MANHATTAN BRIDGE CAPITAL, INC

Previous wording

The properties securing the loans are generally classified as residential or commercial real estate and, typically, are not income producing. All loans, except for one loan with a current outstanding principal balance of approximately $20,000, are 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 bearing interest at a fixed rate of 9% to 12.5% per year, except for one loan issued in June 2024, which initially bore interest at 11.5% per annum and, effective January 2, 2025, was modified to bear interest at 7.25% per annum for an extension term of up to one year, which term was subsequently extended for an additional 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. All loans, except for one loan with a current outstanding principal balance of approximately $14,000, are 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 bearing interest at a fixed rate of 9% to 12% per year, except for one loan issued in June 2024, which initially bore interest at 11.5% per annum and, effective January 2, 2025, was modified to bear interest at 7.25% per annum for an extension term of up to one year, which term was subsequently extended for an additional 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

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.

Current wording

Since commencing our business in 2007, except as set forth below, we have not completed a foreclosure or taken title to any collateral property, although from time to time 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.

Previous wording

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.

Current wording

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 and 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 supply-and-demand imbalance for relatively small real estate loans, present 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, have defined our success until now and should enable us to continue to achieve our objectives.

Previous wording

For the three-month periods ended March 31, 2026 and 2025, the total amounts of $14,246,800 and $10,940,040, respectively, have been lent, offset by collections received from borrowers, under our commercial loans of $12,388,029 and $12,698,051, respectively.

Current wording

For the six-month periods ended June 30, 2026 and 2025, the total amounts of $29,007,320 and $23,482,540, respectively, have been lent, offset by collections received from borrowers, under our commercial loans of $27,302,347 and $23,619,317, respectively.

Previous wording

At March 31, 2026, we were committed to $4,360,756 in construction loans that can be drawn by our borrowers when certain conditions are met.

Current wording

At June 30, 2026, we were committed to $3,927,235 in construction loans that can be drawn by our borrowers when certain conditions are met.

Previous wording

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.

Current wording

To date, none of the loans previously made have resulted in a credit loss or been determined to be uncollectible, although no assurances can be given that existing or future loans may not prove to be non-collectible or foreclosed in the future. As of June 30, 2026, one borrower with an outstanding principal balance of approximately $935,000 was in default, and we had retained Florida foreclosure counsel to pursue available remedies. Based on management’s assessment of the estimated value of the underlying collateral, which management believes substantially exceeds the outstanding principal balance, no allowance for credit losses was recorded as of June 30, 2026.

Previous wording

Three months ended March 31, 2026 compared to three months ended March 31, 2025

Current wording

Three Months Ended June 30, 2026 Compared to the Three Months Ended June 30, 2025

Previous wording

Total revenues for the three months ended March 31, 2026 were approximately $2,068,000, compared to approximately $2,274,000 for the same period in 2025, representing a decrease of $206,000, or 9.1%. The decrease was primarily attributable to lower interest income, driven by a period-over-period decline in loans receivable, as well as lower origination fees reflecting reduced loan origination activity. For the three months ended March 31, 2026, approximately $1,699,000 of our revenue represents interest income on secured commercial loans that we offer to real estate investors, compared to approximately $1,834,000 for the same period in 2025, and approximately $368,000 and $440,000, 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 revenue for the three months ended June 30, 2026 was approximately $2,045,000 compared to approximately $2,355,000 for the same period in 2025, a decrease of approximately $310,000, or 13.2%. The decrease occurred despite increases in both the number of loans originated and the amount of capital deployed and was primarily attributable to lower interest rates and origination fees charged to borrowers as a result of increased competition in the marketplace. In addition, the Company granted approximately $85,000 of discretionary payoff and refinancing credits to certain borrowers during the quarter. These credits were provided in connection with negotiated loan payoffs and other borrower-specific business matters. For the three months ended June 30, 2026 and 2025, approximately $1,738,000 and $1,899,000, respectively, of our revenues were attributable to interest income on secured commercial loans that we offer to real estate investors, and approximately $307,000 and $456,000, 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.

Previous wording

Interest and amortization of deferred financing costs for the three months ended March 31, 2026 were approximately $363,000, compared to approximately $451,000 for the same period in 2025, representing a decrease of $88,000, or 19.5%. The decrease was primarily attributable to lower interest expense resulting from reduced average borrowings under the Webster Credit Line and lower prevailing SOFR rates (see Note 5 to the condensed consolidated financial statements).

Current wording

Interest and amortization of deferred financing costs for the three months ended June 30, 2026 were approximately $399,000 compared to approximately $506,000 for the same period in 2025, representing a decrease of approximately $107,000, or 21.1%. The decrease was primarily attributable to lower interest expense resulting from lower average borrowings and lower SOFR rates (see Note 5 to the condensed consolidated financial statements).

Previous wording

Net income for the three months ended March 31, 2026 was approximately $1,274,000 compared to approximately $1,373,000 for the same period in 2025, representing a decrease of $99,000, or 7.2%. The decrease was primarily attributable to lower revenue, partially offset by reduced interest expense.

Current wording

Net income for the three months ended June 30, 2026 was approximately $1,153,000 compared to approximately $1,413,000 for the same period in 2025, representing a decrease of approximately $260,000, or 18.4%. The decrease was primarily attributable to lower revenue, partially offset by reduced interest expense.

Previous wording

General and administrative expenses for the three months ended March 31, 2026 were approximately $431,000, compared to approximately $454,000 for the same period in 2025, representing a decrease of $23,000, or 5.1%. The decrease was primarily attributable to lower advertising and appraisal expenses, as well as the absence of a NYSE American listing fee related to the MBC Funding II 6.00% Senior Secured Notes (the “Notes”) incurred in the prior year period.

