-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HHRbEWFL+eMK81tpdVPVjn3W6x0iipSJh1IHykpe0/gNnCYhmNr3FwjeEXJxcdBT 2hXyVAFGVGg6MMzjbBMJ4g== 0000891554-02-003340.txt : 20080626 0000891554-02-003340.hdr.sgml : 20080626 20020515162941 ACCESSION NUMBER: 0000891554-02-003340 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20020331 FILED AS OF DATE: 20020515 DATE AS OF CHANGE: 20080620 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERITRANS CAPITAL CORP CENTRAL INDEX KEY: 0001064015 IRS NUMBER: 522102424 STATE OF INCORPORATION: DE FISCAL YEAR END: 0607 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 814-00193 FILM NUMBER: 02652919 BUSINESS ADDRESS: STREET 1: 747 THIRD AVENUE STREET 2: 4TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10017 BUSINESS PHONE: 2123552449 MAIL ADDRESS: STREET 1: 747 THIRD AVENUE STREET 2: 4TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10017 10-Q 1 d50609_10q.txt FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Quarterly Period Ended March 31, 2002 or [ ] 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 0-22153 AMERITRANS CAPITAL CORPORATION (Exact name of registrant as specified in its charter) Delaware 52-2102424 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 747 Third Avenue Fourth Floor New York, New York 10017 (Address of Registrant's (Zip Code) principal executive office) Registrant's telephone number, including area code: (800) 214-1047 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. Yes [X] No [ ] The number of shares of Common Stock, par value $.0001 per share, outstanding as of May 13, 2002: 1,745,600. The number of units, each unit consisting of one share of Common Stock, one share of 9 3/8% participating preferred stock and one warrant exercisable into one share of Common Stock, outstanding as of May 13, 2002: 300,000. AMERITRANS CAPITAL CORPORATION FORM 10-Q Table of Contents PART I. FINANCIAL INFORMATION Item 1. Consolidated Financial Statements .................................... Consolidated Balance Sheets as of March 31, 2002 (unaudited) and June 30, 2001.......................................1 Consolidated Statements of Operations --For the Three Months and Nine Months Ended March 31, 2002 and 2001 (unaudited) ..........3 Consolidated Statements of Cash Flows -- For the Nine Months Ended March 31, 2002 and 2001 (unaudited) ...................4 Notes to Consolidated Financial Statements ...........................5 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations .............................11 PART II. OTHER INFORMATION Item 5. Other Information ....................................................12 Signatures ........................................................13 -i- AMERITRANS CAPITAL CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS March 31, 2002 (Unaudited) and June 30, 2001 ASSETS
March 31, 2002 June 30, 2001 -------------- ------------- Loans receivable $ 53,775,908 $ 54,559,970 Less: unrealized depreciation on loans receivable (318,500) (318,500) ------------ ------------ 53,457,408 54,241,470 Cash and cash equivalents 738,497 575,229 Accrued interest receivable, net of unrealized depreciation of $175,000 and $-0-, respectively 1,337,179 985,334 Assets acquired in satisfaction of loans 1,067,367 932,814 Receivables from debtors on sales of assets acquired in satisfaction of loans 367,271 421,823 Equity securities 486,939 436,914 Furniture, fixtures and leasehold improvements, net 97,954 101,902 Prepaid expenses and other assets 1,078,048 289,383 ------------ ------------ TOTAL ASSETS $ 58,630,663 $ 57,984,869 ============ ============
The accompanying notes are an integral part of these financial statements. -1- AMERITRANS CAPITAL CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS March 31, 2002 (Unaudited) and June 30, 2001 LIABILITIES AND STOCKHOLDERS' EQUITY
March 31, 2002 June 30, 2001 -------------- ------------- LIABILITIES Debentures payable to SBA $ 8,880,000 $ 8,880,000 Notes payable, banks 36,300,000 35,550,000 Accrued expenses and other liabilities 373,758 456,316 Accrued interest payable 194,998 291,427 Accrued dividend payable 209,472 -- ------------ ------------ TOTAL LIABILITIES 45,958,228 45,177,743 ------------ ------------ COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY Common stock, $.0001 par value: 5,000,000 shares authorized; 1,745,600 shares issued and outstanding, 175 175 Additional paid-in-capital 13,471,474 13,471,474 Accumulated deficit (813,284) (678,593) Accumulated other comprehensive income 14,070 14,070 ------------ ------------ TOTAL STOCKHOLDERS' EQUITY 12,672,435 12,807,126 ------------ ------------ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 58,630,663 $ 57,984,869 ============ ============
