LOAN 10-Q Quarterly Report Sept. 30, 2010

MANHATTAN BRIDGE CAPITAL, INC

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10-Q 1 v199966_10q.htm QUARTERLY REPORT

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

( Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30 , 20 10

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________________________________________ to _________________________________________

Commission File Number: 00 0 - 25991

MANHATTAN BRIDGE CAPITAL , INC.

(Exact name of registrant as specified in its charter)

New York	11-3474831
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

192 Lexington Avenue, New York, New York 10016

(Address of principal executive offices)

(212) 489-6800

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x Yes ¨ No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files). ¨ Yes ¨ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	¨ (Do not check if a smaller reporting company)	Smaller reporting company	x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ¨ Yes x No

As of October 27, 2010, the Issuer had a total of 3,324,459 shares of Common Stock, $.001 par value, outstanding.

MANHATTAN BRIDGE CAPITAL, INC.

TABLE OF CONTENTS

		Page Number

Part I	FINANCIAL INFORMATION

Item 1.	Consolidated Financial Statements

	Consolidated Balance Sheets as of September 30, 2010 and December 31, 2009	2
	Consolidated Statements of Operations for the Three and Nine Month Periods Ended September 30, 2010 and 2009	3

	Consolidated Statements of Cash Flows for the Nine Month Periods Ended September 30, 2010 and 2009	4

	Notes to Consolidated Financial Statements	5

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	10

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	14

Item 4.	Controls and Procedures	14

Part II	OTHER INFORMATION

Item 6.	Exhibits	14

SIGNATURES		15

EXHIBITS		E-1

Forward Looking Statements

This report contains forward-looking statements within the meaning of section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements are typically identified by the words “believe,” “expect,” “intend,” “estimate” and similar expressions. Those statements appear in a number of places in this report and include statements regarding our intent, belief or current expectations or those of our directors or officers with respect to, among other things, trends affecting our financial condition and results of operations and our business and growth strategies. These forward-looking statements are not guarantees of future performance and involve risks and uncertainties. Actual results may differ materially from those projected, expressed or implied in the forward-looking statements as a result of various factors (such factors are referred to herein as “Cautionary Statements”), including but not limited to the following: (i) the successful integration of new businesses that we may acquire; (ii) the success of new operations which we have commenced and of our new business strategy; (iii) our limited operating history in our new business; (iv) potential fluctuations in our quarterly operating results; and (v) challenges facing us relating to our growth. 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.

PART I. FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

MANHATTAN BRIDGE CAPITAL, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	September 30, 2010			December 31, 2009
	(Unaudited)			(Audited)
Assets
Current assets:
Cash and cash equivalents	$	959,918		$	707,449
Investment in marketable securities		—			404,268
Total cash and cash equivalents and investment in marketable securities at fair value		959,918			1,111,717

Short term loans		7,066,200			6,476,621
Interest receivable on short term loans		69,314			60,207
Other current assets		73,328			26,568
Total current assets		8,168,760			7,675,113

Property and equipment, net		3,184			5,458
Security deposit		17,515			17,515
Investment in privately held company, at cost		100,000			100,000

Total assets	$	8,289,459		$	7,798,086

Liabilities and Shareholders’ Equity
Current liabilities:
Lines of credit	$	300,000		$	—
Accounts payable and accrued expenses		32,310			77,768
Deferred origination fees		40,626			102,751
Income taxes payable		145,513			162,182
Total current liabilities		518,449			342,701

Commitments and contingencies
Shareholders’ equity:
Preferred shares - $.01 par value; 5,000,000 shares authorized; no shares issued		—			—
Common shares - $.001 par value; 25,000,000 authorized; 3,405,190 issued and 3,324,459 outstanding		3,405			3,405
Additional paid-in capital		9,563,823			9,476,762
Treasury stock, at cost- 80,731 shares		(241,400	)		(241,400	)
Accumulated other comprehensive income		—			123,823
Accumulated deficit		(1,554,818	)		(1,907,205	)
Total shareholders’ equity		7,771,010			7,455,385