Current wording

General and administrative expenses for the six months ended June 30, 2026 were approximately $926,000 compared to approximately $891,000 for the same period in 2025, representing an increase of approximately $35,000, or 3.9%. The increase was primarily attributable to increases in payroll and legal expenses, partially offset by the absence of a NYSE American listing fee related to the MBC Funding II 6.00% Senior Secured Notes (the “Notes”) incurred in the prior year period.

Previous wording

At March 31, 2026, we had cash of approximately $184,000, compared to cash of approximately $205,000 at December 31, 2025.

Current wording

At June 30, 2026, we had cash of approximately $230,000, compared to approximately $205,000 at December 31, 2025, excluding restricted cash, which primarily represents collections on commercial loans pending clearance and designated for repayment of the Webster Credit Line.

Previous wording

For the three months ended March 31, 2026, net cash provided by operating activities was approximately $1,259,000, compared to approximately $1,181,000 for the same period in 2025. The increase was primarily attributable to higher deferred origination and other fees, partially offset by lower net income and an increase in interest and other fees receivable on loans.

Current wording

For the six months ended June 30, 2026, net cash provided by operating activities was approximately $2,692,000, compared to approximately $2,407,000 for the same period in 2025. The increase was primarily attributable to a decrease in interest and other fees receivable during the 2026 period, compared with an increase in such receivables during the 2025 period, proceeds from borrower escrow deposits, and a greater increase in deferred origination and other fees, partially offset by lower net income.

Previous wording

For the three months ended March 31, 2026, net cash used in investing activities was approximately $1,859,000, compared to net cash provided by investing activities of approximately $1,758,000 for the same period in 2025. Net cash used in investing activities for the three months ended March 31, 2026 consisted of the issuance of commercial loans of approximately $14,247,000, offset by the collection of our commercial loans of approximately $12,388,000. 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.

Current wording

For the six months ended June 30, 2026, net cash used in investing activities was approximately $1,705,000, compared to net cash provided by investing activities of approximately $136,000 for the same period in 2025. Net cash used in investing activities for the six months ended June 30, 2026 consisted of the issuance of commercial loans of approximately $29,007,000, offset by the collection on commercial loans of approximately $27,302,000. Net cash provided by investing activities for the six months ended June 30, 2025 primarily consisted of the collection on commercial loans of approximately $23,619,000, offset by the issuance of commercial loans of approximately $23,483,000.

Previous wording

For the three months ended March 31, 2026, net cash provided by financing activities was approximately $577,000, compared to net cash used in financing activities of approximately $2,918,000 for the same period in 2025. Financing cash flows for the three months ended March 31, 2026 reflected net proceeds from Webster Credit Line of approximately $1,835,000 and proceeds from borrower escrow deposits of approximately $115,000, partially offset by a dividend payment of approximately $1,315,000, deferred financing costs of approximately $44,000, and the repurchase of treasury shares of approximately $14,000. Financing cash flows for the three months ended March 31, 2025 reflected net repayments of the Webster Credit Line of approximately $1,602,000 and a dividend payment of approximately $1,315,000.

Current wording

For the six months ended June 30, 2026, net cash used in financing activities was approximately $958,000, compared to approximately $2,536,000 for the same period in 2025. Net cash used in financing activities for the six months ended June 30, 2026 consisted of dividend payments of approximately $2,572,000, deferred financing costs of approximately $65,000, and repurchases of treasury shares of approximately $30,000, partially offset by net proceeds from the Webster Credit Line of approximately $1,708,000. Net cash used in financing activities for the six months ended June 30, 2025 consisted of dividend payments of approximately $2,631,000, partially offset by net proceeds from the Webster Credit Line of approximately $95,000.

Previous wording

We were in compliance with all covenants under the Webster Credit Line and the Valley Credit Line as of March 31, 2026. As of that date, outstanding borrowings under the Webster Credit Line were $13,393,777 and outstanding borrowings under the Valley Credit Line were $6,042,500.

Current wording

We were in compliance with all covenants under the Webster Credit Line and the Valley Credit Line as of June 30, 2026. As of that date, outstanding borrowings under the Webster Credit Line were $13,266,966 and outstanding borrowings under the Valley Credit Line were $6,042,500.

Previous wording

On November 20, 2025, our board of directors approved a new share repurchase program authorizing the repurchase of up to 100,000 shares of our common stock over the following 12 months. As of March 31, 2026, we had repurchased an aggregate of 9,300 shares under the program at a total cost of approximately $42,000. Of these amounts, 3,100 shares were repurchased during the three months ended March 31, 2026 at an aggregate cost of approximately $14,000.

Current wording

On November 20, 2025, our board of directors approved a new share repurchase program authorizing the repurchase of up to 100,000 shares of our common stock over the following 12 months. As of June 30, 2026, we had repurchased an aggregate of 13,142 shares under the program at a total cost of approximately $59,000. Of these amounts, 6,942 shares were repurchased during the six months ended June 30, 2026 at an aggregate cost of approximately $30,000.

Previous wording

We believe that our current cash balances, available borrowings under the Webster Credit Line and the Valley Credit Line, and cash flows from operations will be sufficient to fund our operations for at least the next 12 months. From time to time, we also obtain short-term unsecured loans from our executive officers and others, which provide us with additional flexibility to support the ongoing deployment of capital. We expect, however, that our working capital requirements will increase over the next 12 months as we continue to pursue growth opportunities under favorable market conditions.

Current wording

We believe that our current cash balances, available borrowings under the Webster Credit Line and the Valley Credit Line, and cash flows from operations will be sufficient to fund our operations for at least the next 12 months. We expect, however, that our working capital requirements will increase over the next 12 months as we continue to pursue growth opportunities under favorable market conditions.