The accompanying notes are an integral part of these financial statements. -2- AMERITRANS CAPITAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) For the Three Months and Nine Months Ended March 31, 2002 and 2001
Three Three Nine Nine Months Ended Months Ended Months Ended Months Ended March 31, 2002 March 31, 2001 March 31, 2002 March 31, 2001 -------------- -------------- -------------- -------------- INVESTMENT INCOME Interest on loans receivable $1,533,452 $1,661,585 $4,433,111 $4,726,996 Fees and other income 104,855 67,983 204,328 225,110 Gain on sale of equity security -- 109,507 -- 121,637 ---------- ---------- ---------- ---------- TOTAL INVESTMENT INCOME 1,638,307 1,839,075 4,637,439 5,073,743 ---------- ---------- ---------- ---------- OPERATING EXPENSES Interest 652,857 904,712 2,025,435 2,649,482 Salaries and employee benefits 215,292 236,332 554,741 533,586 Legal fees 84,708 58,985 183,263 139,022 Miscellaneous administrative expenses 281,296 176,451 706,440 630,055 Loss on assets acquired in satisfaction of loans, net 14,494 19,473 64,660 75,242 Directors' fee 6,375 10,500 19,075 10,000 Depreciation in value of loans 161,088 -- 215,931 194,298 Writeoff of Merger Costs -- 413,187 -- 413,187 ---------- ---------- ---------- ---------- TOTAL OPERATING EXPENSES 1,416,110 1,819,640 3,769,545 4,644,872 ---------- ---------- ---------- ---------- OPERATING INCOME 222,197 19,435 867,894 428,871 ---------- ---------- ---------- ---------- INCOME BEFORE INCOME TAXES 222,197 19,435 867,894 428,871 ---------- ---------- ---------- ---------- INCOME TAXES 6,526 2,652 7,596 10,092 ---------- ---------- ---------- ---------- NET INCOME $ 215,671 $ 16,783 $ 860,298 $ 418,779 ---------- ---------- ---------- ---------- WEIGHTED AVERAGE SHARES OUTSTANDING - - Basic 1,745,600 1,745,600 1,745,600 1,745,600 ========== ========== ========== ========== - - Diluted 1,745,600 1,745,600 1,745,600 1,745,600 ========== ========== ========== ========== NET INCOME PER COMMON SHARE - - Basic $ 0.1236 $ 0.0096 $ 0.4928 $ 0.2399 ========== ========== ========== ---------- - - Diluted $ 0.1236 $ 0.0096 $ 0.4928 $ 0.2399 ========== ========== ========== ==========
The accompanying notes are an integral part of these financial statements. -3- AMERITRANS CAPITAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) For the Nine Months Ended March 31, 2002 and 2001
March 31, 2002 March 31, 2001 -------------- -------------- CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 860,298 $ 418,779 ----------- --------- Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 49,084 49,272 Gain on sale of equity securities (121,637) Change in assets and liabilities Accrued interest receivable (351,845) (86,788) Prepaid expenses and other assets (812,840) 174,785 Accrued expenses and other liabilities (82,558) 44,453 Accrued interest payable (96,429) (118,775) ----------- --------- TOTAL ADJUSTMENTS (1,294,588) (58,690) ----------- --------- NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES (434,290) 360,089 ----------- --------- CASH FLOWS FROM INVESTING ACTIVITIES Net change in loans receivable, assets acquired in satisfaction of loans and receivables from debtors on sales of assets acquired in satisfaction of loans 704,063 545,323 (Purchase) sales of equity securities (50,025) 218,333 Acquisition of furniture, fixtures and leasehold improvements (20,960) (15,161) ----------- --------- NET CASH PROVIDED BY INVESTING ACTIVITIES 633,078 748,495 ----------- --------- CASH FLOWS FROM FINANCING ACTIVITIES Proceeds (repayments) from notes payable, banks, net 750,000 (550,000) Dividends paid (785,520) (331,664) ----------- --------- NET CASH USED IN FINANCING ACTIVITIES $ (35,520) $(881,664) ----------- --------- NET INCREASE IN CASH AND CASH EQUIVALENTS $ 163,268 $ 226,920 CASH AND CASH EQUIVALENTS - Beginning 575,229 376,507 ----------- --------- CASH AND CASH EQUIVALENTS - Ending $ 738,497 $ 603,427 =========== =========
