Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2024 | Jul. 22, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Jun. 30, 2024 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2024 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 001-37726 | |
Entity Registrant Name | MBC FUNDING II CORP. | |
Entity Central Index Key | 0001664740 | |
Entity Tax Identification Number | 81-0758358 | |
Entity Incorporation, State or Country Code | NY | |
Entity Address, Address Line One | 60 Cutter Mill Road | |
Entity Address, City or Town | Great Neck | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 11021 | |
City Area Code | (516) | |
Local Phone Number | 444-3400 | |
Title of 12(b) Security | 6% Senior Secured Notes, due April 22, 2026 | |
Trading Symbol | LOAN/26 | |
Security Exchange Name | NYSEAMER | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 100 |
Balance Sheets
Balance Sheets - USD ($) | Jun. 30, 2024 | Dec. 31, 2023 |
Assets | ||
Loans receivable | $ 7,829,250 | $ 8,065,150 |
Cash | 83,790 | 39,969 |
Interest receivable on loans | 66,399 | 76,720 |
Due from Parent company | 1,462,091 | 986,627 |
Prepaid expense | 2,500 | |
Total assets | 9,444,030 | 9,168,466 |
Liabilities: | ||
Senior secured notes (net of deferred financing costs of $134,528 and $172,069, respectively) | 5,865,472 | 5,827,931 |
Accrued expenses | 15,000 | 15,000 |
Total liabilities | 5,880,472 | 5,842,931 |
Stockholder’s equity: | ||
Common shares - $.001 par value; 100 authorized, issued and outstanding | ||
Additional paid-in capital | 100 | 100 |
Retained earnings | 3,563,458 | 3,325,435 |
Total stockholder’s equity | 3,563,558 | 3,325,535 |
Total liabilities and stockholder’s equity | $ 9,444,030 | $ 9,168,466 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - USD ($) | Jun. 30, 2024 | Dec. 31, 2023 |
Statement of Financial Position [Abstract] | ||
Deferred financing costs | $ 134,528 | $ 172,069 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100 | 100 |
Common stock, shares issued | 100 | 100 |
Common stock, shares outstanding | 100 | 100 |
Statements of Operations (Unaud
Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Revenue: | ||||
Interest income from loans | $ 232,010 | $ 222,332 | $ 464,398 | $ 432,912 |
Total revenue | 232,010 | 222,332 | 464,398 | 432,912 |
Operating costs and expenses: | ||||
Interest and amortization of deferred financing costs | 108,771 | 108,771 | 217,541 | 217,541 |
General and administrative expenses | 3,975 | 3,845 | 8,184 | 8,240 |
Total operating costs and expenses | 112,746 | 112,616 | 225,725 | 225,781 |
Income before income tax expense | 119,264 | 109,716 | 238,673 | 207,131 |
Income tax expense | (650) | (650) | (650) | (650) |
Net income | $ 118,614 | $ 109,066 | $ 238,023 | $ 206,481 |
Statements of Changes in Stockh
Statements of Changes in Stockholder's Equity (Unaudited) - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total |
Balance at Dec. 31, 2022 | $ 100 | $ 2,890,311 | $ 2,890,411 | |
Balance, shares at Dec. 31, 2022 | 100 | |||
Net income for the period | 206,481 | 206,481 | ||
Balance at Jun. 30, 2023 | 100 | 3,096,792 | 3,096,892 | |
Balance, shares at Jun. 30, 2023 | 100 | |||
Balance at Mar. 31, 2023 | 100 | 2,987,726 | 2,987,826 | |
Balance, shares at Mar. 31, 2023 | 100 | |||
Net income for the period | 109,066 | 109,066 | ||
Balance at Jun. 30, 2023 | 100 | 3,096,792 | 3,096,892 | |
Balance, shares at Jun. 30, 2023 | 100 | |||
Balance at Dec. 31, 2023 | 100 | 3,325,435 | 3,325,535 | |
Balance, shares at Dec. 31, 2023 | 100 | |||
Net income for the period | 238,023 | 238,023 | ||
Balance at Jun. 30, 2024 | 100 | 3,563,458 | 3,563,558 | |
Balance, shares at Jun. 30, 2024 | 100 | |||
Balance at Mar. 31, 2024 | 100 | 3,444,844 | 3,444,944 | |
Balance, shares at Mar. 31, 2024 | 100 | |||
Net income for the period | 118,614 | 118,614 | ||
Balance at Jun. 30, 2024 | $ 100 | $ 3,563,458 | $ 3,563,558 | |
Balance, shares at Jun. 30, 2024 | 100 |
Statements of Cash Flows (Unaud
Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Cash flows from operating activities: | ||
Net income | $ 238,023 | $ 206,481 |
Adjustment to reconcile net income to net cash provided by operating activities | ||
Amortization of deferred financing costs | 37,541 | 37,541 |
Changes in operating assets: | ||
Interest receivable on loans | 10,321 | 990 |
Prepaid expenses | (2,500) | (2,500) |
Net cash provided by operating activities | 283,385 | 242,512 |
Cash flows from financing activities: | ||
Advances to parent company, net | (239,564) | (228,534) |
Net cash used in financing activities | (239,564) | (228,534) |
Net increase in cash | 43,821 | 13,978 |
Cash, beginning of period | 39,969 | 39,146 |
Cash, end of period | 83,790 | 53,124 |
Supplemental Disclosure of Cash Flow Information: | ||
Taxes paid during the period | 650 | 650 |
Interest paid during the period | 180,000 | 180,000 |
Supplemental Schedule of Noncash Financing and Investing Activities: | ||
Assignments of loans from parent company | 3,340,000 | 6,310,000 |
Assigned loans repaid to parent company by borrowers | $ 3,575,900 | $ 6,215,000 |
THE DESCRIPTION OF COMPANY
THE DESCRIPTION OF COMPANY | 6 Months Ended |
Jun. 30, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
THE DESCRIPTION OF COMPANY | 1. THE DESCRIPTION OF COMPANY The accompanying unaudited condensed financial statements have been prepared by MBC Funding II Corp. (the “Company”), a New York corporation, formed in December 2015 as a wholly-owned subsidiary of Manhattan Bridge Capital, Inc., a New York corporation (“MBC”), in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) 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. GAAP for complete annual 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 condensed financial statements should be read in conjunction with the Company’s annual audited financial statements for the year ended December 31, 2023 and the notes thereto included in the Company’s Annual Report on Form 10-K. Results of operations for the interim period are not necessarily indicative of the operating results to be attained in the entire fiscal year. The Company was formed in December 2015 by MBC specifically for the purpose of conducting an initial public offering (“IPO”) of certain notes. On April 25, 2016, the Company completed the IPO of its 6% senior secured notes due April 22, 2026 Summary of Significant Accounting Policies The preparation of condensed 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 amount of revenues and expenses during the reporting period. Actual amounts could differ from those estimates. Interest income from mortgage loans held by the Company is recognized, as earned, over the loan period. Costs incurred in connection with the issuance of the senior secured notes are being amortized over ten years, using the straight-line method, as the difference between use of the effective interest method is not material. |
RECENTLY ISSUED ACCOUNTING PRON
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | 6 Months Ended |
Jun. 30, 2024 | |
Accounting Changes and Error Corrections [Abstract] | |
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | 2. RECENTLY ISSUED 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 financial statements. |
SENIOR SECURED NOTES
SENIOR SECURED NOTES | 6 Months Ended |
Jun. 30, 2024 | |
Debt Disclosure [Abstract] | |
SENIOR SECURED NOTES | 3. SENIOR SECURED NOTES The Notes are 6 April 22, 2026 1,000 6,000,000 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. To the extent the aggregate principal amount of the mortgage loans owned by the Company plus the Company’s cash on hand is less than 120% of the aggregate outstanding principal balance of the Notes, the Company is required to repay, on a monthly basis, the principal amount of the Notes equal to the amount necessary such that, after giving effect to such repayment, the aggregate principal amount of all mortgage loans owned by the Company plus, the Company’s cash on hand at such time is equal to or greater