Manhattan Bridge Capital, Inc 10-K for FY2025
Manhattan Bridge Capital, Inc (LOAN)
About this 10-K
Manhattan Bridge Capital, Inc filed this 10-K on March 27, 2026, covering the fiscal year ended December 31, 2025 (FY2025).
Headline figures
Fiscal year ended December 31, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $8.67M
- down 10.6% from $9.69M a year earlier
- Net income
- $5.11M
- down 8.6% from net income of $5.59M a year earlier
- Diluted EPS
- $0.45
- down 8.2% from $0.49 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 OF THE SECURITIES EXCHANGE ACT OF 1934 |
For
the fiscal year ended
OR
.
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission
File Number
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
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Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol | Name of each exchange on which registered | ||
| The
|
Securities registered pursuant to section 12(g) of the Act: NONE
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐
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by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐
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by check mark whether the registrant (1) has filed all reports to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
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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).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Act.
| Large accelerated filer ☐ | 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 has filed a report on and attestation to its management’s assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered
public accounting firm that prepared or issued its audit report.
If
securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements.
Indicate by check mark whether any of these error correction are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
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by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
The
aggregate market value of the Registrant’s voting and non-voting common shares held by non-affiliates of the Registrant on June
30, 2025, the last business day of the Registrant’s most recently completed second fiscal quarter, computed by reference to the
closing price for a common share on the Nasdaq Capital Market on such date, was approximately $
As of March 27, 2026, the registrant has a total of common shares outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
MANHATTAN BRIDGE CAPITAL, INC.
FORM 10-K ANNUAL REPORT
TABLE OF CONTENTS
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FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K (“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; (ix) an increase in interest rates may impact our profitability; and (x) we may be unsuccessful in our efforts to extend, renew, replace, or otherwise maintain our credit facilities on acceptable terms, or at all. The accompanying information contained in this Report, including the information set forth under “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, identifies important factors that could cause such differences. These forward-looking statements speak only as of the date of this Report, and we caution potential investors not to place undue reliance on such statements. We undertake no obligation to update or revise any forward-looking statements. All subsequent written or oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the Cautionary Statements.
Unless the context otherwise requires, all references in this Report to “Manhattan Bridge Capital,” “the Company,” “we,” “us” and “our” refer to Manhattan Bridge Capital, Inc., a New York corporation, and its consolidated subsidiary, MBC Funding II Corp. (“MBC Funding II”), a New York corporation.
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PART I
Item 1. Business
General
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 improvement of properties located in the New York metropolitan area, including New Jersey and Connecticut, and in Florida. We are organized and conduct our operations to qualify as a real estate investment trust for federal income tax purposes (“REIT”). We have qualified for taxation as a REIT beginning with our taxable year ended December 31, 2014. For reasons discussed below, our restated certificate of incorporation restricts the acquisition and ownership of our capital stock to 4.0% of our outstanding shares of capital stock, by value or number of shares, whichever is more restrictive.
In order to maintain our qualification for taxation as a REIT, we are required to distribute at least 90% of our REIT taxable income to our shareholders each year. To the extent we distribute less than 100% of our taxable income to our shareholders (but more than 90%) we will maintain our qualification for taxation as a REIT, but the undistributed portion will be subject to regular corporate income taxes. As a REIT, we may also be subject to federal excise taxes and minimum state taxes. We also intend to operate our business in a manner that will permit us to maintain our exemption from registration under the Investment Company Act of 1940, as amended (the “Investment Company Act”). In addition, in order for us to qualify for taxation as a REIT, not more than 50% in value of our outstanding common shares may be owned, directly or indirectly, by five or fewer individuals (as defined in the Internal Revenue Code of 1986, as amended (the “Code”) to include certain entities) at any time during the last half of each taxable year, and at least 100 persons must beneficially own our stock during at least 335 days of a taxable year of 12 months, or during a proportionate portion of a shorter taxable year. To help ensure that we meet the tests, our restated certificate of incorporation restricts the acquisition and ownership of our capital stock. The ownership limitation is fixed at 4.0% of our outstanding shares of capital stock, by value or number of shares, whichever is more restrictive. Assaf Ran, our Chief Executive Officer and founder, is exempt from this restriction.
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 $22,000, 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. Most of the loans we make have a stated fixed interest rate, typically ranging from 9% to 12.5% per annum; however, a substantial portion of our loan agreements also include a provision that permits us to charge interest at a rate equal to the greater of (i) the stated loan rate and (ii) the prime rate plus 3.0% on the outstanding principal balance. 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.
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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 executive officers are experienced in hard money lending under various economic and market conditions. Loans are underwritten and structured by our Chief Executive Officer, assisted by our Chief Financial Officer, and then managed and serviced principally by our Chief Financial Officer and our internal team. A principal source of new transactions has been repeat business from prior customers and their referral of new business. Loans are originated by our internal team, and we also receive leads for new business from real estate brokers, mortgage brokers and a limited amount of advertising.
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.
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The Market Opportunity
Real estate investment is a capital-intensive business that relies heavily on debt capital to acquire, develop, improve, construct, renovate and maintain properties. We believe that the demand for relatively small loans to acquire, renovate or improve residential and commercial real estate held around the New York metropolitan area, including New Jersey and Connecticut, and in Florida markets presents a compelling opportunity to generate attractive returns for an established, well-financed, non-bank lender like us. We have competed successfully in these markets notwithstanding the fact that many traditional lenders, such as banks and other institutional lenders, also service this market. Our primary competitive advantage is our ability to approve and fund loans quickly and efficiently. In this environment, characterized by a supply-demand imbalance for financing and increasing asset values, we believe we are well positioned to capitalize and profit from these industry trends.
We believe there is a significant market opportunity for a well-capitalized “hard money” real estate finance company to originate attractively priced loans with strong credit fundamentals. Particularly around the New York metropolitan area where real estate values are relatively stable and substandard properties are being improved, rehabilitated and renovated, we believe there are many opportunities for a “hard money” lender providing capital for these purposes to small scale developers. We further believe that our flexibility to structure loans to suit the particular needs of our borrowers and our ability to close quickly make us an attractive alternative to banks and other large institutional lenders for small real estate developers and investors.
Our Business and Growth Strategies
Our objective is to protect and preserve capital in a manner that provides for attractive risk-adjusted returns to our shareholders over the long term, principally through dividends. We intend to achieve this objective by continuing to focus exclusively on selectively originating, servicing and managing a portfolio of short-term real estate loans secured by first mortgages on real estate located in the New York metropolitan area, including New Jersey and Connecticut, and in Florida, that are designed to generate attractive risk-adjusted returns across a variety of market conditions and economic cycles. We believe that our ability to react quickly to the needs of borrowers, our flexibility in terms of structuring loans to meet the needs of borrowers, our intimate knowledge of the New York metropolitan area real estate market, our expertise in “hard money” lending and our focus on newly originated first mortgage loans, should enable us to achieve this objective. Nevertheless, we will remain flexible in order to take advantage of other real estate related opportunities that may arise from time to time, whether they relate to the mortgage market or, if we determine that it is in our best interest, to make direct or indirect investments in real estate.
Our strategy to achieve our objective includes the following:
| ● | capitalize on opportunities created by the long-term structural changes in the real estate lending market and the continuing demand for liquidity in the real estate market; | |
| ● | take advantage of the prevailing economic environment as well as economic, political and social trends that may impact real estate lending currently and in the future as well as the outlook for real estate in general and particular asset classes; | |
| ● | remain flexible in order to capitalize on changing sets of investment opportunities that may be present in the various points of an economic cycle; and |
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| ● | operate so as to qualify for taxation as a REIT and for an exemption from registration under the Investment Company Act. |
In furtherance of these strategies, we are party to a credit line agreement with Webster Bank, N.A (as successor to Webster Business Credit Corporation) (“Webster”) and Flushing Bank (“Flushing”), pursuant to which Webster and Flushing have provided us with a $32.5 million credit line. We are also party to a letter agreement with Valley National Bank (“Valley”), pursuant to which Valley has provided MBC Funding II with a $10.0 million credit line.
Our Competitive Strengths
We believe our competitive strengths include:
| ● | Experienced management team. Our management team has successfully originated and serviced a portfolio of real estate mortgage loans generating attractive annual returns under varying economic and real estate market conditions. We expect that the experience of our management team will provide us with the ability to effectively deploy our capital in a manner that we believe will provide for attractive risk-adjusted returns but with a focus on capital preservation and protection. | |
| ● | Long-standing relationships. A significant portion of our business comes from repeat customers with whom we have long-standing relationships. These customers are also a referral source for new borrowers. As long as these customers remain active real estate investors, they provide us with an advantage in securing new business and help us maintain a pipeline to attractive new opportunities that may not be available to many of our competitors or to the general market. | |
| ● | Knowledge of the market. Our intimate knowledge of the real estate markets in the geographic areas in which we operate enhances our ability to identify attractive opportunities and helps distinguish us from many of our competitors. | |
| ● | Disciplined lending. We seek to maximize our risk-adjusted returns, and preserve and protect capital, through our disciplined and credit-based approach. We utilize rigorous underwriting and loan closing procedures that include numerous checks and balances to evaluate the risks and merits of each potential transaction. We seek to protect and preserve capital by carefully evaluating the conditions of various properties, property locations, and the creditworthiness of the guarantors. | |
| ● | Vertically-integrated loan origination platform. We manage and control the loan process from origination through closing with our own personnel and independent legal counsel and appraisers, with whom we have long relationships, who together constitute a highly experienced team in credit evaluation, underwriting and loan structuring. We also believe that our procedures and experience allow us to quickly and efficiently execute opportunities we deem desirable. | |
| ● | Structuring flexibility. As a relatively small, non-bank real estate lender, we can move quickly and have much more flexibility than traditional lenders to structure loans to suit the needs of our clients. Our ability to customize financing structures to meet borrowers’ needs is one of our key business strengths. |
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| ● | No legacy issues. Unlike many of our competitors, we are not burdened by distressed legacy real estate assets. We do not have a legacy portfolio of lower-return or problem loans that could potentially dilute the attractive returns we believe are available in the current liquidity-challenged environment and/or distract and monopolize our management team’s time and attention. We do not have any adverse credit exposure to, and we do not anticipate that our performance will be negatively impacted by, previously purchased assets. |
Our Real Estate Lending Activities
Our real estate lending activities involve originating, funding, servicing and managing short-term loans (i.e.: loans with an initial term of not more than one year), secured by first mortgage liens on real estate property located in the New York metropolitan area, including New Jersey and Connecticut, and in Florida, held for investment or resale. Generally, borrowers use the proceeds from our loans for one of three purposes: (i) to acquire and renovate existing residential (single, two or three family) real estate properties; (ii) to acquire vacant land and construct residential real properties; and (iii) to purchase and hold income producing properties. Our mortgage loans are structured to fit the needs and business plans of the borrowers. Revenue is generated primarily from the interest borrowers pay on our loans and, to a lesser extent, loan fee income generated on the origination and extension of loans.
Most of our loans are funded in full at the closing. However, our loan portfolio includes a number of construction loans, which are only partially funded at closing. At December 31, 2025 and 2024, our unfunded commitment was approximately $4.4 million and $7.2 million, respectively. Advances under construction loans are funded against requests supported by all required documentation as and when needed to pay contractors and other costs of construction. In the case of construction loans, the borrower will either deliver multiple notes or one global note for the entire commitment. In either case, interest only accrues on the funded portion of the loan.
In general, our strategy is to service and manage the loans we originate until they are paid. However, there have been a few instances where we have either used loans as collateral, or sold participating interests in loans. At December 31, 2025, most of our loans are secured by properties located around the New York metropolitan area. Most of the properties we finance are residential, although on occasion they are classified as commercial. However, in all instances the properties are held only for investment by the borrowers. Most of these properties do not generate any cash flow.
The typical terms of our loans are as follows:
Principal amount – In the last seven years, a minimum of $40,000 to a maximum of $3.6 million. Our lending policy limits the maximum loan amount 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.
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Loan-to-Value Ratio - Up to 75%, and/or up to 80% of construction costs.
Interest rate - Most of the loans in our portfolio have a fixed rate of typically 9% to 12.5%.
Term - Generally, one year with early termination in the event of a sale of the property or a refinancing. We entertain requests for granting extensions under certain conditions.
Prepayments - Borrower may prepay the loan at any time beginning three months after the funding date and in some instances, we waive prepayment fees.
Covenants - To timely pay all interest on the loan and to maintain hazard insurance with respect to the property.
Events of default - Include: (i) failure to comply with the loan terms; (ii) breach of a covenant.
Payment terms - Interest only is payable monthly in arrears. Principal is due in a “balloon” payment at the maturity date.
Escrow - None.
Reserves - None.
Security - The loan is evidenced by a promissory note, which is secured by a first mortgage lien on the real property owned by the borrower. In addition, each loan is guaranteed by the principals of the borrower, which may be collaterally secured by a pledge of the guarantor’s interest in the borrower.
Fees and Expenses - Borrowers generally pay an origination fee equal to 0% to 2% of the loan amount. If we agree to extend the term of the loan, we usually collect the same origination fee we charged on the initial funding of the loan. In addition, borrowers in some cases also pay a processing fee, wire fee, bounced check fee, assignment fee and, in the case of construction loans, check requisition fee for each draw from the loan. Finally, the borrower pays all expenses relating to obtaining the loan including the cost of a property appraisal, and all title, recording fees and legal fees.
Operating Data
The current high level of interest rates adversely impacts our interest costs, and also results in less competition and less liquidity in the real estate market. We have experienced a slowdown in the deployment of capital, as well as lower demand for new loans. We have increased the interest rates charged on our commercial loans in order to offset our increased interest costs. In addition, most of our loans contain an adjustable interest rate clause allowing us to charge no less than the prime rate plus 3% on the outstanding loans. Although loan origination activity slowed during 2025, we have recently experienced improved demand for new loans and faster portfolio turnover.
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Our loan portfolio
The following table highlights certain information regarding our real estate lending activities for the periods indicated:
| Year Ended December 31, | ||||||||
| ($ in thousands) | 2025 | 2024 | ||||||
| Loans originated | $ | 35,336 | $ | 41,966 | ||||
| Loans partially or fully repaid | $ | 40,637 | $ | 49,090 | ||||
| Mortgage lending revenues | $ | 8,666 | $ | 9,689 | ||||
| Mortgage lending expenses | $ | 1,759 | $ | 2,339 | ||||
| Number of loans outstanding | 88 | 95 | ||||||
| Principal amount of loans earning interest | $ | 60,674 | $ | 65,974 | ||||
| Average outstanding loan balance | $ | 689 | $ | 694 | ||||
| Percent of loans secured by New York metropolitan area properties, including in New Jersey and Connecticut (1) | 93.18 | % | 95.80 | % | ||||
| Weighted average contractual interest rate | 11.12 | % | 11.36 | % | ||||
| Weighted average term to maturity (in months) (2) | 5.52 | 6.35 | ||||||
| (1) | Calculated based on the number of loans. |
| (2) | Without giving effect to extension options. |
As of December 31, 2024, we had made loans to four separate entities with an aggregate principal balance of $7,225,000, representing 11.0% of our loan portfolio, and as of December 31, 2025, we had made loans to three separate entities with an aggregate principal balance of $6,245,000, representing 10.3% of our loan portfolio. A single individual owns at least 50% interest in each of these entities and is not affiliated with any of our officers or directors.
The following table sets forth information regarding the types of properties securing our mortgage loans outstanding at December 31, 2025 and 2024, and the interest earned, on the active loans, in each category (dollars in thousands):
| 2025 | 2024 | |||||||||||||||||||||||
| Number of Loans | Interest Earned | Percentage | Number of Loans | Interest Earned | Percentage | |||||||||||||||||||
| Residential | 79 | $ | 4,904 | 86 | % | 85 | $ | 4,515 | 85 | % | ||||||||||||||
| Commercial | 7 | 724 | 12 | % | 6 | 801 | 11 | % | ||||||||||||||||
| Mixed Use | 2 | 89 | 2 | % | 4 | 161 | 4 | % | ||||||||||||||||
| Total | 88 | $ | 5,717 | 100 | % | 95 | $ | 5,477 | 100 | % | ||||||||||||||
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Our Origination Process and Underwriting Criteria
We primarily rely on our relationships with existing and former borrowers, real estate investors, real estate brokers, loan initiators, and mortgage brokers to originate loans. Many of our borrowers are “repeat customers.” When underwriting a loan, the primary focus of our analysis is the value of a property and the credit worthiness of the borrower and its principals. Prior to making a final decision on a loan application we conduct extensive due diligence of the borrower and its principals. In terms of the property, we require an assessment report and evaluation. We also order title, lien and judgment searches. We will also evaluate the neighborhood in order to determine the liquidity of the property. Finally, we analyze and assess financial and operational data provided by the borrower relating to its operation and maintenance of the property. In terms of the borrower and its principals, we usually obtain third party credit reports from one of the major credit reporting services as well as personal financial information provided by the borrower and its principals. We analyze all this information carefully prior to making a final determination. Ultimately, our decision is based on our conclusions regarding the value of the property, which takes into account factors such as the neighborhood in which the property is located, the current use and potential alternative use of the property, current and potential net income from the property, the local market, sales information of comparable properties, existing zoning regulations, the creditworthiness of the borrower and its principals and their experience in real estate ownership, construction, development and management. In conducting our due diligence, we rely, in part, on third party professionals and experts including appraisers, title insurers and attorneys.
Before a loan commitment is issued, the loan must be reviewed and approved by our Chief Executive Officer. Our loan commitments are generally issued subject to receipt by us of title documentation and title report, in a form satisfactory to us, for the underlying property. We require a personal guarantee from the principal or principals of the borrower.
Our Current Financing Strategies
Our financing strategies are critical to the success and growth of our business. Our financing strategies at this time are limited to equity and debt offerings, as well as lines of credit from banks. Our principal capital raising transactions have consisted of the following:
Credit facilities. We currently maintain a credit facility with Webster and Flushing pursuant to which are eligible to borrow up to $32.5 million, secured by assignments of mortgages and other collateral (the “Webster Credit Line”), and a credit facility with Valley pursuant to which MBC Funding II is eligible to borrow up to $10.0 million, secured by assignments of mortgages (the “Valley Credit Line”), each as described in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – under “Liquidity and Capital Resources”, below. As of December 31, 2025, borrowings under the Webster Credit Line bore interest, at the Company’s election for each drawdown, at either (i) the Secured Overnight Financing Rate (“SOFR”) plus an applicable premium, which rate was 7.3%, inclusive of a 0.5% agency fee, or (ii) the Base Rate (as defined in the Amended and Restated Credit Agreement) plus 2.00%, plus a 0.5% agency fee. As of December 31, 2025, borrowings under the Valley Credit Line bore interest at the forward-looking term rate based on SOFR for the applicable interest period (“Term SOFR”), subject to a floor, plus an applicable margin and customary fees, which rate was 6.7%. See Note 5 to the financial statements included elsewhere in this Report. As of December 31, 2025 and March 24, 2026, $11,558,632 and $13,825,320, respectively, were outstanding under the Webster Credit Line. As of December 31, 2025 and March 24, 2026, an aggregate of $6,042,500 was outstanding under the Valley Credit Line. The following table shows our capitalization, including our financing arrangements, and our loan portfolio as of December 31, 2025:
| Capitalization ($ in thousands): | ||||
| Sources of capital: | ||||
| Lines of credit | $ | 17,601 | ||
| Other liabilities, net of deferred origination and other fees | 1,650 | |||
| Capital (equity) | 43,100 | |||
| Total sources of capital | $ | 62,351 | ||
| Assets: | ||||
| Loans, net of deferred origination and other fees | $ | 60,219 | ||
| Other assets | 2,132 | |||
| Total assets | $ | 62,351 | ||
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Competition
The real estate finance market around the New York metropolitan area is highly competitive. We face competition for lending and investment opportunities from a variety of institutional lenders and investors and many other market participants, including specialty finance companies, mortgage/other REITs, commercial banks and thrift institutions, investment banks, insurance companies, hedge funds and other financial institutions as well as private equity funds, family offices and high net worth individuals. Many of these competitors enjoy competitive advantages over us, including greater name recognition, established lending relationships with customers, financial resources, and access to capital. However, we have seen less competition and less liquidity in the real estate market due to the interest rate increases in recent years. We also believe that we benefit from our low debt-to-equity ratio in the current market condition.
Notwithstanding some of our competitive disadvantages, we believe we have carved a niche for ourselves among small real estate developers, owners and contractors throughout the New York metropolitan area because of our ability to structure each loan to suit the needs of each individual borrower and our ability to act quickly. In addition, we believe we have developed a reputation among these borrowers as offering reasonable terms and providing outstanding customer service. We believe our future success will depend on our ability to maintain and capitalize on our existing relationships with borrowers and brokers and to expand our borrower base by continuing to offer attractive loan products, remain competitive in pricing and terms, and provide superior service.
In addition, we have also begun operating in the New Jersey, Connecticut and Florida markets. As we have not operated in those markets for an extended period of time, we have faced competition from more established lenders, as well as some smaller lenders, in those markets.
Sales and Marketing
We rely on our internal team to generate lending opportunities as well as referrals from existing or former borrowers, brokers and bankers and advertising to generate lending opportunities. A principal source of new transactions has been repeat business from prior customers and their referral of new leads. We also engage with third parties in order to support sales and marketing efforts as needed.
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Intellectual Property
Our business does not depend on exploiting or leveraging any intellectual property rights. To the extent we own any rights to intellectual property, we rely on a combination of federal, state and common law trademarks, service marks and trade names, copyrights and trade secret protection. We have registered some of our trademarks and service marks in the United States Patent and Trademark Office including “Manhattan Bridge Capital”.
The protective steps we have taken may not deter misappropriation of our proprietary information. These claims, if meritorious, could require us to license other rights or subject us to damages and, even if not meritorious, could result in the expenditure of significant financial and managerial resources on our part.
Employees
As of December 31, 2025, we employed six employees. In addition, during 2025 we used outside lawyers and other independent professionals to verify titles and ownership, to file liens and to consummate the transactions. Outside appraisers were used to assist management in evaluating the worth of collateral, when deemed necessary by management. We also used construction inspectors as well as mortgage brokers and deal initiators.
Regulation
Our operations are subject, in certain instances, to supervision and regulation by state and federal governmental authorities and may be subject to various laws and judicial and administrative decisions imposing various requirements and restrictions. In addition, we may rely on exemptions from various requirements of the Securities Act of 1933, as amended (the “Securities Act”), the Exchange Act, the Investment Company Act and ERISA. These exemptions are sometimes highly complex and may in certain circumstances depend on compliance by third parties who we do not control.
Regulation of Commercial Real Estate Lending Activities
Although most states do not regulate commercial finance, certain states impose limitations on interest rates and other charges and on certain collection practices and creditor remedies, and require licensing of lenders and financiers and adequate disclosure of certain contract terms. We also are required to comply with certain provisions of, among other statutes and regulations, certain provisions of the Equal Credit Opportunity Act that are applicable to commercial loans, The USA PATRIOT Act, regulations promulgated by the Office of Foreign Asset Control and federal and state securities laws and regulations.
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Investment Company Act Exemption
Although we reserve the right to modify our business methods at any time, we are not currently required to register as an investment company under the Investment Company Act. However, we cannot assure you that our business strategy will not evolve over time in a manner that could subject us to the registration requirements of the Investment Company Act.
Section 3(a)(1)(A) of the Investment Company Act defines an investment company as any issuer that is or holds itself out as being engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting or trading in securities. Section 3(a)(1)(C) of the Investment Company Act defines an investment company as any issuer that is engaged or proposes to engage in the business of investing, reinvesting, owning, holding or trading in securities and owns or proposes to acquire investment securities having a value exceeding 40% of the value of the issuer’s total assets (exclusive of U.S. Government securities and cash items) on an unconsolidated basis, which we refer to as the 40% test.
We rely on the exception set forth in Section 3(c)(5)(C) of the Investment Company Act which excludes from the definition of investment company “[a]ny person who is not engaged in the business of issuing redeemable securities, face-amount certificates of the installment type or periodic payment plan certificates, and who is primarily engaged in one or more of the following businesses... (C) purchasing or otherwise acquiring mortgages and other liens on and interests in real estate.” This exception generally requires that at least 55% of an entity’s assets be comprised of mortgages and other liens on and interests in real estate, also known as “qualifying interests,” and at least another 25% of the entity’s assets must be comprised of real estate-type interests reduced by any amount of qualifying interests that the entity holds in excess of the 55% minimum limit (with no more than 20% of the entity’s assets comprised of miscellaneous assets). At the present time, we qualify for the exception under this section and our current intention is to continue to focus on originating short-term loans secured by first mortgages on real property. However, if, in the future, we do acquire non-real estate assets without the acquisition of substantial real estate assets, we may be deemed to be an “investment company” and be required to register as such under the Investment Company Act, which could have a material adverse effect on us.
If we were required to register as an investment company under the Investment Company Act, we would become subject to substantial regulation with respect to our capital structure (including our ability to use leverage), management, operations, transactions with affiliated persons (as defined in the Investment Company Act), portfolio composition, including restrictions with respect to diversification and industry concentration, and other matters.
Qualification for exclusion from the definition of an investment company under the Investment Company Act will limit our ability to make certain investments. In addition, complying with the tests for such exclusion could restrict the time at which we can acquire and sell assets.
Environmental Laws
Our borrowers, who own properties, may be subject to various environmental laws of federal, state and local governments. To the extent that an owner of a property underlying one of our debt instruments becomes liable for removal costs, the ability of the owner to make payments to us may be reduced, which in turn may adversely affect the value of the relevant mortgage asset held by us and our ability to make distributions to our shareholders. To date, our borrowers’ compliance with existing laws has not had a material adverse effect on our earnings and we do not have reason to believe it will have such an impact in the future. However, we cannot predict the impact of unforeseen environmental contingencies or new or changed laws or regulations on the properties owned by our borrowers.
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Available information
We make available our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (Exchange Act), as amended, free of charge on our website at www.manhattanbridgecapital.com, as soon as reasonably practicable after they are electronically filed with or furnished to the Securities and Exchange Commission. The information on our website is not incorporated by reference into this Report.
Item 1A. Risk Factors
The following risk factors, among others, could affect our actual results of operations and could cause our actual results to differ materially from those expressed in forward-looking statements made by us. These forward-looking statements are based on current expectations and except as required by law we assume no obligation to update this information. These disclosures reflect the Company’s beliefs and opinions as to factors that could materially affect the Company and its securities in the future. References to past events are provided by way of example only and are not intended to be a complete listing or a representation as to whether or not such factors have occurred in the past or their likelihood of occurring in the future. You should carefully consider the risks described below and elsewhere in this Report before making an investment decision. Our business, financial condition or results of operations could be materially adversely affected by any of these risks. Our common stock is considered speculative and the trading price of our common stock could decline due to any of these risks, and you may lose all or part of your investment. The following risk factors are not the only risk factors facing our Company. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also affect our business.
Summary of Risk Factors
Our business is subject to a number of risks, including risks that may adversely affect our business, financial condition and results of operations. These risks are discussed more fully below and include, but are not limited to, risks related to:
Risks Relating to Our Business
| ● | our loan origination activities, revenues and profits are limited by available funds; | |
| ● | the competitive real estate lending market and competition; | |
| ● | our investment, leverage and financing strategies; |
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| ● | the broad authority of our management team in making lending decisions and their importance to our business; | |
| ● | the impact of potential security breaches; |
Risks Related to Our Portfolio
| ● | the impact of interest rates on our borrowing and business and the requirement to meet covenants contained in our credit line facilities; | |
| ● | the impact of overestimating loan yields or the value of collateral and interest rate fluctuations; | |
| ● | market conditions for mortgages and mortgage-related assets; | |
| ● | extension of existing loans; | |
| ● | potential lender liability claims; | |
| ● | the impact of the timing of prepayment of loans; | |
| ● | the liquidity of our loan portfolio; | |
| ● | the geographic concentration of our loan portfolio; | |
| ● | our exposure to economic slowdowns or recessions; | |
| ● | our ability to foreclose as promptly as may be necessary; | |
| ● | potential liability relating to environmental matters; | |
| ● | loan defaults; | |
| ● | casualty events occurring on properties securing our loans; | |
| ● | borrower concentration; |
Risks Related to Financing Transactions
| ● | complying with covenants in our existing credit lines; | |
| ● | our use of leverage; |
Risks Related to REIT Status and Investment Company Act Exemption
| ● | potential challenges by the Internal Revenue Service (the “IRS”); | |
| ● | compliance with REIT requirements, including REIT distribution requirements; | |
| ● | potential tax liabilities and our reliance on tax and legal advice on our REIT status; | |
| ● | the impact of our distributions and the tax impact of our dividend payments; | |
| ● | the impact of the liquidation of our assets; | |
| ● | the ownership restrictions set forth in our restated certificate of incorporation; | |
| ● | our ability to generate sufficient cash flow to make distributions; |
| ● | the impact of being deemed an investment company under the Investment Company Act; |
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Risks Related to Our Common Shares
| ● | the potential for our largest shareholder’s interests not aligning with those of our other shareholders; |
Risks Related to Our Organization and Structure
| ● | the impact of certain provisions of New York law; | |
| ● | our capital structure may prevent a change in control and the limited rights of shareholders to take action against our officers and directors; |
General Risk Factors
| ● | access to financing; | |
| ● | the limited trading and volatility in our common stock; | |
| ● | future events that may impact the price of our common stock; and | |
| ● | future offerings may adversely affect the market and our stockholders. |
Risks Related to Our Business
Our loan origination activities, revenues and profits are limited by available funds. If we do not increase our working capital, we will not be able to grow our business.
As a real estate finance company, our revenues and net income are derived primarily from interest and fees received or accrued on our loan portfolio. Our ability to originate real estate loans depends on the funds available to us. As of March 24, 2026, we had approximately $22.6 million of aggregate available borrowing capacity under the Webster Credit Line and the Valley Credit Line, which mature on February 28, 2029 and December 12, 2027, respectively. Although we do not currently anticipate any difficulty in extending these credit lines or obtaining a comparable credit facility from another lender prior to their respective maturities, there can be no assurance that we will be able to do so on acceptable terms, or at all. We intend to use repayments of outstanding loans and additional borrowing capacity under these credit lines to fund the origination of additional real estate loans. However, if demand for our mortgage loans increases, we cannot assure you that we will be able to meet that demand in light of the limited funds available to us for loan originations.
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We operate in a highly competitive market and competition may limit our ability to originate loans with favorable interest rates.
We operate in a highly competitive market, and we believe these conditions will persist for the foreseeable future as the financial services industry continues to consolidate, producing larger, better capitalized and more geographically diverse companies with broad product and service offerings. Thus, our profitability depends, in large part, on our ability to compete effectively. Our competition includes mortgage/other REITs, specialty finance companies, savings and loan associations, banks, mortgage banks, insurance companies, mutual funds, pension funds, private equity funds, hedge funds, institutional investors, investment banking firms, non-bank financial institutions, governmental bodies, family offices and high net worth individuals. We may also compete with companies that partner with and/or receive financing from the U.S. Government. Many of our competitors are substantially larger and have considerably greater financial, technical, marketing and other resources than we do. In addition, larger and more established competitors may enjoy significant competitive advantages, including enhanced operating efficiencies, more extensive referral networks, greater and more favorable access to investment capital and more desirable lending opportunities. Several of these competitors, including mortgage REITs, have recently raised or are expected to raise, significant amounts of capital, which enables them to make larger loans or a greater number of loans. Some competitors may also have a lower cost of funds and access to funding sources that may not be available to us, such as funding from various governmental agencies or under various governmental programs for which we are not eligible. In addition, some of our competitors may have higher risk tolerances or different risk assessments, which could allow them to consider a wider variety of possible loan transactions or to offer more favorable financing terms than we would. Finally, as a REIT and because we operate in a manner so as to be exempt from the requirements of the Investment Company Act, we may face further restrictions to which some of our competitors may not be subject. As a result, we may find that the pool of potential borrowers available to us is limited. We cannot assure you that the competitive pressures we face will not have a material adverse effect on our business, financial condition and results of operations.
We may change our investment, leverage, financing and operating strategies, policies or procedures without shareholder consent, which may adversely affect the market value of our common shares and our ability to make distributions to shareholders.
We may amend or revise our policies, including our policies with respect to growth strategy, operations, indebtedness, capitalization, financing alternatives and underwriting criteria and guidelines, or approve transactions that deviate from our existing policies at any time, without a vote of, or notice to, our shareholders. For example, we may decide that in order to compete effectively, we should relax our underwriting guidelines and make riskier loans, which could result in a higher default rate on our portfolio. We may also decide to expand our business focus to other targeted asset classes, such as participation interests in mortgage loans, mezzanine loans and subordinate interests in mortgage loans. We could also decide to adopt investment strategies that include securitizing our portfolio, hedging transactions and swaps. We may even decide to broaden our business to include acquisitions of real estate assets, which we may or may not operate. Finally, as the market evolves, we may determine that the residential and commercial real estate markets do not offer the potential for attractive risk-adjusted returns for an investment strategy that is consistent with our intention to remain qualified for taxation as a REIT and to operate in a manner to remain exempt from registration under the Investment Company Act. If we believe it would be advisable for us to be a more active seller of loans and/or interests thereon, we may determine that we should conduct such business through a taxable REIT subsidiary or that we should cease to maintain our qualification for taxation as a REIT. These changes may increase our exposure to interest rate risk, default risk, financing risk and real estate market fluctuations, which could adversely affect our business, operations and financial conditions as well as the value of our securities and our ability to make distributions to our shareholders.
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Management has broad authority to make lending decisions. If management fails to generate attractive risk-adjusted loans on a consistent basis, our revenue and income could be materially and adversely affected and the market price of a share of our common shares is likely to decrease.