Supplemental noncash financing activity: During the nine months ended March 31, 2002, the Company accrued a dividend of $209,472. The accompanying notes are an integral part of these financial statements. -4- AMERITRANS CAPITAL CORPORATION AND SUBSIDIARIES NOTES TO FINANCIAL STATEMENTS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 -- Organization and Summary of Significant Accounting Policies Financial Statements The consolidated balance sheet of Ameritrans Capital Corporation ("the Company" or "Ameritrans") as of March 31, 2002, the related statements of operations, and cash flows for the nine months ended March 31, 2002 and March 31, 2001 included in Item 1 have been prepared by the Company, without audit pursuant to the rules and regulations of the Securities and Exchange Commission (the "Commission"). Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, the accompanying consolidated financial statements include all adjustments (consisting of normal, recurring adjustments) necessary to summarize fairly the Company's financial position and results of operations. The results of operations for the nine months ended March 31, 2002 are not necessarily indicative of the results of operations for the full year or any other interim period. These financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2001 as filed with the Commission. Organization and Principal Business Activity Ameritrans, a Delaware corporation, acquired all of the outstanding shares of Elk Associates Funding Corporation ("Elk") on December 16, 1999 in a share for share exchange. Prior to the acquisition, Elk had been operating independently and Ameritrans had no operations. The historical financial statements prior to December 16, 1999 were those of Elk. Elk, a New York corporation, is licensed by the Small Business Administration ("SBA") to operate as a Small Business Investment Company ("SBIC") under the Small Business Investment Act of 1958, as amended. Elk has also registered as an investment company under the Investment Company Act of 1940 to make business loans. -5- Ameritrans is a specialty finance company that through its subsidiary, Elk makes loans to taxi owners, to finance the acquisition and operation of the medallion taxi businesses and related assets, and to other small businesses in the New York City, Chicago, Miami, and Boston markets. Basis of Consolidation The consolidated financial statements include the accounts of Ameritrans, Elk and EAF Holding Corporation ("EAF"), a wholly owned subsidiary of Elk, collectively referred to as the "Company". All significant inter-company transactions have been eliminated in consolidation. EAF was formed in June 1992 and began operations in December 1993. The purpose of EAF is to own and operate certain real estate assets acquired in satisfaction of loans by Elk. Ameritrans organized another subsidiary on June 8, 1998, Elk Capital Corporation ("Elk Capital"), which may engage in similar lending and investment activities. Since inception, Elk Capital has had no operations and activities. -6- Reclassifications Certain amounts in the prior financial statements have been reclassified for comparative purposes to conform with the presentation in the financial statements for the three and nine months ended March 31, 2002. These reclassifications have no effect on previously reported net income. Income Taxes The Company has elected to be taxed as a Regulated Investment Company under the Internal Revenue Code. A Regulated Investment Company will generally not be taxed at the corporate level to the extent its income is distributed to its stockholders. In order to be taxed as a Regulated Investment Company, the Company must pay at least 90 percent of its net investment company taxable income to its stockholders as well as meet other requirements under the Code. In order to preserve this election for fiscal 2002, the Company intends to make the required distributions to its stockholders in accordance with applicable tax rules. Net Income per Share During the year ended June 30, 1999, the Company adopted the provision of Statements of Financial Accounting Standards No. 128 "Earnings per Share" ("SFAS No. 128"). SFAS No. 128 eliminates the presentation of primary and fully dilutive earnings per share ("EPS") and requires presentation of basic and diluted EPS. Basic EPS is computed by dividing income (loss) available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted EPS is based on the weighted-average number of shares of common stock and common stock equivalents outstanding at year end. Common Stock equivalents have been excluded from the weighted average shares for the three and nine months