Ameritrans Capital Corporation Files Amended Form 10-Q for the Third Quarter Ended March 31, 2008

  
    
  
  
    
      Ameritrans Capital Corporation (NASDAQ: AMTC, AMTCP) today announced 
      that it has filed an amended Quarterly Report on Form 10-Q/A with the 
      Securities and Exchange Commission restating certain financial 
      information reported for the three-month and nine month periods ended 
      March 31, 2008. Investors should not rely on the Company’s 
      Form 10-Q filed for this period on May 14, 2008 and are urged to review 
      the amended Quarterly Report on Form 10-Q/A filed with the Securities 
      and Exchange Commission today.
    
    
      On June 2, 2008, management discovered a possible overstatement of 
      accrued interest receivable and related interest income with respect to 
      a group of five (5) loans receivable in the Company’s 
      new corporate loan portfolio. The Company’s 
      Audit Committee (the “Committee”), 
      with the assistance of management, the Company’s 
      independent registered public accountants and legal advisors conducted a 
      review regarding this potential discrepancy. The independent review was 
      prompted by concerns raised by management. Based on the review, on June 
      10, 2008, the Committee concluded that reported accrued interest 
      receivable and related interest income as of March 31, 2008 and for the 
      three-month and nine-month periods ended March 31, 2008 were overstated 
      by $94,050 due to an inadvertent accounting error attributable to the 
      interest income accrued on five loans receivable in the Company’s 
      new corporate loan portfolio.
    
    
      As a result of the restatement, total investment income for the three 
      months ended March 31, 2008 was approximately $1.58 million compared 
      with approximately $1.68 million as previously reported. Restated net 
      loss for the third quarter of fiscal year 2008 available to common 
      stockholders (after payment of the preferred dividends) was ($86,498), 
      or ($0.03) per basic and diluted common share compared to a net income 
      available to common stockholders of $7,552 for the third quarter of 
      fiscal year 2008, or $0.00 per basic and diluted common share as 
      previously reported.
    
    
      On an operating basis after taking into account other income and 
      expense, and before payment of the Company's preferred stock dividends, 
      the Company reported a restated net loss of ($2,123) compared to net 
      income of $91,297 for the quarter ended March 31, 2008 previously 
      reported. For the same period of fiscal year 2007, the Company reported 
      a net loss of ($118,822).
    
    
      As restated, for the nine months ended March 31, 2008, net loss 
      available to common stockholders (after payment of the preferred 
      dividends) totaled ($320,379), or ($0.09) per basic and diluted common 
      share compared to a net loss available to common stockholders of 
      ($226,329), or ($0.07) per basic and diluted common share as previously 
      reported. For the same period of fiscal year 2007, the Company reported 
      a net loss available to common stockholders of ($341,559), or ($0.10) 
      per basic and diluted common share.
    
    
      Additionally, on June 12, 2008, the Board authorized the repurchase of 
      up to $1,000,000 of its outstanding common stock and/or 9 3/8 cumulative 
      preferred stock. On June 13, 2008 the Company mailed a letter to its 
      stockholders regarding this program. Pursuant to this new program, 
      purchases of shares of the Company’s common 
      stock and/or 9 3/8 cumulative preferred stock will be made from time to 
      time, subject to market conditions and at prevailing market prices, 
      through open market purchases. Repurchased shares of common stock and/or 
      9 3/8 cumulative preferred stock will become authorized but unissued 
      shares, and may be issued in the future for general corporate and other 
      purposes. The Company may terminate or limit the stock repurchase 
      program at any time.
    
    
      Ameritrans Capital Corporation is an internally managed, closed-end 
      investment company that has elected to be regulated as a business 
      development company (“BDC”) 
      under the Investment Company Act of 1940, as amended. Ameritrans 
      originates, structures and manages a portfolio of medallion loans, 
      secured business loans and selected equity securities. Ameritrans' 
      wholly owned subsidiary Elk Associates Funding Corporation is licensed 
      by the United States Small Business Administration as a Small Business 
      Investment Company (SBIC) in 1980. The Company maintains its offices at 
      747 Third Avenue, 4th Floor, New York, NY 10017.
    
