Manhattan Bridge Capital Inc Reports Operating Results (10-Q)

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Nov 02, 2009
Manhattan Bridge Capital Inc (LOAN, Financial) filed Quarterly Report for the period ended 2009-09-30.

MANHATTAN BRIDGE CAPITAL INC. formerly DAG Media Inc. through its subsidiaries provides short term secured non-banking commercial loans to small businesses against good collateral such as real estate receivables trading shares etc. in addition to personal guarantees of the principles in most cases. In addition it develops innovative software and a related web site that allows retail businesses and other service providers to reach prospective customers and clients for their goods and services in a more effective way than traditional on-line and print yellow pages search. Manhattan Bridge Capital Inc has a market cap of $3.36 million; its shares were traded at around $1.01 with and P/S ratio of 4.43.

Highlight of Business Operations:

We offer short-term secured commercial loans to small businesses. Loans are secured by collateral such as real estate, receivables, and marketable securities and, generally, accompanied by personal guarantees from the principals of the businesses. The loans are generally for a term of one year. Most of the loans provide for receipt of interest only during the term of the loan and a balloon payment at the end of the term. For the three and nine months ended September 30, 2009 the total amounts of $929,426 and $4,988,030, respectively, have been lent, offset by collections received from borrowers, under the short term commercial loans in the amount of $860,976 and $3,585,463, 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 our officials in evaluating the worth of collateral.

Total revenues for the three month period ended September 30, 2009 were approximately $289,000 compared to approximately $200,000 for the three month period ended September 30, 2008, an increase of $89,000 or 44.5%. The increase in revenue represents an increase in lending operations. For the three month period ended September 30, 2009, $235,000 of our revenue represents interest income on the short term secured commercial loans that we offer to small businesses compared to $178,000 for the same period in 2008, and $54,000 represents origination fees on such loans compared to $22,000 for the same period in 2008. 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.

Total revenues for the nine month period ended September 30, 2009 were approximately $770,000 compared to approximately $544,000 for the nine month period ended September 30, 2008, an increase of $226,000, or 41.5%. The increase in revenue represents an increase in lending operations since the formation of the lending business. Revenue of approximately $633,000 for the nine month period ended September 30, 2009, compared to approximately $489,000 for the same period in 2008, represents interest income on the short and long term secured commercial loans that we offer to small businesses, and $137,000 represents origination fees on such loans compared to $55,000 for the same period in 2008. 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.

For the nine month period ended September 30, 2009 we had other income in the amount 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, compared to other income of approximately $116,000 for the nine month period ended September 30, 2008, which consisted mainly of dividend and interest income of approximately $59,000, realized gains on marketable securities of approximately $18,000, a referral fee of $29,000 and $10,000 in connection with the sale of a listing of potential customers of the Nextyellow website.

At September 30, 2009, we had cash and cash equivalents and marketable securities of approximately $601,000 and working capital of approximately $7,268,000 as compared to cash and cash equivalents and marketable securities of approximately $1,384,000 and working capital of $6,663,000 at December 31, 2008. The decrease in cash and cash equivalents and marketable securities primarily reflects the making of short term commercial loans in the total amount of $4,988,030, offset by collections received from borrowers, under the short term commercial loans in the amount of $3,585,463. The increase in working capital is primarily attributable to the net income of $229,203, a long term loan in a prior period becoming due in the current period, offset by an increase in income tax payable.

Net cash used in investing activities was approximately $1,149,000 for the nine months ended September 30, 2009, compared to net cash used in investing activities of approximately $611,000 for the period ended September 30, 2008. 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. In the period ended September 30, 2008 net cash used in investing activities consisted primarily of the issuance of short term commercial loans in the amount of $4,544,000, offset by collection of these loans in the amount of $3,167,000, an investment in an insurance annuity contract in the amount of $1,175,000, offset by proceeds from the sale of an annuity contract and auction rate securities in the amount of $1,844,000 and installment payments received in connection with the 2006 sale of the directories business in the amount of $97,000.

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