Total liabilities and shareholders’ equity	$	8,289,459		$	7,798,086

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

MANHATTAN BRIDGE CAPITAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

	Three Months Ended September 30 ,						Nine Months Ended September 30 ,
	2010			2009			2010			2009

Interest income from short term loans	$	255,869		$	235,249		$	751,733		$	632,864
Origination fees		50,593			53,359			160,932			137,304
Total Revenue		306,462			288,608			912,665			770,168

Operating costs and expenses:
Interest expense on lines of credit used		6,900			—			21,627			—
General and administrative expenses		182,855			148,164			507,382			453,267
Total operating costs and expenses		189,755			148,164			529,009			453,267
Income from operations		116,707			140,444			383,656			316,901

Interest and dividend income		177			3,581			4,342			19,419
Realized loss on marketable securities		—			—			—			(5,940	)
Realized gain (loss) on marketable securities that were previously marked down		—			(8,004	)		151,419			10,654
Total other income (expense)		177			(4,423	)		155,761			24,133
Income from operations before income tax expense		116,884			136,021			539,417			341,034
Income tax expense		(60,030	)		(52,428	)		(187,030	)		(111,831	)
Net Income	$	56,854		$	83,593		$	352,387		$	229,203

Basic and diluted net income per common share outstanding:
—Basic	$	0.02		$	0.03		$	0.11		$	0.07
—Diluted	$	0.02		$	0.03		$	0.10		$	0.07

Weighted average number of common shares outstanding
—Basic		3,324,459			3,325,760			3,324,459			3,325,760
—Diluted		3,380,406			3,333,628			3,371,971			3,327,364

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

MANHATTAN BRIDGE CAPITAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

	Nine Months Ended September 30,
	2010			2009
Cash flows from operating activities:
Net income	$	352,387		$	229,203
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		2,274			3,205
Non cash compensation expense		59,099			61,280
Realized loss on sale of marketable securities		—			5,940
Realized gain on marketable securities that were previously marked down		(151,419	)		(10,654	)
Changes in operating assets and liabilities:
Interest receivable on short term loans		(9,107	)		(39,523	)
Due from purchaser		—			23,881
Other current and non current assets		(46,760	)		(19,630	)
Accounts payable and accrued expenses		(17,496	)		(33,272	)
Deferred origination fees		(62,125	)		46,530
Income taxes payable		(16,669	)		81,078
Net cash provided by operating activities		110,184			348,038

Cash flows from investing activities:
Proceeds from sale of marketable securities, auction rate securities and annuity contract		431,864			253,525
Issuance of short term and long term loans		(3,912,500	)		(4,988,030	)
Collection received from short term loans		3,322,921			3,585,463
Net cash used in investing activities		(157,715	)		(1,149,042	)

Cash flows from financing activities:
Use of line of credit		300,000			156,582
Net cash provided by financing activities		300,000			156,582

Net increase (decrease) in cash		252,469			(644,422	)
Cash and cash equivalents, beginning of the year		707,449			884,296
Cash and cash equivalents, end of period	$	959,918		$	239,874

Supplemental Cash Flow Information:
Taxes paid during the period	$	203,669		$	30,753
Interest paid during the period	$	21,627		$	746
Non-cash investing and financing activities:
Forgiveness of debt	$	27,961		$	—

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

MANHATTAN BRIDGE CAPITAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2010

1.	THE COMPANY

The accompanying unaudited consolidated financial statements of Manhattan Bridge Capital, Inc., a New York corporation, and its consolidated subsidiaries DAG Funding Solutions, Inc., a wholly-owned subsidiary and a New York corporation, and DAG Interactive, Inc. (“DAG Interactive”), a 80% owned subsidiary and a Delaware corporation (collectively referred to herein as “Manhattan Bridge Capital” “we”, “us” “our” or “the Company”) have been prepared by the Company in accordance with U.S. generally accepted accounting principles for interim financial information and with instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. However, in the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The accompanying unaudited consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2009 and the notes thereto included in the Company’s Form 10-K. Results of consolidated operations for the interim period are not necessarily indicative of the operating results to be attained in the entire fiscal year. All material intercompany accounts and transactions have been eliminated.

