Business Context and Reporting Period
This Form 8-K is a joint current report filed by Manhattan Bridge Capital, Inc. ("Company") and its wholly-owned subsidiary, MBC Funding II Corp. ("MBC Funding II"), dated December 12, 2025. The filing details significant capital structure changes, including the entry into a new credit facility and the termination of existing senior secured notes.
Key Financial Metrics and Agreements
New Credit Facility
- Lender: Valley National Bank.
- Principal Amount: Up to $10,000,000.
- Interest Rate: Floating rate equal to Term SOFR (floor of 3.00%) plus 2.95% per annum.
- Maturity: December 12, 2027, or earlier upon acceleration.
- Fees: 0.20% upfront fee on total commitment; 0.25% per annum unused line fee.
- Collateral: Secured by an all-assets Security Agreement; borrowing base comprised of eligible mortgage loans.
- Guarantees: Guaranteed by the Company and Mr. Assaf Ran (limited liability cap of $500,000).
Debt Redemption
- Instrument: 6.00% Senior Secured Notes, due April 22, 2026.
- Principal Redeemed: $6,000,000 (100% of outstanding principal).
- Redemption Date: December 15, 2025.
- Terms: Redeemed at 100% of principal plus accrued and unpaid interest.
Material Changes Versus Prior Period
The Company has materially altered its debt profile by replacing $6,000,000 in fixed-rate senior secured notes with a new $10,000,000 floating-rate line of credit. This transition shifts the Company's interest rate exposure from a fixed 6.00% to a variable rate based on Term SOFR plus 2.95%. Additionally, the Company amended its existing credit agreement with Webster Bank (Amendment No. 8) to permit the incurrence of the new Valley National Bank facility.
Guidance, Risks, and Contingencies
The filing does not provide specific forward-looking financial guidance or revenue projections. However, it outlines several material risks and covenants associated with the new Credit Facility:
- Covenants: The facility includes minimum fixed charge coverage ratios and maximum leverage ratios applicable to both MBC Funding II and the Company.
- Restrictions: Standard limitations on additional indebtedness, granting of liens, changes in control, affiliate transactions, asset dispositions, and restricted payments.
- Events of Default: Includes payment defaults, covenant breaches, cross-defaults to other material indebtedness, insolvency, and loss or impairment of collateral.
- Consequences of Default: Valley National Bank may terminate advances, accelerate all outstanding amounts, and apply default interest.
Investor Verification Checklist
- Verify the current utilization level of the new $10,000,000 Valley National Bank line of credit.
- Confirm the Company's compliance with the new minimum fixed charge coverage and maximum leverage ratios.
- Review the specific terms of the "borrowing base" to understand the eligibility criteria for mortgage loans securing the facility.
- Assess the impact of the floating interest rate (Term SOFR + 2.95%) on future interest expense compared to the redeemed 6.00% fixed notes.
- Examine the full text of Amendment No. 8 to the Webster Bank agreement to understand any new restrictions imposed on the Company.