ended March 31, 2002 and 2001 as inclusion is anti-dilutive. At March 31, 2002 the Company has 127,780 options outstanding. -7- Loans Valuations The Company's loans are recorded at fair value. Since no ready market exists for those loans, the fair value is determined in good faith by the Board of Directors. In determining the fair value, the Company and Board of Directors consider factors such as the financial condition of the borrower, the adequacy of the collateral, individual credit risks, historical loss experience and the relationships between current and projected market rates and portfolio rates of interest and maturities. To date, fair value of the loans has been determined to approximate cost less unrealized depreciation and no loans have been recorded above cost. The unrealized depreciation has generally been caused by specific events related to credit risk. Use of Estimates in the Financial Statements The preparation of 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 at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Estimates that are particularly susceptible to change relate to the determination of the allowance for loan losses and the fair value of financial instruments. -8- New Accounting Pronouncements The Financial Accounting Standards Board ("FASB") has issued Statement No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" in August 2001. Statement No. 144 changes the accounting for long-lived assets to be held and used by eliminating the requirement to allocate goodwill to long-lived assets to be tested for impairment, by providing a probability weighted cash flow estimation approach to deal with situations in which alternative courses of action to recover the carrying amount of possible future cash flows and by establishing a "primary asset" approach to determine the cash flow estimation period for a group of assets and liabilities that represents the unit of accounting for long-lived assets to be held and used. Statement No. 144 changes the accounting for long-lived assets to be disposed of other than by sale by requiring that the depreciable life of a long-lived asset to be abandoned be revised to reflect a shortened useful life and by requiring that an impairment loss to be recognized at the date a long-lived asset is exchangeed for a similar productive asset or distributed to owners in spin-off if the carrying amount of the asset exceeeds its fair value. Statement No. 144 changes the accounting for long-lived assets to be disposed of by sale by requiring that discontinued operations no longer be recognized on a net realizable value basis (but at the lower of carrying amount or fair value less costs to sell), by eliminating the recognition of future operating losses of discontinued components before they occur and by broadening the presentation of discontinued operations in the income statement to include a component of an entity rather than a segment of a business. A component of an entity comprises operations and cash flows that can be clearly distinguished, operationally, and for financial reporting purposes, from the rest of the entity. The effective date for Statement No. 144 is for fiscal years beginning after December 15, 2001. The Company expects that the adoption of the new statement will not have a significant impact on its financial statements. It is not possible to quantify the impact until the newly issued statement has been studied. NOTE 2 -- Debentures Payable to SBA At March 31, 2002 and June 30, 2001 debentures payable to the SBA consist of subordinated debentures with interest payable semiannually, as follows: Current Effective Principal Issue Date Due Date Interest Rate Amount ---------- -------- ------------- ------ September 1993 September 2003 6.12(1) $1,500,000 September 1993 September 2003 6.12 2,220,000 September 1994 September 2004 8.20 2,690,000 December 1995 December 2005 6.54 1,020,000 June 1996 June 2006 7.71 1,020,000 March 1997 March 2007 7.38(2) 430,000 ---------- $8,880,000 ========== - ---------- (1) Interest rate was 3.12% from inception through September 1998. (2) The Company is also required to pay an additional annual user fee of 1% on this debenture. Under the terms of the subordinated debentures, the Company may not repurchase or retire any of its capital stock or make any distributions to its stockholders other than dividends out of retained earnings (as computed in accordance with SBA regulations) without the prior