Our board of directors has given management broad authority to make decisions to originate loans. The only limitation imposed by the board of directors is that no single loan may exceed the lower of (i) 9.9% of our loan portfolio (without taking into account the loan under consideration) and (ii) $4 million. Within these broad guidelines, our Chief Executive Officer has the absolute authority to make all lending decisions. Thus, management could authorize transactions that may be costly and/or risky, which could result in returns that are substantially below expectations or that result in losses, which would materially and adversely affect our business operations and results. Further, management’s decisions may not fully reflect the best interests of our shareholders. Our board of directors may periodically review our underwriting guidelines but will not, and will not be required to, review all of our proposed loans. In conducting periodic reviews, our board of directors will rely primarily on information provided to them by management.
Our Chief Executive Officer and Chief Financial Officer are each critical to our business and our future success may depend on our ability to retain them. In addition, as our business grows we will need to hire additional personnel.
Our future success depends to a significant extent on the continued efforts of our founder, president and Chief Executive Officer, Assaf Ran, and our Chief Financial Officer, Vanessa Kao. Mr. Ran generates most, if not all, of our loan applications, supervises all aspects of the underwriting and due diligence process in connection with each loan, structures each loan and has absolute authority (subject only to the maximum amount of the loan) as to whether or not to approve the loan. Ms. Kao services all loans in our portfolio. If Mr. Ran is unable to continue to serve as our Chief Executive Officer on a full-time basis, we might not be able to generate sufficient loan applications and our business and operations would be adversely affected. In addition, in the future we may need to attract and retain qualified senior management and other key personnel, particularly individuals who are experienced in the real estate finance business and people with experience in managing a mortgage REIT. If we are unable to recruit and retain qualified personnel in the future, our ability to continue to operate and to grow our business will be impaired.
Terrorist attacks and other acts of violence or war may affect the real estate industry generally and our business, financial condition and results of operations.
The risk of terrorist attacks by extremist groups has risen over the last few years. Any future terrorist attacks, the anticipation of any such attacks, and the consequences of any military or other response by the United States and its allies may have an adverse impact on the U.S. financial markets and the economy in general. In addition, a significant terrorist attack in New York City could have a material adverse impact on the New York real estate market, which, in turn, could make it more difficult for our borrowers to repay their loans. We cannot predict the severity of the effect that any such future events would have on the U.S. financial markets, including the real estate capital markets, the economy or our business. Any future terrorist attacks could adversely affect the credit quality of some of our loan portfolio. We may suffer losses as a result of the adverse impact of any future terrorist attacks and these losses may adversely impact our results of operations.
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The enactment of the Terrorism Risk Insurance Act of 2002 (the “TRIA”), and the subsequent enactment of the Terrorism Risk Insurance Program Reauthorization Act of 2007, which extended TRIA through the end of 2020, which in turn was extended by the Terrorism Risk Insurance Program Reauthorization Act of 2019 through the end of 2027 requires insurers to make terrorism insurance available under their property and casualty insurance policies in order to receive federal compensation under TRIA for insured losses. However, this legislation does not regulate the pricing of such insurance. The absence of affordable insurance coverage may adversely affect the general real estate lending market, lending volume and the market’s overall liquidity and may reduce the number of suitable financing opportunities available to us and the pace at which we are able to make loans. If property owners are unable to obtain affordable insurance coverage, the value of their properties could decline and in the event of an uninsured loss, we could lose all or a portion of our investment.
Our existing credit lines have numerous covenants. If we are unable to comply with these covenants, or obtain necessary waivers, the outstanding amount of our loans could become due and payable.
The Webster Credit Line and the Valley Credit Line contain customary covenants and restrictions, including limitations on borrowings based on the value of the underlying collateral, requirements to maintain specified financial ratios and restrictions on the terms of loans we may originate. If we fail to comply with any of these covenants and do not obtain a waiver, we will be in default under the applicable credit agreements. Upon an event of default, Webster and/or Valley could declare outstanding amounts immediately due and payable, terminate their commitments, require additional collateral and/or exercise remedies against the collateral securing our obligations. Any such action could materially reduce our liquidity, require us to sell assets to repay outstanding indebtedness, materially and adversely affect our business, financial condition, results of operations and ability to make distributions, and cause the value of our outstanding securities to decline. A default could also materially limit our financing alternatives, impair our ability to execute our leverage strategy and adversely affect our returns.
Our indebtedness could adversely affect our financial flexibility and our competitive position.
We have, and expect that we will continue to have a significant amount of indebtedness. As of December 31, 2025, we had approximately $17.6 million of debt outstanding, consisting of the amounts outstanding under the Webster Credit Line and Valley Credit Line. The Webster Credit Line expires on February 28, 2029, and the Valley Credit Line expires on December 12, 2027. As of March 24, 2026, we have approximately $22.6 million available under the credit lines. This level of indebtedness and the pending maturity of such indebtedness increase the risk that we may be unable to generate sufficient cash to pay amounts due in respect of our indebtedness. Our indebtedness could have other important consequences to you and significantly impact our business. For example, it could:
| ● | make it more difficult for us to satisfy our obligations; |
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| ● | increase our vulnerability to adverse changes in general economic, industry and competitive conditions; | |
| ● | require us to dedicate a substantial portion of our cash flow from operations to make payments on our indebtedness, thereby reducing the availability of our cash flow to fund working capital, capital expenditures and other general corporate purposes; | |
| ● | limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; | |
| ● | limit our ability to make material acquisitions or take advantage of business opportunities that may arise; | |
| ● | expose us to fluctuations in interest rates, to the extent our borrowings bear variable rates of interest; | |
| ● | expose us to higher costs or interest rates if we extend or refinance such indebtedness and the risk that we will not be able to extend the Webster Credit Line or the Valley Credit Line; | |
| ● | place us at a competitive disadvantage compared to our competitors that have less debt; | |
| ● | limit our ability to borrow additional funds for working capital, capital expenditures, acquisitions, debt service requirements, execution of our business plan or other general corporate purposes on reasonable terms or at all; | |
| ● | reduce the amount of surplus funds distributable by our subsidiary to us for use in our business, such as for the payment of indebtedness and dividends to our shareholders; and | |
| ● | lead us to elect to make additional investments in our subsidiary if their cash flow from operations is insufficient for them to make payments on their indebtedness. |
We may incur additional debt, which could exacerbate the risks associated with our leverage.
We and our subsidiary may incur substantial additional indebtedness in the future. The covenants in the agreement governing the Webster Credit Line and the Valley Credit Line may limit our ability and the ability of our subsidiary to incur additional indebtedness. To the extent that we are nevertheless able to incur additional indebtedness or such other obligations, the risks associated with our indebtedness described above, including our possible inability to service our debt, will increase.
While we are implementing protocols to prevent future cyber-security incidents, these protocols may not prevent future incidents and any significant similar future incidents could expose us to liability and have a negative impact on our business and our reputation.
During June 2022, we experienced a cybersecurity incident in which one of our unused computer servers as well as one of our executive’s personal computers were hacked and rendered inoperable. We did not suffer any financial loss as a result of the cybersecurity incident, though it is possible that unauthorized individuals did obtain copies of our clients’ records. To date, the cybersecurity incident has not had any effect on our ability to meet our financial obligations, including our ability to carry out our operations and business activities.
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We are constantly exploring new and advanced security protection measures to prevent future cybersecurity incidents. These steps may include working with a cybersecurity consultant as well as potential additional measures. We continually assess cybersecurity threats and make investments to increase internal protection, detection, and response capabilities to address this risk. To date, we have not experienced any material impact to our business or operations resulting from information or cybersecurity attacks, including the incident mentioned above; however, because of the frequently changing attack techniques, along with the increased volume and sophistication of the attacks, there is the potential for us to be adversely impacted. In addition, any cybersecurity breach could compromise our networks and the information stored there could be accessed, publicly disclosed, lost or stolen. In addition, such cybersecurity breach could impact our borrowers if sensitive borrower information is compromised. Any such access, disclosure or other loss of information could result in legal claims or proceedings, liability under laws that protect the privacy of personal information, regulatory penalties, disruption to our operations and the services we provide to customers or damage our reputation, which could materially and adversely affect us. This impact could result in reputational, competitive, operational or other business harm as well as financial costs and regulatory action. See Item 1C. “Cybersecurity”, for additional information.
Risks Related to Our Portfolio
Interest rate fluctuations could reduce our ability to generate income and may cause losses.
Our primary interest rate exposures relate to the yield on our loan portfolio and the financing cost of our debt. In that regard, we have observed a steady increase in interest rates on our debt which, if rates continue to remain high, may have an impact on our income, as well as may impact the rate of our dividends. Our operating results depend, in part, on differences between the interest income generated by our loan portfolio net of credit losses and our financing costs. Thus, changes in interest rates will affect our revenue and net income in one or more of the following ways:
| ● | an increase or continued high level in the SOFR rate impacts our cost of borrowing under the Webster Credit Line and the Valley Credit Line; | |
| ● | our operating expenses may increase; | |
| ● | our ability to originate loans may be adversely impacted; | |
| ● | to the extent we use our credit lines or other forms of debt financing to originate loans, our borrowing costs would rise, reducing the “spread” between our cost of funds and the yield on our outstanding mortgage loans, which tend to be fixed rate obligations; | |
| ● | a rise in, or high level of, interest rates may discourage potential borrowers from refinancing existing loans or defer plans to renovate or improve their properties; | |
| ● | a drop in interest rates may reduce our revenues by requiring us to reduce the interest rates we charge potential borrowers; | |
| ● | borrower default rates may increase; | |
| ● | property values may be negatively impacted, making our existing loans riskier and new loans that we originate smaller; and | |
| ● | rising or continued high interest rates could also result in reduced turnover of properties which may reduce the demand for new mortgage loans. |
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Rising, declining, or volatile interest rates may reduce our profitability and may cause losses.
Our borrowings under the Webster Credit Line and the Valley Credit Line are based on SOFR and therefore expose us to changes in short-term interest rates. In addition, we may enter into other financing arrangements that reference floating-rate benchmarks such as SOFR or a Treasury index. As a result, changes in market interest rates may increase our cost of funds, reduce our net interest margin, and adversely affect our results of operations and financial condition.
Interest rates increased significantly beginning in March 2022 and, more recently, have been volatile and have declined from prior elevated levels. While declining rates may reduce our borrowing costs, they may also reduce the yields we can earn on new originations and on loans that reprice or are refinanced, and may increase prepayments or early payoffs, which could require us to redeploy capital at lower yields. Conversely, if interest rates increase again or remain elevated, our borrowing costs would increase further or remain high. Competitive pressures, borrower affordability constraints, and contractual terms may limit our ability to reprice loans quickly or fully in response to changes in market rates.
Many of our loans have a stated fixed interest rate; however, a substantial portion of our loan agreements also includes provisions that permit us to charge interest at a rate equal to the greater of (i) the stated loan rate and (ii) the prime rate plus 3.0% on the outstanding principal balance. These provisions may not fully offset changes in our cost of funds, particularly during periods of rapid interest rate movements, reduced loan demand, or weakening real estate market conditions.
Changes in interest rates can also affect real estate values, transaction volumes, and borrowers’ ability to refinance or sell properties, which may adversely affect collateral coverage and credit performance. If interest rates rise, decline further, or continue to be volatile, we may experience reduced loan originations, increased delinquencies or defaults, or losses, and our earnings and cash available for distribution to shareholders may be adversely affected.
If we overestimate the yields on our loans or incorrectly value the collateral securing the loan, we may experience losses.
Loan decisions are typically made based on the credit-worthiness of the borrower and the value of the collateral securing the loan. We cannot assure you that our assessments will always be accurate or the circumstances relating to a borrower or the collateral will not change during the loan term, which could lead to losses and write-offs. Losses and write-offs could materially and adversely affect our business, operations and financial condition and the market price of our securities.
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Difficult conditions in the markets for mortgages and mortgage-related assets as well as the broader financial markets have resulted in a significant contraction in liquidity for mortgages and mortgage-related assets, which may adversely affect the value of the assets that we intend to originate.
Our results of operations will be materially affected by conditions in the markets for mortgages and mortgage-related assets as well as the broader financial markets and the economy generally. Significant adverse changes in financial market conditions may result in a decline in real estate values, jeopardizing the performance and viability of many real estate loans. As a result, many traditional mortgage lenders may suffer severe losses and even fail. This situation may negatively affect both the terms and availability of financing for small non-bank real estate finance companies. This could have an adverse impact on our financial condition, business and operations.
Loans on which the maturity date has been extended may involve a greater risk of loss than traditional mortgage loans.
Borrowers usually use the proceeds of a long-term mortgage loan or sale to repay our loans. We may therefore depend on a borrower’s ability to obtain permanent financing or sell the property to repay our loan, which could depend on market conditions and other factors. Our loans are also subject to risks of borrower defaults, bankruptcies, fraud, losses and special hazard losses that are not covered by standard hazard insurance. In the event of a default, we bear the risk of loss of principal and non-payment of interest and fees to the extent of any deficiency between the value of the mortgage collateral and the principal amount and unpaid interest of the loan. To the extent we suffer such losses with respect to our loans, our enterprise value and the price of our securities may be adversely affected.
We may be subject to “lender liability” claims. Our financial condition could be materially and adversely impacted if we were to be found liable and required to pay damages.
In recent years, a number of judicial decisions have upheld the right of borrowers to sue lenders on the basis of various evolving legal theories, collectively termed “lender liability.” Generally, lender liability is founded on the premise that a lender has either violated a duty, whether implied or contractual, of good faith and fair dealing owed to the borrower or has assumed a degree of control over the borrower resulting in the creation of a fiduciary duty owed to the borrower or its other creditors or shareholders. We cannot assure you that such claims will not arise or that we will not be subject to significant liability if a claim of this type did arise.
An increase in the rate of prepayment of outstanding loans may have an adverse impact on the value of our portfolio as well as our revenue and income.
The value of our loan portfolio may be affected by prepayment rates and a significant increase in the rate of prepayments could have an adverse impact on our operating results. Prepayment rates cannot be predicted with certainty and no strategy can completely insulate us from prepayment or other such risks. In periods of declining interest rates, prepayment rates on mortgage and other real estate-related loans generally increase. Proceeds of prepayments received during such periods are likely to be reinvested by us in new loans yielding less than the yields on the loans that were prepaid, resulting in lower revenues and possibly, lower profits. A portion of our loan portfolio requires prepayment fees if a loan is prepaid. However, there can be no assurance that these fees will make us whole for the detriment incurred by virtue of the prepayment.
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The lack of liquidity in our portfolio may adversely affect our business.
The illiquidity of our loan portfolio may make it difficult for us to sell such assets if the need or desire arises. As a result, if we are required to liquidate all or a portion of our portfolio quickly, we may realize significantly less than the outstanding loan balance.
The geographic concentration of our loan portfolio may make our revenues and the values of the mortgages and real estate securing our portfolio vulnerable to adverse changes in economic conditions around the New York metropolitan area.
Under our current business model, we have one asset class — mortgage loans that we originate, service and manage — and we have no current plans to diversify. Moreover, most of our collateral is located in a limited geographic area. At December 31, 2025, most of our outstanding loans are secured by properties located in the New York metropolitan area. A lack of geographical diversification makes our mortgage portfolio more sensitive to local and regional economic conditions. A significant decline around the New York metropolitan area economy could result in a greater risk of default compared with the default rate for loans secured by properties in other geographic locations. This could result in a reduction of our revenues and provision for loan loss allowances, which might not be as acute if our loan portfolio were more geographically diverse. Therefore, our loan portfolio is subject to greater risk than other real estate finance companies that have a more diversified asset base and broader geographic footprint. To the extent that our portfolio is concentrated in one region and/or one type of asset, downturns relating generally to such region or type of asset may result in defaults on a number of our assets within a short time period, which may reduce our net income and the value of our securities and accordingly reduce our ability to make distributions to our shareholders.
A prolonged economic slowdown, a lengthy or severe recession or declining real estate values could impair our investments and harm our operations.
A prolonged economic slowdown, a recession or declining real estate values could impair the performance of our assets and harm our financial condition and results of operations, increase our funding costs, limit our access to the capital markets or result in a decision by lenders not to extend credit to us. Thus, we believe the risks associated with our business will be more severe during periods of economic slowdown or recession because these periods are likely to be accompanied by declining real estate values. Declining real estate values are likely to have one or more of the following adverse consequences:
| ● | reduce the level of new mortgage and other real estate-related loan originations since borrowers often use appreciation in the value of their existing properties to support the purchase or investment in additional properties; | |
| ● | make it more difficult for existing borrowers to remain current on their payment obligations; and | |
| ● | significantly increase the likelihood that we will incur losses on our loans in the event of default because the value of our collateral may be insufficient to cover our cost on the loan. |
Any sustained period of increased payment delinquencies, foreclosures or losses could adversely affect both our net interest income from loans in our portfolio as well as our ability to originate new loans, which would materially and adversely affect our results of operations, financial condition, liquidity and business and our ability to make distributions to our shareholders.
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We evaluate expected credit losses under Accounting Standards Update (“ASU”) 2016-13, Financial Instruments – Credit Losses (ASU Topic 326), and our allowance for credit losses was zero as of December 31, 2025. If we are required to record credit losses or write off all or a portion of any loan in our portfolio, our net income will be adversely impacted.
We evaluate expected credit losses on our loans receivable in accordance with ASU Topic 326. Our allowance for credit losses was zero as of December 31, 2025. Estimating expected credit losses involves significant judgment and is particularly difficult in a turbulent economic environment, including periods in which the availability of real estate credit is limited and real estate transaction activity has decreased.
If actual credit losses differ from our expectations, or if we determine that a loan or a portion of a loan is not collectible, we may be required to record credit loss expense, increase our allowance for credit losses, or write off all or a portion of the loan. Any such credit loss expense, increase in the allowance for credit losses, or loan write-off would reduce our net income and could adversely affect our results of operations and financial condition.
Our evaluation of expected credit losses and collectability is based on a number of factors, which may include projected cash flows from collateral securing our loans (if any), loan structure (including the availability of reserves and recourse guarantees), the borrower’s ability and willingness to repay, the likelihood of repayment or refinancing at maturity, the relative strength or weakness of the refinancing market, and expected market discount rates for varying property types. If our estimates and judgments are incorrect, or if economic and market conditions deteriorate, we could experience losses on our loan portfolio and our results of operations and financial condition could be adversely impacted.
Our due diligence may not reveal all of a borrower’s liabilities and may not reveal other weaknesses in its business.
Before making a loan to a borrower, we assess the strength and skills of such entity’s management and other factors that we believe are material to the performance of the loan. In making the assessment and otherwise conducting customary due diligence, we rely on the resources available to us and, in some cases, services provided by third parties. This process is particularly important and subjective with respect to newly organized entities because there may be little or no information publicly available about the entities. There can be no assurance that our due diligence processes will uncover all relevant facts or that the borrower’s circumstances will not change after the loan is funded. In either case, this could adversely impact the performance of the loan and our operating results.
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Our loans are usually made to entities to enable them to acquire, develop or renovate residential or commercial property, which may involve a greater risk of loss than loans to individual owners of residential real estate.
We make loans to corporations, partnerships and limited liability companies that are looking to purchase, renovate and/or improve residential or commercial real estate held for resale or investment. More often than not, the property is under-utilized, poorly managed, or located in a recovering neighborhood. These loans may have a higher degree of risk than loans to individual property owners with respect to their primary residence or to owners of commercial operating properties because of a variety of factors. For instance, our borrowers usually do not have the need to occupy the property, or an emotional attachment to the property as borrowers of owner-occupied residential properties typically have, and therefore they do not always have the same incentive to avoid foreclosure. Similarly, in the case of non-residential property, a majority of the properties securing our loans have little or no cash flow. If the neighborhood in which the asset is located fails to recover according to the borrower’s projections, or if the borrower fails to improve the quality of the property’s performance and/or the value of the property, the borrower may not receive a sufficient return on the property to satisfy the loan, and we bear the risk that we may not recover some or all of our principal. Finally, there are difficulties associated with collecting debts from entities that may be judgment proof. While we try to mitigate these risks in various ways, including by getting personal guarantees from the principals of the borrower, we cannot assure you that these lending and credit enhancement strategies will be successful.
Volatility of values of residential and commercial properties may adversely affect our loans and investments.
Residential and commercial property values are subject to volatility and may be affected adversely by a number of factors, including, but not limited to, events such as natural disasters, including hurricanes and earthquakes, acts of war and/or terrorism and others that may cause unanticipated and uninsured performance declines and/or losses to us or the owners and operators of the real estate securing our investment; national, regional and local economic conditions, such as what we have experienced in recent years (which may be adversely affected by industry slowdowns and other factors); local real estate conditions (such as an oversupply of housing, retail, industrial, office or other commercial space); changes or continued weakness in specific industry segments; construction quality, construction cost, age and design; demographic factors; retroactive changes to building or similar codes; and increases in operating expenses (such as energy costs). In the event of a decline in the value of a property securing one of our loans, the borrower may have difficulty repaying our loan, which could result in losses to us. In addition, decreases in property values reduce the value of the collateral and the potential proceeds available to a borrower to repay our loans, which could also cause us to suffer losses.
Our inability to promptly foreclose on defaulted loans could increase our costs and/or losses.
The performance of first mortgage loans may depend on the performance of the underlying real estate collateral. In particular, mortgage loans secured by property held for investment or resale are subject to risks of delinquency and foreclosure, and risks of loss that are greater than similar risks associated with loans secured by owner-occupied residential properties. The ability of a borrower under a first mortgage loan to repay a loan secured by an income-producing property typically depends primarily on the successful operation of such property rather than upon the existence of independent income or assets of the borrower. If the net operating income of the property is reduced, the borrower’s ability to repay the loan is impaired and the borrower defaults, we may lose all or substantially all of our investment. If the property is not income producing, as is the case with most of our loans, the risks are even greater. While we have certain rights with respect to the real estate collateral underlying a first mortgage loan, and rights against the borrower and guarantor(s), in the event of a default there are a variety of factors that may inhibit our ability to enforce our rights to collect the loan, whether through a non-payment action against the borrower, a foreclosure proceeding against the underlying property or a collection or enforcement proceeding against the guarantor. These factors include, without limitation, state foreclosure timelines and deferrals associated therewith (including with respect to litigation); unauthorized occupants living in the property; federal, state or local legislative action or initiatives designed to provide residential property owners with assistance in avoiding foreclosures and that serve to delay the foreclosure process; government programs that require specific procedures to be followed to explore the refinancing of a residential mortgage loan prior to the commencement of a foreclosure proceeding; and continued declines in real estate values and sustained high levels of unemployment that increase the number of foreclosures and place additional pressure on the already overburdened judicial and administrative systems.
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Our loans are typically not funded with interest reserves and our borrowers may be unable to pay the interest accruing on the loans when due, which could have a material adverse impact on our financial condition.
Our loans are typically not funded with an interest reserve. Thus, we rely on the borrowers to make interest payments as and when due from other sources of cash. Given the fact that most of the properties securing our loans are not income producing or even cash producing and most of the borrowers are entities with no assets other than the single property that is the subject of the loan, some of our borrowers have considerable difficulty servicing our loans and the risk of a non-payment or default is considerable. We depend on the borrower’s ability to refinance the loan at maturity or sell the property for repayment. If the borrower is unable to repay the loan, together with all the accrued interest, at maturity, our operating results and cash flows would be materially and adversely affected. Foreclosure of a mortgage loan can be an expensive and lengthy process that could have a substantial negative effect on our anticipated return on the foreclosed mortgage loan. In addition, in the event of the bankruptcy of the borrower, we may not have full recourse to the assets of the borrower, or the assets of the borrower or the guarantor may not be sufficient to satisfy the debt.
Liability relating to environmental matters may impact the value of properties that we may acquire or the properties underlying our investments.
Under various U.S. federal, state and local laws, an owner or operator of real property may become liable for the costs of removal of certain hazardous substances released on its property. These laws often impose liability without regard to whether the owner or operator knew of, or was responsible for, the release of such hazardous substances. The presence of hazardous substances may adversely affect an owner’s ability to sell real estate or borrow using real estate as collateral. To the extent that an owner of a property underlying one of our debt instruments becomes liable for removal costs, the ability of the owner to make payments to us may be reduced, which in turn may adversely affect the value of the relevant mortgage asset held by us and our ability to make distributions to our shareholders. If we acquire any properties by foreclosure or otherwise, the presence of hazardous substances on a property may adversely affect our ability to sell the property and we may incur substantial remediation costs, thus harming our financial condition. The discovery of material environmental liabilities attached to such properties could have a material adverse effect on our results of operations and financial condition and our ability to make distributions to shareholders.
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Defaults on our loans may cause declines in revenues and net income.
Defaults by borrowers could result in one or more of the following adverse consequences:
| ● | a decrease in interest income, profitability and cash flow; | |
| ● | the establishment of or an increase in loan loss reserves; | |
| ● | write-offs and losses; | |
| ● | an increase in legal and enforcement costs, as we seek to protect our rights and recover the amounts owed; and | |
| ● | default under our credit facilities. |
As a result, we will have less cash available for paying our other operating expenses and for making distributions to our shareholders. This would have a material adverse effect on the market value of our securities.
Our revenues and the value of our portfolio may be negatively affected by casualty events occurring on properties securing our loans.
We require our borrowers to obtain, for our benefit, all risk property insurance covering the property and any improvements to the property collateralizing our loan in an amount intended to be sufficient to provide for the cost of replacement in the event of casualty. However, the amount of insurance coverage maintained for any property may not be sufficient to pay the full replacement cost following a casualty event. Furthermore, there are certain types of losses, such as those arising from earthquakes, floods, hurricanes and terrorist attacks, that may be uninsurable or that may not be economically feasible to insure. Changes in zoning, building codes and ordinances, environmental considerations and other factors may make it impossible for our borrowers to use insurance proceeds to replace damaged or destroyed improvements at a property. If any of these or similar events occur, the amount of coverage may not be sufficient to replace a damaged or destroyed property and/or to repay in full the amount due on loans collateralized by such property. As a result, our returns and the value of our investment may be reduced.
Borrower concentration could lead to significant losses, which could have a material adverse impact on our operating results and financial condition.
A single borrower or a group of affiliated borrowers may account for more than 10% of our loan portfolio. A default by one borrower in a group is likely to result in a default by the other borrowers in the group. At December 31, 2025, we have made loans to three different entities in the aggregate amount of $6.2 million or representing 10.3% of our loan portfolio. One individual holds at least a fifty percent interest in each of the different entities. This individual is not affiliated with any of our officers or directors. Concentration of loans to one borrower or a group of affiliated borrowers poses a significant risk, as default would have a material adverse impact on our operating results, cash flow, financial condition and our ability to service our debt.
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Risks Related to Financing Transactions
Our existing credit lines have numerous covenants with which we must comply. If we are unable to comply with these covenants, the outstanding amounts of our loans could become due and payable and we may have to sell off a portion of our loan portfolio to pay off the debt.
We have a $32.5 million credit line with Webster and Flushing that expires on February 28, 2029 and a $10.0 million credit line with Valley that expires on December 12, 2027, The Webster Credit Line and the Valley Credit Line contain various covenants and restrictions that are typical for these kinds of credit facilities, including limiting the amount that we can borrow relative to the value of the underlying collateral, maintaining various financial ratios and limitations on the terms of loans we make to our customers. The Webster Credit Line and the Valley Credit Line impose certain restrictions which may adversely impact our ability to grow and/or maintain our qualification for taxation as a REIT. Certain of these restrictions apply to both facilities, while others apply only to specific facilities. These limitations include the following:
| ● | limit our ability to pay dividends under certain circumstances; | |
| ● | limit our ability to make certain investments or acquisitions; | |
| ● | limit our ability to reduce liquidity below certain levels; | |
| ● | limit our ability to redeem debt or equity securities; | |
| ● | limit our ability to determine our operating policies and investment strategies; and | |
| ● | limit our ability to repurchase our common shares, sell assets, engage in mergers or consolidations, grant liens and enter into transactions with affiliates. |
If we fail to meet or satisfy any of these covenants, we would be in default under the terms of the Webster Credit Line or the Valley Credit Line and the lenders could elect to declare outstanding amounts due and payable, terminate the commitments to us, require us to post additional collateral and/or enforce their interests against existing collateral. Acceleration of our debt to Webster, Flushing and/or Valley could also make it difficult for us to satisfy the requirements necessary to maintain our qualification for taxation as a REIT, significantly reduce our liquidity or require us to sell our assets to repay amounts due and outstanding. This would significantly harm our business, financial condition, results of operations and ability to make distributions and could result in the foreclosure of our assets which secure our obligations, which could cause the value of our outstanding securities to decline. A default could also significantly limit our financing alternatives such that we would be unable to pursue our leverage strategy, which could adversely affect our returns.
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Under the terms of the agreement governing the Webster Credit Line, our borrowing capacity is limited to 70% of Eligible Mortgage Loans (as defined). Moreover, Webster, in its discretion, may reduce this percentage. This borrowing limitation is determined, in part, by the value of the real estate securing the loans in our portfolio. Thus, a general decline in real estate values or a change in the percentage will adversely impact our ability to borrow under the Webster Credit Line and could even result in a situation where any amount in excess of the borrowing limitation will become immediately due and payable. If we default and Webster accelerates the loan we would have to repay the debt immediately with our working capital (i.e., proceeds from loan repayments), sell a portion of our loan portfolio and use the proceeds to repay the debt or refinance with another lender. We cannot assure you that we would be able to replace the Webster Credit Line on similar terms or on any terms. If we have to sell a portion of our loan portfolio, the amount we realize may be less than the face amount of the loans sold, resulting in a loss. If we sell a portion of our portfolio or use proceeds from loan repayments to pay the debt incurred pursuant to the Webster Credit Line, our opportunities to grow our business will be negatively impacted.
Similarly, the Valley Credit Line, under which MBC Funding II is the borrower and the Company is a guarantor, is subject to borrowing base limitations and other financial and operational covenants that are determined, in part, by the value and eligibility of the underlying collateral securing the loans in our portfolio. Any decline in the value of such collateral, deterioration in loan performance, or failure to satisfy the applicable covenants or borrowing base requirements under the Valley Credit Line could reduce MBC Funding II’s borrowing capacity or result in amounts outstanding becoming immediately due and payable. In such circumstances, MBC Funding II may be required, and the Company as guarantor may also be required, to repay amounts under the Valley Credit Line using available liquidity, sell portions of our loan portfolio, or seek alternative financing, which may not be available on favorable terms or at all. Any such actions could adversely affect our liquidity, financial condition, and ability to grow our business.
Our use of leverage may adversely affect the return on our assets and may reduce cash available for distribution to our shareholders, as well as increase losses when economic conditions are unfavorable.
We do not have a formal policy limiting the amount of debt we incur and our governing documents contain no limitation on the amount of leverage we may use. We may significantly increase the amount of leverage we utilize at any time without approval of our board of directors. In addition, we may leverage individual assets at substantially higher levels. Incurring substantial debt could subject us to many risks that, if realized, would materially and adversely affect us, including the risk that:
| ● | our cash flow from operations may be insufficient to make required payments of principal and interest on our outstanding indebtedness or we may fail to comply with other covenants contained in the debt, which is likely to result in (i) acceleration of such debt (and any other debt containing a cross-default or cross-acceleration provision) that we may be unable to repay from internal funds or to refinance on favorable terms, or at all, (ii) our inability to borrow unused amounts under our financing arrangements, even if we are current in payments on borrowings under those arrangements and/or (iii) the loss of some or all of our assets pledged or liened to secure our indebtedness to foreclosure or sale; | |
| ● | our debt may increase our vulnerability to adverse economic and industry conditions with no assurance that yields will increase with higher financing costs; | |
| ● | we may be required to dedicate a substantial portion of our cash flow from operations to payments on our debt, thereby reducing funds available for operations, future business opportunities, shareholder distributions or other purposes; and |
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| ● | we are not able to refinance debt that matures prior to the asset it was used to finance on favorable terms, or at all. |
Our board of directors may adopt leverage policies at any time without the consent of our shareholders, which could result in a portfolio with a different risk profile.
Risks Related to REIT Status and Investment Company Act Exemption
Our investments in construction loans require us to make estimates about the fair value of land improvements that may be challenged by the IRS.
We may invest in construction loans, the interest from which would be qualifying income for purposes of the gross income tests applicable to REITs, provided that the loan value of the real property securing the construction loan was equal to or greater than the highest outstanding principal amount of the construction loan during any taxable year. For purposes of construction loans, the loan value of the real property is generally the fair value of the land plus the reasonably estimated cost of the improvements or developments that secure the loan and that are to be constructed from the proceeds of the loan. There can be no assurance that the IRS, will not challenge our estimates of the loan values of the real property related to any construction loans in which we invest.
Complying with REIT requirements may hinder our ability to maximize profits, which would reduce the amount of cash available to be distributed to our shareholders. This could have a negative impact on the value of our securities.
In order to maintain our qualification for taxation as a REIT, we must continually satisfy tests concerning among other things, the composition of our assets, our sources of income, the amounts we distribute to our shareholders and the ownership of our capital stock. Specifically, we must ensure that at the end of each calendar quarter at least 75% of the value of our assets consists of cash, cash items, government securities and qualified REIT real estate assets. The remainder of our investment in securities of any issuer (excluding those of our taxable REIT subsidiaries and our qualified REIT subsidiaries) cannot include more than 10% of the outstanding voting securities of such issuer, more than 10% of the total value of the outstanding securities of such issuer or exceed more than 5% of the value of our assets. If we fail to comply with these requirements, we must dispose of the portion of our assets in excess of such amounts within 30 days after the end of the calendar quarter in order to maintain our qualification for taxation as a REIT and to avoid suffering other adverse tax consequences. In such event, we may be forced to sell non-qualifying assets at less than their fair market value. In addition, we may also be required to make distributions to shareholders at times when we do not have funds readily available for distribution or are otherwise not optional for us. Accordingly, compliance with REIT requirements may hinder our ability to operate solely on the basis of maximizing profits.
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Our failure to remain qualified for taxation as a REIT would subject us to U.S. federal income tax and applicable state and local income taxes, which would reduce the amount of cash available for distribution to our shareholders.