The preparation of consolidated financial statements in conformity with generally accepted accounting principles 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 amount of revenues and expenses during the reporting period. Actual amounts could differ from those estimates.

The Company provides short term, secured, non–banking commercial loans, to small businesses.

The Company recognizes revenues in accordance with ASC 605, which provides guidance on the recognition, presentation and disclosure of revenue in financial statements. ASC 605 outlines the basic criteria that must be met to recognize revenue and provides guidance for disclosure related to revenue recognition policies. In general, the Company recognizes revenue when (i) persuasive evidence of an arrangement exists, (ii) delivery of the product has occurred or services have been rendered, (iii) the sales price charged is fixed or determinable, and (iv) collectibility is reasonably assured.

Interest income from short term commercial loans is recognized, as earned, over the loan period.

Origination fee revenue on short term commercial loans is amortized over the term of the respective note.

Marketable securities are reported at fair value and are classified as available-for-sale. Unrealized gains and losses from those securities are reported as a separate component of shareholders’ equity, net of the related tax effect. Realized gains and losses are determined on a specific identification basis. Additionally, the Company assesses whether an other-than-temporary impairment loss on the investments has occurred due to declines in fair value or other market conditions. Declines in fair value that are considered other than temporary, if any, are recorded as charges in the Consolidated Statements of Operations. The Company did not record an impairment loss on marketable securities for the three and nine month periods ended September 30, 2010 and 2009.

Effective January 1, 2008, the Company adopted the ASC 820, Fair Value Measurements, which defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. ASC 820-10 establishes a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:

Level 1—Quoted prices in active markets.

Level 2—Observable inputs other than quoted prices in active markets that are either directly or indirectly observable.

Level 3—Unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

Cash equivalents and investment instruments are classified within Level 1 or Level 2 of the fair value hierarchy. The Company’s Level 1 investments are valued using quoted market prices in active markets. The Company’s Level 2 investments are valued using broker or dealer quotations for similar assets and liabilities. As of September 30, 2010 and December 31, 2009 the Company’s Level 1 investments consisted of cash, money market accounts and marketable securities in the amount of approximately $960,000 and $1,112,000, respectively, and were recorded as cash and cash equivalents and marketable securities in the Company’s consolidated balance sheets.

We have evaluated subsequent events and transactions for potential recognition or disclosure in the financial statements through October 27, 2010, the day the financial statements were issued.

2.	RECENT TECHNICAL ACCOUNTING PRONOUNCEMENTS

In June 2009, the FASB issued “The FASB Accounting Standards Codification and Hierarchy of Generally Accepted Accounting Principles” under ASC 105. ASC 105 establishes the FASB Standards Accounting Codification as the source of authoritative U.S. generally accepted accounting principles recognized by the FASB to be applied to nongovernmental entities and rules and interpretive releases of the SEC as authoritative GAAP for SEC registrants. The Codification supersedes all the existing non-SEC accounting and reporting standards upon its effective date and subsequently, the FASB will not issue new standards in the form of Statements, FASB Staff Positions or Emerging Issues Task Force Abstracts. The adoption of this new standard did not have a material effect on the Company’s disclosures of the consolidated financial statements.

In August 2009, the FASB issued an update to ASC 820. This Accounting Standards Update (“ASU”) No. 2009-5, Measuring Liabilities at Fair Value (“ASU 2009-5”) amends the provisions in ASC 820 related to the fair value measurement of liabilities and clarifies for circumstances in which a quoted price in an active market for the identical liability is not available. ASU 2009-5 is intended to reduce potential ambiguity in financial reporting when measuring the fair value of liabilities. ASU 2009-5 is effective for the Company in the first quarter of fiscal year 2010. ASU 2009-5 concerns disclosure only. The adoption of ASU 2009-5 did not have a material effect on the Company’s consolidated financial statements.