written approval of the SBA. NOTE 3 -- Notes Payable to Banks At March 31, 2002 and June 30, 2001, the Company had loan agreements with three (3) banks for lines of credit aggregating $40,000,000. At March 31, 2002 and June 30, 2001, the Company had $36,300,000 and $35,550,000, respectively, outstanding under these lines. The loans, which mature through June 2002, bear interest based on the Company's choice of the lower of either the reserve adjusted LIBOR rate plus 150 basis points or the bank's prime rates including certain fees which make the effective rates approximately prime minus 1/2%. Upon maturity, the Company anticipates extending the lines of credit for another year, as has been the practice in previous years. Pursuant to the terms of the agreements the Company is required to comply with certain terms, covenants and conditions. The Company pledged its loans receivable and other assets as collateral for the above lines of credit. -9- NOTE 4 -- Commitments and Contingencies Interest Rate Swap In October 1998, the Company entered into a $5,000,000 interest rate Swap transaction with a bank expiring on October 8, 2001 and was not renewed. On June 11, 2001, the Company entered into an additional interest rate Swap transaction with the same bank for $10,000,000 expiring on June 11, 2002. On June 11, 2001, the Company entered into another interest rate Swap transaction for $15,000,000 with this bank expiring June 11, 2003. These Swap transactions were entered into to protect the Company from an upward movement in interest rates relating to outstanding bank debt (see Note 3 for terms and effective interest rates). These Swap transactions call for a fixed rate of 4.95%, 4.35% and 4.95%, respectively, for the Company and if the floating one month LIBOR rate is below the fixed rate then the Company is obligated to pay the bank for the difference in rates. When the one-month LIBOR rate is above the fixed rate then the bank is obligated to pay the Company for the difference in rates. The effective fixed costs on the outstanding bank debt that was swapped, including the 150 basis points, is 6.45%, 5.85% and 6.45%, respectively. Loan commitments At March 31, 2002 and June 30, 2001, the Company had commitments to make loans totaling approximately $3,231,352 and $547,000, at interest rate ranging from 8.25% to 18%. Employment Agreements During November 2001, the Company entered into an employment agreement with an executive effective as of July 1, 2001, whereby the Company would pay a minimum of $240,000 plus a discretionary bonus and annual increases. This employment agreement terminates on July 1, 2006 but will be automatically renewed for an additional five (5) years unless either the Company or the executive gives notice of non-renewal. During November 2001, the Company also entered into a consulting agreement with this executive as of July 1, 2001, whereby based on early termination of the employment agreement the Company would pay a consulting fee for the term of the consulting agreement of a minimum of one-half of the executive's base salary in effect at the termination date of the employment agreement. During November 2001 and January 2002, the Company entered into employment agreements with five executives, whereby the Company would pay a minimum aggregate of $380,900 per annum plus a discretionary bonus and annual increases. These employment agreements terminate through January 1, 2007, but will be automatically renewed for an additional five (5) years unless either the Company or the executives gives notice of non-renewal. Note 5 - Other Matters Quarterly Dividend The Company's Board of Directors declared for the quarters ended June 30, 2001 and September 30, 2001 a total dividend of $471,312, or $0.27 per share, on October 11, 2001 to stockholders of record on October 22, 2001, which was paid October 30, 2001. The Company's Board of Directors also declared a dividend of $314,208 or $0.18 per share for the quarter ended December 31, 2001, on January 9, 2002 to stockholders of record on January 22, 2002, which was paid January 30, 2002. The Company's Board of Directors declared for the quarter ended March 31, 2002 a dividend of $209,472 or $0.12 per share, on March 15, 2002 to stockholders of record on March 25, 2002, which was paid on April 5, 2002. SBA Commitment During January 2002 the Company and the SBA entered into an agreement whereby the SBA committed to reserve debentures in the