We intend to continue to operate in a manner that will enable us to continue to remain qualified for taxation as a REIT as long as we believe it is in the best interests of our shareholders. While we believe that we qualified for taxation as a REIT for the taxable year ended December 31, 2025, we have not requested and do not intend to request a ruling from the IRS that we so qualified in 2024 or that we will qualify in future years. The U.S. federal income tax laws and the Treasury Regulations promulgated thereunder governing REITs are complex. In addition, judicial and administrative interpretations of the U.S. federal income tax laws governing REIT qualification are limited. To qualify for taxation as a REIT, we must meet, on an ongoing basis, various tests regarding the nature of our assets and our income, the ownership of our outstanding shares, and the amount of our distributions. Our ability to satisfy the asset tests depends on our analysis of the characterization and fair market values of our assets, some of which are not susceptible to a precise determination, and for which we will not obtain independent appraisals. Our compliance with the REIT income and quarterly asset test requirements also depends on our ability to successfully manage the composition of our income and assets on an ongoing basis. Thus, while we intend to operate so that we will continue to qualify for taxation as a REIT, given the highly complex nature of the rules governing REITs, the ongoing importance of factual determinations, and the possibility of future changes in our circumstances, no assurance can be given that we will so qualify for any particular year. These considerations also might restrict the types of assets that we can acquire in the future.
If we fail to qualify for taxation as a REIT in any taxable year, and we do not qualify for certain statutory relief provisions, we would be required to pay U.S. federal income tax on our taxable income, and distributions to our shareholders would not be deductible by us in determining our taxable income. In such a case, we might need to borrow money or sell assets in order to pay our taxes. Our payment of income tax would decrease the amount of our income available for distribution to our shareholders. Furthermore, if we fail to maintain our qualification for taxation as a REIT, we no longer would be required to distribute substantially all of our taxable income to our shareholders. In addition, unless we were eligible for certain statutory relief provisions, we could not re-elect to qualify for taxation as a REIT until the fifth calendar year following the year in which we failed to qualify.
REIT distribution requirements could adversely affect our ability to execute our business plan and may require us to incur debt or sell assets to make such distributions.
In order to qualify for taxation as a REIT, we must distribute to our shareholders, each calendar year, at least 90% of our REIT taxable income (including certain items of non-cash income), determined without regard to the deduction for dividends paid and excluding net capital gain. To the extent that we satisfy the 90% distribution requirement, but distribute less than 100% of our taxable income, we are subject to U.S. federal income tax on our undistributed income. In addition, we will incur a 4% nondeductible excise tax on the amount, if any, by which our distributions in any calendar year are less than a minimum amount specified under U.S. federal income tax laws. We intend to distribute our net income to our shareholders in a manner that will satisfy the REIT 90% distribution requirement and avoid the 4% nondeductible excise tax.
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Under the terms of the agreement governing the Webster Line of Credit, we are prohibited from paying dividends with respect to our common shares if at the time during the 90-day period before the payment of the dividend and the 90-day period following the payment of the dividend we are within $500,000 of our maximum borrowing ability under the facility. Under these circumstances, we would have to choose to either pay the dividend putting us in default under the Webster Credit Line and maintain our qualification for taxation as a REIT or not pay the dividend and jeopardize our REIT status. In either case, there would be material adverse consequences to us and our shareholders.
Our taxable income may substantially exceed our net income as determined by accounting principles generally accepted in the United States of America (“U.S. GAAP”) and differences in timing between the recognition of taxable income and the actual receipt of cash may occur. For example, we may be required to accrue interest and discount income on mortgage loans before we receive any payments of interest or principal on such assets. In addition, the Code requires that we accrue income no later than when it is taken into account on applicable financial statements, even if financial statements take such income into account before it would accrue under the original discount rules, the market discount rules, or other rules in the Code. Thus, we may be required under the terms of the indebtedness that we incur, to use cash received from interest payments to make principal payment on that indebtedness, with the effect that we will recognize income but will not have a corresponding amount of cash available for distribution to our shareholders.
As a result of the foregoing, we may generate less cash flow than taxable income in a particular year and find it difficult or impossible to meet the REIT distribution requirements in certain circumstances. In such circumstances, we may be required to: (i) sell assets in adverse market conditions, (ii) borrow on unfavorable terms, (iii) distribute amounts that would otherwise be invested in future acquisitions, capital expenditures or repayment of debt, (iv) make a taxable distribution of our shares as part of a distribution in which shareholders may elect to receive shares or (subject to a limit measured as a percentage of the total distribution) cash or (v) use cash reserves, in order to comply with the REIT distribution requirements and to avoid federal income tax and the 4% nondeductible excise tax. Thus, compliance with the REIT distribution requirements may hinder our ability to grow, which could adversely affect the value of our securities.
Even if we remain qualified for taxation as a REIT, we may face tax liabilities that reduce our cash flow.
As a REIT, we may be subject to certain U.S. federal, state and local taxes on our income and assets, including taxes on any undistributed income, tax on income from some activities conducted as a result of a foreclosure, and state or local income, franchise, property and transfer taxes, including mortgage recording taxes. In addition, in order to meet the REIT qualification requirements, or to avoid the imposition of a 100% tax that applies to certain gains derived by a REIT from sales of inventory or property held primarily for sale to customers in the ordinary course of business, we may create “taxable REIT subsidiaries” to hold some of our assets. Any taxes paid by such subsidiary corporations would decrease the cash available for distribution to our shareholders.
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Our qualification for taxation as a REIT may depend on the accuracy of legal opinions or advice rendered or given and the inaccuracy of any such opinions, advice or statements may adversely affect our REIT qualification and result in significant corporate-level tax.
In determining whether we qualify for taxation as a REIT, we may rely on opinions or advice of counsel as to whether certain types of assets that we hold or acquire are deemed REIT real estate assets for purposes of the REIT asset tests and produce income which qualifies under the gross income tests. The inaccuracy of any such opinions, advice or statements may adversely affect our qualification for taxation as a REIT and result in significant corporate-level tax.
We may choose to make distributions in shares of our capital stock, in which case you may be required to pay income taxes in excess of the cash dividends you receive.
We may distribute taxable dividends that are payable in cash and/or common shares at the election of each shareholder. Shareholders receiving such dividends will be required to include the full amount of the dividend as ordinary income. As a result, shareholders may be required to pay income taxes with respect to such dividends in excess of the cash portion of the dividend. Accordingly, shareholders receiving a distribution of common shares may be required to sell those shares or may be required to sell other assets they own at a time that may be disadvantageous in order to satisfy any tax imposed on the distribution they receive from us. If a shareholder sells the common shares that he or she receives as a dividend in order to pay this tax, the sales proceeds may be less than the amount included in income with respect to the dividend, depending on the market price of our common shares at the time of the sale. Furthermore, with respect to certain non-U.S. shareholders, we may be required to withhold U.S. tax with respect to such dividends, including in respect of all or a portion of such dividend that is payable in common shares, by withholding or disposing of some of the common shares in the distribution and using the proceeds of such disposition to satisfy the withholding tax imposed. In addition, if a significant number of our shareholders determine to sell our common shares in order to pay taxes owed on dividends, such sales may put downward pressure on the trading price of our common shares.
Dividends paid by REITs do not qualify for the reduced tax rates on dividend income from regular corporations, which could adversely affect the value of our common shares.
Dividends paid by REITs are not generally eligible for reduced rates applicable to “qualified” dividends paid by other corporations but are taxed at the same rate as ordinary income. However, REIT dividends paid to noncorporate U.S. shareholders that meet specified holding requirements are generally taxed at an effective tax rate lower than applicable ordinary income tax rates due to the availability of a deduction under the Code for specified forms of income from passthrough entities. More favorable rates will nevertheless continue to apply to regular corporate “qualified” dividends, which may cause investors who are individuals, trusts and estates to perceive investments in REITs to be relatively less attractive than investments in the stocks of non-REIT corporations that pay dividends. This could have an adverse impact on the market price of our common shares.
Liquidation of our assets may jeopardize our qualification for taxation as a REIT.
To qualify for taxation as a REIT, we must comply with requirements regarding our assets and our sources of income. If we are compelled to liquidate our assets to repay obligations to our lenders, we may be unable to comply with these requirements, thereby jeopardizing our qualification for taxation as a REIT. In addition, we may be subject to a 100% tax on any gain realized from the sale of assets that are treated as inventory or property held primarily for sale to customers in the ordinary course of business.
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The ownership restrictions set forth in our restated certificate of incorporation may not prevent five or fewer shareholders from owning 50% or more of our outstanding shares of capital stock causing us to lose our status as a REIT, which may inhibit market activity in our common shares and restrict our business combination opportunities.
In order for us to qualify for taxation as a REIT, not more than 50% in value of our outstanding common shares may be owned, directly or indirectly, by five or fewer individuals (as defined in the Code to include certain entities) at any time during the last half of each taxable year, and at least 100 persons must beneficially own our stock during at least 335 days of a taxable year of 12 months, or during a proportionate portion of a shorter taxable year. To help ensure that we meet the tests, our restated certificate of incorporation restricts the acquisition and ownership of our capital stock. The ownership limitation is fixed at 4.0% of our outstanding shares of capital stock, by value or number of shares, whichever is more restrictive. Assaf Ran, our Chief Executive Officer and founder, is exempt from this restriction. As of December 31, 2025, Mr. Ran owns 22.8% of our outstanding common shares. In addition, our board of directors may grant such an exemption to such limitations in its sole discretion, subject to such conditions, representations and undertakings as it may determine. These ownership limits could delay or prevent a transaction or a change in control of our company that might involve a premium price for shares of our common shares or otherwise be in the best interest of our shareholders.
Legislative or other actions affecting REITs could materially and adversely affect us and our shareholders.
The rules dealing with U.S. federal, state, and local taxation are constantly under review by persons involved in the legislative process and by the IRS, the U.S. Department of the Treasury, and other taxation authorities. Changes to the tax laws, with or without retroactive application, could materially and adversely affect us and our shareholders. We cannot predict how changes in the tax laws might affect us or our shareholders. New legislation, Treasury regulations, administrative interpretations or court decisions could significantly and negatively affect our ability to remain qualified for taxation as a REIT or the tax consequences of such qualification.
We may be unable to generate sufficient cash flows from our operations to make distributions to our shareholders at any time in the future.
As a REIT, we are required to distribute to our shareholders at least 90% of our REIT taxable income each year. We intend to satisfy this requirement through quarterly distributions of all or substantially all of our REIT taxable income in such year, subject to certain adjustments. Our ability to make distributions may be adversely affected by a number of factors, including the risk factors described in this Report. If we distribute proceeds from the sale of securities, which would generally be considered to be a return of capital for tax purposes, our future earnings and cash available for distribution may be reduced from what they otherwise would have been. All distributions will be made at the discretion of our board of directors and will depend on various factors, including our earnings, our financial condition, our liquidity, our debt and preferred stock covenants, maintenance of our REIT qualification, applicable provisions of the New York Business Corporation Law (“NYBCL”), and other factors as our board of directors may deem relevant from time to time. We believe that a change in any one of the following factors could adversely affect our results of operations and impair our ability to pay distributions to our shareholders:
| ● | how we deploy the net proceeds from the sale of securities; | |
| ● | our ability to make loans at favorable interest rates; | |
| ● | expenses that reduce our cash flow; | |
| ● | defaults in our asset portfolio or decreases in the value of our portfolio; and | |
| ● | the fact that anticipated operating expense levels may not prove accurate, as actual results may vary from estimates. |
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A change in any of these factors could affect our ability to make distributions. As a result, we cannot assure you that we will be able to make distributions to our shareholders at any time in the future or that the level of any distributions we do make to our shareholders will achieve a market yield or increase or even be maintained over time, any of which could materially and adversely affect us.
In addition, distributions that we make to our shareholders will generally be taxable to our shareholders as ordinary income (subject to the lower effective tax rates applicable to qualified REIT dividends via the deduction-without-outlay mechanism of Section 199A of the Code, which is generally available to our noncorporate U.S. shareholders that meet specified holding requirements). However, a portion of our distributions may be designated by us as long-term capital gains to the extent that they are attributable to capital gain income recognized by us or may constitute a return of capital to the extent that they exceed our earnings and profits as determined for tax purposes. A return of capital is not taxable, but has the effect of reducing the basis of a shareholder’s investment in our common shares.
We could be materially and adversely affected if we are deemed to be an investment company under the Investment Company Act.
We intend to conduct our business in a manner that will qualify for the exception from the Investment Company Act set forth in Section 3(c)(5)(C) of the Investment Company Act. The SEC generally requires that, for the exception provided by Section 3(c)(5)(C) to be available, at least 55% of an entity’s assets be comprised of mortgages and other liens on and interests in real estate, also known as “qualifying interests,” and at least another 25% of the entity’s assets must be comprised of additional qualifying interests or real estate-type interests (with no more than 20% of the entity’s assets comprised of miscellaneous assets). Any significant acquisition by us of non-real estate assets without the acquisition of substantial real estate assets could cause us to meet the definitions of an “investment company.” Although we intend to monitor our portfolio periodically and prior to each investment acquisition and disposition, there can be no assurance that we will be able to maintain this exception from registration. Existing SEC no-action positions regarding the requirements of Section 3(c)(5)(C) were issued in accordance with factual situations that may be substantially different from the factual situations we may face. No assurance can be given that the SEC will concur with our classification of the assets of our subsidiaries. Future revisions to the 1940 Act or further guidance from the SEC staff may cause us to lose our ability to rely on Section 3(c)(5)(C) and/or Section 3(c)(6) or force us to re-evaluate our portfolio and our investment strategy. Such changes may prevent us from operating our business successfully.
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If we are deemed to be an investment company, we could be required to dispose of non-real estate assets or a portion thereof, potentially at a loss, in order to qualify for the Section 3(c)(5)(C) exception. We may also be required to register as an investment company if we are unable to dispose of the disqualifying assets, which could have a material adverse effect on us.
Registration under the Investment Company Act would require us to comply with a variety of substantive requirements that impose, among other things:
| ● | limitations on capital structure; | |
| ● | restrictions on specified investments; | |
| ● | restrictions on leverage or senior securities; | |
| ● | restrictions on unsecured borrowings; | |
| ● | prohibitions on transactions with affiliates; and | |
| ● | compliance with reporting, record keeping, voting, proxy disclosure and other rules and regulations that would significantly increase our operating expenses. |
If we were required to register as an investment company but failed to do so, we could be prohibited from engaging in our business, and criminal and civil actions could be brought against us.
Registration with the SEC as an investment company would be costly, would subject us to a host of complex regulations and would divert attention from the conduct of our business, which could materially and adversely affect us. In addition, if we purchase or sell any real estate assets to avoid becoming an investment company under the Investment Company Act, our net asset value, the amount of funds available for investment and our ability to pay distributions to our shareholders could be materially adversely affected.
Risks Related to Our Common Shares
Our largest shareholder’s interests may not always be aligned with the interests of our other shareholders.
As of December 31, 2025, Assaf Ran, our Chief Executive Officer, beneficially owned 22.8% of our outstanding shares. Thus, Mr. Ran currently has and will continue to exercise significant control over all corporate actions. This concentration of ownership could have an adverse impact on the market price of our common shares.
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There is limited trading in our common shares, which could make it difficult for you to sell your common shares.
Our common shares are listed on The Nasdaq Capital Market. Average daily trading volume in our common shares was approximately 21,000 and 24,000 shares in 2024 and in 2025, respectively. The lack of liquidity may make it more difficult for you to sell your common shares when you wish to do so. Even if an active trading market develops, the market price of our common shares may be highly volatile and could be subject to wide fluctuations.
Risks Related to Our Organization and Structure
Certain provisions of New York law could inhibit changes in control.
Various provisions of the NYBCL may have the effect of deterring a third party from making a proposal to acquire us or of impeding a change in control under circumstances that otherwise could provide the holders of our common shares with the opportunity to realize a premium over the then-prevailing market price of our common shares. For example, we are subject to the “business combination” provisions of the NYBCL that, subject to limitations, prohibit certain business combinations (including a merger, consolidation, share exchange, or, in circumstances specified in the statute, an asset transfer or issuance or reclassification of equity securities) between us and an “interested shareholder” (defined generally as any person who beneficially owns 20% or more of our then outstanding voting capital stock or an affiliate thereof for five years after the most recent date on which the shareholder becomes an interested shareholder). After the five-year prohibition, any business combination between us and an interested shareholder generally must be recommended by our board of directors and approved by the affirmative vote of a majority of the votes entitled to be cast by holders of outstanding shares of our voting capital stock other than shares held by the interested shareholder with whom or with whose affiliate the business combination is to be effected or held by an affiliate or associate of the interested shareholder. These provisions do not apply if holders of our common shares receive a minimum price, as defined under the NYCBL, for their shares in the form of cash or other consideration in the same form as previously paid by the interested shareholder for its common shares. They also do not apply to business combinations that are approved or exempted by a board of directors prior to the time that the interested shareholder becomes an interested shareholder.
Our authorized but unissued common and preferred shares may prevent a change in our control.
Our restated certificate of incorporation authorizes us to issue up to 25,000,000 common shares and 5,000,000 preferred shares. As of March 24, 2026, we had 11,757,058 common shares issued and 11,429,351 common shares outstanding and no preferred shares issued or outstanding. Our board of directors has the power and authority to create classes of common or preferred shares, with such rights and designations as it deems appropriate or advisable, which rights and designations may be senior to or have a priority over the rights and designations of any existing class of common or preferred shares. For example, our board of directors may establish a series of common or preferred shares that could delay or prevent a transaction or a change in control that might involve a premium price for our common shares or otherwise be in the best interest of our shareholders.
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Our rights and the rights of our shareholders to take action against our directors and officers are limited, which could limit your recourse in the event of actions not in your best interests.
Our restated certificate of incorporation limits the liability of our present and former directors to us and our shareholders for money damages due to any breach of duty in such capacity, if a judgment or other final adjudication adverse to a present or former officer or director establishes that his or her acts or omissions were in bad faith or involved intentional misconduct or a knowing violation of law or that he or she personally gained in fact a financial profit or other advantage to which he or she was not legally entitled or that his or her acts violated Section 719 of the NYBCL. Section 719 of the NYBCL limits director liability to the following four instances:
| ● | declarations of dividends in violation of the NYBCL; | |
| ● | a purchase or redemption by a corporation of its own shares in violation of the NYBCL; | |
| ● | distributions of assets to shareholders following dissolution of the corporation without paying or providing for all known liabilities; and | |
| ● | making any loans to directors in violation of the NYBCL. |
Our restated certificate of incorporation and bylaws authorize us to indemnify our directors and officers for actions taken by them in those capacities to the maximum extent permitted by the NYBCL. In addition, we may be obligated to pay or reimburse the defense costs incurred by our present and former directors and officers without requiring a preliminary determination of their ultimate entitlement to indemnification.
Our bylaws contain provisions that make removal of our directors difficult, which could make it difficult for our shareholders to effect changes to our management.
Our bylaws provide that a director may be removed by either the board of directors or by shareholders for cause. Vacancies may be filled only by a majority of the remaining directors in office, even if less than a quorum, unless the vacancy occurred as a result of shareholder action, in which case the vacancy must be filled by a vote of shareholders at a special meeting of shareholders duly called for that purpose. These requirements make it more difficult to change our management by removing and replacing directors and may prevent a change in control of our company that is in the best interests of our shareholders.
General Risk Factors
Our access to financing may be limited and, thus, our ability to maximize our returns may be adversely affected.
Our ability to grow and compete may depend on our ability to borrow money to leverage our loan portfolio and to build and manage the cost of expanding our infrastructure to manage and service a larger loan portfolio. In general, the amount, type and cost of any financing that we obtain from another financial institution will have a direct impact on our revenue and expenses and, therefore, can positively or negatively affect our financial results. The percentage of leverage we employ will vary depending on our assessment of a variety of factors, which may include the anticipated liquidity and price volatility of our existing portfolio, the potential for losses and extension risk in our portfolio, the gap between the duration of our assets and liabilities, the availability and cost of financing, our opinion as to the creditworthiness of our financing counterparties, the health of the U.S. economy and commercial mortgage markets, our outlook for the level, slope, and volatility of interest rates, the credit quality of our borrowers and the collateral underlying our assets.
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Our access to financing will depend upon a number of factors, over which we have little or no control, including:
| ● | general market conditions; | |
| ● | the market’s view of the quality of our assets; | |
| ● | the market’s perception of our growth potential; | |
| ● | our eligibility to participate in and access capital from programs established by the U.S. Government; | |
| ● | our current and potential future earnings and cash distributions; and | |
| ● | the market price of our common shares. |
Continuing weakness in the capital and credit markets could adversely affect our ability to secure financing on favorable terms or at all. In general, this could potentially increase our financing costs and reduce our liquidity or require us to sell loans at an inopportune time or price.
We cannot assure you that we will always have access to structured financing arrangements when needed. If structured financing arrangements are not available to us we may have to rely on equity issuances, which may be dilutive to our shareholders, or on less efficient forms of debt financing that require a larger portion of our cash flow from operations, thereby reducing funds available for our operations, future business opportunities, cash distributions to our shareholders and other purposes. We cannot assure you that we will have access to such equity or debt capital on favorable terms (including, without limitation, cost and term) at the desired times, or at all, which may cause us to curtail our lending activities and/or dispose of loans in our portfolio, which could negatively affect our results of operations.
The market prices of our common shares may be adversely affected by future events.
Market factors unrelated to our performance could also negatively impact the value of our securities, including the market price of our common shares. One of the factors that investors may consider in deciding whether to buy or sell our common shares is our distribution rate as a percentage of our share price relative to market interest rates. If market interest rates increase or remain at high levels, prospective investors may demand a higher distribution rate or seek alternative investments paying higher dividends or interest. As a result, interest rate fluctuations and conditions in the capital markets can affect the market value of our common shares. For instance, if interest rates rise, it is likely that the market price of our common shares will decrease as market rates on interest-bearing securities increase. Other factors that could negatively affect the market price of our common shares include:
| ● | our actual or projected operating results, financial condition, cash flows and liquidity, or changes in business strategy or prospects; |
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| ● | actual or perceived conflicts of interest with individuals, including our executive officers; | |
| ● | equity issuances by us, or share resales by our shareholders, or the perception that such issuances or resales may occur; | |
| ● | actual or anticipated accounting problems; | |
| ● | changes in our earnings estimates or publication of research reports about us or the real estate industry; | |
| ● | changes in market valuations of similar companies; | |
| ● | adverse market reaction to any increased indebtedness we incur in the future; | |
| ● | additions to or departures of our key personnel; | |
| ● | speculation in the press or investment community; | |
| ● | our failure to meet, or the lowering of, our earnings’ estimates or those of any securities analysts; | |
| ● | increases in market interest rates, which may lead investors to demand a higher distribution yield for our common shares, would result in increased interest expenses on our debt; | |
| ● | decreases in market interest rates, which will increase competition in the market for loans and may require use to lower our interest rates and fees for loans we originate; | |
| ● | changes in the credit markets; | |
| ● | failure to maintain our qualification for taxation as a REIT or exemption from the Investment Company Act; | |
| ● | actions by our shareholders; | |
| ● | price and volume fluctuations in the stock market generally; | |
| ● | general market and economic conditions, including the current state of the credit and capital markets; | |
| ● | sales of large blocks of our common shares; | |
| ● | sales of our common shares by our executive officers, directors and significant shareholders; and | |
| ● | restatements of our financial results and/or material weaknesses in our internal controls. |
The price of our common shares is volatile, and purchasers of our common shares could incur substantial losses.
Historically, the price at which our common shares trade on The Nasdaq Capital Market has been volatile and seemingly unrelated to our operating performance. In 2024, the range was $4.60 to $5.90. In 2025, the range was $4.29 to $6.05. These broad market fluctuations may adversely affect the trading price of our common shares. Class action litigation has often been instituted against companies whose securities have experienced periods of volatility in market price. Any such litigation brought against us could result in substantial costs, which would hurt our financial condition and results of operations, divert management’s attention and resources.
Common shares eligible for future sale may have adverse effects on our share price.
We cannot predict the effect, if any, the future sale of the common shares would have on the market price of our common shares. The market price of our common shares may decline significantly when the restrictions on resale lapse. Sales of substantial amounts of common shares or the perception that such sales could occur may adversely affect the prevailing market price for our common shares.
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We may, from time-to-time, issue common shares and securities convertible into, or exchangeable or exercisable for, common shares to attract or retain key employees or in public offerings or private placements to raise capital. We are not required to offer any such shares or securities to existing shareholders on a preemptive basis. Therefore, it may not be possible for existing shareholders to participate in such future share or security issuances, which may dilute the existing shareholders’ interests in us.
Future offerings of debt or equity securities, which would rank senior to our common shares, may adversely affect the market price of our common shares.
If we decide to issue debt or equity securities in the future, which would rank senior to our common shares, it is likely that they will be governed by an indenture or other instrument containing covenants restricting our operating flexibility. Additionally, any convertible or exchangeable securities that we issue in the future may have rights, preferences and privileges more favorable than those of our common shares and may result in dilution to owners of our common shares. We and, indirectly, our shareholders, will bear the cost of issuing and servicing such securities. Because our decision to issue debt or equity securities in any future offering will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of our future offerings. Thus, holders of our common shares will bear the risk of our future offerings reducing the market price of our common shares and diluting the value of their stock holdings in us.
Item 1B. Unresolved Staff Comments
None.
Item 1C. Cybersecurity.
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Risk Management and Strategy
As one of the critical elements of our overall ERM approach, our cybersecurity efforts are focused on the following key areas:
| ● | Governance:
Management oversees cybersecurity risk mitigation and reports to the board of directors
any cybersecurity incidents. Further, our | |
| ● | Collaborative Approach: We have implemented a cross-functional approach to identifying, preventing and mitigating cybersecurity threats and incidents, while also implementing controls and procedures that provide for the prompt escalation of certain cybersecurity incidents so that decisions regarding the public disclosure and reporting of such incidents can be made by management in a timely manner. | |
| ● | Technical Safeguards: We deploy technical safeguards that are designed to protect our information systems from cybersecurity threats, including firewalls, intrusion prevention and detection systems, anti-malware functionality and access controls, which are evaluated and improved through vulnerability assessments and cybersecurity threat intelligence. |
Item 2. Properties
Our executive and principal operating office is located in Great Neck, New York. We use this space for all of our operations. This space is occupied under a lease, as amended, that expires November 30, 2027. The current monthly rent is $5,475, including electricity and real estate taxes. We believe this facility is adequate to meet our requirements at our current level of business activity.
Item 3. Legal Proceedings
None.
Item 4. Mine Safety Disclosure
Not applicable.
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PART II
Item 5. Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities.
Holders
As of March 24, 2026, the number of registered holders of our common shares was 10 and the estimated number of beneficial owners of our common shares was approximately 6,000. Equiniti Trust Company, LLC serves as transfer agent for our common shares.
Dividends
We elected to be taxed as a REIT commencing with our year ended December 31, 2014. From and after the effective date of our REIT election, we intend to pay regular quarterly distributions to holders of our common shares in an amount not less than 90% of our REIT taxable income (determined before the deduction for dividends paid and excluding any net capital gains). As a REIT, our distributions generally will be taxable as ordinary income to our shareholders (subject to the lower effective tax rates applicable to qualified REIT dividends via the deduction-without-outlay mechanism of Section 199A of the Code, which is generally available to our noncorporate U.S. shareholders that meet specified holding requirements), although we may designate a portion of the distributions as qualified dividend income or capital gain or a portion of the distributions may constitute a return of capital. For tax reporting purposes, taxable income dividends/distributions and non-taxable return of capital distributions may result and will be reported as such to U.S. individual taxpayers on Form 1099-DIV. For the tax year of 2025, 100% of our total distributions are characterized as non-qualified dividends (Section 199A).
Issuer Purchases of Equity Securities
On November 20, 2025, our board of directors authorized a share repurchase program authorizing the repurchase of up to 100,000 shares of our common stock in the next twelve months. As of December 31, 2025, we repurchased an aggregate of 6,200 shares under this repurchase program, at an aggregate cost of approximately $29,000. An additional 3,100 shares were repurchased between January 1, 2026 and March 24, 2026, in the aggregate cost of approximately $14,000.
As set forth in the table below, during the quarter ended December 31, 2025, we repurchased 6,200 of our common shares under the share buyback program at an aggregate cost of $28,558.
ISSUER PURCHASES OF EQUITY SECURITIES
| Period | (a) Total Number of Shares (or Units) Purchased | (b) Average Price Paid per Share (or Unit) | (c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs | (d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs | ||||||||||||
| October 2025 | — | $ | — | — | — | |||||||||||
| November 2025 | 5,200 | $ | 4.58 | 5,200 | 94,800 | |||||||||||
| December 2025 | 1,000 | $ | 4.76 | 1,000 | 93,800 | |||||||||||
| Total | 6,200 | $ | 4.61 | 6,200 | 93,800 | |||||||||||
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Item 6. [Reserved.]
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following management’s discussion and analysis of financial condition and results of operations should be read in conjunction with our audited consolidated financial statements and notes thereto contained elsewhere in this Report. This discussion contains forward-looking statements based on current expectations that involve risks and uncertainties. Actual results and the timing of certain events may differ significantly from those projected in such forward-looking statements.
Overview
We are a New York-based real estate finance company taxed as a REIT 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. As a REIT, we are required to distribute at least 90% of our REIT taxable income to our shareholders on an annual basis.
In order to maintain our qualification for taxation as a REIT, we are required to distribute at least 90% of our REIT taxable income to our shareholders each year. To the extent we distribute less than 100% of our taxable income to our shareholders (but more than 90%) we will maintain our qualification for taxation as a REIT, but the undistributed portion will be subject to regular corporate income taxes. As a REIT, we may also be subject to federal excise taxes and minimum state taxes. We also intend to operate our business in a manner that will permit us to maintain our exemption from registration under the Investment Company Act. In addition, in order for us to qualify for taxation as a REIT, not more than 50% in value of our outstanding common shares may be owned, directly or indirectly, by five or fewer individuals (as defined in the Code to include certain entities) at any time during the last half of each taxable year, and at least 100 persons must beneficially own our stock during at least 335 days of a taxable year of 12 months, or during a proportionate portion of a shorter taxable year. To help ensure that we meet the tests, our restated certificate of incorporation restricts the acquisition and ownership of our capital stock. The ownership limitation is fixed at 4.0% of our outstanding shares of capital stock, by value or number of shares, whichever is more restrictive.
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 $22,000, 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.
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Since commencing this business in 2007, we have made over 1,340 loans and never foreclosed on a property, except as set forth below, although sometimes we have renewed or extended our loans to enable the borrower to avoid premature sale or refinancing of the property. When we renew or extend a loan, we receive additional “points” and other fees.
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.
In September 2025, we sold one of our loans receivable at its face value of $250,000.
Our primary business objective is to grow our loan portfolio while protecting and preserving capital in a manner that provides for attractive risk-adjusted returns to our shareholders over the long term through dividends. We intend to achieve this objective by continuing to selectively originate loans and carefully manage our portfolio of first mortgage real estate loans in a manner designed to generate attractive risk-adjusted returns across a variety of market conditions and economic cycles. We believe that the demand for relatively small loans secured by residential and commercial real estate held for investment around the New York metropolitan market, including New Jersey and Connecticut, and in the Florida market remains relatively strong, but weakened due to high interest rates. Our ability to close deals fast has created an opportunity for non-bank “hard money” real estate lenders like us to selectively originate high-quality first mortgage loans and this condition should persist for a number of years.
We have built our business on a foundation of intimate knowledge of the New York metropolitan area real estate market combined with a disciplined credit and due diligence culture that is designed to protect and preserve capital. We believe that our flexibility in terms of meeting the needs of borrowers without compromising our standards on credit risk, our expertise, our intimate knowledge of the New York metropolitan area real estate market and our focus on newly originated first mortgage loans, has defined our success until now and should enable us to continue to achieve our objectives.
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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.
As of December 31, 2025, we were committed to $4,402,556 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.
Critical Accounting Policies and Use of Estimates
The preparation of 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 financial statements and the reported amounts of revenues and expenses during the reporting period. Management will base the use of estimates on (a) a preset number of assumptions that consider past experience, (b) future projections, and (c) general financial market conditions. Actual amounts could differ from those estimates.
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.
Effective January 1, 2020, we adopted ASU Topic 326. The ASU introduced a new credit loss methodology, Current Expected Credit Losses (“CECL”), which requires earlier recognition of credit losses, while also providing additional transparency about credit risk. Management estimates our CECL reserve primarily using the Weighted Average Remaining Maturity (“WARM”) method, which requires reference to historic loss data taking into consideration expected economic conditions over the relevant timeframe. Application of the WARM method to estimate a CECL reserve requires judgment, including (i) the appropriate historical loan loss reference data, (ii) the expected timing and amount of future loan fundings and repayments, and (iii) the current credit quality of our loan portfolio and expectations of performance and market conditions over the relevant time period. In addition, management reviews each loan on a quarterly basis and evaluates the borrower’s ability to pay the monthly interest, the borrower’s likelihood of executing the original exit strategy, as well as the loan-to-value ratio. Failure to properly measure an allowance for credit losses could result in the overstatement of earnings and the carrying value of the loans receivable. Actual losses, if any, could differ significantly from estimated amounts.
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We continually monitor events and changes in circumstances that could indicate that the carrying amounts of long-lived assets, including intangible assets, may not be recoverable. When such events or changes in circumstances occur, we assess the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the undiscounted cash flows is less than the carrying amount of these assets, we recognize an impairment loss based on the excess of the carrying amount over the fair value of the assets.
There are also areas in which in management’s judgment in selecting any available alternative would not produce a materially different result. See our audited consolidated financial statements and notes thereto which begin on page F-1 of this Report, which contain accounting policies and other disclosures required by accounting principles generally accepted in the United States of America.