    
      This announcement contains forward-looking statements within the 
      meaning of the Private Securities Litigation Reform Act of 1995. Such 
      statements are subject to certain risks and uncertainties that could 
      cause actual results to differ materially from those presently 
      anticipated or projected. Ameritrans Capital Corporation cautions 
      investors not to place undue reliance on forward-looking statements, 
      which speak only as to management's expectations on this date.
    
    
      
        
          
            AMERITRANS CAPITAL CORPORATION AND SUBSIDIARIES
          
          
             
          
          
            CONSOLIDATED BALANCE SHEETS
          
          
             
          
          
            AS OF MARCH 31, 2008 (UNAUDITED) AND JUNE 30, 2007
          
          
             
          
          
            ASSETS
          
        
      
      
        
        
        
           
        
        
        
        
           
        
        
        
      
      
        
        
        
        
        
          March 31, 2008(unaudited)(as restated)
        
        
        
        
          
          
          June 30, 2007
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Loans receivable
        
        
        
        
          $57,056,417
        
        
        
        
          $57,693,496
        
      
      
        
          Less: unrealized depreciation on loans receivable
        
        
        
        
          (282,708)
        
        
        
        
          (286,550)
        
      
      
        
          Loans receivable, net
        
        
        
        
          56,773,709
        
        
        
        
          57,406,946
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Cash and cash equivalents
        
        
        
        
          1,090,182
        
        
        
        
          251,394
        
      
      
        
          Accrued interest receivable, net of unrealized depreciation of 
          $20,000 and $51,500, respectively
        
        
        
        
          631,770
        
        
        
        
          596,553
        
      
      
        
          Assets acquired in satisfaction of loans
        
        
        
        
          38,250
        
        
        
        
          56,030
        
      
      
        
          Receivables from debtors on sales of assets acquired in satisfaction 
          of loans
        
        
        
        
          278,940
        
        
        
        
          225,625
        
      
      
        
          Equity investments
        
        
        
        
          2,312,995
        
        
        
        
          2,837,719
        
      
      
        
          Investment in life settlement contracts
        
        
        
        
          2,587,455
        
        
        
        
          1,910,077
        
      
      
        
          Furniture, equipment and leasehold improvements, net
        
        
        
        
          163,462
        
        
        
        
          183,043
        
      
      
        
          Prepaid expenses and other assets
        
        
        
        
          625,039
        
        
        
        
          477,496
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          TOTAL ASSETS
        
        
        
        
          $64,501,802
        
        
        
        
          $63,944,883
        
      
    
    
      
        
          
            AMERITRANS CAPITAL CORPORATION AND SUBSIDIARIES 
          
          
             
          
          
            CONSOLIDATED BALANCE SHEETS (Continued)
          
          
             
          
          
            AS OF MARCH 31, 2008 (UNAUDITED) AND JUNE 30, 2007
          
          
             
          
          
            LIABILITIES AND STOCKHOLDERS’ EQUITY
          
        
      
      
        
        
        
           
        
        
        
        
           
        
        
        
      
      
        
        
        
        
        
          
            March 31, 2008
          
          
            (unaudited)
          
          
            (as restated)
          
        
        
        
        
          June 30, 2007
        
      
      
        
          LIABILITIES
        
        
        
        
        
        
        
        
        
      
      
        
          Debentures payable to SBA
        
        
        
        
          $12,000,000
        
        
        
        
          $12,000,000
        
      
      
        
          Notes payable, banks
        
        
        
        
          30,495,697
        
        
        
        
          29,332,500
        
      
      
        
          Notes payable, related parties
        
        
        
        
          100,000
        
        
        
        
          150,000
        
      
      
        
          Accrued expenses and other liabilities
        
        
        
        
          454,557
        
        
        
        
          431,577
        
      
      
        
          Accrued interest payable
        
        
        
        
          180,404
        
        
        
        
          301,591
        
      
      
        
          Dividends payable
        
        
        
        
          84,375
        
        
        
        
          84,375
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          TOTAL LIABILITIES
        
        
        
        
          43,315,033
        
        
        
        
          42,300,043
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          COMMITMENTS AND CONTINGENCIES (Notes 4, 5, 6, 7 and 10)
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          STOCKHOLDERS’ EQUITY
        
