate of 11.5% that was reduced to 7.25% on January 2, 2025, for a period of up to one 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.

Current wording

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 12% per year, except for one loan issued in June 2024, which had an initial interest rate of 11.5% that was reduced to 7.25% on January 2, 2025, for a period of up to one 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.

Previous wording

For the three month periods ended March 31, 2025 and 2024, the total amounts of $10,953,162 and $9,650,271, respectively, have been lent, offset by collections received from borrowers under our commercial loans in the amounts of $12,698,051 and $10,102,525, respectively.

Current wording

For the six month periods ended June 30, 2025 and 2024, the total amounts of $23,495,662 and $19,677,520, respectively, have been lent, offset by collections received from borrowers, under our commercial loans of $23,619,317 and $25,866,190, respectively.

Previous wording

At March 31, 2025, we were committed to $5,983,256 in construction loans that can be drawn by our borrowers when certain conditions are met.

Current wording

At June 30, 2025, we were committed to $6,286,256 in construction loans that can be drawn by our borrowers when certain conditions are met.

Previous wording

Interest and amortization of deferred financing costs for the three months ended March 31, 2025 were approximately $451,000, compared to approximately $691,000 for the three months ended March 31, 2024, a decrease of $240,000, or 34.7%. The decrease is primarily attributable to the decrease in interest expense due to lower SOFR rates and 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).

Current wording

Interest and amortization of deferred financing costs for the three months ended June 30, 2025 were approximately $506,000 compared to approximately $603,000 for the three months ended June 30, 2024, a decrease of $97,000, or 16.1%. The decrease is primarily attributable to the decrease in interest expense due to lower SOFR rates and 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).

Previous wording

Total revenues for the three months ended March 31, 2025 were approximately $2,274,000, compared to approximately $2,573,000 for the three months ended March 31, 2024, a decrease of $299,000, or 11.6%. The decrease in revenue was primarily attributable to lower interest income, resulting from a reduction in loans receivable, period over period. For the three months ended March 31, 2025, approximately $1,834,000 of our revenue represents interest income on secured commercial loans that we offer to real estate investors, compared to approximately $2,142,000 for the same period in 2024, and approximately $440,000 and $431,000, respectively, represent 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.

Current wording

Total revenues for the six months ended June 30, 2025 were approximately $4,629,000 compared to approximately $5,016,000 for the six months ended June 30, 2024, a decrease of $387,000, or 7.7%. The decrease in revenue was primarily attributable to lower interest income, resulting from a reduction in loans receivable, period-over-period. For the six months ended June 30, 2025 and 2024, revenues of approximately $3,733,000 and $4,175,000, respectively, were attributable to interest income on secured commercial loans that we offer to real estate investors, and approximately $896,000 and $841,000, respectively, were attributable to origination fees on such loans. The loans are principally secured by collateral consisting of real estate and accompanied by personal guarantees from the principals of the borrowers.

Previous wording

General and administrative expenses for the three months ended March 31, 2025 were approximately $454,000 compared to approximately $410,000 for the three months ended March 31, 2024, an increase of $44,000, or 10.7%. The increase is primarily attributable to increases in payroll and appraisal expenses, partially offset by reductions in travel and meals expenses.

Current wording

General and administrative expenses for the six months ended June 30, 2025 were approximately $891,000 compared to approximately $845,000 for the six months ended June 30, 2024, an increase of $46,000, or 5.4%. The increase is primarily attributable to increases in payroll and appraisal expenses as well as NYSE American listing fee, partially offset by reductions in travel and meals expenses as well as costs related to the filing of our registration statement on Form S-3 incurred in 2024.

Previous wording

Net income for the three months ended March 31, 2025 was approximately $1,373,000 compared to approximately $1,476,000 for the three months ended March 31, 2024, a decrease of $103,000, or 7.0%. This decrease is primarily attributable to the decrease in interest income from loans, partially offset by the decrease in interest expense.

Current wording

Net income for the six months ended June 30, 2025 was approximately $2,786,000 compared to approximately $2,885,000 for the six months ended June 30, 2024, a decrease of $99,000, or 3.4%. This decrease is primarily attributable to the decrease in interest income from loans, partially offset by the decrease in interest expense.