In December 2009, the FASB issued Accounting Standards Update (“ASU”) 2009-17, which codifies SFAS No. 167, Amendments to FASB Interpretation No. 46(R) issued in June 2009. ASU 2009-17 requires a qualitative approach to identifying a controlling financial interest in a variable interest entity (“VIE”), and requires ongoing assessment of whether an entity is a VIE and whether an interest in a VIE makes the holder the primary beneficiary of the VIE. ASU 2009-17 is effective for annual reporting periods beginning after November 15, 2009. The Company believes that the adoption of ASU 2009-17 will not have a material effect on its consolidated financial statements.

In January 2010, the FASB issued ASU 2010-6, Improving Disclosures About Fair Value Measurements, which requires reporting entities to make new disclosures about recurring or nonrecurring fair-value measurements including significant transfers into and out of Level 1 and Level 2 fair-value measurements and information on purchases, sales, issuances, and settlements on a gross basis in the reconciliation of Level 3 fair- value measurements. ASU 2010-6 is effective for annual reporting periods beginning after December 15, 2009, except for Level 3 reconciliation disclosures which are effective for annual periods beginning after December 15, 2010. The Company believes that the adoption of ASU 2010-6 will not have a material effect on its consolidated financial statements.

Management does not believe that any other recently issued, but not yet effected, accounting standards if currently adopted would have a material effect on the Company’s consolidated financial statements.

3.	SHORT TERM COMMERCIAL LOANS

At September 30, 2010, we were committed to an additional $710,000 in construction loans that can be drawn by the borrower when certain conditions are met.

At September 30, 2010, approximately $700,000 of the loans outstanding are due from three different entities that are all owned by the same individual, which represents more than 10% of the total balance of the loans outstanding.

In addition at September 30, 2010, the Company had made loans to four borrowers in the aggregate amount of $1,092,500. One individual holds a fifty percent interest in each of the borrowers. The individual has no relationship to any of the officers or directors of the Company.

4.	EARNINGS PER SHARE OF COMMON STOCK

Basic and diluted earnings per share are calculated in accordance with ASC 260 “Earnings Per Share”. Under ASC 260, basic earnings per share is computed by dividing income available to common shareholders by the weighted-average number of common shares outstanding for the period. The computation of diluted earnings per share is similar to basic earnings per share, except that the denominator is increased to include the potential dilution from the exercise of stock options and warrants for common shares using the treasury stock method. The numerator in calculating both basic and diluted earnings per common share for each period is the reported net income.

The denominator is based on the following weighted average number of common shares:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2010		2009		2010		2009
Basic		3,324,459		3,325,760		3,324,459		3,325,760
Incremental shares for assumed conversion of options		55,947		7,868		47,512		1,604
Diluted		3,380,406		3,333,628		3,371,971		3,327,364

For the three and nine month periods ended September 30, 2010, 553,720 and 562,155, stock options were not included in the diluted earnings per share calculation, respectively, as their effect would have been anti-dilutive.

For the three and nine month periods ended September 30, 2009, 568,461 and 574,725, stock options were not included in the diluted earnings per share calculation, respectively, as their effect would have been anti-dilutive.

5.	STOCK – BASED COMPENSATION

The Company measures and recognizes compensation awards for all stock option grants made to employees and directors, based on their fair value in accordance with ASC 718 “Compensation- Stock Compensation”, 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 718 and ASC 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.

Share based compensation expense recognized under ASC 718 for the three and nine months ended September 30, 2010 were $13,344 and $59,099, respectively. Share based compensation expense recognized under ASC 718 for the three and nine months ended September 30, 2009 were $15,621 and $61,280, respectively.