Results of operations
Years ended December 31, 2025 and 2024
Total revenue
Total revenue for the year ended December 31, 2025, was approximately $8,666,000, compared to approximately $9,689,000 for the year ended December 31, 2024, a decrease of $1,023,000, or 10.6%. The decrease in revenue was primarily attributable to lower interest income, resulting from a period-over-period decrease in loans receivable, and lower origination fees, reflecting a slowdown in new loan originations. In 2025, approximately $7,175,000 of our revenue represented interest income on secured, real estate loans that we offer to real estate investors, compared to approximately $8,047,000 in 2024, and approximately $1,491,000 represented origination fees on such loans, compared to approximately $1,642,000 in 2024. 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 year ended December 31, 2025, were approximately $1,755,000, compared to approximately $2,337,000 for the year ended December 31, 2024, a decrease of approximately $582,000, or 24.9%. The decrease was primarily attributable to lower interest expense resulting from lower SOFR rates and lower average borrowings under the Webster Credit Line. (See Note 5 to the financial statements included elsewhere in this Report).
General and administrative expenses
General and administrative expenses for the year ended December 31, 2025, were approximately $1,814,000, compared to approximately $1,776,000 for the year ended December 31, 2024, an increase of approximately $38,000, or 2.1%. The increase is primarily attributable to higher payroll and appraisal expenses, as well as a NYSE American listing fee related to the MBC Funding II 6.00% Senior Secured Notes (the “Notes”), partially offset by lower bank charges, travel and meal expenses as well as costs related to the filing of our registration statement on Form S-3 incurred in 2024.
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Net income
Net income for the year ended December 31, 2025, was approximately $5,111,000, compared to approximately $5,591,000 for the year ended December 31, 2024, a decrease of approximately $480,000, or 8.6%. This decrease was primarily due to lower interest income, partially offset by lower interest expense.
Liquidity and Capital Resources
As of December 31, 2025, we had cash of approximately $205,000, compared to approximately cash of $178,000 as of December 31, 2024.
For the year ended December 31, 2025, net cash provided by operating activities was approximately $4,929,000, compared to approximately $4,932,000 for the year ended December 31, 2024. The slight decrease was primarily attributable to lower net income, largely offset by a smaller increase in interest and other fees receivable on loans.
Net cash provided by investing activities was approximately $5,313,000 for the year ended December 31, 2025, compared to approximately $7,548,000 for the year ended December 31, 2024. Investing cash flows in 2025 primarily reflected collections of commercial loans of approximately $40,637,000, partially offset by the origination of short-term commercial loans of approximately $35,323,000. Investing cash flows in 2024 primarily reflected collections of commercial loans of approximately $49,090,000, partially offset by the origination of short-term commercial loans of approximately $41,538,000.
Net cash used in financing activities was approximately $10,216,000 for the year ended December 31, 2025, compared to approximately $13,970,000 for the year ended December 31, 2024. Financing cash flows in 2025 primarily reflected the repayment of the $6,000,000 principal amount of the Notes, dividend payments of approximately $5,262,000, purchases of treasury shares of approximately $29,000 and deferred financing costs of approximately $99,000, partially offset by net borrowings under the credit lines of approximately $1,173,000. Financing cash flows in 2024 primarily reflected net repayments under the credit lines of approximately $8,724,000, dividend payments of approximately $5,233,000, purchases of treasury shares of approximately $10,000 and deferred financing costs of approximately $2,000.
Our Amended and Restated Credit and Security Agreement (as amended) with Webster, Flushing and Mizrahi Tefahot Bank Ltd. (“Mizrahi”) provides for the Webster Credit Line. On February 24, 2026, we entered into an amendment to that agreement which, among other things, extended the maturity date of the Webster Credit Line to March 31, 2026, provided for the departure of Mizrahi as a lender and reallocated the revolving commitments of the remaining lenders.
On March 24, 2026, we entered into an amendment to the Amended and Restated Credit Agreement that, among other things, (i) extended the maturity of the credit facility to February 28, 2029, (ii) modified certain portfolio composition requirements, including limiting mortgage loans outstanding for more than 30 months to 17.5% of the total portfolio, (iii) updated applicable interest margins, and (iv) revised certain mortgage loan eligibility criteria. In connection with the amendment, we paid a non-refundable amendment fee of $20,000. Except as amended, all other material terms of the credit facility remain in full force and effect.
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The Webster Credit Line continues to provide an aggregate borrowing capacity of $32.5 million, secured by assignments of mortgages and other collateral. As of December 31, 2025, borrowings under the Webster Credit Line bore interest, at our election for each drawdown, at either (i) SOFR plus an applicable premium, which rate was approximately 7.3%, inclusive of a 0.5% agency fee, or (ii) the Base Rate (as defined in the Amended and Restated Credit Agreement) plus 2.00%, plus a 0.5% agency fee.
The Webster Credit Line contains customary covenants and restrictions, including, among others, limitations on borrowings relative to collateral value, requirements to maintain specified financial ratios, limitations on the terms of loans we make to our customers, and restrictions, under certain circumstances, on dividends and share repurchases, asset dispositions, mergers or consolidations, the granting of liens, and transactions with affiliates. The Amended and Restated Credit Agreement also contains a cross-default provision pursuant to which a default under certain indebtedness of us or our subsidiary, MBC Funding II, may constitute a default under the Webster Credit Line. Under the Amended and Restated Credit Agreement, we may repurchase, redeem or otherwise retire our equity securities in an amount not to exceed ten percent of our annual net income from the prior fiscal year. The Webster Credit Line also includes restrictions, subject to negotiated exceptions, on additional indebtedness and other restricted payments. In addition, Mr. Ran has provided a personal guaranty of up to $1.0 million, plus enforcement costs, with respect to amounts that may be owed under the Webster Credit Line.
On December 12, 2025, MBC Funding II entered into a letter agreement with Valley pursuant to which Valley agreed to provide MBC Funding II with a revolving line of credit of up to $10.0 million. In connection with the credit facility, MBC Funding II executed a Line of Credit Note evidencing the advances available under the facility and entered into an all-assets Security Agreement in favor of Valley. In addition, we and Mr. Assaf Ran provided guaranties of the obligations under the credit facility, including a limited guaranty from Mr. Ran capped at $500,000.
The Valley Credit Line is secured by substantially all of the assets of MBC Funding II and is guaranteed by us. The Credit Facility matures on the earlier of December 12, 2027 or the acceleration of the obligations following an event of default. Borrowings under the Valley Credit Line are subject to a borrowing base based on eligible mortgage loans. The Valley Credit Line contains customary covenants and restrictions, including financial covenants and limitations on borrowings based on collateral values. We used borrowings under the Valley Credit Line, together with other available funds, to redeem MBC Funding II’s outstanding Notes in December 2025. Pursuant to a notice of redemption delivered on November 26, 2025, MBC Funding II redeemed all outstanding Notes on December 15, 2025 at a redemption price equal to 100% of principal plus accrued and unpaid interest to, but excluding, the redemption date. Following the redemption, no Notes remained outstanding and trading of the Notes were suspended prior to market open on the redemption date.
Outstanding borrowings under the Valley Credit Line bear interest at a floating rate equal to Term SOFR, subject to a floor of 3.00%, plus 2.95% per annum, and are subject to standard benchmark replacement provisions. The facility also requires the payment of an upfront fee equal to 0.20% of the total commitment and an unused line fee equal to 0.25% per annum on the average daily unused portion of the facility.
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As of December 31, 2025, borrowings under the Valley Credit Line bore interest at a floating rate equal to Term SOFR, subject to a floor, plus an applicable margin and customary fees, which rate was approximately 6.7%.
We were in compliance with all covenants under the Webster Credit Line, as amended, as of December 31, 2025 and 2024. MBC Funding II was in compliance with all covenants under the Valley Credit Line as of December 31, 2025. As of December 31, 2025, outstanding borrowings under the Webster Credit Line were $11,558,632 and outstanding borrowings under the Valley Credit Line were $6,042,500.
On April 11, 2023, our board of directors approved a share repurchase program authorizing the repurchase of up to 100,000 shares of our common stock. The program expired on April 10, 2024. Prior to its expiration, we repurchased 56,294 shares for an aggregate purchase price of $271,468, including 2,000 shares repurchased during the first quarter of 2024 for an aggregate purchase price of $9,800.
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 December 31, 2025, we had repurchased 6,200 shares under the program for an aggregate purchase price of approximately $29,000. In addition, during the first quarter of 2026, we repurchased 3,100 shares for an aggregate purchase price of approximately $14,000.
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 do not currently expect any difficulty in extending these credit facilities or obtaining a comparable facility from another lender prior to their respective maturities. 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.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
We are a “smaller reporting company” as defined by Regulation S-K and as such, are not required to provide the information contained in this item pursuant to Regulation S-K.
Item 8. Financial Statements
The consolidated financial statements required by this item are set forth beginning on page F-1.
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Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
None.
Item 9A. Controls and Procedures
| 1. | 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 Rule 13a-15(e) and 15d-15(e) under the Exchange Act) as of December 31, 2025 (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) is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and (ii) is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
| 2. | Internal Control over Financial Reporting |
Management’s Annual Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting and for the assessment of the effectiveness of internal control over financial reporting. As defined by the SEC, internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Exchange Act as a process designed by, or under the supervision of our principal executive and principal financial officers and effected by the Board, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America. Our internal control over financial reporting is supported by written policies and procedures that: (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.
Our internal control system was designed to provide reasonable assurances to our management and the Board regarding the preparation and fair presentation of published financial statements. All internal control systems, no matter how well designed, have inherent limitations which may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
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Management conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2025. In making this assessment, management used the framework set forth in the report entitled Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013. Based on this evaluation, management concluded that our internal control over financial reporting was effective as of December 31, 2025.
This Report does not include an attestation report by the Company’s independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s independent registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this Report.
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 December 31, 2025 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Item 9B. Other Information
On March 24, 2026, we entered into an amendment to the Amended and Restated Credit Agreement that, among other things, (i) extended the maturity of the credit facility to February 28, 2029, (ii) modified certain portfolio composition requirements, including limiting mortgage loans outstanding for more than 30 months to 17.5% of the total portfolio, (iii) updated applicable interest margins, and (iv) revised certain mortgage loan eligibility criteria. In connection with the amendment, we paid a non-refundable amendment fee of approximately $20,000. Except as amended, all other material terms of the credit facility remain in full force and effect.
During
the three months ended December 31, 2025, no director or officer of the Company
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
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PART III
Item 10. Directors, Executive Officers and Corporate Governance.
Executive Officers and Directors
Our executive officers and directors and their respective ages as of March 24, 2026 are as follows:
| Name | Age | Position | ||
| Assaf Ran | 60 | Founder, Chairman of the Board, Chief Executive Officer and President | ||
| Vanessa Kao | 48 | Chief Financial Officer, Vice President, Treasurer, Secretary and Director | ||
Michael Jackson (1)(2)(3) |
61 | Director | ||
Eran Goldshmit (1)(2)(3) |
59 | Director | ||
| Lyron Bentovim (1) | 56 | Director | ||
| Phillip Michals (1)(2)(3) | 56 | Director |
(1) Member of the Audit Committee.
(2) Member of the Compensation Committee.
(3) Member of the Corporate Governance and Nominating Committee.
All directors hold office until the next annual meeting of shareholders and until their successors are duly elected and qualified. Officers are elected to serve subject to the discretion of the Board.
Set forth below is a brief description of the background and business experience of our executive officers and directors:
Assaf Ran, our founder, has been our Chief Executive Officer, president and chairman since our inception in 1989. Mr. Ran has 37 years of senior management experience leading public and private businesses. Mr. Ran started several yellow page and other businesses from the ground up and managed to make each one of them successful. Mr. Ran’s professional experience and background with us, as our director since March 1999, have given him the expertise needed to serve as one of our directors.
Vanessa Kao has been our Chief Financial Officer, vice president, treasurer and secretary since rejoining us in June 2011. Ms. Kao joined our board in November 2023. From January 2014 through April 2016, she was also the Chief Financial Officer of Jewish Marketing Solutions LLC. Since April 2016, she has been serving as a consultant to Jewish Marketing Solutions LLC. From July 2004 through April 2006, she served as our assistant Chief Financial Officer. From April 2006 through December 2013, she was the Chief Financial Officer of DAG Jewish Directories, Inc. Ms. Kao holds a M.B.A. in Finance and MIS/E-Commerce from the University of Missouri and a bachelor’s degree of Business Administration in Finance from the National Taipei University in Taiwan.
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Lyron Bentovim has been a member of the Board since December 2008. Mr. Bentovim currently serves as the president and chief executive officer of The Glimpse Group, Inc. (Nasdaq: GGRP), an immersive technology company based in New York, NY. Mr. Bentovim also serves as a managing partner at Darklight Partners, a strategic advisor to small and mid-size public and private companies. Prior to that, from July 2014 to August 2015, Mr. Bentovim served as chief operating officer and chief financial officer of Top Image Systems Ltd. (formerly listed on Nasdaq: TISA), and from March 2013 to July 2014, Mr. Bentovim served as chief operating officer and chief financial officer of NIT Health Inc. and as chief operating officer and chief financial officer and managing director at Cabrillo Advisors LLC. From August 2009 until July 2012, Mr. Bentovim has served as chief operating officer and chief financial officer of Sunrise Telecom, Inc. Prior to joining Sunrise Telecom, Inc., from January 2002 until August 2009, Mr. Bentovim served as a portfolio manager for Skiritai Capital LLC, an investment advisor based in San Francisco. Mr. Bentovim has over 25 years of management experience, including his experience as a member of the board of directors at RTW Inc., Ault, Inc., Top Image Systems Ltd., Three-Five Systems Inc., Sunrise Telecom Inc., Blue Sphere Corporation, and Argonaut Technologies Inc. Prior to his position in Skiritai Capital LLC, Mr. Bentovim served as president, chief operating officer and co-founder of WebBrix, Inc. Additionally, Mr. Bentovim spent time as a senior engagement manager with strategy consultancies including USWeb/CKS, the Mitchell Madison Group LLC and McKinsey & Company Inc. Mr. Bentovim has an MBA from Yale School of Management and a law degree from the Hebrew University, Jerusalem, Israel. Mr. Bentovim’s professional experience and background with other companies and with us have given him the expertise needed to serve as one of our directors.
Eran Goldshmit has been a member of the Board since March 1999. Since August 2001, he has been the president of the New York Diamond Center, New York, NY. From December 1998 until July 2001, Mr. Goldshmit was the general manager of the Carmiel Shopping Center in Carmiel, Israel. Mr. Goldshmit received certification as a financial consultant in February 1993 from the School for Investment Consultants, Tel Aviv, Israel, and a BA in business administration from the University of Humberside, England, in December 1998. Mr. Goldshmit’s professional experience and background with other companies and with us have given him the expertise needed to serve as one of our directors.
Michael J. Jackson has been a member of the Board since July 2000. Since May 2017, Mr. Jackson has been the chief financial officer of Radius Global Market Research. Since February 2025, Mr. Jackson has served as a member of the board of directors of Radius Holding Company. From March 2016 through April 2017, Mr. Jackson served as chief financial officer and executive vice president of both Ethology, Inc., a digital marketing agency, and Tallwave, LLC, a business design and innovation agency. From April 2007 through February 2016, he was the chief financial officer and the executive vice president of iCrossing, Inc., a digital marketing agency. From October 1999 to April 2007, he served as executive vice president and chief financial officer of AGENCY.COM, a global Internet professional services company. He also served as the chief accounting officer of AGENCY.com from May 2000 and as its corporate controller from August 1999 until September 2001. From October 1994 until August 1999, Mr. Jackson was a senior manager at Arthur Andersen, LLP and manager at Ernst & Young LLP. Mr. Jackson also served on the New York State Society Auditing Standards and Procedures Committee from 1998 to 1999 and served on the New York State Society’s Securities and Exchange Commission Committee from 1999 to 2001. Mr. Jackson holds an MBA in Finance from Hofstra University and is a certified public accountant. Mr. Jackson is a current member of the board of directors of AvenueZ, Inc., a privately held digital marketing technology company. Mr. Jackson’s professional experience and background with other companies and with us have given him the expertise needed to serve as one of our directors.
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Phillip Michals has been a member of the Board since rejoining our Board in June 2019. Mr. Michals is the chief executive officer and executive chairman of A.G.P./Alliance Global Partners, a full-service investment banking and wealth management firm since 2018. Mr. Michals is also a Co-Founder and Chairman of the Board and Director of A.G.P. Canada, where he assists the team with developing and executing business goals in Canada. Mr. Michals has also been a partner in RG Michals since 1999 and affiliated with an independent firm from 2010 to 2018. His responsibilities were primarily in business development. He was also a partner for over 10 years at MSCI, an advisory/consulting firm that consulted for member firms of NYSE and FINRA. Mr. Michals currently has his Series 7, 63, 24, 99, and 65 licenses and received his Bachelor of Science from the University of Delaware. Mr. Michals’ professional experience and background with other companies and with us have given him the expertise needed to serve as one of our directors.
Code of Ethics
We have adopted a Code of Ethics that applies to our principal executive officer, principal financial officer and other persons performing similar functions. Our current Code of Ethics is posted on our web site at www.manhattanbridgecapital.com. The information on our website is not incorporated by reference into this Report. We intend to satisfy the disclosure requirement under Item 5.05 of Form 8-K regarding amendment to, or waiver from, a provision of our Code of Ethics by posting such information on the website address specified above.
Insider Trading Policy
We have adopted an insider trading policy, or the Policy, governing the purchase, sale and other transactions in our securities that applies to our directors, executive officers, employees, and other covered persons, including immediate family members and entities controlled by any of the foregoing persons, as well as by the Company itself.
The Policy prohibits, among other things, insider trading and certain speculative transactions in our securities (including short sales, buying put and selling call options and other hedging or derivative transactions in our securities) and establishes a regular blackout period schedule during which directors, executive officers, employees, and other covered persons may not trade in the Company’s securities, as well as certain pre-clearance procedures that directors and executive officers must observe prior to effecting any transaction in our securities.
The Company believes that the Policy is reasonably designed to promote compliance with insider trading laws, rules and regulations, and listing standards applicable to the Company. A copy of the Policy is filed as Exhibit 19.1 to this Report.
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Committees of the Board of Directors
We have three standing committees: an Audit Committee, a Compensation Committee and a Corporate Governance and Nominating Committee. Each committee is made up entirely of independent directors as defined under the Nasdaq Stock Market Rules. The members of the Audit Committee are Michael Jackson, who serves as chairman, Eran Goldshmit, Lyron Bentovim and Phillip Michals. The members of the Compensation Committee and the Corporate Governance and Nominating Committee are Michael Jackson, Eran Goldshmit and Phillip Michals. Current copies of each committee’s charter are available on our website at www.manhattanbridgecapital.com.
Audit Committee. The Audit Committee oversees our accounting and financial reporting processes, internal systems of accounting and financial controls, relationships with auditors and audits of financial statements. Specifically, the Audit Committee’s responsibilities include the following:
| ● | selecting, hiring and terminating our independent auditors; | |
| ● | evaluating the qualifications, independence and performance of our independent auditors; | |
| ● | approving the audit and non-audit services to be performed by the independent auditors; | |
| ● | reviewing the design, implementation and adequacy and effectiveness of our internal controls and critical policies; | |
| ● | overseeing and monitoring the integrity of our consolidated financial statements and our compliance with legal and regulatory requirements as they relate to our financial statements and other accounting matters; | |
| ● | with management and our independent auditors, reviewing any earnings announcements and other public announcements regarding our results of operations; and | |
| ● | preparing the report that the Securities and Exchange Commission requires in our annual proxy statement. |
The Board has determined that Michael Jackson is qualified as an Audit Committee Financial Expert pursuant to Item 407(d)(5) of Regulation S-K. Each Audit Committee member is independent, as that term is defined in Section 10A(m)(3) of the Exchange Act and their relevant experience is more fully described above.
Compensation Committee. The Compensation Committee assists the Board in determining the compensation of our officers and directors. Specific responsibilities include the following:
| ● | approving the compensation and benefits of our executive officers; | |
| ● | administering our clawback policy; | |
| ● | reviewing the performance objectives and actual performance of our officers; and | |
| ● | administering our stock option and other equity and incentive compensation plans. |
The Compensation Committee is comprised entirely of directors who satisfy the standards of independence applicable to compensation committee members under Section 16(b) of the Exchange Act. During the fiscal year ended December 31, 2025, the Compensation Committee did not utilize the services of a compensation consultant.
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Corporate Governance and Nominating Committee. The Corporate Governance and Nominating Committee assists the Board by identifying and recommending individuals qualified to become members of the Board. Specific responsibilities include the following:
| ● | evaluating the composition, size and governance of the Board and its committees and making recommendations regarding future planning and the appointment of directors to our committees; | |
| ● | establishing a policy for considering shareholder nominees to the Board; | |
| ● | reviewing our corporate governance principles and making recommendations to the Board regarding possible changes; and | |
| ● | reviewing and monitoring compliance with our code of ethics and insider trading policy. |
Shareholder Communications
The Board has established a process to receive communications from shareholders. Shareholders and other interested parties may contact any member (or all members) of the Board, or the non-management directors as a group, any Board committee or any chair of any such committee by mail or electronically. To communicate with the Board, any individual director or any group or committee of directors, correspondence should be addressed to the Board or any such individual director or group or committee of directors by either name or title. All such correspondence should be sent c/o Corporate Secretary at 60 Cutter Mill Road, Suite 205, Great Neck, NY 11021.
All communications received as set forth in the preceding paragraph will be opened by the Secretary for the sole purpose of determining whether the contents represent a message to our directors. Any contents that are not in the nature of advertising, promotions of a product or service, patently offensive material or matters deemed inappropriate for the Board will be forwarded promptly to the addressee. In the case of communications to the Board or any group or committee of directors, the Secretary will make sufficient copies of the contents to send to each director who is a member of the group or committee to which the envelope or e-mail is addressed.
Item 11. Executive Compensation
The following Summary Compensation Table sets forth all compensation earned by or paid to, in all capacities, during the years ended December 31, 2025 and 2024 by (i) the Company’s Chief Executive Officer and (ii) the most highly compensated executive officers, other than the Chief Executive Officer, who were serving as executive officers and whose total compensation exceeded $100,000 (the individuals falling within categories (i) and (ii) are collectively referred to as the “Named Executives”):
Summary Compensation Table
| Name and Principal Position | Year | Salary | Bonus | All Other Compensation | Total | ||||||||||||||
| ($) | ($) | ($)(1) | ($) | ||||||||||||||||
| Assaf Ran | |||||||||||||||||||
| Chief Executive Officer and President | 2025 | $ | 365,385 | $ | — | $ | 41,400 | $ | 406,785 | ||||||||||
| 2024 | $ | 365,000 | $ | 30,000 | $ | 50,875 | $ | 445,875 | |||||||||||
| Vanessa Kao | |||||||||||||||||||
| Chief Financial Officer, Vice President, | 2025 | $ | 185,000 | $ | 52,000 | $ | 13,545 | $ | 250,545 | ||||||||||
| Treasurer and Secretary | 2024 | $ | 177,500 | $ | 37,500 | $ | 12,545 | $ | 227,545 | ||||||||||
(1) Consists of certain expense reimbursements and Company matching contributions made pursuant to its Simple IRA Plan.
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Employment Contracts
We have an employment agreement with Mr. Assaf Ran, our President and Chief Executive Officer, pursuant to which: (i) Mr. Ran’s employment term renews automatically on June 30th of each year for successive one-year periods unless either party gives to the other written notice at least 180 days prior to June 30th of its intention to terminate the agreement; (ii) Mr. Ran receives a current annual base salary of $380,000 and annual bonuses as determined by the Compensation Committee of the Board, in its sole and absolute discretion, and is eligible to participate in all executive benefit plans established and maintained by us; and (iii) Mr. Ran agreed to a one-year non-competition period following the termination of his employment. If the employment agreement is terminated by Mr. Ran for “good reason” (as defined in the employment agreement) he shall be paid (1) his base compensation up to the effective date of such termination; (2) his full share of any incentive compensation payable to him for the year in which the termination occurs; and (3) a lump sum payment equal to 100% of the average cash compensation paid to, or accrued for, him in the two calendar years immediately preceding the calendar year in which the termination occurs.
In June 2024, the Compensation Committee approved an increase in Mr. Ran’s annual base salary from $350,000 to $380,000. In December 2025, Mr. Ran voluntarily agreed to forgo $14,615 of base salary for the period from December 18, 2025 through December 31, 2025.
Restricted Stock Grant
In September 2011, upon shareholders’ approval at the 2011 annual meeting of shareholders, we granted 1,000,000 restricted common shares (the “Restricted Shares”) to Mr. Ran, our Chief Executive Officer. Under the terms of the restricted shares agreement, among other things, Mr. Ran may not sell, convey, transfer, pledge, encumber or otherwise dispose of the Restricted Shares until the earliest to occur of the following: (i) September 9, 2026, with respect to 1/3 of the Restricted Shares, September 9, 2027 with respect to an additional 1/3 of the Restricted Shares and September 9, 2028 with respect to the final 1/3 of the Restricted Shares; (ii) the date on which Mr. Ran’s employment is terminated by us for any reason other than for “Cause” (i.e., misconduct that is materially injurious to us monetarily or otherwise, including engaging in any conduct that constitutes a felony under federal, state or local law); or (iii) the date on which Mr. Ran’s employment is terminated on account of (A) his death; or (B) his disability, which, in the opinion of his personal physician and a physician selected by us prevents him from being employed with us on a full-time basis (each such date being referred to as a “Risk Termination Date”). If at any time prior to a Risk Termination Date Mr. Ran’s employment is terminated by us for Cause, or by Mr. Ran voluntarily for any reason other than death or disability, Mr. Ran will forfeit that portion of the Restricted Shares which has not previously vested. Mr. Ran has the power to vote the Restricted Shares and will be entitled to all dividends payable with respect to the Restricted Shares.
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In connection with the Compensation Committee’s approval of the foregoing grant of Restricted Shares, the Compensation Committee consulted with and obtained the concurrence of independent compensation experts and informed Mr. Ran that it had no present intention of continuing its prior practice of annually awarding stock options to Mr. Ran as Chief Executive Officer. Also, Mr. Ran, advised the Compensation Committee that he would not seek future stock option grants.
Termination and Change of Control Arrangement
In the event of termination, Mr. Ran will not be entitled to receive any severance and any non-vested options will be automatically forfeited. If at any time prior to a Risk Termination Date Mr. Ran’s employment is terminated by us for cause or by Mr. Ran voluntarily for any reason other than death or disability, Mr. Ran will forfeit that portion of the Restricted Shares which have not previously vested. If Mr. Ran is terminated for any reason other than for cause, the Restricted Shares become immediately transferable.
The following table sets forth information concerning outstanding equity awards to the Named Executives as of December 31, 2025.
Outstanding Equity Awards at Fiscal Year-End
| Stock Awards | ||||||
| Name | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | ||||
| Assaf Ran Chief Executive Officer and President | 1,000,000 | 4,650,000 | (1)(2) | |||
| (1) | Calculated based on the closing market price of $4.65 at the end of the last completed fiscal year on December 31, 2025. |
| (2) | Mr. Ran may not sell, convey, transfer, pledge, encumber or otherwise dispose of the Restricted Shares until the earliest to occur of the following: (i) September 9, 2026, with respect to 1/3 of the Restricted Shares, September 9, 2027 with respect to an additional 1/3 of the Restricted Shares and September 9, 2028 with respect to the final 1/3 of the Restricted Shares; (ii) the date on which Mr. Ran’s employment is terminated by us for any reason other than for “Cause;” or (iii) on a Risk Termination Date. If at any time prior to a Risk Termination Date Mr. Ran’s employment is terminated by us for Cause or Mr. Ran voluntarily terminates his employment for any reason other than death or disability, Mr. Ran will forfeit that portion of the Restricted Shares which have not previously vested. |
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We do not have any formal policy that requires the Company to grant, or avoid granting, equity-based compensation at certain times. We do not grant equity awards in anticipation of the release of material nonpublic information that is likely to result in changes to the price of our common stock, and do not time the public release of such information based on award grant dates. The timing of any equity grants to executive officers or directors in connection with new hires, promotions, or other non-routine grants is tied to the event giving rise to the award (such as an executive officer’s commencement of employment or promotion effective date).
During the year ended December 31, 2025, there were no equity grants made to our executive officers during any period beginning four business days before the filing of a periodic report or current report disclosing material non-public information and ending one business day after the filing or furnishing of such report with the Securities and Exchange Commission, that were likely to result in changes to the price of our common stock, and do not time the public release of such information based on award grant dates.
Compensation of Directors
During 2025, the annual cash compensation paid to each independent member of the Board was $17,500, plus an additional $300 for each committee meeting attended. The table below summarizes the compensation paid to our directors for the year ended December 31, 2025:
Director Compensation
Name (a) | Fees
Earned or ($) | |||
| Michael Jackson | $ | 18,700 | ||
| Eran Goldshmit | $ | 18,700 | ||
| Lyron Bentovim | $ | 18,700 | ||
| Phillip Michals | $ | 18,700 | ||
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Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters
The following table, together with the accompanying footnotes, sets forth information, as of March 24, 2026, regarding the beneficial ownership of our common shares by all persons known by us to beneficially own more than 5% of our outstanding common shares, each Named Executive Officer, each director, and all of our directors and executive officers as a group:
| Name of Beneficial Owner | Amount of Beneficial Ownership (1) | Percentage of Class | ||||||
| Executive Officers and Directors | ||||||||
| Assaf Ran (2) | 2,610,000 | 22.8 | % | |||||
| Vanessa Kao | 8,236 | * | ||||||
| Michael Jackson | 41,344 | * | ||||||
| Eran Goldshmit | 10,978 | * | ||||||
| Lyron Bentovim | 41,044 | * | ||||||
| Phillip Michals | 101,058 | * | ||||||
| All executive officers and directors as a group (6 persons) | 2,812,660 | 24.6 | % | |||||
* Less than 1%
| (1) | A person is deemed to be a beneficial owner of securities that can be acquired by such person within 60 days from March 24, 2026, upon the exercise of options and warrants or conversion of convertible securities. Each beneficial owner’s percentage ownership is determined by assuming that options, warrants and convertible securities that are held by such person (but not held by any other person) and that are exercisable or convertible within 60 days from March 24, 2026 have been exercised or converted. Except as otherwise indicated, and subject to applicable community property and similar laws, each of the persons named has sole voting and investment power with respect to the shares shown as beneficially owned. All percentages are determined based on 11,429,351 shares outstanding on March 24, 2026. |
| (2) | Includes 1,000,000 Restricted Shares granted to Mr. Ran on September 9, 2011, which was approved by shareholders at our 2011 annual meeting of shareholders. Mr. Ran may not sell, convey, transfer, pledge, encumber or otherwise dispose of the Restricted Shares until the earliest to occur of the following: (i) September 9, 2026, with respect to 1/3 of the Restricted Shares, September 9, 2027 with respect to an additional 1/3 of the Restricted Shares and September 9, 2028 with respect to the final 1/3 of the Restricted Shares; (ii) the date on which Mr. Ran’s employment is terminated by us for any reason other than for “Cause;” or (iii) on a Risk Termination Date. If at any time prior to a Risk Termination Date Mr. Ran’s employment is terminated by us for Cause or Mr. Ran voluntarily terminates his employment for any reason other than death or disability, Mr. Ran will forfeit that portion of the Restricted Shares which have not previously vested. Also includes 1,383,000 shares of common stock directly owned by Ran & Ran of NY Inc., which is currently wholly owned by Mr. Ran. Mr. Ran’s address is c/o Manhattan Bridge Capital, Inc., 60 Cutter Mill Road, Suite 205, Great Neck, New York 11021. |
Item 13. Certain Relationships and Related Transactions and Director Independence
The Board is comprised of Assaf Ran, Vanessa Kao, Michael J. Jackson, Eran Goldshmit, Lyron Bentovim and Phillip Michals. The Board has determined, in accordance with Nasdaq’s Stock Market Rules, that: (i) Messrs. Jackson, Goldshmit, Bentovim and Michals (the “Independent Directors”) are independent and represent a majority of its members; (ii) Messrs. Jackson, Goldshmit, Bentovim and Michals, as the members of the Audit Committee, are independent for such purposes; and (iii) Messrs. Jackson, Goldshmit and Michals, as the members of the Compensation Committee, are independent for such purposes. In determining director independence, the Board applies the independence standards set by the Nasdaq. In its application of such standards the Board takes into consideration all transactions with Independent Directors and the impact of such transactions, if any, on any of the Independent Directors’ ability to continue to serve on the Board.
| 63 |
Item 14. Principal Accountant Fees and Services
The aggregate fees billed by our principal accounting firm, Hoberman & Lesser CPAs, LLP, for the fiscal years ended December 31, 2025, and 2024 (including for services for MBC Funding II) are as follows:
(a) Audit Fees
2025
The aggregate fees incurred during 2025 for our principal accountant were $73,500, covering the audit of our annual financial statements and the review of our financial statements for the first, second and third quarters of 2025.
2024
The aggregate fees incurred during 2024 for our principal accountant were $71,750, covering the audit of our annual financial statements and the review of our financial statements for the first, second and third quarters of 2024.
(b) Audit-Related Fees
There were no audit-related fees billed by our principal accountant during 2025 or 2024.
(c) Tax Fees
There were no tax fees billed by our principal accountant during 2025 or 2024.
(d) All Other Fees
No other fees, beyond those disclosed in this Item 14, were billed during 2025 or 2024 except that we were billed $1,500 in 2024 by our principal accountant for services rendered in connection with our Registration Statement on Form S-3.
Audit Committee Pre-Approval, Policies and Procedures
Our Audit Committee approved the engagement with Hoberman & Lesser CPAs, LLP. These services were pre-approved by our Audit Committee to assure that such services do not impair the auditor’s independence from us.
| 64 |
PART IV
Item 15. Exhibits, Financial Statement Schedules
(a) 1. Financial Statements - See Index to Financial Statements on page F-1.
2. Financial Statement Schedules – See (c) below.
3. Exhibits – See (b) below.
| 65 |
* Furnished herewith.