than 120% of the outstanding principal amount of the Notes. For this purpose, each mortgage loan is deemed to have a value equal to its outstanding principal balance, unless the borrower is in default of its obligations. The Company may redeem the Notes, in whole or in part, at any time after April 22, 2019 upon at least 30 days prior written notice to the Noteholders. The redemption price will be equal to the outstanding principal amount of the Notes redeemed plus the accrued but unpaid interest thereon up to, but not including, the date of redemption, without penalty or premium. No Notes were redeemed by the Company as of June 30, 2024. Each Noteholder had the right to cause the Company to redeem his, her or its Notes on April 22, 2021 by notifying the Company in writing, no earlier than November 22, 2020 and no later than January 22, 2021. No Noteholder exercised such right during the required time frame and as such the Notes are no longer redeemable by the Noteholders. The Company is obligated to offer to redeem the Notes if there occurs a “change of control” with respect to the Company or MBC or if the Company or MBC sell any assets unless, in the case of an asset sale, the proceeds are reinvested in the business of the seller. The redemption price in connection with a “change of control” will be 101 The Company’s principal executive officers consist of Assaf Ran, who serves as its Chief Executive Officer and President, and Vanessa Kao, who serves as its Chief Financial Officer. Each of Mr. Ran and Ms. Kao serve in similar functions with the Company’s parent, MBC and, as of June 30, 2024, own an aggregate of $ 704,000 288,000 |
COMMERCIAL LOANS
COMMERCIAL LOANS | 6 Months Ended |
Jun. 30, 2024 | |
Commercial Loans | |
COMMERCIAL LOANS | 4. COMMERCIAL LOANS The Company purchased from MBC a pool of mortgage loans, originated and funded by MBC, each of which is secured by first priority liens on real property, free and clear of all liens and other security interests (see Note 3). To the extent any of the mortgages are satisfied in full, such mortgages will be replaced with one or more mortgages with similar aggregate principal amount. At June 30, 2024, the pool of mortgage loans was comprised of 16 7,829,250 18 8,065,150 The loans typically have a maximum initial term of 12 Credit risk profile as of June 30, 2024 and December 31, 2023: SCHEDULE OF CREDIT RISK Performing loans Developers- Residential Developers- Commercial Developers- Mixed Use Total outstanding loans June 30, 2024 $ 6,209,250 $ 1,500,000 $ 120,000 $ 7,829,250 December 31, 2023 $ 6,445,150 $ 1,500,000 $ 120,000 $ 8,065,150 At June 30, 2024, loans receivable from one borrower represented 19.2 14.8 13.5 11.5 At December 31, 2023, loans receivable from one borrower represented 18.6 14.4 13.1 |
DUE FROM PARENT COMPANY
DUE FROM PARENT COMPANY | 6 Months Ended |
Jun. 30, 2024 | |
Related Party Transactions [Abstract] | |
DUE FROM PARENT COMPANY | 5. DUE FROM PARENT COMPANY The Company utilized the net proceeds from the IPO to purchase a pool of mortgage loans from MBC. Under the Indenture, the aggregate principal amount of the mortgage loans owned by the Company, plus the Company’s cash on hand, must always be equal to at least 120 |
COMMERCIAL LOANS (Tables)
COMMERCIAL LOANS (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Commercial Loans | |
SCHEDULE OF CREDIT RISK | Credit risk profile as of June 30, 2024 and December 31, 2023: SCHEDULE OF CREDIT RISK Performing loans Developers- Residential Developers- Commercial Developers- Mixed Use Total outstanding loans June 30, 2024 $ 6,209,250 $ 1,500,000 $ 120,000 $ 7,829,250 December 31, 2023 $ 6,445,150 $ 1,500,000 $ 120,000 $ 8,065,150 |
THE DESCRIPTION OF COMPANY (Det
THE DESCRIPTION OF COMPANY (Details Narrative) | 6 Months Ended | |
Apr. 25, 2016 | Jun. 30, 2024 | |
Debt Instrument [Line Items] | ||
Debt instrument maturity date | Apr. 22, 2026 | |
6% Senior Secured Notes [Member] | ||
Debt Instrument [Line Items] | ||