The exercise price of options granted under our stock option plan may not be less than the fair market value on the date of grant. The options may vest over a period not to exceed ten years. Stock options under our stock option plan may be awarded to officers, key-employees, consultants and non-employee directors of the Company. Under our stock option plan, every non-employee director of the Company is granted 7,000 options upon first taking office, and then 7,000 upon each additional year in office. The objectives of our stock option plan include attracting and retaining key personnel, providing for additional performance incentives and promoting the success of the Company by increasing the efforts of such officers, employees, consultants and directors. Our stock option plan is the only plan that the Company has adopted with stock options available for grant.

The fair value of each option is estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted-average share assumptions used for grants in 2010 and 2009, respectively: (1) expected life of 5 years; (2) no annual dividend yield; (3) expected volatility 62% to 73%; and (4) risk free interest rate of 1.5% to 2.7%.

The following summarizes stock option activity for the nine month period ended September 30, 2010:

	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value
Outstanding at December 31, 2009		699,000		$	1.87
Granted		98,000			1.40
Exercised		—			—
Forfeited		(91,000	)		4.15
Outstanding at September 30, 2010		706,000		$	1.51		2.22	$	578,198
Vested and exercisable at September 30, 2010		609,667		$	1.58		1.95	$	524,501

The weighted-average fair value of each option granted during the nine month periods ended September 30, 2010 and 2009, estimated as of the grant date using the Black-Scholes option valuation model, was $0.78 per option and $0.37 per option, respectively.

6. LINES OF CREDIT

The Company established a line of credit with Smith Barney. The line of credit provides for maximum borrowings in the amount of up to 50% of the value of the Company's marketable securities held by Smith Barney. This line bears interest at the prime rate minus .75%. During the first quarter of 2010 the Company used $158,434 from its line, which was paid during the second quarter of 2010..

In addition, in September 2009, the Company established a line of credit with Valley National Bank. The line of credit provides for maximum borrowings in the amount of up to $300,000 and bears fixed interest at the rate of 9%. As of September 30, 2010, $300,000 is outstanding under this line.

7. FORGIVENESS OF DEBT

On June 21, 2010 the board of directors of the Company decided to dissolve DAG Interactive. In connection with such dissolution, the Company recorded forgiveness of debt in the amount of $27,961, for accounts payable due to a related party, as an increase in equity on its balance sheet.

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our results of operations should be read in conjunction with our unaudited consolidated financial statements and notes thereto included in this Quarterly Report on Form 10-Q. The discussion and analysis 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 .

We offer short-term loans to real estate investors (also known as hard money) to fund their acquisition of properties located in New York Metro area. Currently, our customers’ purchases are often from banks or distressed sellers. Substantially all of our loans are secured by first mortgages on the acquired real estate. In addition, the principals of our corporate borrowers personally guaranty the loans and, as additional collateral and protection, pledge the borrower’s stock. We generally require our borrowers to contribute substantial amount of the purchase price in equity in connection with all the real estate acquisitions we fund. We conducts due diligence to qualify our borrowers, generally require current appraisals and limit our loans to a maximum of 65% of the appraised value. Loans are generally for a term of one year and provide for receipt of interest only during the term of the loan and a balloon payment at the end of the term. To date, we have not experienced any defaults and none of the loans previously made have been non-collectable, although no assurances can be given that existing or future loans may not go into default or prove to be non-collectable in the future.

For the three and nine months ended September 30, 2010 the total amounts of $976,000 and $3,912,500, respectively, have been lent, offset by collections received from borrowers in the amount of $1,616,500 and $3,322,921 respectively. Loans ranging in size from $50,000 to $1,020,000 were concluded at stated interest rates of 12% to 16%, but often at higher effective rates based upon points or other up-front fees. We use our own employees, outside lawyers and other independent professionals to verify titles and ownership, to file liens and to consummate the transactions. Outside appraisers are also employed to assist us in evaluating the worth of collateral.

At September 30, 2010, we were committed to an additional $710,000 in construction loans that can be drawn by the borrower when certain conditions are met.