** Compensation plan or arrangement for current or former executive officers and directors.
*** Filed herewith.
| 66 |
| (1) | Previously filed as exhibit to Quarterly Report on Form 10-Q for the quarter ended June 30, 2014 and incorporated herein by reference. |
| (2) | Previously filed as exhibit to Registration Statement on Form SB-2/A filed on April 23, 1999 and incorporated herein by reference. |
| (3) | Previously filed as exhibit to Registration Statement on Form SB-2 filed on March 10, 1999 and incorporated herein by reference. |
| (4) | Previously filed as exhibit to Quarterly Report on Form 10-Q for the quarter ended June 30, 2016 and incorporated herein by reference. |
| (5) | Previously filed as Appendix A to Schedule 14A filed on August 5, 2011 and incorporated herein by reference. |
| (6) | Previously filed as exhibit to Current Report on Form 8-K filed on July 13, 2017 and incorporated herein by reference. |
| (7) | Previously filed as exhibit to Quarterly Report on Form 10-Q for the quarter ended September 30, 2017 and incorporated herein by reference. |
| (8) | Previously filed as exhibit to Annual Report on Form 10-K for the fiscal year ended December 31, 2016 and incorporated by reference herein. |
| (9) | Previously filed as exhibit to Quarterly Report on Form 10-Q for the quarter ended June 30, 2018 and incorporated herein by reference. |
| (10) | Previously filed as exhibit to Annual Report on Form 10-K for the fiscal year ended December 31, 2022 and incorporated by reference herein. |
| (11) | Previously filed as exhibit to Current Report on Form 8-K filed on April 25, 2022 and incorporated herein by reference. |
| (12) | Previously filed as exhibit to Current Report on Form 8-K filed on February 3, 2023 and incorporated herein by reference. |
| (13) | Previously filed as exhibit to Quarterly Report on Form 10-Q for the quarter ended June 30, 2021 and incorporated herein by reference. |
| (14) | Previously filed as exhibit to Annual Report on Form 10-K for the fiscal year ended December 31, 2022 and incorporated by reference herein. |
| (15) | Previously filed as exhibit to Quarterly Report on Form 10-Q for the quarter ended March 31, 2024 and incorporated herein by reference. |
| (16) | Previously filed as exhibit to Annual Report on Form 10-K for the fiscal year ended December 31, 2023 and incorporated by reference herein. |
| (17) | Previously filed as exhibit to Annual Report on Form 10-K for the fiscal year ended December 31, 2024 and incorporated by reference herein. |
| (18) | Previously filed as exhibit to Current Report on Form 8-K filed on December 16, 2025 and incorporated herein by reference. |
| (19) | Previously filed as exhibit to Current Report on Form 8-K filed on February 25, 2026 and incorporated herein by reference. |
| (c) | No financial statement schedules are included because the information is either provided in the financial statements or is not required under the related instructions or is inapplicable and such schedules therefore have been omitted. |
Item 16. 10-K Summary
None.
| 67 |
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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. | ||
| By: | /s/ Assaf Ran | |
| Assaf Ran, President, Chief Executive Officer and Chairman of the Board of Directors | ||
Date: March 27, 2026
In accordance with the Exchange Act, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
| Signature | Title | Date | ||
/s/ Assaf Ran |
President, Chief Executive Officer and Chairman of the Board of |
March 27, 2026 | ||
| Assaf Ran | Directors (Principal Executive Officer) | |||
/s/ Vanessa Kao |
Chief Financial Officer and Treasurer (Principal Financial and | March 27, 2026 | ||
| Vanessa Kao | Accounting Officer), Director | |||
/s/ Lyron Bentovim |
Director | March 27, 2026 | ||
| Lyron Bentovim | ||||
/s/ Eran Goldshmit |
Director | March 27, 2026 | ||
| Eran Goldshmit | ||||
/s/ Michael Jackson |
Director | March 27, 2026 | ||
| Michael Jackson | ||||
/s/ Phillip Michals |
Director | March 27, 2026 | ||
| Phillip Michals |
| 68 |
MANHATTAN BRIDGE CAPITAL, INC.
Index to Consolidated Financial Statements
Page Number | |
| Report of Independent Registered Public Accounting Firm (PCAOB ID No. |
F-2 |
| Consolidated Financial Statements: | |
| Balance Sheets at December 31, 2025 and 2024 | F-4 |
| Statements of Operations for the years ended December 31, 2025 and 2024 | F-5 |
| Statements of Changes in Stockholders’ Equity for the years ended December 31, 2025 and 2024 | F-6 |
| Statements of Cash Flows for the years ended December 31, 2025 and 2024 | F-7 |
| Notes to Consolidated Financial Statements | F-8 |
| F-1 |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of
Manhattan Bridge Capital, Inc.
Opinion on the Consolidated Financial Statements
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosures to which it relates.
| F-2 |
Allowance for Credit Losses
As discussed in Note 2 to the consolidated financial statements, the Company estimates its allowance for credit losses on its loans receivable primarily using the Weighted Average Remaining Maturity method (WARM) along with consideration of other variables. Based on these assessments, the Company determined that no allowance for credit losses is required.
The allowance for credit losses was identified by us as a critical audit matter because of the extent of auditor judgment applied and significant audit effort to evaluate the subjective and complex judgments made by management in determining whether any of its loans receivable are impaired and/or require an allowance for credit losses.
Addressing the critical audit matter involved performing procedures and evaluating audit evidence in connection with our overall opinion on the consolidated financial statements. The primary procedures included evaluating the appropriateness of the method and other variables used, testing the application of the method and other variables used, as well as testing the accuracy of data used with respect to the method and other variables. These procedures also included obtaining and evaluating the conclusions of the Company’s third-party valuation specialists, as well as obtaining and evaluating other publicly available independent empirical data, and comparing said values to the aggregate amounts owed by borrowers for indication of loan losses. We also evaluated management’s significant judgments applied in determining whether indicators of impairment were present, with respect to the Company’s loan portfolio and the underlying collateral, by obtaining evidence to corroborate such judgments and searching for evidence contrary to such judgments.
 | ||
| We have served as the Company’s auditors since 2007. | ||
| March 27, 2026 |
| F-3 |
MANHATTAN BRIDGE CAPITAL, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2025 AND 2024
| 2025 | 2024 | |||||||
| Assets | ||||||||
| Loans receivable, net of deferred origination and other fees | $ | $ | ||||||
| Interest and other fees receivable on loans | ||||||||
| Cash | ||||||||
| Cash – restricted | ||||||||
| Other assets | ||||||||
| Right-of-use asset – operating lease, net | ||||||||
| Deferred financing costs, net | ||||||||
| Total assets | $ | $ | ||||||
| Liabilities and Stockholders’ Equity | ||||||||
| Liabilities: | ||||||||
| Lines of credit | $ | $ | ||||||
| Senior secured notes (net of deferred financing costs of $96,985) | ||||||||
| Accounts payable and accrued expenses | ||||||||
| Operating lease liability | ||||||||
| Loan holdback | ||||||||
| Dividends payable | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies | ||||||||
| Stockholders’ equity: | ||||||||
| Preferred shares - $ par value; shares authorized; issued and outstanding | ||||||||
| Common shares - $ par value; shares authorized; issued; and outstanding, respectively | ||||||||
| Additional paid-in capital | ||||||||
| Less: Treasury shares, at cost – and shares, respectively | ( | ) | ( | ) | ||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ equity | ||||||||
| Total liabilities and stockholders’ equity | $ | $ | ||||||
The accompanying notes are an integral part of these consolidated financial statements.
| F-4 |
MANHATTAN BRIDGE CAPITAL, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024
2025 |
2024 | |||||||
| Revenue: | ||||||||
| Interest income from loans | $ | $ | ||||||
| Origination fees | ||||||||
| Total Revenue | ||||||||
| Operating costs and expenses: | ||||||||
| Interest and amortization of deferred financing costs | ||||||||
| Referral fees | ||||||||
| General and administrative expenses | ||||||||
| Total operating costs and expenses | ||||||||
| Income from operations | ||||||||
| Other income | ||||||||
| Income before income tax expense | ||||||||
| Income tax expense | ( | ) | ( | ) | ||||
| Net income | $ | $ | ||||||
| Basic and diluted net income per common share outstanding: | ||||||||
| —Basic | $ | $ | ||||||
| —Diluted | $ | $ | ||||||
| Weighted average number of common shares outstanding | ||||||||
| —Basic | ||||||||
| —Diluted | ||||||||
The accompanying notes are an integral part of these consolidated financial statements.
| F-5 |
MANHATTAN BRIDGE CAPITAL, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024
| Common Stock | Additional Paid-in | Treasury Shares | Accumulated | |||||||||||||||||||||||||
| Shares | Amount | Capital | Shares | Cost | Deficit | Totals | ||||||||||||||||||||||
| Balance, January 1, 2024 | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||
| Purchase of treasury shares | 2,000 | ( | ) | ( | ) | |||||||||||||||||||||||
| Non-cash compensation | ||||||||||||||||||||||||||||
| Dividends paid | ( | ) | ( | ) | ||||||||||||||||||||||||
| Dividends declared and payable | ( | ) | ( | ) | ||||||||||||||||||||||||
| Net income for the year ended December 31, 2024 | ||||||||||||||||||||||||||||
| Balance, December 31, 2024 | ( | ) | ( | ) | ||||||||||||||||||||||||
| Balance | $ | ( | ) | ( | ) | |||||||||||||||||||||||
| Purchase of treasury shares | 6,200 | ( | ) | ( | ) | |||||||||||||||||||||||
| Non-cash compensation | ||||||||||||||||||||||||||||
| Dividends paid | ( | ) | ( | ) | ||||||||||||||||||||||||
| Dividends declared and payable | ( | ) | ( | ) | ||||||||||||||||||||||||
| Net income for the year ended December 31, 2025 | ||||||||||||||||||||||||||||
| Balance, December 31, 2025 | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||
| Balance, | $ | ( | ) | ( | ) | |||||||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
| F-6 |
MANHATTAN BRIDGE CAPITAL, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024
| 2025 | 2024 | |||||||
| Cash flows from operating activities: | ||||||||
| Net income | $ | $ | ||||||
| Adjustments to reconcile net income to net cash provided by operating activities - | ||||||||
| Amortization of deferred financing costs | ||||||||
| Depreciation | ||||||||
| Non-cash compensation expense | ||||||||
| Adjustment to right-of-use asset - operating lease and liability | ( | ) | ( | ) | ||||
| Changes in operating assets and liabilities: | ||||||||
| Interest and other fees receivable on loans | ( | ) | ( | ) | ||||
| Other assets | ( | ) | ||||||
| Accounts payable and accrued expenses | ( | ) | ( | ) | ||||
| Deferred origination fees | ( | ) | ( | ) | ||||
| Net cash provided by operating activities | ||||||||
| Cash flows from investing activities: | ||||||||
| Issuance of short-term loans | ( | ) | ( | ) | ||||
| Collections received from loans | ||||||||
| Purchase of fixed assets | ( | ) | ( | ) | ||||
| Net cash provided by investing activities | ||||||||
| Cash flows from financing activities: | ||||||||
| Repayment of lines of credit | ( | ) | ( | ) | ||||
| Proceeds from lines of credit | ||||||||
| Repayment of senior secured notes | ( | ) | ||||||
| Dividends paid | ( | ) | ( | ) | ||||
| Purchase of treasury shares | ( | ) | ( | ) | ||||
| Deferred financing costs incurred | ( | ) | ( | ) | ||||
| Net cash used in financing activities | ( | ) | ( | ) | ||||
| Net increase (decrease) in cash and restricted cash | ( | ) | ||||||
| Cash and restricted cash, beginning of year* | ||||||||
| Cash and restricted cash, end of year* | $ | $ | ||||||
| Supplemental Disclosure of Cash Flow Information: | ||||||||
| Cash paid during the period for taxes | $ | $ | ||||||
| Cash paid during the period for interest | $ | $ | ||||||
| Cash paid during the period for operating leases | $ | $ | ||||||
| Supplemental Schedule of Noncash Financing Activities: Dividend declared and payable | $ | $ | ||||||
| Loan holdback relating to mortgage receivable | $ | $ | ||||||
| Supplemental Schedule of Noncash Operating and Investing Activities: | ||||||||
| Reduction in interest receivable in connection with the increase in loans receivable | $ | $ | ||||||
| * |
The accompanying notes are an integral part of these consolidated financial statements.
| F-7 |
MANHATTAN BRIDGE CAPITAL, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024
| 1. | Description of the Company |
Manhattan Bridge Capital, Inc. (“MBC”) and its wholly-owned subsidiary, MBC Funding II Corp. (“MBC Funding II”) (collectively, the “Company”), offer short-term, secured, non–banking loans (sometimes referred to as “hard money” loans) 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.
| 2. | Summary of Significant Accounting Policies |
Basis of Presentation
The accompanying financial statements have been prepared under the accrual basis and are in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) in compliance with the Accounting Standards Codification (“ASC”) of the Financial Accounting Standards Board (“FASB”).
Principles of Consolidation
The consolidated financial statements include the accounts of Manhattan Bridge Capital, Inc. and its wholly-owned subsidiary, MBC Funding II. All significant intercompany balances and transactions have been eliminated in consolidation.
Use of Estimates
The preparation of 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Management will base the use of estimates on (a) a preset number of assumptions that consider past experience, (b) future projections, and (c) general financial market conditions. Actual amounts could differ from those estimates.
Concentrations of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and short-term commercial loans.
The
Company maintains its cash with major financial institutions. Accounts at the financial institutions are insured by the Federal Deposit
Insurance Corporation (FDIC) up to $
Credit risks associated with short-term commercial loans the Company makes to real estate investors and related interest and other fees receivable are described in Note 4.
| F-8 |
Allowance for Credit Losses
The Company complies with Accounting Standards Update (“ASU”) 2016-13, “Financial Instruments – Credit Losses (ASC Topic 326).” The CECL methodology utilizes a lifetime “expected credit loss” methodology for the recognition of credit losses for loans and other receivables at the time the financial asset is originated or acquired. The expected credit losses are adjusted each period for changes in expected lifetime credit losses.
The Company estimates its CECL reserve primarily using the Weighted Average Remaining Maturity (“WARM”) method, which has been identified as an acceptable loss-rate method for estimating CECL reserves in the FASB Staff Q&A ASC Topic 326, No.1. The WARM method requires reference to historic loss data taking into consideration expected economic conditions over the relevant timeframe. The Company applies the WARM method for the majority of its loan portfolio, which loans share similar risk characteristics.
Application of the WARM method to estimate a CECL reserve requires judgment, including (i) the appropriate historical loan loss reference data, (ii) the expected timing and amount of future loan fundings and repayments, and (iii) the current credit quality of the Company’s loan portfolio and expectations of performance and market conditions over the relevant time period. To estimate the historic loan losses relevant to the Company’s portfolio, the Company reviews its historical loan performance, which includes zero realized principal losses since the inception of the Company’s business. In addition, the Company reviews each loan on a quarterly basis and evaluates the borrower’s ability to pay the monthly interest, the borrower’s likelihood of executing the original exit strategy, as well as the loan-to-value ratio. Based on these analyses, as of December 31, 2025 and 2024, no allowance for credit losses is required. Failure to properly measure an allowance for credit losses could result in the overstatement of earnings and the carrying value of the loans receivable. Actual losses, if any, could differ significantly from estimated amounts.
Income Taxes
The Company follows ASC Sub-Topic 740-10, “Accounting for Uncertainty in Income Taxes”, which prescribes a recognition threshold and measurement attribute for financial statement recognition and measurement of a tax position taken, or expected to be taken, in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. As of December 31, 2025 and 2024, the Company has no material uncertain tax positions to be accounted for in the consolidated financial statements. The Company recognizes interest and penalties related to uncertain tax positions, if any, as part of income tax expense.
The
Company is organized and conducts its operations to qualify as a real estate investment trust (“REIT”) for federal income
tax purposes. The Company elected to be taxed as a REIT commencing with its taxable year ended December 31, 2014. A REIT calculates taxable
income similar to other domestic corporations, with the major difference being a REIT is entitled to a deduction for dividends paid.
A REIT is generally required to distribute each year at least
| F-9 |
Revenue Recognition
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.
Deferred Financing Costs
Deferred financing costs related to the Company’s former 6% senior secured notes (the “Notes”) were presented as a direct reduction of the related debt liability in accordance with ASU 2015-03 (ASC Sub-Topic 835-30) and were amortized over the term of the Notes. The remaining unamortized balance of costs was fully recognized upon redemption of the Notes in December 2025.
Deferred financing costs related to the Company’s credit facilities, including (i) the Amended and Restated Credit and Security Agreement, as amended (the “Amended and Restated Credit Agreement”) with Webster Bank, N.A. (as successor to Webster Business Credit Corporation) (“Webster”), Flushing Bank (“Flushing”) and Mizrahi Tefahot Bank Ltd. (“Mizrahi”) (the “Webster Credit Line”), and (ii) the letter agreement (the “Letter Agreement”) with Valley National Bank (“Valley”) that established a line of credit for MBC Funding II (the “Valley Credit Line”), are presented as an asset on the balance sheet in accordance with ASU 2015-15 (ASC Sub-Topic 835-30) and are amortized over the term of the respective agreements using the straight-line method.
Amortization of deferred financing costs is included in interest and amortization of deferred financing costs in the accompanying consolidated statements of operations.
Basic and diluted EPS are calculated in accordance with ASC Topic 260, “Earnings Per Share.” Under ASC Topic 260, basic earnings per share is computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted EPS includes the potential dilution from the exercise of stock options and warrants for common shares using the treasury shares method. The numerator in calculating both basic and diluted EPS for each year is the reported net income. There were no outstanding stock options or warrants at December 31, 2025 and 2024.
The Company measured and recognized compensation awards for all stock option grants made to employees and directors, based on their fair value in accordance with ASC Topic 718, “Compensation - Stock Compensation” (“ASC Topic 718”), which establishes standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services. A key provision of this statement is to measure the cost of employee services received in exchange for an award of equity instruments (including stock options) based on the grant-date fair value of the award. The cost will be recognized over the service period during which an employee is required to provide service in exchange for the award (i.e., the requisite service period or vesting period). The Company accounts for equity instruments issued to non-employees in accordance with the provisions of ASC Topic 718 and ASC Sub-Topic 505-50, “Equity-Based Payment to Non-Employees.” All transactions with non-employees in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more appropriately measurable.
| F-10 |
Fair Value of Financial Instruments
The carrying amounts of the Company’s lines of credit and interest-bearing commercial loans approximate fair value due to the short-term and/or variable-rate nature of these instruments. The fair value of the Notes (when outstanding) was determined using quoted market prices.
Recent Accounting Pronouncements
Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s consolidated financial statements.
Reclassifications
Certain amounts included in the December 31, 2024 consolidated financial statements have been reclassified to conform to the December 31, 2025 presentation.
| 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 Company’s Webster Credit Line established pursuant to the Amended and Restated Credit Agreement (see Note 5).
| 4. | Commercial Loans |
Loans Receivable
The
Company offers short-term secured non–banking loans to real estate investors (also known as hard money 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
For
the years ended December 31, 2025 and 2024, the total amounts of $
| F-11 |
At
December 31, 2025, the Company was committed to $
At
December 31, 2024, the Company has made loans to four different entities in the aggregate amount of $
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 December 31, 2025 and 2024:
Schedule of Credit Risk
| Performing loans | Developers-Residential | Developers-Commercial | Developers-Mixed Use | Total outstanding loans | ||||||||||||
| December 31, 2025 | $ | $ | $ | $ | ||||||||||||
| December 31, 2024 | $ | $ | $ | $ | ||||||||||||
At
December 31, 2025, the Company’s loans receivable consisted of loans in the amount of $
Generally, borrowers are paying their interest, and the Company receives a fee in connection with the extension of the loans. In all instances, the borrowers have either signed an extension agreement or are in the process of signing an extension. Accordingly, at December 31, 2025, no loan impairments exist and there are no provisions for impairment credit losses of loans or recoveries thereof.
In
September 2025, the Company sold one of its loans receivable at its face value of $
Subsequent
to the balance sheet date, approximately $
| 5. | Lines of Credit |
As
of December 31, 2025, the Company was party to an Amended and Restated Credit and Security Agreement with Webster, Flushing, and Mizrahi
(the “Lenders”). The Amended and Restated Credit Agreement provides the Company with an aggregate revolving credit line of
$
| F-12 |
Borrowings
under the Webster Credit Line bear interest, at the Company’s election for each drawdown, at either
The
Webster Credit Line contains customary covenants and restrictions, including, among others, limitations on borrowings relative to collateral
value, requirements to maintain specified financial ratios, limitations on the terms of loans the Company makes to its customers, and
restrictions, under certain circumstances, on dividends and share repurchases, asset dispositions, mergers or consolidations, the granting
of liens, and transactions with affiliates. The Amended and Restated Credit Agreement also contains a cross-default provision pursuant
to which a default under certain indebtedness of the Company or its subsidiary, MBC Funding II, may constitute a default under the Webster
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 the Company’s annual net income from the prior fiscal year. The Webster Credit Line also
includes restrictions, subject to negotiated exceptions, on additional indebtedness and other restricted payments. In addition, Mr. Ran
has provided a personal guaranty of up to $
On
December 12, 2025, MBC Funding II entered into a committed credit facility with Valley, providing for maximum borrowings of up to $
Deferred
financing costs incurred to establish and amend the lines of credit are being amortized on a straight-line basis over the terms of the
respective agreements. Amortization expense related to these costs was $
The Company was in compliance with all covenants under the Webster Credit Line, as amended, as of December 31, 2025 and 2024. MBC Funding II was in compliance with all covenants under the Valley Credit Line as of December 31, 2025.
As
of December 31, 2025, outstanding borrowings under the Webster Credit Line were $
| F-13 |
On February 24, 2026, the Company entered into an amendment to the Amended and Restated Credit Agreement that, among other things, (i) extended the term through March 31, 2026, (ii) provided for the departure of Mizrahi as a lender, and (iii) reallocated revolving commitments among the remaining lenders.
On
March 24, 2026, the Company entered into an amendment to the Amended and Restated Credit Agreement that, among other things, (i) extended
the maturity of the credit facility to
| 6. | Senior Secured Notes |
On
April 25, 2016, in an initial public offering, MBC Funding II issued the Notes, due
Pursuant
to a notice of redemption delivered on November 26, 2025, MBC Funding II redeemed all outstanding Notes on December 15, 2025 at a redemption
price equal to
| 7. | Simple IRA Plan |
On
October 26, 2000, the Board of Directors approved a Simple IRA Plan (the “IRA Plan”) to attract and retain valuable executives.
The IRA Plan allows for participation by up to
| 8. | Stockholders’ Equity |
On
April 11, 2023, the Company adopted a share repurchase program authorizing the repurchase of up to shares of the Company’s
common stock. The program expired on April 10, 2024. Prior to expiration, the Company repurchased an aggregate of shares for an
aggregate cost of $
On
November 20, 2025, the Company adopted a new share repurchase program authorizing the repurchase of up to shares of the Company’s
common stock over the subsequent 12 months. As of December 31, 2025, the Company had repurchased an aggregate of shares under the
program for an aggregate cost of approximately $
| F-14 |
| 9. | Stock-Based Compensation |
Stock-based compensation expense recognized under ASC Topic 718 of $ for each of the years ended December 31, 2025 and 2024 reflects
the amortization of the fair value of restricted shares granted to the Company’s Chief Executive Officer on September
9, 2011 of $
| 10. | Commitments and Contingencies |
Operating Leases
On
October 27, 2020, the Company amended its existing lease (the “Lease Amendment”) for its corporate headquarters located at
60 Cutter Mill Road, Great Neck, New York, to expand the office premises and to
At December 31, 2025, approximate future minimum lease payments, including mandatory fixed electricity charges, are as follows:
Schedule of Future Minimum Lease Payments
| 2026 | $ | |||
| 2027 | ||||
| Total minimum lease payments | ||||
| Less: amount representing interest | ( | ) | ||
| Present Value of Net Minimum Lease Payments | $ |
At December 31, 2025, the Company’s operating lease had a weighted-average remaining lease term of 1.92 years, and the weighted-average discount rate used was 4.14%, which was based on the Company’s incremental borrowing rate at the inception of the lease.
Rent
expense, including fixed electricity charges and variable real estate taxes, in the years 2025 and 2024 was approximately $
Employment Agreements
In
March 1999, the Company entered into an employment agreement with Mr. Ran, pursuant to which: (i) Mr. Ran’s employment term renews
automatically on June 30th of each year for successive one-year periods unless either party gives to the other written notice
at least 180 days prior to June 30th of its intention to terminate the agreement; (ii) Mr. Ran receives a current annual base
salary of $
In
June 2024, the Compensation Committee approved an increase in Mr. Ran’s annual base salary from $
| F-15 |
| 11. | Segment Reporting |
The Company reports segment information based on the management approach which designates the internal reporting used by the Chief Operating Decision Maker, which is the Company’s Chief Executive Officer, for making decisions and assessing performance as the source of the Company’s reportable segments. The Company operates as a single reportable segment, originating, servicing, and managing short-term secured commercial loans to real estate investors. Management evaluates performance on a consolidated basis, as all loans share similar risk profiles, underwriting standards, and operational processes. Key performance metrics include interest income, origination fees, loan performance, and operating expenses. Significant expenses reviewed by management include interest and amortization of deferred financing costs and general and administrative expenses, which remain consistent across loan types. There are no material differences between segment-level information and consolidated financial reporting. The Company will continue to evaluate its segment reporting disclosures and make adjustments if there are material changes in business operations or financial reporting requirements.
Net income from the Company’s reportable segment is as follows:
Schedule of Net Income From the Company’s Reportable Segment
| 2025 | 2024 | |||||||
| Lending revenue: | $ | $ | ||||||
| Less: | ||||||||
| Interest expense | ||||||||
| Amortization of deferred financing costs | ||||||||
| Referral fees | ||||||||
| General and administrative expenses | ||||||||
| Other income | ( | ) | ( | ) | ||||
| Income tax expense | ||||||||
| Net income | $ | $ | ||||||
| 12. | Subsequent Events |
Pursuant
to a dividend declared by the Company’s Board of Directors on
On
February 10, 2026, the Company’s Board of Directors declared a cash dividend of $ per share, payable on
| F-16 |
Exhibit 10.3
AGREEMENT OF LEASE, made this 9 day of June 2011 by and between 60 CUTTER MILL ROAD PROPERTY CORP., a New York corporation with offices located at 60 Cutter Mill Road, Suite 303, Great Neck, New York 11021, (“Landlord”), and MANHATTAN BRIDGE CAPITAL, INC. with offices at 192 Lexington Avenue, Suite 504, New York, New York 10016 (“Tenant”),
WITNESSETH:
Landlord hereby leases to Tenant and Tenant hereby hires from Landlord Suite 205 (as delineated on Exhibit A attached hereto) (“Demised Premises”) in the building (“Building”) known as 60 Cutter Mill Road, Village of Great Neck Plaza, Town of North Hempstead, County of Nassau, Great Neck, New York 11021 for a term to commence on the date hereof and to expire on the final day of the second month of the Sixth Lease Year (as hereinafter defined), at a basic rental rate set forth in Paragraph 3 hereof.
The parties hereto, for themselves, their heirs, distributees, executors, administrators, legal representatives, successors and assigns, hereby covenant as follows:
1. DEFINITIONS. These terms shall have the following meanings in this lease:
(a) “Basic Rent” shall mean the rent at the rental rate or rates provided for in Paragraph 3 of this lease and shall apply to Basic Rent on an annual basis or on a monthly basis as is applicable.
(b) “Additional Rent” shall mean all sums of money, other than Basic Rent, as shall become due and payable from Tenant to Landlord hereunder, and Landlord shall have the same remedies for a default in payment of Additional Rent as for a default in payment of Basic Rent.
(c) “Rents” shall mean Basic Annual Rent and Additional Rent hereunder.
(d) “Rent Commencement Date” shall be that date five (5) days after the date upon which Landlord notifies Tenant Landlord’s Work (as defined in Subparagraph 2(b) hereof) is substantially completed and Tenant is provided access and keys to the Demised Premises with undisturbed use and occupancy. If the Rent Commencement Date is the first day of a calendar month, then the Rent Commencement Date shall also be the Anniversary Date. If the Rent Commencement Date is not the first day of a calendar month, the Anniversary Date shall be the first day of the calendar month immediately following the Rent. Commencement Date. “Lease Year” shall mean any 12-month period beginning on the Anniversary Date or an anniversary of the Anniversary Date. The Lease Year beginning on the Anniversary Date shall be the First Lease Year, the Lease Year beginning on the first anniversary of the Anniversary Date shall be the Second Lease Year, and so forth. Landlord’s notice to Tenant of the substantial completion of Landlord’s Work shall include the actual dates of the Rent Commencement Date, the Anniversary Date, and the Expiration Date, and Tenant shall execute such notice, which shall then be an addendum to this lease. Tenant’s failure to execute such notice shall in no way affect the Rent Commencement Date, Anniversary Date or Expiration Date.
(e) “Term” shall mean the term for which the Demised Premises are hereby leased.
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(f) “Landlord” means a landlord or lessor, and as used in this lease means only the Landlord, or the mortgagee in possession, for the time being of the Land and Building, so that in the event of any sale or sales of the Land and Building, or in the event of a lease of the Building, or of the Land and Building, Landlord shall be and hereby is entirely freed and relieved of all covenants and obligations of Landlord hereunder, and it shall be deemed and construed without further agreement between the parties or their successors in interest, or between the parties and the purchaser, at any such sale, or the said lessee of the Building, or of the Land and Building, that the purchaser or the lessee, as the case may be, has assumed and agreed to carry out any and all covenants and obligations of Landlord hereunder.
(g) “Tenant” shall mean tenant herein named or any assignee or other successor in interest (immediate or remote) of tenant herein named when tenant herein named or such assignee or other successor in interest, as the case may be, is in possession of the Demised Premises as owner of the Tenant’s estate and interest granted by this lease, and also if Tenant is not an individual or corporation, all of the individuals, firms and/or corporations or other entities comprising Tenant. Tenant’s obligation hereunder shall be construed in every instance as conditions as well as covenants.
(h) “Land” shall mean that certain parcel of land located at 60 Cutter Mill Road, Great Neck, New York, County of Nassau, and “Building” shall mean the commercial building now or hereafter existing on the Land.
(i) “Business Days” as used in this lease shall exclude Saturdays (except such portion thereof as is covered by specific hours in Paragraph 31 hereof), Sundays and all days observed by the State of New York or Federal Government as legal holidays and those designated as holidays by the applicable building service union employees service contract or by the applicable Operating Engineers contract with respect to HVAC service.
(j) All references in this lease to numbered Paragraphs and lettered Exhibits are references to Paragraphs of this lease and Exhibits annexed to (and thereby made part of) this lease, as the case may be, unless expressly otherwise designated in the context.
(k) The words “re-enter” and “re-entry” as used in this lease are not restricted to their technical legal meaning.
2. OCCUPANCY, LANDLORD’S WORK AND TENANT ALTERATIONS. (a) Tenant shall use and occupy the Demised Premises as general offices, and for no other purpose. Tenant shall not use the Demised Premises or any part thereof for any unlawful business, use or purpose nor any business, use or purpose deemed disreputable or extra-hazardous nor for any purpose in any manner which is in violation of any present or future governmental laws, rules or regulations or which is inconsistent with the purposes or functions of a first-class office building. Tenant shall not use or occupy the Demised Premises in violation of the Certificate of Occupancy issued for the Building. Tenant shall not use or occupy the Demised Premises or do or permit anything to be done thereon in any manner which shall make it impossible for Landlord to carry any insurance required by this lease or any prior lease or which will invalidate or increase the cost of such insurance to Landlord, or which will cause structural injury to the Building, or which would constitute a public or private nuisance, or which will violate any present or future ordinary or extraordinary, foreseen or unforeseen, laws, regulations, ordinances or requirements of the Federal, State or local governments, or of any other governmental public or quasi-public authorities now existing or hereafter created having jurisdiction over Landlord and/or the Demised Premises.
| 2 |
(b) Attached hereto and made a part hereof as Exhibit B is a plan (the “Plan”) setting forth layouts to complete the Demised Premises in accordance with this lease. Landlord, at its cost and expense shall perform the work set forth in the Plan (“Landlord’s Work”) in accordance with the Plan, provided, however, that Landlord shall have the right to make any changes required by any governmental department or bureau having jurisdiction of the Demised Premises, proved such changes to not diminish or adversely affect Tenant’s use of the Demised Premises. If Tenant shall request any change in the Plan, either relating to scope of work or quality of the installation, same shall be undertaken by Landlord only if: (i) Tenant expressly agrees to such changes in writing, (ii) Landlord expressly agrees to such changes in writing, and (iii) Tenant expressly agrees in writing to pay the additional cost and expenses to be incurred by Landlord in making such changes, plus a fee to Landlord of eight percent (8%) of the additional costs and expenses. Landlord’s Work shall be performed by Landlord only once, it being understood that Landlord’s obligation to perform Landlord’s Work is a single, non-recurring obligation. Not later than three (3) days after the Rent Commencement Date, Landlord’s representative and Tenant’s representative shall jointly examine Landlord’s Work and shall compile a list of any remaining items thereof which Landlord may be obligated to complete (i.e., so- called “punchlist” items), Not later than thirty (30) days after the Rent Commencement Date, Tenant may provide to Landlord an additional punchlist of minor or “touch-up” items in the Demised Premises. The taking of possession of the Demised Premises by Tenant shall be deemed to be Tenant’s acceptance of same, but Landlord shall thereafter diligently proceed to complete said punchlist items. Except for Landlord’s Work, Landlord shall have no obligation to perform any work or repair to prepare the Demised Premises for Tenant’s occupancy. The hard and soft costs to Landlord of Landlord’s Work are referred to herein as “Landlord’s Work Costs.”
(c) Neither Tenant nor its agents or employees shall interfere by act or omission with the commencement or completion of work being done by Landlord and its agents and employees. If Tenant so interferes, Landlord may, at Landlord’s sole discretion, estimate the date upon which the Rent Commencement Date would occur absent such act or omission, and notify Tenant of such date, and if on such notice such date shall be deemed to be the Rent Commencement Date, and Tenant shall be liable for an Landlord shall charge Tenant Basic Rent (as defined below) from and after the Rent Commencement Date.