amount of $12,000,000 to be issued by the Company on or prior to September 30, 2006. A 2% leverage fee will be deducted pro rata as the commitment proceeds are drawn down, of which a $120,000 non-refundable fee has been paid by the Company. Note 6 - Subsequent Event On April 24, 2002 the Company completed a public offering of 300,000 units, each unit consisting of one share of Common Stock, one share of 9 3/8% cumulative participating redeemable Preferred Stock, face value $12.00, and one redeemable Warrant exercisable into one share of Common Stock. Each Warrant entitles the holder to purchase one share of Common Stock at an exercise price of $6.70, subject to adjustment, until April 2007. The Warrants may be redeemed by the Company under certain conditions. The gross proceeds from the sale was approximately $5,700,000 less costs and commissions of approximately $1,551,000 resulting in net proceeds of approximately $4,149,000. The underwriter may increase this offering by 45,000 units to cover over-allotments through June 2, 2002. This does not include additional underwriting compensation to be paid by the Company to the underwriter in the form of an option to purchase up to 30,000 units, each unit consisting of one share of common stock, one share of 9 3/8% participating preferred stock (face value $12.00) and one warrant to purchase one share of common stock at an exercise price of $8.40. These units are exercisable over a five year period commencing April 18, 2003 at an exercise price of $21.45 per unit. -10- ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Management's Discussion and Analysis of Financial Condition and Results of Operations The information contained in this section should be used in conjunction with the consolidated Financial Statements and Notes therewith appearing in this report Form 10-Q and the Company's Annual Report on Form 10-K for the year ended June 30, 2001. General Ameritrans acquired Elk on December 16, 1999 in a share for share exchange. As of March 31, 2002 Ameritrans had no separate operations. Elk is licensed by the Small Business Administration (SBA) to operate as a Small Business Investment Company (SBIC) under the Small Business Investment Act of 1958, as amended. The Company has also registered as an investment company under the Investment Company Act of 1940. The Company primarily makes loans and investments to persons who qualify under SBA regulation as socially or economically disadvantaged and loans and investments to entities which are at least 50% owned by such persons. The Company also makes loans and investments to persons who qualify under SBA regulation as "non-disadvantaged". The Company's primary lending activity is to originate and service loans collateralized by New York City, Boston, Chicago and Miami Taxicab Medallions. The Company also makes loans and investments in other diversified businesses. Results of Operations For the Nine Months Ended March 31, 2002 and 2001 Total Investment Income The Company's investment income for the nine months ended March 31, 2002 decreased to $4,637,439 from $5,073,743 or 9% as compared with the nine months period ended March 31, 2001. This decrease was mainly due to leveling of the portfolio due to the economic environment and the fact that the Company was more than 90% drawn on its available bank credit lines. As a result, the Company began to slowdown expansion in its Chicago medallion and diversified portfolio. Investment income was also reduced because of lower interest rates. The portfolio was $53,775,908 at March 31, 2002 as compared to $56,435,260 at March 31, 2001. Operating Expenses Interest expenses for the nine month period ended March 31, 2002 decreased $624,047 to $2,025,435 when compared with the nine months ended March 31, 2001. This decrease was due to lower interest rates charged during the period. Other operating expenses decreased $272,913 when compared with the nine month period ended March 31, 2001 due to the termination of a potential merger during the nine month period ended March 31, 2001. The Company incurred a one time charge in the amount of $413,187 during the nine month period ended March 31, 2001. Depreciation in value of loans for the nine month period ended March 31, 2002 was $215,931 as compared to $194,298 in the period ended March 31, 2001. -11- Results of Operations For the Three Months ended March 31, 2002 and 2001 Total investment income The Company's investment