Results of Operations

Three Months Ended September 30, 2010 Compared to Three Months Ended September 30, 2009

Revenue

Total revenues for the three month period ended September 30, 2010 were approximately $306,000 compared to approximately $289,000 for the three month period ended September 30, 2009, an increase of $17,000 or 5.9%. The increase in revenue represents an increase in lending operations. For the three month period ended September 30, 2010, $256,000 of our revenue represents interest income on the short term secured commercial loans that we offer to small businesses compared to $235,000 for the same period in 2009, and $51,000 represents origination fees on such loans compared to $54,000 for the same period in 2009. Loans are secured by collateral such as real estate, receivables, and marketable securities and generally are accompanied by personal guarantees from the principals of the businesses.

Interest expense on lines of credit used

Interest expense on lines of credit used for the three month period ended September 30, 2010 was $7,000 compared to $0 for the three month period ended September 30, 2009. The increase in interest expense is due to use of the two lines of credit we established (See note 6) in order to increase our ability to make loans.

General and administrative expenses

General and administrative expenses for the three month period ended September 30, 2010 were approximately $183,000 compared to approximately $148,000 for the three month period ended September 30, 2009. This increase is primarily attributable to an increase in payroll expenses of approximately $33,000, offset by professional fees.

Other income (expenses)

For the three month period ended September 30, 2010 we had other income in the amount of $177, consisting of dividend and interest income, compared to net other expenses of approximately $4,000 for the three month period ended September 30, 2009 which consisted mainly of dividend and interest income of approximately $4,000, offset by a realized loss on the sale of marketable securities that were previously marked down of approximately $8,000.

Income tax expense

For the three month period ended September 30, 2010 we had income tax expense of approximately $60,000.

Nine Months Ended September 30, 2010 Compared to Nine Months Ended September 30, 2009

Revenue

Total revenues for the nine month period ended September 30, 2010 were approximately $913,000 compared to approximately $770,000 for the nine month period ended September 30, 2009, an increase of $143,000, or 18.6%. The increase in revenue represents an increase in lending operations. Revenue of approximately $752,000 for the nine month period ended September 30, 2010, compared to approximately $633,000 for the same period in 2009, represents interest income on the short term secured commercial loans that we offer to small businesses, and $161,000 represents origination fees on such loans compared to $137,000 for the same period in 2009. Loans are secured by collateral such as real estate, receivables, and marketable securities and generally are accompanied by personal guarantees from the principals of the businesses.

Interest expense on lines of credit used

Interest expense on lines of credit used for the nine month period ended September 30, 2010 was approximately $22,000 compared to $0 for the nine month period ended September 30, 2009. The increase in interest expense is due to use of the two lines of credit we established (See note 6) in order to increase our ability to make loans.

General and administrative costs

General and administrative expenses for the nine month period ended September 30, 2010 were approximately $507,000 compared to approximately $453,000 for the nine month period ended September 30, 2009. This increase is primarily attributable to an increase in payroll expenses of approximately $56,000, offset by professional fees.

Other income

For the nine month period ended September 30, 2010 we had other income in the amount of approximately $156,000, consisting mainly of the realized gain on the sale of marketable securities that were previously marked down of $151,000 and dividend and interest income of approximately $4,000, compared to other income of approximately $24,000, which consisted mainly of dividend and interest income of approximately $19,000, a realized gain on the sale of marketable securities that were previously marked down of approximately $11,000, offset by realized losses on marketable securities in the amount of approximately $6,000.

Income tax expense

For the nine month period ended September 30, 2010 we had income tax expense of approximately $187,000 and for the nine month period ended September 30, 2009 we had income tax expense of approximately $112,000.

Liquidity and Capital Resources

At September 30, 2010, we had cash and cash equivalents of approximately $960,000 and working capital of approximately $7,650,000 as compared to cash and cash equivalents and marketable securities of approximately $1,112,000 and working capital of $7,332,000 at December 31, 2009. The decrease in cash and cash equivalents and marketable securities primarily reflects the making of short term commercial loans in the total amount of $3,912,500, offset by proceeds of collection of these loans in the amount of $3,322,921 and the use of lines of credit in the amount of $300,000. The increase in working capital is primarily attributable to the net income of $352,387.