Initial public offering for debt description | the Company completed the IPO of its 6% senior secured notes due April 22, 2026 (the “Notes”). | |
Debt instrument maturity date | Apr. 22, 2026 |
SENIOR SECURED NOTES (Details N
SENIOR SECURED NOTES (Details Narrative) - USD ($) | 6 Months Ended | ||
Apr. 25, 2016 | Jun. 30, 2024 | Dec. 31, 2023 | |
Debt Instrument [Line Items] | |||
Debt instrument maturity date | Apr. 22, 2026 | ||
Senior notes | $ 5,865,472 | $ 5,827,931 | |
Mr. Ran [Member] | |||
Debt Instrument [Line Items] | |||
Senior notes | 704,000 | ||
Ms. Kao [Member] | |||
Debt Instrument [Line Items] | |||
Senior notes | $ 288,000 | ||
Change of Control [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument, redemption price, percentage | 101% | ||
6% Senior Secured Notes [Member] | |||
Debt Instrument [Line Items] | |||
Debt interest rate | 6% | ||
Debt instrument maturity date | Apr. 22, 2026 | ||
Principal amount | $ 1,000 | ||
Senior secured notes, required security description | 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. To the extent the aggregate principal amount of the mortgage loans owned by the Company plus the Company’s cash on hand is less than 120% of the aggregate outstanding principal balance of the Notes, the Company is required to repay, on a monthly basis, the principal amount of the Notes equal to the amount necessary such that, after giving effect to such repayment, the aggregate principal amount of all mortgage loans owned by the Company plus, the Company’s cash on hand at such time is equal to or greater than 120% of the outstanding principal amount of the Notes. For this purpose, each mortgage loan is deemed to have a value equal to its outstanding principal balance, unless the borrower is in default of its obligations. | ||
6% Senior Secured Notes [Member] | IPO [Member] | |||
Debt Instrument [Line Items] | |||
Senior notes | $ 6,000,000 |
SCHEDULE OF CREDIT RISK (Detail
SCHEDULE OF CREDIT RISK (Details) - USD ($) | Jun. 30, 2024 | Dec. 31, 2023 |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Total outstanding loans | $ 7,829,250 | $ 8,065,150 |
Developers-Residential [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Total outstanding loans | 6,209,250 | 6,445,150 |
Developers-Commercial [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Total outstanding loans | 1,500,000 | 1,500,000 |
Developers-Mixed Used [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Total outstanding loans | $ 120,000 | $ 120,000 |
COMMERCIAL LOANS (Details Narra
COMMERCIAL LOANS (Details Narrative) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2024 USD ($) Loans | Dec. 31, 2023 USD ($) Loans | |
Product Information [Line Items] | ||
Number of loans | Loans | 16 | 18 |
Mortgage loans outstanding principal balance | $ | $ 7,829,250 | $ 8,065,150 |
Loans receivable fixed rates of interest | The loans typically have a maximum initial term of 12 months, bear interest at a fixed rate of 10% to 13.5% per year, and provide for receipt of interest only during the term of the loan and a balloon payment at the end of the term. | |
Loan term | 12 months | |
One Borrower [Member] | Credit Concentration Risk [Member] | Loans Receivable [Member] | ||
Product Information [Line Items] | ||
Concentration risk, percentage | 19.20% | 18.60% |
One Other Borrower [Member] | Credit Concentration Risk [Member] | Loans Receivable [Member] | ||
Product Information [Line Items] | ||
Concentration risk, percentage | 14.80% | 14.40% |
Another Borrower [Member] | Credit Concentration Risk [Member] | Loans Receivable [Member] | ||
Product Information [Line Items] | ||
Concentration risk, percentage | 13.50% | 13.10% |
Another Borrower [Member] | Credit Concentration Risk [Member] | Loans Receivable [Member] | ||
Product Information [Line Items] | ||
Concentration risk, percentage | 11.50% |
DUE FROM PARENT COMPANY (Detail
DUE FROM PARENT COMPANY (Details Narrative) | Jun. 30, 2024 |
Related Party Transactions [Abstract] | |
Debt instrument, collateral percentage | 120% |