income for the three months ended March 31, 2002 decreased to $1,638,307 from $1,839,075 or 11% for the three month period ended March 31, 2001. This decrease was mainly due to a decrease in the sales of equity securities of $109,507 combined with a leveling of the loan portfolio during the three month period, when compared with the prior period. Operating Expenses Interest expense for the three month period ended March 31, 2002 decreased $251,855 ($652,857 from $904,712) for the similar period ended March 31, 2001. This decrease was mainly due to lower interest rates on non SBA debt. Other operating expenses decreased $312,763 when compared with the similar three month period ended March 31, 2001. This decrease was due to the termination of a potential merger. The Company incurred a one time charge in the amount of $413,187 during the three months ended March 31, 2001. Depreciation in value of loans increased $161,088 when compared with the similar period in the prior period. Balance Sheet and Reserves Total assets increased $645,794 as of March 31, 2002 when compared with total assets as of June 30, 2001. This increase was due to prepaid costs incurred in connection with the Company's successful offering, combined with management's decision to reduce its loan portfolio during period of the economic recovery and pending the Company's public offering of securities which was completed April of 2002 and prepaid commitment fee due to an approved increase of SBA financing. Non SBA bank borrowings during the period were increased by $750,000. On April 24, 2002 the Company completed a public offering of 300,000 units, each unit consisting of one share of Common Stock, one share of 9 3/8% cumulative participating redeemable Preferred Stock, face value $12.00, and one redeemable Warrant exercisable into one share of Common Stock. Each Warrant entitles the holder to purchase one share of Common Stock at an exercise price of $6.70, subject to adjustment, until April 2007. The Warrants may be redeemed by the Company under certain conditions. The gross proceeds from the sale was approximately $5,700,000 less costs and commissions of approximately $1,551,000 resulting in net proceeds of approximately $4,149,000. The underwriter may increase this offering by 45,000 units to cover over-allotments through June 2, 2002. This does not include additional underwriting compensation to be paid by the Company to the underwriter in the form of an option to purchase up to 30,000 units, each unit consisting of one share of common stock, one share of 9 3/8% participating preferred stock (face value $12.00) and one warrant to purchase one share of common stock at an exercise price of $8.40. These units are exercisable over a five year period commencing April 18, 2003 at an exercise price of $21.45 per unit. PART II. OTHER INFORMATION Item 5. Other Information On April 24, 2002 the Company completed a public offering of 300,000 units, each unit consisting of one share of Common Stock, one share of 9 3/8% cumulative participating redeemable Preferred Stock, face value $12.00, and one redeemable Warrant exercisable into one share of Common Stock. Each Warrant entitles the holder to purchase one share of Common Stock at an exercise price of $6.70, subject to adjustment, until April 2007. The Warrants may be redeemed by the Company under certain conditions. The gross proceeds from the sale was approximately $5,700,000 less costs and commissions of approximately $1,551,000 resulting in net proceeds of approximately $4,149,000. The underwriter may increase this offering by 45,000 units to cover over-allotments through June 2, 2002. This does not include additional underwriting compensation to be paid by the Company to the underwriter in the form of an option to purchase up to 30,000 units, each unit consisting of one share of common stock, one share of 9 3/8% participating preferred stock (face value $12.00) and one warrant to purchase one share of common stock at an exercise price of $8.40. These units are exercisable over a five year period commencing April 18, 2003 at an exercise price of $21.45 per unit. -12- AMERITRANS CAPITAL CORPORATION 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. AMERITRANS CAPITAL CORPORATION Date: May 15, 2002 By: /s/ Gary C. Granoff ------------------- Gary C. Granoff Chief Financial Officer (Principal Financial Officer and Chief Accounting Officer) -13- -----END PRIVACY-ENHANCED MESSAGE-----