For the nine month periods ended September 30, 2010 and 2009, net cash provided by operating activities were approximately $110,000 and $348,000, respectively. The decrease in net cash provided by operating activities primarily results from increase in realized gain on marketable securities that were previously marked down, a decrease in deferred origination fees, a decrease in income taxes payable and an increase in other current assets, offset by an increase in net income.

Net cash used in investing activities was approximately $158,000 for the nine months ended September 30, 2010, compared to net cash used in investing activities of approximately $1,149,000 for the period ended September 30, 2009. Net cash used in investing activities consisted primarily of the issuance of the our short term commercial loans in the amount of approximately $3,912,000, offset by collection of these loans in the amount of $3,323,000 and proceeds from sale of marketable securities in the amount of approximately 432,000. In the period ended September 30, 2009 net cash used in investing activities consisted primarily of the issuance of the our short term commercial loans in the amount of $4,988,000, offset by collection of these loans in the amount of $3,585,000 and proceeds from sale of marketable securities in the amount of approximately 254,000.

We have not entered into any off-balance sheet transactions, arrangements or other relationships with unconsolidated entities or other persons that are likely to affect liquidity or the availability of our requirements for capital resources.

We anticipate that our current cash balances will be sufficient to fund our operations for the next 12 months. However, we expect our working capital requirements to increase over the next 12 months as we continue to strive for growth.

Changes to Critical Accounting Policies and Estimates

Our critical accounting polices and estimates are set forth in our Annual Report on Form 10-K for the fiscal year ended December 31, 2009.

Item 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a smaller reporting company we are not required to provide the information required by this Item.

Item 4. CONTROLS AND PROCEDURES

(a)

Evaluation and Disclosure Controls and Procedures

Our management, with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of September 30, 2010. Based on this evaluation, our chief executive officer and chief financial officer concluded that, as of September 30, 2010, our disclosure controls and procedures were (1) effective in that they were designed to ensure that material information relating to us is made known to our chief executive officer and chief financial officer by others within our organization, as appropriate to allow timely decisions regarding required disclosures, and (2) effective in that they ensure that information required to be disclosed by us in our reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

(b)

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the fiscal quarter ended September 30, 2010 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II-OTHER INFORMATION

Item 6.

EXHIBITS

Exhibit No.		Description

31.1		Chief Executive Officer Certification as required under section 302 of the Sarbanes Oxley Act (filed herewith)

31.2		Chief Financial Officer Certification as required under section 302 of the Sarbanes Oxley Act (filed herewith)

32.1*		Chief Executive Officer Certification pursuant to 18 U.S.C. section 1350 as adopted pursuant to section 906 of the Sarbanes Oxley Act (furnished herewith)

32.2*		Chief Financial Officer Certification pursuant to 18 U.S.C. section 1350 as adopted pursuant to section 906 of the Sarbanes Oxley Act (furnished herewith)

* Furnished, not filed, in accordance with item 601(32)(ii) of Regulation S-K.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Manhattan Bridge Capital, Inc. (Registrant)

Date: October 27, 2010	By: /s/ Assaf Ran
	Assaf Ran, President and Chief Executive Officer
	(Principal Executive Officer)

Date: October 27, 2010	By: /s/ Inbar Evron-Yogev
	Inbar Evron-Yogev, Chief Financial Officer
	( Principal Financial and Accounting Officer)

TABLE OF CONTENTS

Part I. Financial Information Item 1. Consolidated Financial Statements Item 2. Management S Discussion and Analysis Of Financial Item 3. Quantitative and Qualitative Disclosures About Market Risk Item 4. Controls and Procedures Part Ii-other Information Item 6. Exhibits

LOAN 10-Q Quarter ended Sept. 30, 2010