Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

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

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

We are a wholly-owned subsidiary of Manhattan Bridge Capital, Inc., a New York corporation ("MBC"), and were formed in December 2015 specifically for the purpose of the initial public offering ("IPO") of the Notes (described below). On April 25, 2016, we sold $6,000,000 aggregate principal amount of our 6% Senior Secured Notes, due April 22, 2026 (the "Notes"), in our IPO for net proceeds of $5,200,000, after deducting the underwriting discounts and commissions and other offering expenses. The Notes are secured by a first priority lien on all of our assets, including, primarily, mortgage notes, mortgages and other transaction documents entered into in connection with first mortgage loans originated and funded by MBC, which we acquired from MBC pursuant to an asset purchase agreement. Under the terms of the indenture governing the Notes (the "Indenture"), the aggregate outstanding principal balance of the mortgage loans held by us, together with our cash on hand, must always equal at least 120% of the aggregate outstanding principal amount of the Notes at all times until the Notes are paid in full. In addition, MBC has guaranteed our obligations under the Notes and has secured that guaranty with a pledge of all of our outstanding common shares. We plan to redeem the Notes prior to their maturity with proceeds from a replacement or MBC's existing credit facility, though we cannot assure you that we will be successful in doing so.

The Notes are listed on the NYSE American and trade under the symbol "LOAN/26".

To the extent any of the mortgages acquired from MBC are satisfied in full, such mortgages will be replaced with one or more mortgages with similar aggregate principal amount. At September 30, 2025, the pool of mortgage loans was comprised of 12 loans with an aggregate outstanding principal balance of $8,034,000.

Prior to the consummation of the IPO on April 25, 2016, we did not have any material operations. As of April 2016, we collect payments of interest on the mortgages we hold and use those funds to make the required interest payments to the holders of the Notes and certain operating expenses. Any excess cash will be distributed to MBC or held by us to be used for working capital and general corporate purposes.

Results of Operations

Three months ended September 30, 2025 compared to three months ended September 30, 2024

Total Revenue

Total revenues for the three months ended September 30, 2025 and 2024 of approximately $230,000 and $229,000, respectively, represent interest income on the secured commercial loans that we purchased from MBC.

Interest and amortization of deferred financing costs

Interest and amortization of deferred financing costs for each of the three months ended September 30, 2025 and 2024 of approximately $109,000 are attributable to the issuance of the Notes.

General and administrative expenses

General and administrative expenses for the three months ended September 30, 2025 and 2024 of approximately $9,000 and $4,000, respectively, are comprised of fees paid to the Indenture trustee and NYSE American LLC, as well as bank fees. The increase is primarily due to an increase in the NYSE American listing fee.

Nine months ended September 30, 2025 compared to nine months ended September 30, 2024

Total Revenue

Total revenues for the nine months ended September 30, 2025 and 2024 of approximately $675,000 and $693,000, respectively, represent interest income on the secured commercial loans that we purchased from MBC. The decrease in revenue was primarily attributable to a reduction in loans receivable, period over period.

Interest and amortization of deferred financing costs

Interest and amortization of deferred financing costs for each of the nine months ended September 30, 2025 and 2024 of approximately $326,000 are attributable to the issuance of the Notes.

General and administrative expenses

General and administrative expenses for the nine months ended September 30, 2025 and 2024 of approximately $27,000 and $12,000, respectively, are comprised of fees paid to the Indenture trustee and NYSE American LLC, as well as bank fees. The increase is primarily due to an increase in the NYSE American listing fee.

Liquidity and Capital Resources

At September 30, 2025, we had cash of approximately $63,000 compared to cash of approximately $50,000 at December 31, 2024.

Net cash provided by operating activities for the nine months ended September 30, 2025 was approximately $363,000, compared to approximately $406,000 for the nine months ended September 30, 2024. The decrease in net cash provided by operating activities mainly resulted from the decrease in revenue and an increase in prepaid expenses. Net cash provided by operating activities for the nine months ended September 30, 2025 and 2024 primarily resulted from our interest income and amortization of deferred financing costs.

Net cash used in financing activities for the nine months ended September 30, 2025 was approximately $350,000, compared to approximately $399,000 for the nine months ended September 30, 2024. The decrease in net cash used in financing activities primarily resulted from the decline in net income. Net cash used in financing activities for the nine months ended September 30, 2025 and 2024 reflected advances of excess cash to MBC for working capital and general corporate purposes. Amounts advanced to MBC are non-interest bearing and due on demand.

We had no cash provided by or used in investing activities for the nine months ended September 30, 2025 or 2024.

Under the terms of the Indenture, the aggregate outstanding principal balance of the mortgage loans held by the Company, together with the Company's cash on hand, must always equal at least 120% of the aggregate outstanding principal amount of the Notes at all times.

We believe that our current cash balances together with our cash flows from operations will be sufficient to fund our operations for the next 12 months.