(d) With Landlord’s prior written consent, Tenant may make, at its own cost and expense, any changes, alterations, decoration, additions or improvements (hereinafter, “Alterations”) in and to the Demised Premises from time to time, provided: (i) said Alterations do not affect the structure or appearance of the Building or the public spaces, common areas or spaces of any other tenants in the Building, or affect utility services or plumbing or electrical lines; (ii) Tenant causes Tenant’s contractors and subcontractors to carry workman’s compensation, general liability, personal and property damage insurance as required by Landlord; and (iii) Tenant obtains all licenses, permits, certificates and government approvals which may be required in connection with any Alterations and submits copies thereof promptly to Landlord prior to commencing any Alterations. All of Landlord’s reasonable, out of pocket costs incurred in connection with the review of plans in connection with the determination as to whether to grant consent to Alterations shall be reimbursed by Tenant, and shall be payable as Additional Rent. Tenant will perform all work in compliance with the provisions of any license, permit, certificate or government approval and upon completion will obtain certificates of final approval thereof and shall deliver copies thereof promptly to Landlord, and will conduct its work in such manner so as to maintain harmonious labor relations and will not unreasonably interfere with the operations of the Building or the tenants of other spaces in the Building. If Tenant shall not discharge any mechanics’ lien filed against the Demised Premises or the Building as a result of Alterations undertaken by Tenant at the Demised Premises within twenty (20) days after it is filed, Landlord may, at its option, bond such lien or pay same in full and Tenant shall within five (5) days of invoice therefor, reimburse Landlord for all Landlord’s costs in connection therewith, any amount so invoiced to be Additional Rent hereunder. Tenant shall give Majestic Property Management Corp. (or another designee of Landlord) the opportunity to bid on all work at the Demised Premises.
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(e) All fixtures, partitions and railings, attached to or built into the Demised Premises by Landlord, which are installed in the Demised Premises shall, upon installation become the property of Landlord, and shall remain upon and be surrendered with the Demised Premises unless Landlord, upon 20 days’ prior to the date fixed for expiration of the term of this lease, elects to relinquish Landlord’s rights thereto and to have them removed by Tenant, in which event, they shall be removed by Tenant prior to the expiration of this lease. All furniture, furnishings and other articles of movable property owned by Tenant and located in the Demised Premises shall be and shall remain the property of Tenant and may be removed by Tenant at any time during the term of this lease; provided -however, if any of the foregoing shall be removed, Tenant shall repair or pay the cost of repairing any damages to the Demised Premises and/or the Building resulting from such removal. Any of the aforesaid furniture, furnishing and other moveable , property which shall remain in the Demised Premises after the expiration or earlier termination of this lease, or after a reasonable period following an earlier termination date, shall be deemed to have been abandoned and may be retained by Landlord as Landlord’s property or may be disposed of in such manner as Landlord sees fit, at Tenant’s sole cost and expense. Landlord has not conveyed to Tenant any rights in or to the outer side of the outside walls of the Building.
3. BASIC RENT. (a) If the Rent Commencement Date is not the Anniversary Date, Tenant shall pay to Landlord Basic Rent at the rate of $94.81 per diem for the period from the Rent Commencement Date through the final day of the calendar month in which the Rent Commencement Date occurs, which Basic Rent shall be due and payable on the Rent Commencement Date.
(b) During the First Lease Year, Tenant shall pay to Landlord Basic Rent at the rate of THIRTY-FOUR THOUSAND ONE HUNDRED THIRTY-TWO DOLLARS ($34,132.00) per annum, payable in advance on the first day of each month in monthly installments of TWO THOUSAND EIGHT HUNDRED FORTY-FOUR AND 33/100 DOLLARS ($2,844.33) without any notice, demand or setoff, except that Basic Rent for the first two months of the First Lease Year shall be abated and Basic Rent for the third month of the First Lease Year shall be payable simultaneously with Tenant’s execution of this lease.
(c) During the Second Lease Year, Tenant shall pay to Landlord Basic Rent at the rate of THIRTY-FOUR THOUSAND NINE HUNDRED EIGHTY- FIVE AND 30/100 DOLLARS ($34,985.30) per annum, payable in advance on the first day of each month in monthly installments of TWO THOUSAND NINE HUNDRED FIFTEEN AND 44/100 DOLLARS ($2,915.44) without any notice, demand or setoff.
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(d) During the Third Lease Year, Tenant shall pay to Landlord Basic Rent at the rate of THIRTY-FIVE THOUSAND EIGHT HUNDRED FIFTY-NINE AND 93/100 DOLLARS ($35,859.93) per annum, payable in advance on the first day of each month in monthly installments of TWO THOUSAND NINE HUNDRED EIGHTY-EIGHT AND 33/100 DOLLARS ($2,988.33) without any notice, demand or setoff.
(e) During the Fourth Lease Year, Tenant shall pay to Landlord Basic Rent at the rate of THIRTY-SIX THOUSAND NINE HUNDRED THIRTY- FIVE AND 73/100 DOLLARS ($36,935.73) per annum, payable in advance on the first day of each month in monthly installments of THREE THOUSAND SEVENTY-SEVEN AND 98/100 DOLLARS ($3,077.98) without any notice, demand or setoff.
(f) During the Fifth Lease Year, Tenant shall pay to Landlord Basic Rent at the rate of THIRTY-EIGHT THOUSAND FORTY-THREE AND 80/100 DOLLARS ($38,043.80) per annum, payable in advance on the first day of each month in monthly installments of THREE THOUSAND ONE HUNDRED SEVENTY AND 32/100 DOLLARS ($3,170.32) without any notice, demand or setoff.
(g) During the Sixth Lease Year (which shall be only two months long), Tenant shall pay to Landlord Basic Rent at the rate of THIRTY-NINE THOUSAND ONE HUNDRED EIGHTY-FIVE AND 11/100 DOLLARS ($39,185.11) per annum, payable in advance on the first day of each month in monthly installments of THREE THOUSAND TWO HUNDRED SIXTY- FIVE AND 43/100 DOLLARS ($3,265.43) without any notice, demand or setoff.
(h) The above increases refer to Basic Annual Rent to which must be added the Additional Rent as set forth in Paragraphs 5 and 6 hereof and elsewhere in this lease.
4. SECURITY. Simultaneously with Tenant’s execution hereof, Tenant shall deposit with Landlord SIX THOUSAND THREE HUNDRED FORTY-EIGHT AND 96/100 DOLLARS ($6,348.96) which shall be held as security under this lease. From time to time during the term of this lease, Tenant shall deposit additional security with Landlord, so that total security held by Landlord shall always be equal to two (2) months’ then-current Basic Rent and Additional Rent for use of electricity. If Tenant defaults in respect of any of the terms, provisions and conditions of this lease, including, but not limited to, the payment of Basic Rent and Additional Rent, Landlord may, at Landlord’s option, use, apply or retain the whole or any part of the security so deposited to the extent required for the payment of any Basic Rent and Additional Rent or any other sum as to which Tenant is in default or for any sum which Landlord may expend or may be required to expend by reason of Tenant's default in respect of any of the terms, covenants, and conditions of this lease, including but not limited to, any damages or deficiency in the re-letting of the Demised Premises, whether such damages or deficiency accrued before or after summary proceedings or other re-entry by Landlord and Tenant shall immediately thereafter restore the security deposit so that Landlord shall at all times hereunder be holding an amount equal to two (2) months’ then-current Basic Rent and Additional Rent for use of electricity as security. If Tenant shall fully and faithfully comply with all of the terms, provisions, covenants and conditions of this lease, then the security shall be returned to Tenant after the date fixed as the end of the Lease and after delivery of possession of the Demised Premises to Landlord in the condition required by this lease. In the event of a sale of the Land and Building, Landlord shall have the right to transfer the security to the vendee or lessee and Landlord shall thereupon be released by Tenant from all liability for the return of such security, provided successor to Landlord acknowledges receipt of security; and Tenant agrees to look to the new Landlord solely for the return of said security, and it is agreed that the provisions hereof shall apply to every transfer or assignment made of the security to a new Landlord. Tenant shall not assign or encumber or attempt to assign or encumber the monies deposited herein as security and neither Landlord nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment or attempted encumbrance.
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5. ELECTRIC CURRENT. (a) Landlord shall furnish electricity, including electricity for air conditioning, to Tenant based on the method of including a charge for the use thereof as Additional Rent as set forth in Subparagraph 5(b) below. Such usage shall include, but not be limited to, electricity for air conditioning of the Demised Premises and a pro rata share of electricity for air conditioning, lighting, and other services used in the common areas of the Building. Landlord. will furnish electricity to Tenant through presently installed electrical facilities for Tenant’s reasonable use of same. Tenant shall make no alterations or additions to the electric systems serving the Building, the electric equipment, and/or appliances without first obtaining written consent from Landlord in each instance. Landlord, its agent or consultant is given the right to make surveys from time to time in the Demised Premises covering the electrical equipment and fixtures and use of current. Landlord shall not in any wise be liable or responsible to Tenant for any loss or damage or expense which Tenant may sustain or incur if either the quantity or character of electrical service is changed or is no longer available or suitable for Tenant’s requirements. Tenant’s use of electric current shall never exceed the capacity of existing feeders to the Building or the risers or wiring installation. Any riser or risers to supply Tenant’s electrical requirements, upon written request of Tenant, will be installed by Landlord at the sole cost and expense of Tenant, if, in Landlord’s sole judgment, the same are necessary and will not cause or create a dangerous or hazardous condition or entail excessive or unreasonable alterations, repairs or expense or interfere with or disturb other tenants or occupants. In addition to the installation of such riser or risers. Landlord will also at the sole cost and expense of Tenant, install all other equipment proper and necessary in connection therewith subject to the aforesaid terms and conditions. Landlord reserves the right to terminate the furnishing of electricity at any time upon thirty (30) days written notice to Tenant, in which event Tenant may make applications directly to the utility’ company servicing the’ Building for the Tenant’s entire separate supply of electric current and Landlord shall permit its wires and conduits to the extent available and safely capable to be used for such purpose. Upon the expiration of the aforesaid thirty (30) days written notice to Tenant, Landlord may discontinue furnishing the electric current.
(b) Commencing the Rent Commencement Date, Tenant shall pay Additional Rent for use of electricity at the initial rate of THREE THOUSAND NINE HUNDRED SIXTY-ONE AND 75/100 DOLLARS ($3,961.75) per annum, payable in advance on the first day of each month (in addition to Basic Rent and other charges due under this lease) in installments of THREE HUNDRED THIRTY AND 15/100 DOLLARS ($330.15) per month without any notice, demand or setoff. Additional Rent for use of electricity shall be pro-rated accordingly if the Rent Commencement Date is not the Anniversary Date, and such pro-rated payment, if applicable, shall be payable on the Rent Commencement Date.
(c) Landlord shall in no way be liable or responsible to Tenant for any loss, damage or expense which Tenant may sustain or incur if (i) the supply of electric energy to the Premises is temporarily interrupted or (ii) the quantity or character of electric service is changed or is no longer available or suitable for Tenant’s requirements, except to the extent resulting from Landlord’s willful misconduct or gross negligence.
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(d) All amounts payable by Tenant under this Paragraph are in addition to amounts payable elsewhere in this lease. Such amounts shall be deemed as Additional Rent for the use of the Demised Premises, i.e. space use, and shall not be deemed as a purchase of electricity.
6. REAL ESTATE TAXES. (a) Tenant shall pay as Additional Rent 1.20% (“Tenant’s Proportionate Share”) of all taxes and assessments, general and special, ordinary and extraordinary, and all other impositions of every kind and nature whatsoever, which may be levied, imposed or assessed during the Term against the Demised Premises, the Land and Building and improvements and appurtenances, or any part thereof (hereinafter jointly “Property”), and all taxes and assessments upon any leasehold interests, to the extent that such taxes and assessments exceed the Base Year total as hereinafter defined; provided, however, that with respect to the tax years in which this lease commences or expires the amount of any excess for such tax year payable hereunder shall be pro rated between Landlord and Tenant on the basis of the Commencement Date and the Expiration Date.
(b) “Base Year” shall mean i) for a taxing authority whose tax year is the calendar year, the 2012 calendar year, and ii) for a taxing authority whose tax year is not the calendar year, that taxing authority’s tax year ending during 2012.
(c) If any kind of tax or assessment whatsoever shall be charged against Landlord partially or totally in substitution for real estate taxes and/or assessments, same shall be deemed as a real estate tax for purposes of this section of this lease.
(d) Should any governmental authority having jurisdiction impose a tax and/or assessment (other than franchise tax) upon or against the Rents payable hereunder by Tenant to Landlord, or the occupancy by Tenant, such tax shall be Tenant’s obligation and responsibility, but if paid by Landlord, shall be deemed Additional Rent and reimbursed to Landlord by Tenant within ten (10) days after submission of a bill for same. All costs and expenses of opposing or seeking reduction of real estate taxes or assessments or other taxes referred to in this section shall be deemed as an addition to actual real estate taxes and shall be reimbursed by Tenant to the same extent as if this were an addition to real estate taxes.
(e) Tenant shall pay Tenant’s Proportionate Share of such increase in taxes and assessments to Landlord within twenty (20) days after the submission of a bill for same, provided however, upon written request of Landlord or Landlord’s mortgagee to escrow such increases in taxes, Tenant shall pay Tenant’s Proportionate Share of such increase in taxes and assessments requested to be escrowed in advance on a monthly basis, based on Landlord’s estimate. If the monthly payments made by Tenant shall be less than Tenant’s Proportionate Share of the increase in such taxes and assessments, then Tenant shall pay such deficiency to Landlord within twenty (20) days after written request. If Tenant’s monthly payments shall exceed Tenant’s actual proportionate share of the increase in such taxes and assessments/ then such excess shall be applied against the next payment(s) due pursuant to this Paragraph. Upon Tenant’s request Landlord shall provide Tenant with copies of tax bills which relate to any bill provided by Landlord to Tenant pursuant to this Paragraph.
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(f) Tenant shall pay as aforesaid Tenant’s Proportionate Share of all assessments which may be levied, assessed, charged or imposed upon the Land and Building or any part thereof by reason of any public works or construction, provided that whenever assessments or special assessments may be paid in installments. Landlord shall enter into such agreement or agreements as are permitted by law to secure the right and privilege of paying such assessments or special assessments in installments. In such case, the last such installment paid prior to commencement or termination of this lease shall be pro rated between Landlord and Tenant.
(g) Tenant shall pay all personal property taxes levied on the merchandise, equipment, appliances, fixtures, machinery, inventory, furniture and other personal property and contents and leasehold value of the Demised Premises.
(h) Landlord shall grant Tenant a credit towards Additional Rent for Real Estate Taxes in the amount of Tenant’s Proportionate Share of any real estate tax refund for any period during the term of this lease.
Paragraphs 7 and 8 are intentionally deleted.
9. MAINTENANCE AND REPAIRS. (a) Tenant shall, throughout the term of this lease, take good care of the Demised Premises and the fixtures and appurtenances therein. Tenant shall be responsible for repair of all damage or injury to the Demised Premises or any other part of the Building and the systems and equipment thereof, requiring nonstructural repairs caused by or resulting from carelessness, omission, neglect or improper conduct of Tenant, Tenant’s subtenants, agents, employees, invitees or licensees, or which arise out of any work, labor, service or equipment (except by Landlord) done for or supplied to Tenant or any subtenant or arising out of the installation, use or operation of the property or equipment of Tenant or any subtenant, except by Landlord. Tenant shall also repair all non-structural damage to the Building and the Demised Premises caused by the moving of Tenant’s fixtures, furniture and equipment. If structural damage to the Building is caused by or results from carelessness, omission, neglect or improper conduct of Tenant, Tenant’s subtenants, agents, employees, invitees or licensees, or which arise out of any work, labor, service or’ equipment done for or supplied to Tenant or any subtenant or arising out of the installation, use or operation of the property or equipment of Tenant or any subtenant, or is caused by the moving of Tenant’s fixtures, furniture and equipment, then Landlord shall make such structural repairs and Tenant shall promptly reimburse Landlord for such work upon presentment of a bill therefor, such reimbursement to be deemed Additional Rent. Tenant shall promptly make, at Tenant’s expenses, all repairs in and to the Demised Premises for which Tenant is responsible, using only the contractor for the trade or trades in question, selected from a list of at least two contractors per trade submitted by Landlord. Any other repairs in or to the Building or the facilities and systems thereof for which Tenant is responsible shall be performed by Landlord at the Tenant’s expense. The foregoing obligations of Tenant shall survive the expiration or earlier termination of this lease. Landlord shall maintain in good working order and repair the exterior and the structural portions of the Building, including the structural portions of the Demised Premises, and the public portions of the Building’s interior and the Building’s plumbing, electrical, heating and ventilating systems (to the extent such systems presently exist) serving the Demised Premises. Tenant agrees to give prompt notice of any defective condition in the Demised Premises for which Landlord may be responsible hereunder. There shall be no allowance to Tenant for diminution of rental value and no liability on the part of Landlord by reason of inconvenience, annoyance or injury to business arising from Landlord or others making repairs, alterations, additions or improvements in or to any portion of the Building or the Demised Premises or in and to the fixtures, appurtenances or equipment thereof. It is specifically agreed that Tenant shall not be entitled to any setoff or reduction of rent by reason of any failure of Landlord to comply with the covenants of this or any other provision of this Lease. Tenant agrees that Tenant’s sole remedy at law in such instance will be by way of an action for damages for breach of contract. The provisions of this Paragraph shall not apply in the case of fire or other casualty which are dealt with in Paragraph 14 hereof.
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(b) Except if required by the neglect or other fault of Landlord, Tenant at its expense, shall replace all scratched, damaged or broken doors or other glass in the Demised Premises and shall be responsible for all maintenance and repair of lighting fixtures and wall and floor coverings in the Demised Premises.
10. WINDOW CLEANING. Tenant will not clean nor require, permit, suffer or allow any window in the Demised Premises to be cleaned from the outside in violation of Section 202 of the Labor Law or any other applicable law or of the Rules of the Board of Standards and Appeals, or of any other Board or body having or asserting jurisdiction.
11. REQUIREMENTS OF LAW, FIRE INSURANCE, FLOOR LOADS. During the term of this lease, Tenant, at Tenant’s sole cost and expense, shall promptly comply with all present and future laws, orders and regulations of all state, federal, municipal and local governments, departments, commissions and boards and any direction of any public officer pursuant to law, and all orders, rules and regulations of the New York Board of Fire Underwriters, Insurance Services Office, or any similar body which shall impose any violation, order or duty upon Landlord or Tenant with respect to the Demised Premises, whether or not arising out of Tenant’s use or manner of use thereof, (including Tenant’s permitted use) or, with respect to the Building if arising out of Tenant’s use or manner of use of the Demised Premises or the Building (including the use permitted under the lease). Nothing herein shall require Tenant to make structural repairs or alterations unless Tenant has, by its manner of use of the Demised Premises or method of operation therein, violated any such laws, ordinances, orders, rules, regulations or requirements with respect thereto. Tenant may, after securing Landlord to Landlord’s satisfaction against all damages, interest, penalties and expenses, including, but not limited to, reasonable attorney’s fees, by cash deposit or by surety bond in an amount and in a company satisfactory to Landlord, contest and appeal any such laws, ordinances, orders, rules, regulations or requirements provided same is done with all reasonable promptness and provided such appeal shall not subject Landlord to prosecution for a criminal offense or constitute a default under any lease or mortgage under which Landlord may be obligated, or cause the Demised Premises or any part thereof to be condemned or vacated. Tenant shall not do or permit any act or thing to be done in or to the Demised Premises, which is contrary to law, or which will invalidate or be in conflict with public liability, fire or other policies of insurance at any time carried by or for the benefit of Landlord with respect to the Demised Premises or the Building, or which shall or might subject Landlord to any liability or responsibility to any person or for property damage. Tenant shall not keep anything in the Demised Premises except as now or hereafter permitted by the Fire Department, Board of Fire Underwriters, Fire Insurance Rating Organization or other authority having jurisdiction, and then only in such manner and such quantity so as not to increase the rate for fire insurance applicable to the Building, nor use the Demised Premises in a manner which will increase the insurance rate for the Building or any property located therein over that in effect prior to the commencement of Tenant’s occupancy. Tenant shall pay all costs, expenses, fines, penalties, or damages, which may be imposed upon Landlord by reason of Tenant’s failure to comply with the provisions of this Paragraph and if by reason of such failure the fire insurance rate shall, at the beginning of this lease or at any time thereafter, be higher than it otherwise would be, then Tenant shall reimburse Landlord, as Additional Rent hereunder, for that portion of all fire insurance premiums thereafter paid by Landlord which shall have been charged because of such failure by Tenant. In any action or proceeding wherein Landlord and Tenant are parties, a schedule or “make-up” of rate for the Building or Demised Premises issued by the New York Fire Insurance Exchange, or other body making fire insurance rates applicable to the Demised Premises shall be conclusive evidence of the facts therein stated and of the several items and charges in the fire insurance rates then applicable to the Demised Premises. Tenant shall not place a load upon any floor of the Demised Premises exceeding the floor load per square foot area which it was designed to carry and which is allowed by law. Landlord reserves the right to prescribe the weight and position of all safes, business machines and mechanical equipment. Such installations shall be placed and maintained by Tenant, at Tenant’s expense, in settings sufficient, in Landlord’s judgement, to absorb and prevent vibration, noise and annoyance.
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12. SUBORDINATION. This lease is subject and subordinate to all ground or underlying leases and to all mortgages which may now or hereafter affect such lease or the real property of which Demised Premises are a part and to all renewals, modifications, consolidations, replacements and extensions of any such underlying leases and mortgages. This clause shall be self-operative and no, further instrument of subordination shall be required by any ground or underlying lessor or by any mortgagee, affecting any lease or the real property of which the Demised Premises are a part. In confirmation of such subordination, Tenant shall execute promptly any certificate that Landlord may request.
13. PROPERTY -’LOSS, DAMAGE, REIMBURSEMENT, INDEMNITY. Landlord or its agents shall not be liable for any damage to property of Tenant or of others entrusted to employees of the Building, nor for loss of or damage to any property of Tenant by theft or otherwise, nor for any injury or damage to persons or property resulting from any cause of whatsoever nature, unless caused by or due to the negligence of Landlord, its agents, servants or employees. Neither Landlord nor its agents will be liable for any such damage caused by other tenants or persons in, upon or about the Building or caused by operations in construction of any private, public or quasi public work. If at any time any windows of the Demised Premises are temporarily closed, darkened or bricked up (or permanently closed, darkened or bricked up, if required by law) for any reason whatsoever, Landlord shall not be liable for any damage Tenant may sustain thereby and Tenant shall not be entitled to any compensation therefor nor abatement or diminution of rent nor shall the same release Tenant from its obligations hereunder nor constitute an eviction. Tenant shall indemnify and save harmless Landlord against and from all liabilities, obligations, damages, penalties, claims, costs and expenses for which Landlord shall not be reimbursed by insurance, including reasonable attorneys fees, paid, suffered or incurred as a result of any breach by Tenant, Tenant’s agents, contractors, employees, invitees, or licensees of any covenant or condition of this lease, or the carelessness, negligence or improper conduct of the Tenant, Tenant’s agents, contractors, employees, invitees or licensees. Tenant’s liability under this lease extends to the acts and omissions of any subtenant, and any agent, contractor, employee, invitee or licensee of any sub-tenant. In case any action or proceeding is brought against Landlord by reason of any such claim, Tenant upon written notice from Landlord, will, at Tenant’s expense, resist or defend such action or proceeding by counsel approved by Landlord in writing.
14. DESTRUCTION, FIRE AND OTHER CASUALTY. (a) If the Demised Premises or any part thereof shall be damaged by fire or other casualty, Tenant shall give prompt written notice thereof to Landlord and this lease shall continue in full force and effect except as hereinafter set forth.
(b) If the Demised Premises are partially damaged or rendered partially unusable by fire or other casualty, the damages thereto shall be repaired by and at the expense of Landlord and the rent, until such repair shall be substantially completed, shall be apportioned from the day following the casualty according to the part of the Demised Premises which is usable.
(c) If the Demised Premises are totally damaged or rendered wholly unusable by fire or other casualty, then the rent shall be proportionately paid up to the time of the casualty and thenceforth shall cease until the date when the Demised Premises shall have been repaired and restored by Landlord, subject to Landlord’s right to elect not to restore the same as hereinafter provided.
(d) If the Demised Premises are rendered wholly unusable (whether or not the Demised Premises are damaged in whole or in part), or if the Building shall be so damaged that Landlord shall decide to demolish it or to rebuild it, then, in any of such events, Landlord may elect to terminate this lease by written notice to Tenant, given within 90 days after such fire or casualty, specifying a date for the expiration of the lease, which date shall not be more than 60 days after the giving of such notice, and upon the date specified in such notice the term of this lease shall expire as fully and completely as if such date were the date set forth above for the termination of this lease and Tenant shall forthwith quit, surrender and vacate the Demised Premises without prejudice however, to Landlord’s rights and remedies against Tenant under the lease provisions in effect prior to such termination, and any rent owing shall be paid up to such date and any payments of rent made by Tenant which were on account of any period subsequent to such date shall be returned to Tenant. Unless Landlord shall serve a termination notice as provided for herein, Landlord shall make the repairs and restoration under the conditions of (b) and (c) hereof, with all reasonable expedition, subject to delays due to adjustment of insurance claims, labor troubles and causes beyond Landlord’s control. After any such casualty, Tenant shall cooperate with Landlord’s restoration by removing from the Demised Premises as promptly as reasonably possible, all of Tenant’s movable equipment, furniture, and other property. Tenant’s liability for rent shall resume five (5) days after written notice from Landlord that the Demised Premises are substantially ready for Tenant’s occupancy. Notwithstanding the foregoing, if the Demised Premises are wholly unusable for thirty (30) consecutive days due to casualty, and such casualty is not due to the act or omission of Tenant or an employee, assignee, sub-tenant, or contractor of Tenant, then Tenant may terminate this lease by notice to Landlord, provided Landlord has not commenced the restoration described elsewhere in this paragraph.
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(e) Nothing contained hereinabove shall relieve Tenant from liability that may exist as a result of damage from fire or other casualty. Notwithstanding the foregoing, each party shall look first to any insurance in its favor before making any claim against the other party for recovery for loss or damage resulting from fire or other casualty, and to the extent that such insurance is in force and collectible and to the extent permitted by law, Landlord and Tenant each hereby releases and waives all right of recovery against the other or any one claiming through or under each of them by way of subrogation or otherwise. The foregoing release and waiver shall be in force only if both releasors’ insurance policies contain a clause providing that such a release or waiver shall not invalidate the insurance. If, and to the extent, that such waiver can be obtained only by the payment of additional premiums, then the party benefitting from the waiver shall pay such premium within ten days after written demand or shall be deemed to have agreed that the party obtaining insurance coverage shall be free of any further obligation under the provisions hereof with respect to waiver of subrogation. Tenant acknowledges that Landlord will not carry insurance on Tenant’s furniture and/or furnishings or any fixtures or equipment, improvements, or appurtenances removable by Tenant and agrees that Landlord will not be obligated to repair any damage thereto or replace the same.
(f) Tenant hereby waives the provisions of Section 227 of the Real Property Law and agrees that the provisions of this Paragraph shall govern and control in lieu thereof.
15. EMINENT DOMAIN. If the whole or any part of the Demised Premises shall be acquired or condemned by Eminent Domain for any public or quasi public use or purpose, then and in that event, the term of this Lease shall cease and terminate from the date of title vesting in such proceeding and Tenant shall have no claim for the value of any unexpired term of said lease and assigns to Landlord, Tenant’s entire interest in any such award.
16. ASSIGNMENT, SUBLETTING, OR MORTGAGE OF TENANT’S INTEREST IN LEASE. (a) Tenant, for itself, its heirs, distributees, executors, administrators, legal representatives, successors and assigns, expressly covenants that it shall not assign, mortgage or encumber this agreement, nor underlet or suffer or permit the Demised Premises or any part thereof to be used by others, without the prior written consent of Landlord in each instance. Transfer of the majority of the stock of a corporate Tenant shall be deemed an assignment. If this lease be assigned, or if the Demised Premises or any part thereof be underlet or occupied by anybody other than Tenant, Landlord may, after default by Tenant, collect rent from the assignee, under-tenant or occupant, and apply the net amount collected to the rent herein reserved, but no such assignment, underletting, occupancy or collection shall be deemed a waiver of this covenant, or the acceptance of the assignee, under-tenant or occupant as tenant, or a release of Tenant from the further performance by Tenant of covenants on the part of Tenant herein contained. The consent by Landlord to an assignment or underletting shall not in any wise be construed to relieve Tenant from obtaining the express consent in writing of Landlord to any further assignment or underletting.
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(b) Notwithstanding sub-paragraph (a) above, Tenant may assign this lease or sub-let the Demised Premises to an affiliate or subsidiary of Tenant without the prior written consent of Landlord, provided (i) the terms of such assignment or sub-letting are set forth in a written instrument executed by Tenant and Tenant’s assignee/sub-tenant; (ii) said written instrument states that the terms of said instrument are wholly subject to this lease, as same may be amended; (iii) in the case of sub-letting, said instrument states that in the event of non-payment of Rents (or any portion thereof) by Tenant, Tenant’s sub-tenant shall pay the amount due to Tenant pursuant to said instrument directly to Landlord upon Landlord’s notice of such non-payment; (iv) the full name and address for service of process is set forth in said instrument; and (v) Tenant delivers a copy of said instrument to Landlord promptly upon execution of same.
(c) Any transfer by operation of law or otherwise, of Tenant’s interest in this lease or of a 50% or greater direct or indirect interest in Tenant (whether stock, partnership interest or otherwise and whether in one or in a series of transactions) shall be deemed an assignment of this lease.
17. ACCESS TO DEMISED PREMISES. Landlord or Landlord's agents shall have the right (but shall not be obligated) to enter the Demised Premises in any emergency at any time, and, at other reasonable times upon notice to Tenant (which may not be written notice) and only during business hours, to examine the same and to make such repairs, replacements and improvements as Landlord may deem necessary and reasonably desirable to the Demised Premises or to any other portion of the Building or which Landlord may elect to perform. Tenant shall permit Landlord to use and maintain and replace pipes and conduits in and through the Demised Premises and to erect new pipes and conduits therein provided they are concealed within the walls, floor, or ceiling. Landlord may, during the progress of any work in the Demised Premises, take all necessary materials and equipment into the Demised Premises without the same constituting an eviction nor shall the Tenant be entitled to any abatement of rent while such work is in progress nor to any damages by reason of loss or interruption of business or otherwise. Throughout the term hereof Landlord shall have the right to enter the Demised Premises at reasonable hours for the purpose of showing the same to prospective purchasers or mortgagees of the Building, and during the last six months of the term for the purpose of showing the same to prospective tenants. If, during an emergency, Tenant is not present to open and permit an entry into the Demised Premises, Landlord or Landlord's agents may enter the same whenever such entry may be necessary or permissible by master key or forcibly and provided reasonable· care is exercised to safeguard Tenant's property, such entry shall not render Landlord or its agents liable therefor, nor in any event shall the obligations of Tenant hereunder be affected. If during the last month of the term Tenant shall have removed all or substantially all of Tenant's property therefrom, Landlord may immediately enter, alter, renovate or redecorate the Demised Premises without limitation or abatement of rent, or incurring liability to Tenant for any compensation and such act shall have no effect on this lease or Tenant's obligations hereunder.
18. BANKRUPTCY. (a) Anything elsewhere in this lease to the contrary notwithstanding, this lease may be canceled by Landlord by the sending of a written notice to Tenant within a reasonable time after the happening of any one or more of the following events: (1) the commencement of a case in bankruptcy or under the laws of any state naming Tenant as the debtor; or (2) the making by Tenant of an assignment or any other arrangement for the benefit of creditors under any state statute. Neither Tenant nor any person claiming through or under Tenant, or by reason of any statute or order of court, shall thereafter be entitled to possession of the Demised Premises but shall forthwith quit and surrender the Demised Premises. If this lease shall be assigned in accordance with its terms, the provisions of this Paragraph shall be applicable only to the party then owning Tenant’s interest in this lease.
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(b) In the event of the termination of this lease pursuant to (a) hereof, Landlord shall forthwith, notwithstanding any other provisions of this lease to the contrary, be entitled to recover from Tenant as and for liquidated damages an amount equal to the difference between the rent reserved hereunder for the unexpired portion of the term demised and the fair and reasonable rental value of the Demised Premises for the same period. In the computation of such damages the difference between any installment of rent becoming due hereunder after the date of termination and the fair and reasonable rental value of the Demised Premises for the period for which such installment was payable shall be discounted to the date of termination at the rate of four percent (4%) per annum. If the Demised Premises or any part thereof be relet by the Landlord for the unexpired term of said lease, or any part thereof, before presentation of proof of such liquidated damages to any court, commission or tribunal, the amount of rent reserved upon such reletting shall be deemed to be the fair and reasonable rental value for the part or the whole of the Demised Premises so re-let during the term of the re-letting. Nothing herein contained shall limit or prejudice the right of the Landlord to prove for and obtain as liquidated damages by reason of such termination, an amount equal to the maximum allowed by any statute or rule of law in effect at the time when, and governing the proceedings in which, such damages are to be proved, whether or not such amount be greater, equal to, or less than the amount of the difference referred to above.