Previous wording

At March 31, 2025, we had cash of approximately $201,000, compared to cash of approximately $178,000 at December 31, 2024, not including restricted cash, which mainly represents collections received, pending clearance, from the Company’s commercial loans and is primarily dedicated to the reduction of the Webster Credit Line.

Current wording

At June 30, 2025, we had cash of approximately $209,000, compared to cash of approximately $178,000 at December 31, 2024, not including restricted cash, which mainly represents collections received, pending clearance, from the Company’s commercial loans and is primarily dedicated to the reduction of the Webster Credit Line.

Previous wording

For the three months ended March 31, 2025, net cash provided by operating activities was approximately $1,181,000, compared to approximately $1,141,000 for the three months ended March 31, 2024. The increase in net cash provided by operating activities was primarily due to a smaller increase in interest and other fees receivable on loans compared to the prior period, partially offset by the decrease in net income.

Current wording

For the six months ended June 30, 2025, net cash provided by operating activities was approximately $2,407,000, compared to approximately $2,425,000 for the six months ended June 30, 2024. The decrease in net cash provided by operating activities was primarily due to the decrease in net income and a larger increase in interest and other fees receivable on loans compared to the prior period, partially offset by an increase in deferred origination and other fees.

Previous wording

For the three months ended March 31, 2025, net cash provided by investing activities was approximately $1,758,000, compared to approximately $565,000 for the three months ended March 31, 2024. Net cash provided by investing activities for the three months ended March 31, 2025 consisted of the collection of our commercial loans of approximately $12,698,000, offset by the issuance of commercial loans of approximately $10,940,000. Net cash provided by investing activities for the three months ended March 31, 2024 consisted of the collection of our commercial loans of approximately $10,103,000, offset by the issuance of commercial loans of $9,538,000.

Current wording

For the six months ended June 30, 2025, net cash provided by investing activities was approximately $136,000, compared to approximately $6,410,000 for the six months ended June 30, 2024. Net cash provided by investing activities for the six months ended June 30, 2025 mainly consisted of the collection of our commercial loans of approximately $23,619,000, offset by the issuance of commercial loans of approximately $23,483,000. Net cash provided by investing activities for the six months ended June 30, 2024 mainly consisted of the collection of our commercial loans of approximately $25,866,000, offset by the issuance of commercial loans of $19,455,000.

Previous wording

For the three months ended March 31, 2025, net cash used in financing activities was approximately $2,918,000, compared to approximately $2,999,000 for the three months ended March 31, 2024. Net cash used in financing activities for the three months ended March 31, 2025 reflects the repayment of the Webster Credit Line of approximately $1,602,000 and a dividend payment of approximately $1,315,000. Net cash used in financing activities for the three months ended March 31, 2024 reflects the repayment of the Webster Credit Line of approximately $1,702,000, a dividend payment of approximately $1,287,000 and the purchase of treasury shares of approximately $10,000.

Current wording

For the six months ended June 30, 2025, net cash used in financing activities was approximately $2,536,000, compared to approximately $10,421,000 for the six months ended June 30, 2024. Net cash used in financing activities for the six months ended June 30, 2025 reflects dividend payments of approximately $2,631,000, partially offset by the net proceeds from the Webster Credit Line of approximately $95,000. Net cash used in financing activities for the six months ended June 30, 2024 reflects the partial repayment of the Webster Credit Line of approximately $7,807,000, dividend payments of approximately $2,603,000, repurchase of treasury shares of approximately $10,000 and deferred financing costs of approximately $2,000.

Previous wording

We were in compliance with all covenants of the Webster Credit Line, as amended, as of March 31, 2025. At March 31, 2025, the outstanding amount under the Amended and Restated Credit Agreement was $14,825,735. The interest rate on the amount outstanding fluctuates daily. The rate, including a 0.5% agency fee, was approximately 7.9% as of March 31, 2025.

Current wording

We were in compliance with all covenants of the Webster Credit Line, as amended, as of June 30, 2025. At June 30, 2025, the outstanding amount under the Amended and Restated Credit Agreement was $16,523,205. The interest rate on the amount outstanding fluctuates daily. The rate, including a 0.5% agency fee, was approximately 7.9% as of June 30, 2025.