        
        
        
        
        
        
        
        
      
      
        
          Preferred stock 9,500,000 and 500,000 shares authorized, 
          respectively, none issued or outstanding
        
        
        
        
          -
        
        
        
        
          -
        
      
      
        
          9 3/8% cumulative participating callable preferred stock $0.01 par 
          value, $12.00 face value, 500,000 shares authorized; 300,000 shares 
          issued and outstanding
        
        
        
        
          3,600,000
        
        
        
        
          3,600,000
        
      
      
        
          Common stock, $0.0001 par value; 45,000,000 and 50,000,000 shares 
          authorized, respectively; 3,405,583 and 3,401,208 shares issued and 
          3,395,583 and 3,391,208 shares outstanding, respectively
        
        
        
        
          341
        
        
        
        
          340
        
      
      
        
          Additional paid-in-capital
        
        
        
        
          21,139,504
        
        
        
        
          21,119,817
        
      
      
        
          Deferred compensation (Note 8)
        
        
        
        
          (40,639)
        
        
        
        
          (94,475)
        
      
      
        
          Stock options outstanding (Note 8)
        
        
        
        
          133,613
        
        
        
        
          118,475
        
      
      
        
          Accumulated deficit
        
        
        
        
          (3,375,831)
        
        
        
        
          (2,987,539)
        
      
      
        
          Accumulated other comprehensive loss
        
        
        
        
          (200,219)
        
        
        
        
          (41,778)
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
          21,256,769
        
        
        
        
          21,714,840
        
      
      
        
          Less: Treasury stock, at cost, 10,000 shares of common stock
        
        
        
        
          (70,000)
        
        
        
        
          (70,000)
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          TOTAL STOCKHOLDERS’ EQUITY
        
        
        
        
          21,186,769
        
        
        
        
          21,644,840
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
        
        
        
        
          $64,501,802
        
        
        
        
          $63,944,883
        
      
    
    
      
        
          
            AMERITRANS CAPITAL CORPORATION AND SUBSIDIARIES 
          
          
            CONSOLIDATED STATEMENTS OF OPERATIONS
          
          
             
          
          
            FOR THE THREE MONTHS AND NINE MONTHS ENDED MARCH 31, 2008 AND 
            2007
          
          
            (UNAUDITED)
          
        
      
      
        
        
        
           
        
        
        
        
           
        
        
        
        
           
        
        
        
        
           
        
        
        
      
      
        
        
        
        
        
          Three Months Ended March 31, 2008(as restated)
        
        
        
        
          Three Months Ended March 31, 2007
        
        
        
        
          
            Nine MonthsEnded March 31, 2008
          
          
            (as restated)
          
        
        
        
        
          Nine MonthsEnded March 31, 2007
        
      
      
        
          INVESTMENT INCOME
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Interest on loans receivable
        
        
        
        
          $
        
        
          1,504,009
        
        
        
        
        
        
          $
        
        
          1,376,993
        
        
        
        
        
        
          $
        
        
          4,613,548
        
        
        
        
        
        
          $
        
        
          3,978,125
        
        
        
      
      
        
          Gain on sale of medallions and automobiles
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          19,058
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          28,373
        
        
        
      
      
        
          Realized losses on equity securities, net
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          (29,914
        
        
          )
        
        
        
        
        
        
          -
        
        
        
      
      
        
          Equity in loss of investee (Note 3)
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          (44,675
        
        
          )
        
        
        
        
        
        
          (161,469
        
        
          )
        
        
        
        
        
        
          (83,183
        
        
          )
        
      
      
        
          Fees and other income
        
        
        
        
        
        
          80,884
        
        
        
        
        
        
        
        
          126,531
        
        
        
        
        
        
        
        
          236,429
        
        
        
        
        
        
        
        
          364,750
        
        
        
      
      
        
          Leasing income
        
        
        
        
           
        
        
          -
        
        
           
        
        
        
        
           
        
        
          13,566
        
        
           
        
        
        
        
           
        
        
          -
        
        
           
        
        
        
        
           
        
        
          76,383
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          TOTAL INVESTMENT INCOME
        