19. DEFAULT. (a) If Tenant defaults in fulfilling any of the covenants of this lease other than the covenants for the payment of Basic Rent or Additional Rent; or if any execution or attachment shall be issued against Tenant or any of Tenant’s property whereupon the Demised Premises shall be taken or occupied by someone other than Tenant; or if this lease be rejected under Section 365 of Title 11 of the U.S. Code (bankruptcy code) then, in any one or more of such events, upon Landlord serving a written fifteen (15) days’ notice upon Tenant specifying the nature of said default and upon the expiration of said fifteen (15) days, if Tenant shall have failed to comply with or remedy such default, or if the said default or omission complained of shall be of a nature that the same cannot be completely cured or remedied within said fifteen (15) day period, and if Tenant shall not have diligently commenced curing such default within such fifteen (15) day period, and shall not thereafter with reasonable diligence and in good faith, proceed to remedy or cure such default, then Landlord may serve a written ten (10) days’ notice of cancellation of this lease upon Tenant, and upon the expiration of said ten (10) days this lease and the term thereunder shall end and expire as fully and completely as if the expiration of such ten (10) day period were the day herein definitely fixed for the end and expiration of this lease and the term thereof and Tenant shall then quit and surrender the Demised Premises to Landlord but Tenant shall remain liable as hereinafter provided.
(b) If the notice provided for in (a) hereof shall have been given, and the term shall expire as aforesaid; or if Tenant shall make default in the payment of the Basic Rent reserved herein or any item of Additional Rent herein mentioned or any part of either or in making any other payment herein required; then and in any of such events (which default shall in such payment shall constitute an Event of Default hereunder), Landlord may without notice dispossess Tenant (and the legal representative of Tenant or other occupant of Demised Premises) by summary proceedings or otherwise. Any reference herein to any specific remedy is not exclusive, and Landlord has all other rights and remedies available at law or equity.
20. REMEDIES OF LANDLORD AND WAIVER OF REDEMPTION. In case of any such default, expiration and/or dispossess by summary proceedings or otherwise, (a) the rent shall become due thereupon and be paid up to the time of such re-entry, dispossess and/or expiration, (b) Landlord may re-let the Demised Premises or any part or parts thereof, either in the name of Landlord or otherwise, for a term or terms, which may at Landlord’s option be less than or exceed the period which would otherwise have constituted the balance of the term of this lease and may grant concessions or free rent or charge a higher rental than that in this lease, and/or (c) Tenant or the legal representatives of Tenant shall also pay Landlord as liquidated damages for the failure of Tenant to observe and perform said Tenant’s covenants herein contained, any deficiency between the rent hereby reserved and/or covenanted to be paid and the net amount, if any, of the rents collected on account of the lease or leases of the Demised Premises for each month of the period which would otherwise have constituted the balance of the term of this lease. The failure of Landlord to re-let the Demised Premises or any part or parts thereof shall not release or affect Tenant’s liability for damages. In computing such damages there shall be added to the said deficiency such expenses as Landlord may incur in connection with re-letting, such as legal expenses, attorneys’ fees, brokerage, advertising and for keeping the Demised Premises in good order or for preparing the same for re-letting. Any such damages shall be paid in monthly installments by Tenant on the rent day specified in this lease and any suit brought to collect the amount of the deficiency for any month shall not prejudice in any way the rights of Landlord to collect the deficiency of any subsequent month by a similar proceeding. Landlord, in putting the Demised Premises in good order or preparing the same for re-rental may, at Landlord’s option, make such alterations, repairs, replacements, and/or decorations in the Demised Premises as Landlord, in Landlord’s sole judgment, considers advisable and necessary for the purpose of re-letting the Demised Premises, and the making of such alterations, repairs, replacements, and/or decorations shall not operate or be construed to release Tenant from liability hereunder as aforesaid. Landlord shall in no event be liable in any way whatsoever for failure to re-let the Demised Premises, or in the event that the Demised Premises are re-let, for failure to collect the rent thereof under such re-letting, and in no event shall Tenant be entitled to receive any excess, if any, of such net rents collected over the sums payable by Tenant to Landlord hereunder. In the event of a breach or threatened breach by Tenant of any of the covenants or provisions hereof, Landlord shall have the right of injunction and the right to invoke any remedy allowed at law or in equity as if re-entry, summary proceedings and other remedies were not herein provided for. Mention in this lease of any particular remedy, shall not preclude Landlord from any other remedy, in law or in equity, all of which are expressly reserved to Landlord. Tenant hereby expressly waives any and all rights of redemption granted by or under any present or future laws in the event of Tenant being evicted or dispossessed for any cause, or in the event of Landlord obtaining possession of Demised Premises by reason of the violation by Tenant of any of the covenants and conditions of this lease, or otherwise. Landlord shall make commercially reasonable efforts to mitigate its damages in such event.
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21. FEES AND EXPENSES. (a) If Tenant shall default in the observance or performance of any term or covenant on Tenant’s part to be observed or performed under or by virtue of any of the terms or provisions in any paragraph of this lease, then, unless otherwise provided elsewhere in this lease, Landlord may immediately or at any time thereafter and without notice perform the obligation of Tenant thereunder. If Landlord, in connection with the foregoing or in connection with any default by Tenant in the covenant to pay rent hereunder, makes any expenditures or incurs any obligations for the payment of money, including but not limited to attorney’s fees, in instituting, prosecuting or defending any action or proceeding, then Tenant will reimburse Landlord for such sums so paid or obligations incurred with interest and costs, provided same are reasonable. The foregoing expenses incurred by reason of Tenant’s default shall be deemed to be Additional Rent hereunder and shall be paid by Tenant to Landlord within fifteen (15) days of rendition of any bill or statement to Tenant therefor. If Tenant’s lease term shall have expired at the time of making of such expenditures or incurring of such obligations, such sums shall be recoverable by Landlord as damages.
(b) If Tenant shall fail to make payment of any installment of Rents within ten (10) days after the date when such payment is due, Tenant shall pay to Landlord, in addition to such installment of Rent, as a late charge and as Additional Rent, a sum equal to six (6%) percent per annum above the then current prime rate charged by JP Morgan Chase, or its successor computed from the date such payment was due to and including the date of payment.
(c) If any check, or voucher payment made by Tenant to the Landlord in payment of Rents is returned by the financial institution to the Landlord marked “insufficient funds”, “uncollected funds” or if the Landlord is debited by its bank as a result of a “bad” check previously delivered to Landlord by Tenant in payment of Rents, then a bookkeeping or administrative charge in the amount of SEVENTY FIVE DOLLARS ($75.00) shall become due and payable by Tenant to Landlord as Additional Rent.
(d) If Landlord utilizes the services of in-house counsel or of an attorney which Landlord has on an annual retainer, then Landlord and Tenant agree that an hourly rate of ONE HUNDRED FIFTY DOLLARS ($150.00) per hour shall be deemed the reasonable costs of any such legal services employed by Landlord to enforce any of the terms, conditions and covenants of this lease, including but not limited to’ the payment of Rents.
22. BUILDING ALTERATIONS AND MANAGEMENT. Landlord shall have the right at any time without the same constituting an eviction and without incurring liability to Tenant therefor to change the arrangement and/or location of public entrances, passageways, doors, doorways, corridors, elevators, stairs, toilets or other public parts of the Building and to change the name, number or designation by which the Building may be known. There shall be no allowance to Tenant for diminution of rental value and no liability on the part of Landlord by reason of inconvenience, annoyance or injury to business arising from Landlord or other Tenants making any repairs in the Building or any such alterations, additions and improvements. Furthermore, Tenant shall not have any claim against Landlord by reason of Landlord’s imposition of such controls of the manner of access to the Building by Tenant’s social or business visitors as the Landlord may deem necessary for the security of the Building and its occupants.
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23. NO REPRESENTATIONS BY LANDLORD. Neither Landlord nor Landlord’s agents have made any representations or promises with respect to the physical condition of the Building, the Land or Demised Premises, the rents, leases, expenses of operation or any other matter or thing affecting or related to the Demised Premises except as herein expressly set forth and no rights, easements or licenses are acquired by Tenant by implication or otherwise except as expressly set forth in the provisions of this lease. Tenant has inspected the Building and the Demised Premises and is thoroughly acquainted with their condition and agrees to take the same “as is” and acknowledges that the taking of possession of the Demised Premises by Tenant shall be conclusive evidence that the Demised Premises and the Building were in good and satisfactory condition at the time such possession was so taken, except as to latent defects. All understandings and agreements heretofore made between the parties hereto are merged in this lease, which alone fully and completely expresses the agreement between Landlord and Tenant and any executory agreement hereafter made shall be ineffective to change, modify, discharge or effect an abandonment of it in whole or in part, unless such executory agreement is in writing and signed by the party against whom enforcement of the change, modification, discharge or abandonment is sought.
24. END OF TERM. Upon the expiration or other termination of the term of this lease, Tenant shall quit and surrender to Landlord the Demised Premises, broom clean, in good order and condition, ordinary wear and damages which Tenant is not required to repair as provided elsewhere in this lease excepted, and Tenant shall remove all its property. Tenant’s obligation to observe or perform this covenant shall survive the expiration or other termination of this lease. If the last day of the term of this Lease or any renewal thereof, falls on Sunday, this lease shall expire at noon on the preceding Saturday unless it be a legal holiday in which case it shall expire at noon on the preceding business day.
25. QUIET ENJOYMENT. Landlord covenants and agrees with Tenant that upon Tenant paying the Basic Rent and Additional Rent and observing and performing all the terms, covenants and conditions, on Tenant’s part to be observed and performed, Tenant may peaceably and quietly enjoy the Demised Premises, subject, nevertheless, to the terms and conditions of this lease and to the ground leases, underlying leases and mortgages hereinbefore mentioned.
26. FAILURE TO GIVE POSSESSION. If Landlord is unable to give possession of the Demised Premises on the date of the commencement of the term hereof, because of the holding-over or retention of possession of any tenant, under tenant or occupants, or if Landlord’s work pursuant to paragraph 2 has not been substantially completed on the Commencement Date because of a holding over or retention of possession of any tenant, under tenant or occupant or due to force majeure, or for any other reason, Landlord shall not be subject to any liability for failure to give possession on said date and the validity of the lease shall not be impaired under such circumstances, nor shall the same be construed in any wise to extend the term of this lease, but the rent payable hereunder shall be abated (provided Tenant is not responsible for Landlord’s inability to obtain possession) until after Landlord shall have given Tenant written notice that the Demised Premises are ready for Tenant’s occupancy. If permission is given to Tenant to enter into the possession of the Demised Premises or to occupy premises other than the Demised Premises prior to the date specified as the commencement of the term of this lease, Tenant covenants and agrees that such occupancy shall be deemed to be under all the terms, covenants, conditions and provisions of this lease, except as to the covenant to pay Rents. The provisions of this Paragraph are intended to constitute “an express provision to the contrary” within the meaning of Section 223-a of the New York Real Property Law.
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27. NO WAIVER. The failure of Landlord to seek redress for violation of, or to insist upon the strict performance of any covenant or condition of this lease or of any of the Rules or Regulations, set forth or hereafter adopted by Landlord, shall not prevent a subsequent act which would have originally constituted a violation from having all the force and effect of an original violation. The receipt by Landlord of Rents with knowledge of the breach of any covenant of this lease shall not be deemed a waiver of such breach and no provision of this lease shall be deemed to have been waived by Landlord unless such waiver be in writing signed by Landlord. No payment by Tenant or receipt by Landlord of a lesser amount than the monthly rent herein stipulated shall be deemed to be other than on account of the earliest stipulated rent, nor shall any endorsement or statement of any check or any letter accompanying any check or payment as rent be deemed an accord and satisfaction, and Landlord may accept such check or payment without prejudice to Landlord’s right to recover the balance of such rent or pursue any other remedy in this lease provided. No act or thing done by Landlord or Landlord’s agents during the term hereby demised shall be deemed an acceptance of a surrender of the Demised Premises, and no agreement to accept such surrender shall be valid unless in writing signed by Landlord. No employee of Landlord or Landlord’s agent shall have any power to accept the keys to the Demised Premises prior to termination of the lease and the delivery of keys to any such agent or employee shall not operate as a termination of the lease or a surrender of the Demised Premises.
28. WAIVER OF TRIAL BY JURY. It is mutually agreed by and between Landlord and Tenant that the respective parties hereto shall and they hereby do waive trial by jury in any action, proceeding or counter-claim brought by either of the parties hereto against the other (except for personal injury or property damage) on any matters whatsoever arising out of or in any way connected with this lease, the relationship of Landlord and Tenant, Tenant’s use of or occupancy of the Demised Premises, and any emergency statutory or any other statutory remedy. It is further mutually agreed that in the event Landlord commences any summary proceeding for possession of the Demised Premises, Tenant will not interpose any counterclaim of whatever nature or description in any such proceeding, except for counterclaims which would otherwise be waived if not raised.
29. INABILITY TO PERFORM. This Lease and the obligation of Tenant to pay Rents hereunder and perform all of the other covenants and agreements hereunder on part of Tenant to be performed shall in no wise be affected, impaired or excused because Landlord is unable to fulfill any of its obligations under this Lease or to supply or is delayed in supplying any service expressly or impliedly to be supplied or is unable to make, or is delayed in making any repair, additions, alterations, or decorations or is unable to supply or is delayed in supplying any equipment or fixtures if Landlord is prevented or delayed from so doing by reason of strike or labor troubles or any cause whatsoever including, but not limited to, government preemption in connection with a National Emergency or by reason of any rule, order or regulation of any department or subdivision thereof of any government agency or by reason of the conditions of supply and demand which have been or are affected by war or other emergency.
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30. BILLS AND NOTICES. Except as otherwise in this lease provided, a bill, statement, notice or communication which Landlord may desire or be required to give to Tenant, shall be deemed sufficiently given or rendered if, in writing, delivered to Tenant personally or sent by registered or certified mail or by nationally recognized overnight delivery service addressed to Tenant at the Building or at the last known residence address or business address of Tenant or left at any of the aforesaid premises addressed to Tenant, and the time of the rendition of such bill or statement and of the giving of such notice or communication shall be deemed to be the time when the same is delivered to Tenant, mailed, or left at the Demised Premises as herein provided. Any notice by Tenant to Landlord must be served by registered or certified mail addressed to Landlord at the address first hereinabove given or at such other address as Landlord shall designate by written notice.
31. LANDLORD’S SERVICES. As long as Tenant is not in default under any of the covenants of this lease, Landlord shall provide: (a) necessary elevator facilities 24 hours a day on business days and on Saturdays from 8 a.m. to 1 p.m. and have one elevator subject to call at all other times; (b) heat to the Demised Premises when and as required by law, on business days from 8 a.m. to 8 p.m. and on Saturdays from 8 a.m. to 1 p.m.; (c) water for ordinary lavatory purposes, but if Tenant uses or consumes water for any other purposes or in unusual quantities (of which fact Landlord shall be the sole judge), Landlord may install a water meter at Tenant’s expense which Tenant shall thereafter maintain at Tenant’s expense in good working order and repair to register such water consumption and Tenant shall pay for water consumed as shown on said meter as additional rent as and when bills are rendered;(d) cleaning service for the Demised Premises on Business Days at Landlord’s expense provided that the same are kept in order by Tenant. If, however, the Demised Premises are to be kept clean by Tenant, it shall be done at Tenant’s sole expense, in a manner satisfactory to Landlord and no one other than persons approved by Landlord shall be permitted to enter the Demised Premises or the Building for such purpose. Tenant shall pay Landlord the cost of removal of any of Tenant’s extraordinary refuse and rubbish from the Building; (e) if the Demised Premises is serviced by Landlord’s air conditioning/cooling and ventilating system, air conditioning/cooling will be furnished to tenant from May 15th through September 30th on Business Days from 8 a.m. to 6 p.m., and ventilation will be furnished on business days during the aforesaid hours except when air conditioning/cooling is being furnished as aforesaid. If Tenant requires air-conditioning/cooling or ventilation for more extended hours or on Saturdays, Sundays or on holidays, Landlord will furnish such service as shall be ordered by Tenant, upon notice given not later than 1 p.m. on Monday through Friday or 1 p.m. of the preceding business day for a Saturday, Sunday or holiday when such heating or air-conditioning is so required. Such notice shall be in writing and shall be given either to the building office or to the building superintendent manager, and not mailed as provided in Paragraph 31. Landlord reserves the right to stop services of the heating, elevators, plumbing, air-conditioning, power systems or cleaning or other services, if any, when necessary by reason of accident or for repairs, alterations, replacements or improvements necessary or desirable in the judgment of Landlord for as long as may be reasonably required by reason thereof.
32. TENANT’S COMPLIANCE WITH LANDLORD’S FIRE & CASUALTY INSURANCE. Tenant shall, at Tenant’s expense, comply with all insurance company requirements pertaining to the use of the Demised Premises. If Tenant’s conduct or use of the Demised Premises causes any increase in the premium for any insurance policies carried by Landlord, then Tenant shall reimburse Landlord for any such increase. Tenant, at Tenant’s expense, shall comply with all rules, orders, regulations or requirements of the American Insurance Association (formerly the National Board of Fire Underwriters) and with any similar body.
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33. TENANT’S INSURANCE. Tenant shall maintain the following coverage in the following amounts:
Commercial General Liability covering the insured against claims of Bodily Injury, Personal Injury and Property Damage arising out of Tenant’s operations, assumed liabilities or use of the Demised Premises, including the performance by Tenant of the indemnity agreements set forth in this lease, for limits of liability not less than Bodily Injury and Property Damage Liability $1,000,000 Each Occurrence and $2,000,000 Annual Aggregate. Liability policies obtained should be extended to include Contractual Liability, Personal Advertising Injury, Products/Completed Operations, Host or Full Liquor Liability, Fire Legal Liability and Premises Medical Expenses, as applicable.
Property Damage Insurance covering (i) all office furniture, trade fixtures, office equipment, merchandise and all other items of Tenant’s property on the Demised Premises installed by, for, or at the expense of Tenant, and (ii) all other improvements, alterations and additions to the Demised Premises. Such insurance shall be written on an “all risks” of physical loss or damage basis, for the full replacement cost value new without deduction for depreciation of the covered items and in amounts that meet any co-insurance clauses of the policies of insurance and shall include a vandalism and malicious mischief endorsement, sprinkler leakage coverage and earthquake sprinkler leakage coverage.
Worker’s Compensation/Employer’s Liability Insurance. If the nature of Tenant’s use of the Demised Premises requires that any or all of its employees be provided coverage under State Worker’s Compensation Insurance of similar statutes, Tenant shall keep in force Worker’s Compensation Insurance or similar statutory coverage containing statutorily prescribed limits and Employer’s Liability with limits of at least $1,000,000 Bodily Injury by Accident for Each Accident, $1,000,000 Bodily Injury by Disease for Each Person and $1,000,000 Bodily Injury by Disease policy limit.
Form of Policies. The minimum limits of policies of insurance required of Tenant shall in no event limit the liability of Tenant under this lease. Provided it is commercially reasonable and available, such insurance shall (i) name Landlord and any other party it so specifies as an additional insured, (ii) specifically cover the liability assumed by Tenant under this lease, including, but not limited to, Tenant’s obligations under this lease (iii) be issued by an insurance company having a rating of not less than AXII in Best’s Key Rating Guide or which is otherwise acceptable to Landlord and licensed to do business in the State of New York, (iv) be primary insurance as to all claims thereunder and provide that any insurance carried by Landlord is not excess and is noncontributing with any insurance requirement of Tenant, (v) provide that said insurance shall not be canceled or coverage changed unless thirty (30) day’s prior written notice shall have been given to Landlord and any mortgagee of Landlord, and (iv) contain a cross-liability endorsement or severability of interest clause acceptable to Landlord. Tenant shall deliver said policy or policies or certificates thereof to Landlord on or before the Commencement Date and at least thirty (30) days before the Expiration Date.
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34. HAZARDOUS MATERIALS.
(a) Definition. As used in this lease, the term “Hazardous Materials” means any flammable items, explosives, radioactive materials, hazardous or toxic substances, material or waste or related materials, including any substances defined as or included in the definition of “hazardous substances”, “hazardous wastes”, infectious wastes”, “hazardous materials” or “toxic substances” now or subsequently regulated under any federal, state or local laws, regulations or ordinances including, without limitation, oil petroleum-based products, paints, solvents, lead, cyanide, DDT, printing inks, acids, pesticides, ammonia compounds, and other chemical products, asbestos, PCBs and similar compounds, and including any different products and materials which are subsequently found to have adverse effects on the environment or the health and safety of persons.
(b) General Prohibition. Tenant shall not cause or permit any Hazardous Material to be generated, produced, brought upon, used, stored, treated, discharged, released, spilled or disposed of on, in, under or about the Property by Tenant or by its affiliates, agents, employees, contractors, sublessees, assignees or invitees. Tenant shall indemnify, defend and hold Landlord harmless from and against any and all actions (including, without limitation, remedial or enforcement actions of any kind, administrative or judicial proceedings, and order or judgments arising out of or resulting therefrom), costs, claims, damages (including, without limitation, punitive damages), expenses (including, without limitation, attorneys’ consultants’ and experts’ fees, court costs and amounts paid in settlement of any claims or actions), fines, forfeitures or other civil, administrative or criminal penalties, injunctive or other relief (whether or not based upon personal injury, property damage, or contamination of, or adverse effects upon, the environment, water tables or natural resources), liabilities pr losses arising from a breach of this prohibition by Tenant or its affiliates, agents, employees, contractors, sublessees, assignees or invitees.
(c) Notice. In the event that Hazardous Materials are discovered upon, in, or under the Property, and any governmental agency or entity having jurisdiction over the Property requires the removal of such Hazardous Materials, Tenant shall be responsible for all costs of removing those Hazardous Materials arising out of or related to the use or occupancy of the Property by Tenant or its affiliates, agents, employees, contractors, sublessees, assignees or invitees but not those of its predecessors. Notwithstanding the foregoing, Tenant shall not take any remedial action in or about the’ Demised Premises or the Property without first notifying Landlord of Tenant’s intention to do so and affording Landlord the opportunity to protect Landlord’s interest with respect thereto. If Landlord takes any remedial action as a result of Tenant’s actions (or those of Tenant’s affiliates, agents, employees, contractors, sublessees, assignees or invitees) or on behalf of Tenant pursuant hereto, the cost and expense of same shall be reimbursed by Tenant to Landlord as Additional Rent. Tenant immediately shall notify Landlord in writing of: (i) any spill, release, discharge or disposal of any Hazardous Material in, on or under the Demised Premises, the Property or any portion thereof, (ii) any enforcement, cleanup, removal or other governmental or regulatory action instituted, contemplated, or threatened (if Tenant has notice thereof) pursuant to any Hazardous Materials Laws; (iii) any claim made or threatened by any person against Tenant, the Demised Premises, or the Property relating to damage, contribution, cost recovery, compensation, loss or injury resulting from or claimed to result from any Hazardous Materials and; (iv) any reports made to any governmental agency or entity arising out of or in connection with any Hazardous Materials in, on, under or about or removed from the Demised Premises or the Property, including any complaints, notices, warnings, reports or asserted violations in connection therewith. Tenant also shall supply to Landlord as promptly as possible, and in any event within five (5) business days after Tenant first receives or sends the same, copies of all claims, reports, complaints, notices, warnings, or asserted violations relating in any way to the Demised Premises, the Property or Tenant’s use or occupancy thereof.
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(d) Survival. The respective rights and obligations of Landlord and Tenant under this Paragraph shall survive the expiration or earlier termination of this lease.
35. INDEMNIFICATION AND LIABILITY OF LANDLORD. Tenant shall indemnify and save harmless Landlord and its agents against and from (a) any and all claims (i) arising from (x) the conduct of business in or management (other than by Landlord) of the Demised Premises or (y) any work or thing whatsoever done, or any condition created (other than by Landlord) in or about the Demised Premises during the Term or during the period of time, if any, prior to the Commencement Date that Tenant obtains access to the Demised Premises pursuant to this lease, or (ii) arising from any negligent or otherwise wrongful act or omission of Tenant or any of its subtenants or licensees or its or their employees, agents or contractors, and (b) all costs, expenses and liabilities incurred in or in connection with each such claim or action or proceeding brought thereon. In case any action or proceeding be brought against Landlord by reason of any such claim, Tenant, upon notice from Landlord, shall resist and defend such action or proceeding by counsel chosen by Tenant who shall be reasonably satisfactory to Landlord. Tenant or its counsel shall keep Landlord fully apprised at all times of the status of such defense. Counsel for Tenant’s insurer shall be satisfactory to Landlord.
36. RELATIONSHIP OF PARTIES. The relationship of the parties to this lease shall be that of Landlord and Tenant and nothing herein shall be deemed to constitute a relationship of joint venture, partner, or any other relationship other than that of Landlord and Tenant.
37. RENT CONTROL. If the Rents shall not be fully collectible by reason of any federal, state, county or local law, proclamation, order or regulation, or direction of a public officer or body pursuant to law, Tenant shall enter into such agreement and take such other steps (without additional expense to Tenant) as Landlord may request and may be legally permissible to permit Landlord to collect the maximum rent which may from time to time during the continuance of such rent restriction be legally permissible (and not in excess of the amounts reserved therefor under this lease). Upon the termination of such legal rent restriction prior to the Expiration Date, (a) the Rents shall become and thereafter be payable hereunder in accordance with the amounts reserved in this lease for the periods following such expiration and (b) Tenant shall pay to Landlord, if legally permissible, an amount equal to the Rents which would have been paid pursuant to this lease but for such legal rent restriction less the Rents paid by Tenant to Landlord during the period(s) such legal rent restriction was in effect.
38. INVALIDITY. If any term or provision of this lease or the application thereof to any person or circumstance shall to any extent, be invalid or unenforceable, then the remainder of this lease shall not be affected thereby, and each term and provision of this lease shall be valid and be enforced to the fullest extent permitted by law, and such invalid or unenforceable provision shall be replaced by a valid and enforceable provision as similar to the original provision as possible.
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39. BROKER. Tenant represents that no broker was involved in its negotiations concerning the Demised Premises except Majestic Property Affiliates, Inc. and Coldwell Banker Commercial NRT. Landlord shall pay the broker’s commission pursuant to a separate agreement between Landlord and Majestic Property Affiliates, Inc. and Coldwell Commercial NRT.
40. ADDITIONAL DAMAGES. If Landlord terminates this lease due to default of Tenant, including but not limited to bankruptcy of Tenant, then Tenant shall nonetheless remain liable for Rents and payment of all future Rents and other payments which would otherwise become due for the balance of the Term had it not been terminated shall become immediately due and payable. Landlord has at all times the right to distrain for Rents due. Landlord has a valid and first lien upon all property of Tenant whether exempt by law or not, as security for the payment of Rents herein reserved, subordinate only to liens granted to finance the initial purchase or installation of fixtures, equipment or inventory.
41. LIABILITY OF LANDLORD. Tenant shall look only to Landlord’s estate and interest in the Land and Building (or the proceeds thereof), any liability insurance available for such purpose, for the satisfaction of Tenant’s remedies for the collection of any judgment (or other judicial process) requiring the payment of money by Landlord in the event of any default by Landlord under this lease and no other property or other assets of Landlord shall be subject to levy, execution or other enforcement procedures for the satisfaction of Tenant’s remedies under or with respect to this lease, the relationship of Landlord and Tenant hereunder or Tenant’s use and occupancy of the Demised Premises. Without limiting the foregoing, this lease is made on the express condition that it shall be enforceable only against and payable only out of the interest of Landlord in the Land and Building and that neither Landlord nor any officer, director, agent or employee of Landlord assumes or shall be held for any personal liability therefor and that all persons dealing with Landlord pursuant to this agreement shall look only to the aforementioned property interest for payment or performance of any debts, obligations, claims or liabilities.
42. NOTICE TO SUPERIOR LESSORS & MORTGAGEES. If in connection with the procurement, continuation or renewal of any financing for which the Land and/or the Building or the interest of the lessee therein under a superior lease represents collateral in whole or in part, an institutional lender shall request reasonable modifications of this lease as a condition of such financing, then Tenant will not withhold its consent thereto provided that such modifications do not materially increase the obligations of Tenant under this lease or materially and adversely affect any rights of Tenant under this lease. Any change which increases the Rents or costs payable by Tenant shall be deemed to materially affect Tenant’s rights under this lease.
43. NOTICE OF DEFAULT TO MORTGAGEE. Tenant agrees to give any Mortgagee, by Registered Mail, a copy of any Notice of Default served upon the Landlord, provided that prior to such notice Tenant has been notified, in writing, (by way of Notice of Assignment of Rents and Leases, or otherwise) of the address of such Mortgagee. Tenant further agrees that if Landlord shall have failed to cure such default within the time provided for in this lease, then the Mortgagee shall have an additional sixty (60) days within which to cure such default or if such default cannot be cured within that time, then such additional time as may be necessary if, within sixty (60) days, any Mortgagee has commenced and is diligently pursuing the remedies necessary to cure such default, (including, but not limited to, commencement of foreclosure proceedings, if necessary to effect such cure) in which event this lease shall not be terminated while such remedies are being so diligently pursued.
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44. FINANCIAL INFORMATION. If Landlord requires financial information from Tenant concerning Tenant’s financial condition and/or results of operations with respect to procurement, continuation or renewal of mortgage financing covering the Building, then Tenant will, upon Landlord’s written request, furnish to Landlord or Landlord’s designee any and all financial statements, reports or relevant information as may be reasonably requested by the lending institution. Tenant shall provide said information no more than thirty (30) days after the request therefor is made.
45. PARKING SPACES. Landlord shall provide 2 reserved and 2 non-reserved parking spaces for use of Tenant, its on-site employees and invitees. Such parking spaces are solely for parking noncommercial vehicles used by such parties at the Demised Premises, and may not be used for any other purpose. Reserved spaces may only be used for parking vehicles of employees of Tenant, Overnight or long-term storage of vehicles is not permitted. The parking spaces are not leased to Tenant, and Landlord may revoke its permission for Tenant to use parking spaces upon Tenant’s failure to abide by the terms hereof. Landlord reserves the right to alter its parking plan and assignments, and to make reasonable rules for use of parking areas. Landlord shall not be liable for temporary loss of parking spaces due to causes beyond Landlord’s control, or if repairs or replacements to the Building require parking spaces to be unavailable. Landlord may at any time rescind and void this Paragraph 45 if Landlord elects to alter its parking policy for the Building; Tenant shall not be entitled to any consideration or credit in such event. If Landlord is obligated to pay to any taxing authority any sales tax, assessment or charge arising out of the parking privileges herein provided, then it is agreed that Tenant will, within ten (10) days of presentation of a written bill from Landlord, pay to Landlord its pro rata share thereof; this sentence shall survive the Expiration Date or sooner termination of this lease.
46. CAPTIONS. The captions are inserted only as a matter of convenience and for reference and in no way define, limit or describe the scope of this lease nor the intent of any provisions thereof.
47. RULES AND REGULATIONS. Tenant and Tenant’s servants, employees, agents, visitors, and licensees shall observe faithfully, and comply strictly with, the rules and regulations and such other and further reasonable rules and regulations as Landlord or Landlord’s agents may from time to time adopt. Notice of any additional rules or regulations shall be given in such manner as Landlord may elect. In case Tenant disputes the reasonableness of any additional rule or regulation hereafter made or adopted by Landlord or Landlord’s agents, the parties hereto agree to submit the question of the reasonableness of such rule or regulation for decision to the New York office of the American Arbitration Association, whose determination shall be final and conclusive upon the parties hereto. The right to dispute the reasonableness of any additional rule or regulation upon Tenant’s part shall be deemed waived unless the same shall be asserted by service of a notice, in writing upon Landlord within ten (10) days after the giving of notice thereof. Nothing in this lease contained shall be construed to impose upon Landlord any duty or obligation to enforce the rules and regulations or terms, covenants or conditions in any other lease, as against any other tenant and Landlord shall not be liable to Tenant for violation of the same by any other tenant, its servants, employees, agents, visitors or licensees.
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48. ESTOPPEL CERTIFICATE. Tenant, at any time, and from time to time, upon at least 10 days’ prior notice by Landlord, shall execute, acknowledge and deliver to Landlord, and/or to any other person, firm or corporation specified by Landlord, a statement certifying that this Lease is unmodified and in full force and effect (or, if there have been modifications, that the same is in full force and effect as modified and stating the modifications), stating the dates to which the Basic Rent and Additional Rent have been paid, and stating whether or not there exists any default by Landlord under this Lease, and, if so, specifying each such default, and such other information as Landlord and any prospective mortgagor or prospective purchaser may reasonably request.
Paragraph 49 in intentionally deleted.
50. SUBLEASE PROFIT. In the event of any subletting of all or a part of the Demised Premises by Tenant or assignment of Tenant’s interest in this lease (except to an affiliate or subsidiary of Tenant), whether or not such subletting or assignment requires the consent of Landlord, and whether or not Tenant obtains landlord’s consent to such subletting or assignment, Tenant shall pay to Landlord as Additional Rent an amount equal to fifty percent (50%) of the Assignment Profit (as hereinafter defined) or the Sublease Profit (as hereinafter defined) the case may be, as and when collected by Tenant, i.e., if Tenant receives the Assignment Profit or Sublease Profit on a monthly basis, it shall remit Landlord’s portion thereof on a monthly basis, or if Tenant receives the Assignment Profit or Sublease Profit in, advance (on the date of execution or commencement of the sublease or assignment), Tenant shall remit to Landlord its portion thereof when received by Tenant.
“Assignment Profit” shall mean an amount equal to all sums and other considerations paid to Tenant by the assignee for or by reason of such assignment (including, but not limited to, sums paid for the sale or rental of Tenant’s fixtures, leasehold improvements, equipment, furniture, furnishings or other personal property, less, in the case of a sale thereof, the then net unamortized or undepreciated cost thereof determined on the basis of Tenant’s federal income tax returns).
“Sublease Profit” shall mean in any year of the term of this lease (i) any rents, additional charges or other consideration payable under the sublease to Tenant by the subtenant which is in excess of the Basic Rent and Additional Rent accruing during such year of the term of this lease in respect of the subleased space (at the rate per square foot payable to Tenant hereunder) pursuant to the terms hereof and (ii) all sums paid for the sale or rental of Tenant’s fixtures, leasehold improvements, equipment, furniture or other personal property, less, in the case of the sale thereof, the then net unamortized or undepreciated cost thereof determined on the basis of Tenant’s federal income tax returns, which net unamortized amount shall be deducted from the sums paid in connection with such sale in equal monthly installments over the balance of the term of the sublease (each such monthly deduction to be in an amount equal to the quotient of the net unamortized amount, divided by the number of months remaining in the term of this lease). The sums payable under this paragraph shall be paid to Landlord as and when paid by the subtenant to Tenant.
