EX-99 2 finaljune13200810qapressrele.htm EXHIBIT 99.1 PRESS RELEASE For Immediate Release

For Immediate Release

From:

Ameritrans Capital Corporation

For more information Contact:

Gary C. Granoff

(800) 214-1047


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


New York, NY, June 13, 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 Months
Ended March 31, 2008
(as restated)

Nine Months
Ended 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 PER
COMMON SHARE

 

 

 

 

- Basic and diluted

$

(0.03)

$

(0.06)

$

(0.09)

$

(0.10)