        
        
        
           
        
        
          1,584,893
        
        
           
        
        
        
        
           
        
        
          1,491,473
        
        
           
        
        
        
        
           
        
        
          4,658,594
        
        
           
        
        
        
        
           
        
        
          4,364,448
        
        
           
        
      
      
        
          OPERATING EXPENSES
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Interest
        
        
        
        
        
        
          587,253
        
        
        
        
        
        
        
        
          537,964
        
        
        
        
        
        
        
        
          1,897,087
        
        
        
        
        
        
        
        
          1,619,609
        
        
        
      
      
        
          Salaries and employee benefits
        
        
        
        
        
        
          437,890
        
        
        
        
        
        
        
        
          423,811
        
        
        
        
        
        
        
        
          1,223,314
        
        
        
        
        
        
        
        
          1,041,889
        
        
        
      
      
        
          Occupancy costs
        
        
        
        
        
        
          62,168
        
        
        
        
        
        
        
        
          59,764
        
        
        
        
        
        
        
        
          199,211
        
        
        
        
        
        
        
        
          169,506
        
        
        
      
      
        
          Professional fees
        
        
        
        
        
        
          154,214
        
        
        
        
        
        
        
        
          244,701
        
        
        
        
        
        
        
        
          503,057
        
        
        
        
        
        
        
        
          603,371
        
        
        
      
      
        
          Other administrative expenses
        
        
        
        
        
        
          340,482
        
        
        
        
        
        
        
        
          331,680
        
        
        
        
        
        
        
        
          872,816
        
        
        
        
        
        
        
        
          879,814
        
        
        
      
      
        
          Loss and impairments on assets acquired in satisfaction of loans, net
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          6,400
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          38,069
        
        
        
      
      
        
          Write off and depreciation on interest and loans receivable, net
        
        
        
        
           
        
        
          5,009
        
        
           
        
        
        
        
           
        
        
          5,975
        
        
           
        
        
        
        
           
        
        
          30,363
        
        
           
        
        
        
        
           
        
        
          100,624
        
        
           
        
      
      
        
          TOTAL OPERATING EXPENSES
        
        
        
        
           
        
        
          1,587,016
        
        
           
        
        
        
        
           
        
        
          1,610,295
        
        
           
        
        
        
        
           
        
        
          4,725,848
        
        
           
        
        
        
        
           
        
        
          4,452,882
        
        
           
        
      
      
        
          NET LOSS
        
        
        
        
          $
        
        
          (2,123
        
        
          )
        
        
        
        
          $
        
        
          (118,822
        
        
          )
        
        
        
        
          $
        
        
          (67,254
        
        
          )
        
        
        
        
          $
        
        
          (88,434
        
        
          )
        
      
      
        
          DIVIDENDS ON PREFERRED STOCK
        
        
        
        
          $
        
        
          (84,375
        
        
          )
        
        
        
        
          $
        
        
          (84,375
        
        
          )
        
        
        
        
          $
        
        
          (253,125
        
        
          )
        
        
        
        
          $
        
        
          (253,125
        
        
          )
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          NET LOSS AVAILABLE TO COMMON SHAREHOLDERS
        
        
        
        
          $
        
        
          (86,498
        
        
          )
        
        
        
        
          $
        
        
          (203,197
        
        
          )
        
        
        
        
          $
        
        
          (320,379
        
        
          )
        
        
        
        
          $
        
        
          (341,559
        
        
          )
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          WEIGHTED AVERAGE SHARES OUTSTANDING
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          - Basic and diluted
        
        
        
        
           
        
        
          3,395,583
        
        
           
        
        
        
        
           
        
        
          3,391,208
        
        
           
        
        
        
        
           
        
        
          3,394,835
        
        
           
        
        
        
        
           
        
        
          3,391,208
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          NET LOSS PERCOMMON SHARE
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          - Basic and diluted
        
        
        
        
          $
        
        
          (0.03
        
        
          )
        
        
        
        
          $
        
        
          (0.06
        
        
          )
        
        
        
        
          $
        
        
          (0.09
        
        
          )
        
        
        
        
          $
        
        
          (0.10
        
        
          )