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51. HOLDOVER. If Tenant holds over in possession of the Demised Premises after the expiration of the Term without the express written consent of Landlord, then Tenant shall pay to Landlord Basic Rent at a rate 150% of that rate in effect immediately prior to the expiration date of the term, which Basic Rent shall be payable upon the same terms as for Basic Rent set forth above in this lease. Landlord’s acceptance of such Basic Rent as described in the preceding sentence shall not be deemed an extension of the Term.
52. SUCCESSORS AND ASSIGNS. The covenants, conditions and agreements contained in this lease shall bind and inure to the benefit of Landlord and Tenant and their respective heirs, distributees, executors, administrators, successors, and except as otherwise provided in this lease, their assigns.
53. TERMINATION PAYMENT. If Tenant defaults under any of its obligations under this lease (either by act of commission or omission), and as a result of such default, this lease is terminated as part of an action to regain possession of the Demised Premises, then, in addition to any other Rent or any remedy or right Landlord may be entitled to exercise under law, in equity or pursuant to this lease, Landlord shall also be entitled to receive, and Tenant shall be obligated to pay, a Termination Payment in an amount calculated by multiplying FORTY-FIVE THOUSAND DOLLARS ($45,000.00) by a fraction, the numerator of which is the number of months (or partial months) from the date of such default through the final month of the Sixth Lease Year, and the denominator of which is 62. The Termination Payment shall be collectable as Additional Rent. The provisions of this paragraph shall survive the expiration or earlier termination of this lease.
54. LEASE NOT AN OFFER; LEASE SOLE AGREEMENT. The preparation of this lease by Landlord or the delivery of an unexecuted copy of this lease to Tenant shall not be deemed an offer to lease the Demised Premises. This lease shall only be of force and effect if a fully-executed original of this lease is delivered to Tenant by Landlord, and if this lease is approved by Landlord’s mortgagee. This lease is the sole agreement between Landlord and Tenant pertaining to Tenant’s occupancy of the Demised Premises; any amendment or modification hereof, or other agreement pertaining to Tenant’s occupancy of the Demised Premises shall only be of any force or effect if in writing and executed by Landlord and Tenant.
IN WITNESS WHEREOF, Landlord and Tenant have respectively signed and sealed this lease as of the day and year first above written.
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Exhibit A
Schematic showing location of Demised Premises in Building
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Exhibit A
Schematic showing location of Demised Premises in Building
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GUARANTY
May __ , 2011
As a material inducement for 60 Cutter Mill Road Property Corp, to enter into that certain lease by and between 60 Cutter Mill Road Property Corp, and Manhattan Bridge Capital, Inc. (“Lease”) dated as of the date hereof, the undersigned (“Principal”) covenants, promises and guarantees that Principal shall be liable for and pay Basic Rent, Additional Rent, and all other amounts due under the Lease during the period of the actual occupancy by Tenant (as defined in the Lease) under the Lease. The obligation of Principal shall cease upon (A) Tenant’s actual vacancy and surrender of the Demised Premises (as defined in the Lease) broom clean, (B) the delivery to Landlord of all keys, alarm access codes, etc. for the Demised Premises, (C) the delivery to Landlord of a letter executed by Principal and Tenant stating that the Demised Premises are surrendered and vacant and free of all tenancies or claims of right thereunder, (D) the full payment of all Basic Rent and Additional Rent, and all other amounts due through and including the date items (A) , (B) , and (C) above are completed, and (E) the full payment of the Termination Payment if and to the extent same becomes due and payable pursuant to the terms of Paragraph 53 of the Lease, but for no other damages arising from Tenant’s breach of the Lease after such surrender date. Notwithstanding such vacancy and surrender, Tenant shall continue to be liable under the terms of the Lease for breach hereof and no acceptance by Landlord of any surrender or vacancy shall be deemed to modify, release, satisfy or otherwise relieve Tenant of any liability whatsoever under the Lease. All capitalized terms herein shall have the same meaning as in the Lease.
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Exhibit 10.12
WAIVER AGREEMENT
This WAIVER AGREEMENT (this “Waiver”) is entered into as of March 07, 2022, by and among MANHATTAN BRIDGE CAPITAL, INC., a New York corporation (“Borrower”; and collectively with any Person who is or hereafter becomes a party to the Credit Agreement (as defined below) as a borrower or a guarantor, each a “Loan Party” and collectively, the “Loan Parties”), the financial institutions who are or hereafter become parties to the Credit Agreement (as defined below) as lenders (collectively, the “Lenders” and each individually a “Lender”) and WEBSTER BUSINESS CREDIT, A DIVISION OF WEBSTER BANK, N.A., successor in interest to Webster Business Credit Corporation (“WBCC”), individually, as a Lender hereunder and as agent for itself and each other Lender (WBCC, acting in such agency capacity, the “Agent”).
BACKGROUND
Loan Parties, Lenders and Agent are parties to an Amended and Restated Credit and Security Agreement dated as of August 8, 2017 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Credit Agreement”) pursuant to which Agent and Lenders provide Loan Parties with certain financial accommodations.
Loan Parties have requested that Agent and Lenders waive the Specified Event of Default (as defined hereafter), and Agent and Lenders are willing to do so on the terms and conditions hereafter set forth.
NOW, THEREFORE, in consideration of any loan or advance or grant of credit heretofore or hereafter made to or for the account of Borrower by Lenders, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:
1. Definitions. All capitalized terms not otherwise defined herein shall have the respective meanings given to them in the Credit Agreement.
2. Waiver.
(a) Subject to satisfaction of the conditions precedent set forth in Section 3 below, Agent and Lenders hereby (i) waive the Event of Default which has occurred as a result of Loan Parties’ failure to maintain the minimum Fixed Charge Coverage Ratio required by Section 8.2 of the Credit Agreement as of the end of the Fiscal Quarter for the Test Period ended December 31, 2021 (the “Specified Event of Default”) and (ii) agree that the portion of the distributions and/or dividends made by Loan Parties during the Fiscal Quarter ended December 31, 2021 in the amount of $700,000 (the “Excess Distributions”), which exceeded the equity received by Loan Parties to fund such distributions and/or dividends, shall be excluded from the calculation of Fixed Charge Coverage Ratio for the purposes of determining compliance with Section 8.2 of the Credit Agreement as of the end of each of the Fiscal Quarters ending March 31, 2022, June 30, 2022 and September 30, 2022 to the extent such Excess Distributions would be included in the applicable Test Period.
(b) Notwithstanding the foregoing, the waiver of the Specified Event of Default does not establish a course of conduct between Loan Parties and Agent and Lenders, and Loan Parties hereby agree that Agent and/or Lenders are not obligated to waive any future Events of Defaults or Defaults under the Credit Agreement. Except as specifically provided herein, the Credit Agreement and all other documents, instruments and agreements executed and/or delivered in connection therewith, shall remain in full force and effect, and are hereby ratified and confirmed. The execution, delivery and effectiveness of this Waiver shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of Agent and Lenders, nor constitute a waiver of any provision of the Credit Agreement or any other documents, instruments or agreements executed and/or delivered under or in connection therewith.
3. Conditions of Effectiveness. This Waiver shall become effective (such date, the “Waiver Effective Date”) upon Agent’s receipt of:
(a) a copy of this Waiver duly executed and delivered by Agent, Required Lenders and each Loan Party with one original executed copy of this Waiver to be promptly delivered by Loan Parties to Agent, in form and substance satisfactory to Agent; and
(b) an executed copy of the Fee Letter, dated of even date herewith, between Borrower and WBCC, in form and substance satisfactory to WBCC.
4. Release. Each of the Loan Parties on behalf of itself and its successors, assigns, and other legal representatives, and Personal Guarantor on behalf of himself and his successors, assigns, and other legal representatives, hereby, (a) jointly and severally, absolutely, unconditionally and irrevocably releases, remises and forever discharges Agent and Lenders, and each of their present and former shareholders, affiliates, subsidiaries, divisions, predecessors, directors, officers, attorneys, employees, agents and other representatives and their respective successors and assigns (Agent and Lenders and all such other parties being hereinafter referred to collectively as the “Releasees” and individually as a “Releasee”), of and from all demands, actions, causes of action, suits, covenants, contracts, controversies, agreements, promises, sums of money, accounts, bills, reckonings, damages and any and all other claims, counterclaims, defenses, rights of set-off, demands and liabilities whatsoever (individually, a “Claim” and collectively, “Claims”) of every name and nature, known or unknown, suspected or unsuspected, both at law and in equity, whether liquidated or unliquidated, matured or unmatured, asserted or unasserted, fixed or contingent, foreseen or unforeseen and anticipated or unanticipated, which each of the Loan Parties and Personal Guarantor, or any of their respective successors, assigns, or other legal representatives and their successors and assigns may now or hereafter own, hold, have or claim to have against the Releasees or any of them for, upon, or by reason of any nature, cause or thing whatsoever which arises at any time on or prior to the day and date of this Waiver, in relation to, or in any way in connection with the Credit Agreement, as amended and supplemented through the date hereof, the Personal Guaranty, this Waiver, the Other Documents; (b) understands, acknowledges and agrees that the release set forth above may be pleaded as a full and complete defense and may be used as a basis for an injunction against any action, suit or other proceeding which may be instituted, prosecuted or attempted in breach of the provisions of such release; (c) agrees that no fact, event, circumstance, evidence or transaction which could now be asserted or which may hereafter be discovered shall affect in any manner the final and unconditional nature of the release set forth above and nothing contained herein shall constitute an admission of liability with respect to any Claim on the part of any Releasee; and (d) jointly and severally, absolutely, unconditionally and irrevocably, covenants and agrees with each Releasee that it will not sue (at law, in equity, in any regulatory proceeding or otherwise) any Releasee on the basis of any Claim released, remised and discharged by any of the Loan Parties or Personal Guarantor pursuant to this Paragraph 4. If any Loan Party or Personal Guarantor violates the foregoing covenant, Loan Parties and Personal Guarantor, jointly and severally, agree to pay, in addition to such other damages as any Releasee may sustain as a result of such violation, all attorneys’ fees and costs incurred by any Releasee as a result of such violation.
5. Governing Law. This Waiver shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns and shall be governed by and construed in accordance with the laws of the State of New York.
6. Counterparts; Facsimile. This Waiver may be executed by the parties hereto in one or more counterparts, each of which shall be deemed an original and all of which when taken together shall constitute one and the same agreement. Any signature delivered by a party by .pdf or electronic transmission shall be deemed to be an original signature hereto.
[Remainder of page intentionally left blank; signature pages follow]
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IN WITNESS WHEREOF, this Waiver has been duly executed as of the day and year first written above.
| BORROWER: | ||
| MANHATTAN BRIDGE CAPITAL, INC. | ||
| By: | /s/ Assaf Ran | |
| Name: | Assaf Ran | |
| Title: | CEO | |
| PERSONAL GUARANTOR: | ||
| /s/ Assaf Ran | ||
| ASSAF RAN | ||
[Signature Page to Waiver]
| WEBSTER BUSINESS CREDIT, | ||
| A DIVISION OF WEBSTER BANK, N.A., | ||
successor in interest to Webster Business Credit Corporation, as Agent and a Lender | ||
| By: | /s/ Leo Goldstein | |
| Name: | Leo Goldstein | |
| Title: | Vice President | |
[Signature Page to Waiver]
| FLUSHING BANK, as a Lender | ||
| By: | /s/ Jacqueline Yu | |
| Name: | Jacqueline Yu | |
| Title: | Vice President | |
[Signature Page to Waiver]
| MIZRAHI TEFAHOT BANK LTD., as a Lender | ||
| By: | /s/ Nguyen B. Phung | |
| Name: | Nguyen B. Phung | |
| Title: | Vice President | |
| By: | /s/ Gerry Perez | |
| Name: | Gerry Perez | |
| Title: | Senior Vice President | |
[Signature Page to Waiver]
Exhibit 10.19
AMENDMENT NO. 10
TO
AMENDED AND RESTATED CREDIT AND SECURITY AGREEMENT
This AMENDMENT NO. 10 (this “Amendment”) is executed on March 24, 2026, by and among MANHATTAN BRIDGE CAPITAL, INC., a New York corporation (“Borrower”; and collectively with any Person who is or hereafter becomes a party to the Credit Agreement (as defined below) as a borrower or a guarantor, each a “Loan Party” and collectively, the “Loan Parties”), the Lenders (as defined below) signatory hereto, the Guarantors signatory hereto, and WEBSTER BANK, NATIONAL ASSOCIATION (“Webster”), individually, as a Lender hereunder and as agent for itself and each other Lender (Webster, acting in such agency capacity, the “Agent”).
BACKGROUND
Loan Parties, the financial institutions who are or hereafter become parties thereto as lenders (collectively, the “Lenders” and each individually, a “Lender”), and Agent are parties to an Amended and Restated Credit and Security Agreement, dated as of August 8, 2017 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Credit Agreement”) pursuant to which Agent and Lenders provide Loan Parties with certain financial accommodations.
Loan Parties have requested that Agent and Lenders make certain amendments to the Credit Agreement, and Agent and Lenders are willing to do so on the terms and conditions hereafter set forth.
NOW, THEREFORE, in consideration of any loan or advance or grant of credit heretofore or hereafter made to or for the account of Borrower by Lenders, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:
1. Definitions. All capitalized terms not otherwise defined herein shall have the respective meanings given to them in the Credit Agreement.
2. Amendment to Credit Agreement. Subject to satisfaction of the conditions precedent set forth in Section 4 below, the Credit Agreement is hereby amended as follows:
(a) Section 7.24 of the Credit Agreement is hereby amended in its entirety to read as follows:
“7.24 Long Term Mortgages. Loan Parties shall not permit Mortgage Loans (which, for the avoidance of doubt, are held by Loan Parties and not sold to the MBC II Subsidiary) that are outstanding more than thirty (30) months after their Origination Date to comprise more than seventeen and one half percent (17.5%) of Loan Parties' total portfolio of Mortgage Loans at any time.”
(b) Section 14.1 is hereby amended to read in its entirety as follows:
“14.1 Term; Early Termination Fee. This Agreement, which shall inure to the benefit of and shall be binding upon, the respective successors and permitted assigns of each Loan Party, Agent and Lenders, shall become effective on the Closing Date and shall continue in full force and effect until February 28, 2029 (the “Term”) unless sooner terminated as herein provided. Borrower may terminate this Agreement at any time upon ninety (90) days’ prior written notice upon payment in full of the Obligations. In the event the Obligations are prepaid in full prior to the last day of the Term (the date of such prepayment hereinafter referred to as the “Early Termination Date”), Borrower shall pay to Agent, for the ratable benefit of the Lenders, an early termination fee (the “Early Termination Fee”), for the loss of its bargain (and not as a penalty) in an amount equal to (i) two percent (2%) of the Maximum Revolving Amount, if the Early Termination Date occurs from February 28, 2026 (“Loan Year Date”) through the date immediately prior to the first anniversary of the Loan Year Date, (ii) one percent (1%) of the Maximum Revolving Amount if the Early Termination Date occurs on the first anniversary of the Loan Year Date through and including the date immediately prior to the second anniversary of the Loan Year Date, and (iii) one half of one percent (0.50%) of the Maximum Revolving Amount if the Early Termination Date occurs on the second anniversary of the Loan Year Date through and including the date which is immediately prior to the date which is six months after the second anniversary of the Loan Year Date, it being agreed that in the remaining six months of the Term, no Early Termination Fee will apply.”
(c) Annex One of the Credit Agreement is hereby amended by adding the following defined terms in their appropriate alphabetical order to read as follows:
“Amendment No. 10” shall mean that certain Amendment No. 10, dated as of March 24, 2026, to this Agreement.
“Amendment No. 10 Effective Date” shall have the meaning set forth in Section 3 of Amendment No. 10.
(d) Annex One of the Credit Agreement is hereby amended by amending the following defined terms in their entirety to read as follows:
“Applicable Margin” shall mean, from and after the Amendment No. 10 Effective Date, with respect to any type of Advance referenced below, the applicable percentage specified below:
| Advances | Base Rate Loans | Daily Adjusted Rate Term SOFR Rate | ||
| Revolving Advances | 2.00% | 2.75% |
“Term SOFR Adjustment” means for any calculation with respect to a Base Rate Loan or Daily Adjusted Term SOFR Rate Loan, a percentage per annum equal to 0.00%.
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(e) Annex Two of the Credit Agreement is hereby amended by amending Part I, Section (u) thereof in its entirety to read as follows:
“(u) Customary Provisions. The stated maturity of each Mortgage Note does not exceed thirty (30) months and does not provide for, or have, any extension beyond thirty (30) months from the original due date of such Mortgage Note; provided, however, up $2,275,000 aggregate principal amount of Mortgage Loans may have a stated maturity up to thirty-six (36) months and may provide extensions up to thirty-six (36) months. The Mortgage contains customary and enforceable provisions such as to render the rights and remedies of the holder thereof adequate for the realization against the Mortgaged Property of the benefits of the security provided thereby, including, (i) in the case of a Mortgage designated as a deed of trust, by trustee’s sale, and (ii) otherwise by judicial foreclosure. Upon default by a Mortgagor Customer on a Mortgage Loan and foreclosure on, or trustee’s sale of, the Mortgaged Property pursuant to the proper procedures, the holder of the Mortgage Loan will be able to deliver good and merchantable title to the Mortgaged Property. There is no homestead or other exemption available to a Mortgagor Customer which would interfere with the right to sell the Mortgaged Property at a trustee’s sale or the right to foreclose the Mortgage.”
3. Conditions of Effectiveness. This Amendment shall become effective (such date, the “Amendment No. 10 Effective Date”) upon Agent’s receipt of:
(a) a copy of this Amendment duly executed and delivered by Lenders, each Loan Party, MBC II Subsidiary, and Personal Guarantor (defined below) with one original executed copy of this Amendment to be promptly delivered by Loan Parties to Agent, in form and substance satisfactory to Agent;
(b) a copy (including one original) of the Amendment No. 10 Fee Letter duly executed by Borrower and Agent, along with the payment of all fees required thereunder;
(c) a certificate of the Secretary (or Assistant Secretary) of each Loan Party, dated as of the Amendment No. 10 Effective Date, in form and substance acceptable to Agent, certifying as to (i) the incumbency and signature of the officers (or other representatives) of each Loan Party executing this Amendment, and (ii) the authorizations by the board of directors (or other governing body) of such Loan Party to such officers or other representatives to enter into and carry out such transactions as are contemplated pursuant to this Amendment;
(d) UCC, judgment and tax lien searches, the results of which shall be satisfactory to Agent;
(e) such other documents, instruments and agreements as Agent or its counsel may require.
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4. Representations and Warranties. Each Loan Party hereby represents and warrants as follows:
(a) This Amendment and the Credit Agreement, as amended hereby, constitute legal, valid and binding obligations of each Loan Party and are enforceable against each Loan Party in accordance with their respective terms.
(b) Upon the effectiveness of this Amendment, each Loan Party hereby reaffirms all covenants, representations and warranties made in the Credit Agreement as amended hereby and agrees that all such covenants, representations and warranties shall be deemed to have been remade as of the effective date of this Amendment.
(c) After giving effect to this Amendment, no Event of Default or Default has occurred and is continuing or would exist after giving effect to this Amendment.
(d) No Loan Party has any defense, counterclaim or offset with respect to the Credit Agreement or any Other Document to which it is a party.
5. Effect on the Credit Agreement.
(a) Upon the effectiveness of this Amendment, each reference in the Credit Agreement to “this Amendment,” “hereunder,” “hereof,” “herein” or words of like import shall mean and be a reference to the Credit Agreement as amended hereby. This Amendment shall be an Other Document for all purposes under the Credit Agreement.
(b) Except as specifically amended herein, the Credit Agreement, and all other documents, instruments and agreements executed and/or delivered in connection therewith, shall remain in full force and effect, and are hereby ratified and confirmed.
(c) The execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right, power or remedy of Agent or any Lender, nor constitute a waiver of any provision of the Credit Agreement, or any other documents, instruments or agreements executed and/or delivered under or in connection therewith.
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6. Release. Each of the Loan Parties on behalf of itself and its successors, assigns, and other legal representatives, and Personal Guarantor on behalf of himself and his successors, assigns, and other legal representatives (collectively, the “Releasing Parties”), hereby, (a) jointly and severally, absolutely, unconditionally and irrevocably releases, remises and forever discharges Agent and Lenders, and each of their present and former shareholders, affiliates, subsidiaries, divisions, predecessors, directors, officers, attorneys, employees, agents and other representatives and their respective successors and assigns (Agent and Lenders and all such other parties being hereinafter referred to collectively as the “Released Parties” and individually as a “Released Party”), of and from all demands, actions, causes of action, suits, covenants, contracts, controversies, agreements, promises, sums of money, accounts, bills, reckonings, damages and any and all other claims, counterclaims, defenses, rights of set-off, demands and liabilities whatsoever (individually, a “Claim” and collectively, “Claims”) of every name and nature, known or unknown, suspected or unsuspected, both at law and in equity, whether liquidated or unliquidated, matured or unmatured, asserted or unasserted, fixed or contingent, foreseen or unforeseen and anticipated or unanticipated, which each of the Loan Parties and Personal Guarantor, or any of their respective successors, assigns, or other legal representatives and their successors and assigns may now or hereafter own, hold, have or claim to have against the Released Parties or any of them for, upon, or by reason of any nature, cause or thing whatsoever which arises at any time on or prior to the day and date of this Amendment, in relation to, or in any way in connection with the Credit Agreement, as amended and supplemented through the date hereof, the Personal Guaranty, this Amendment, the Other Documents; (b) understands, acknowledges and agrees that the release set forth above may be pleaded as a full and complete defense and may be used as a basis for an injunction against any action, suit or other proceeding which may be instituted, prosecuted or attempted in breach of the provisions of such release; (c) agrees that no fact, event, circumstance, evidence or transaction which could now be asserted or which may hereafter be discovered shall affect in any manner the final and unconditional nature of the release set forth above and nothing contained herein shall constitute an admission of liability with respect to any Claim on the part of any Released Party; and (d) jointly and severally, absolutely, unconditionally and irrevocably, covenants and agrees with each Released Party that it will not sue (at law, in equity, in any regulatory proceeding or otherwise) any Released Party on the basis of any Claim released, remised and discharged by any of the Loan Parties or Personal Guarantor pursuant to this Paragraph 7. If any Releasing Party violates the foregoing covenant, Releasing Parties, jointly and severally, agree to pay, in addition to such other damages as any Released Party may sustain as a result of such violation, all attorneys' fees and costs incurred by any Released Party as a result of such violation.
7. Governing Law. This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns and shall be governed by and construed in accordance with the laws of the State of New York.
8. Headings. Section headings in this Amendment are included herein for convenience of reference only and shall not constitute a part of this Amendment for any other purpose.
9. Counterparts; Facsimile. This Amendment may be executed by the parties hereto in one or more counterparts, each of which shall be deemed an original and all of which when taken together shall constitute one and the same agreement. Any signature delivered by a party by .pdf or electronic transmission shall be deemed to be an original signature hereto.
10. Reaffirmation by Guarantors. Assaf Ran (the “Personal Guarantor”) and MBC II Subsidiary each hereby reaffirm that all of the Obligations of Loan Parties under the Credit Agreement as amended by this Amendment are irrevocably guaranteed by (i) Personal Guarantor in accordance with the terms and conditions of the Second Amended and Restated Guaranty, dated as of January 31, 2023 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time) in favor of Agent for the ratable benefit of Lenders and (ii) MBC II Subsidiary in accordance with the terms and conditions of the MBC II Guaranty, in each case, in favor of Agent for the ratable benefit of Lenders.
11. Severability. In case of one or more of the provisions contained in this Amendment shall be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby.
[Remainder of page intentionally left blank; signature pages follow]
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IN WITNESS WHEREOF, this Amendment has been duly executed as of the day and year first written above.
| BORROWER: | ||
| MANHATTAN BRIDGE CAPITAL, INC. | ||
| By: | /s/ Assaf Ran | |
| Name: | Assaf Ran | |
| Title: | CEO | |
[Signature Page to Amendment No. 10]
| ACKNOWLEDGED AND AGREED TO BY: | ||
| GUARANTORS: | ||
| /s/ Assaf Ran | ||
| ASSAF RAN | ||
| MBC FUNDING II CORP. | ||
| By: | /s/ Assaf Ran | |
| Name: | Assaf Ran | |
| Title: | CEO | |
[Signature Page to Amendment No. 10]
WEBSTER BANK, NATIONAL ASSOCIATION, as Agent and a Lender |
||
| By: | /s/ Leo Goldstein | |
| Name: | Leo Goldstein | |
| Title: | Director | |
[Signature Page to Amendment No. 10]
| FLUSHING BANK, as a Lender | ||
| By: | /s/ Jacqueline Yu | |
| Name: | Jacqueline Yu | |
| Title: | Vice President | |
[Signature Page to Amendment No. 10]
Exhibit 10.26
Execution Version
This AMENDMENT TO LOAN DOCUMENTS, dated as of February 25, 2026 (this “Amendment”), is made and entered into among MBC FUNDING II CORP. (“Borrower”) and VALLEY NATIONAL BANK (“Lender”).
RECITALS
WHEREAS, reference is made to that certain Line of Credit in the principal amount of $10,000,000 (the “Facility”) evidenced by (i) the Letter Agreement dated as of December 12, 2025 among Borrower, each Guarantor (as defined therein), and Lender (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Loan Agreement”) and (ii) the Line of Credit Note, dated as of December 12, 2026 by Borrower in favor of Lender (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Note” and, together with the Loan Agreement, any security agreements, pledge agreements, guaranty agreements, promissory notes, letters of credit or other documents entered into in connection therewith, collectively, the “Loan Documents”);
WHEREAS, the parties hereto wish to amend the Loan Documents to (i) modify the Interest Period to commence on the first of each month and (ii) make such other amendments as are set forth below, in each case on the terms and subject to the conditions set forth herein and in the Loan Documents;
NOW, THEREFORE, in consideration of the mutual agreements herein contained and other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties hereto agree as follows:
Section 1. Defined Terms; Interpretation; Etc. Capitalized terms used and not defined herein shall have the meanings assigned to such terms in the applicable Loan Document. This Amendment constitutes a “Loan Document”.
Section 2. Amendments.
(a)
The Note is hereby amended (a) to delete the red text (indicated textually in the same manner as the following example: stricken
text) and (b) to add the blue underlined text (indicated textually in the same manner as the following example: underlined
text), in each case, as set forth below.
| (i) | The definition of “Interest Period” in Section 3.1 of the Note is hereby amended as follows: |
“Interest
Period” shall mean as to any advance hereunder, the period of one (1) month (subject to availability thereof), with the initial
Interest Period commencing on the date of the first disbursement of an advance hereunder, and each subsequent Interest Period commencing
on the first day of the next succeeding calendar month last
day of the immediately preceding Interest Period; provided that (i) if an Interest Period would end on a day
which is not a Business Day, such Interest Period shall end on the next succeeding Business Day unless such day falls in the next succeeding
calendar month in which case the Interest Period shall end on the next preceding Business Day,
and (ii) the final Interest Period shall commence on the last day of the immediately preceding
Interest Period, and end on the Maturity Date, and (iii) any Interest Period that begins on the last
Business Day of a calendar month (or a day for which there is no numerically corresponding day in the last calendar month of such Interest
Period) shall end on the last Business Day of the last calendar month of such Interest Period.
(b) All other references in the Loan Documents to the Interest Period shall be deemed amended accordingly to reflect the amendments set forth herein.
Section 3. Acknowledgements.
(a) Except as specifically amended herein, the Loan Agreement and the Note shall remain in full force and effect in accordance with its respective terms. The amendments contained herein shall not be construed as a waiver or amendment of any other provision of the Loan Documents.
(b) Each undersigned guarantor and subordinating creditor (each, an “other Obligor”), if any, hereby confirms and agrees that the respective guarantee(s) and subordination agreement(s) delivered by it to Lender in connection with Facility are hereby ratified and confirmed and remain in full force and effect.
(c) All Collateral as set forth in the Loan Agreement and any and all security and pledge agreements delivered in connection therewith, is and shall continue to be collateral security for the obligations under the Loan Documents, as amended hereby.
(d) No break funding indemnification amounts shall be owed pursuant to Section 4.6 of the Note in connection with the amendments made hereunder.
Section 4. Representations. In order to induce Lender to enter into this Amendment, Borrower hereby represents, warrants and agrees that: (i) the representations and warranties contained in the Loan Documents are true and correct on and as of the date hereof as though made on and as of such date, except for those representations and warranties given as of a specific date, (ii) no default or Event of Default, as defined in any Loan Document, has occurred and is continuing; (iii) it has full power, right and legal authority to execute, deliver and perform its obligations under this Amendment; and (iv) it has taken all action necessary to authorize the execution and delivery of, and the performance of its obligations under this Amendment.
Section 5. Conditions Precedent. This Amendment shall be effective as of the date hereof, upon receipt by Lender of:
(a) a duly executed copy hereof by Borrower and, if applicable, each other Obligor; and
(b) all fees and other amounts due and payable on or prior to the date hereof, including reimbursement or payment of all out-of-pocket expenses (including reasonable fees, charges and disbursements of counsel) required to be reimbursed or paid by the Borrower or any other Obligor.
Section 6. Miscellaneous.
(a) Governing Law; Jurisdiction; Venue. This Amendment shall be governed by and construed in accordance with the substantive laws set forth in the Loan Documents. Any and all provisions in the Loan Documents pertaining to jurisdiction and venue are hereby incorporated herein by reference, mutatis mutandis, with references therein to the applicable Loan Document being deemed references to this Amendment.
(b) Counterparts; Electronic Signatures. This Amendment may be signed in any number of counterparts with the same effect as if the signatures thereto and hereto were upon the same instrument. The words “execution,” “signed,” “signature,” and words of like import in this Amendment shall be deemed to include electronic signatures or electronic records, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.
(c) Severability. The illegality, invalidity or unenforceability of any provision of this Amendment under the law of any jurisdiction shall not affect its legality, validity or enforceability under the law of any other jurisdiction nor the legality, validity or enforceability of any other provision.
(d) Effect on Other Loan Documents. The Loan Documents and all agreements, instruments and documents executed and delivered in connection therewith, shall each be deemed amended hereby to the extent necessary, if any, to give effect to the provisions of this Amendment. Except as specifically amended by this Amendment, the Loan Documents shall remain in full force and effect and are hereby ratified and confirmed and this Amendment shall not be considered a novation. The execution, delivery and performance of this Amendment shall not constitute a waiver of any provision of, or operate as a waiver of any right, power or remedy of Lender under any of the Loan Documents.
[Signature Page Follows]
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Please indicate your agreement and acceptance to the terms set forth above by signing and returning a copy of this Amendment to the undersigned.
| Very truly yours, | |||
| VALLEY NATIONAL BANK | |||
| By: | /s/ Robert Finn | ||
| Name: | Rober Finn | ||
| Title: | Vice President | ||
| AGREED TO as of the date hereof: | |||
| bORROWER: | |||
| MBC FUNDING II CORP. | |||
| By: | /a/ Assaf Ran | ||
| Name: | Assaf Ran | ||
| Title: | CEO | ||
| GUARANTOR(S): | |||
| MANHATTAN BRIDGE CAPITAL, INC. | |||
| By: | /s/ Assaf Ran | ||
| Name: | Assaf Ran | ||
| Title: | CEO | ||
| /a/ Assaf Ran | |||
| Assaf Ran, acting individually | |||
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Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders
Manhattan Bridge Capital, Inc.
We hereby consent to the incorporation by reference in the Registration Statements of Manhattan Bridge Capital, Inc. on Form S-8 (#333-82374, #333-127424 and #333-163105) and on Form S-3 (#333-279603) of our report dated March 27, 2026, on the consolidated balance sheets of Manhattan Bridge Capital, Inc. and Subsidiary as of December 31, 2025 and 2024, and the related consolidated statements of operations, changes in stockholders’ equity and cash flows for the years then ended, as appearing in the annual report on Form 10-K of Manhattan Bridge Capital, Inc. for the year ended December 31, 2025.
/s/Hoberman & Lesser CPAs, LLP
New York, New York
March 27, 2026
Exhibit 31.1
CERTIFICATION PURSUANT TO RULE 13a-14
I, Assaf Ran, certify that:
| 1. | I have reviewed this Annual Report on Form 10-K, of Manhattan Bridge Capital, Inc. |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a 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 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 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: March 27, 2026 | /s/ Assaf Ran |
| Assaf Ran | |
|
President and Chief Executive Officer | |
| (Principal Executive Officer) |
Exhibit 31.2
CERTIFICATION PURSUANT TO RULE 13a-14
I, Vanessa Kao, certify that:
| 1. | I have reviewed this Annual Report on Form 10-K of Manhattan Bridge Capital, Inc. |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a 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 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 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: March 27, 2026 | /s/ Vanessa Kao |
|
Vanessa Kao | |
| Chief Financial Officer and Treasurer | |
| (Principal Financial and Accounting Officer) |
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
In connection with the Annual Report of Manhattan Bridge Capital, Inc. on Form 10-K, for the period ended December 31, 2025 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Assaf Ran, Chief Executive Officer of Manhattan Bridge Capital, Inc., certify, pursuant to 18 U.S.C. § 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, as amended; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Manhattan Bridge Capital, Inc.
| Date: March 27, 2026 | /s/ Assaf Ran |
| Assaf Ran | |
| (Principal Executive Officer) |
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
In connection with the Annual Report of Manhattan Bridge Capital, Inc. on Form 10-K, for the period ended December 31, 2025 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Vanessa Kao, Chief Financial Officer of Manhattan Bridge Capital, Inc., certify, pursuant to 18 U.S.C. § 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, as amended; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Manhattan Bridge Capital, Inc.
| Date: March 27, 2026 | /s/ Vanessa Kao |
| Vanessa Kao | |
| (Principal Financial Officer) |