10-Q/A 1 amend630.txt AMENDMENT NO. 1 TO 10-Q 6/30/03 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q/A AMENDMENT NO. 1 X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2003 ------------------------------------------------------------------------------- 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 No. 0-6729 FIRST MONTAUK FINANCIAL CORP. ------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) New Jersey 22-1737915 ------------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) Parkway 109 Office Center, 328 Newman Springs Rd., Red Bank, NJ 07701 ------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (732) 842-4700 ----------------------- 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____ Indicate by check whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes No__X__ APPLICABLE ONLY TO CORPORATE ISSUERS: 8,529,030 Common Shares, no par value, were outstanding as of September 5, 2003. Page 1 of 13 Explanatory Note This Amendment Number 1 to the Quarterly Report on Form 10-Q/A of First Montauk Financial Corp. for the fiscal quarter ended June 30, 2003 is being filed in order to: 1) Amend the Results of Operations discussion in the Management's Discussion and Analysis of Financial Condition and Results of Operations (Item 2 of Part I of Quarterly Report on Form 10-Q) to correct the disclosure of revenue for the firm's principal transactions; and 2) Restate the disclosure provided in Item 5 of Part II of the Quarterly Report on Form 10-Q in order to provide information inadvertently omitted from the Quarterly Report. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Factors Affecting "Forward-Looking Statements" From time to time, the Company may publish "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended, or make oral statements that constitute forward-looking statements. These forward-looking statements may relate to such matters as anticipated financial performance, future revenues or earnings, business prospects, projected ventures, new products, anticipated market performance, and similar matters. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements. In order to comply with the terms of the safe harbor, the Company cautions readers that a variety of factors could cause the Company's actual results to differ materially from the anticipated results or other expectations expressed in the Company's forward-looking statements. These risks and uncertainties, many of which are beyond the Company's control, include, but are not limited to: (i) transaction volume in the securities markets, (ii) the volatility of the securities markets, (iii) fluctuations in interest rates, (iv) changes in regulatory requirements which could affect the cost of doing business, (v) fluctuations in currency rates, (vi) general economic conditions, both domestic and international, (vii) changes in the rate of inflation and related impact on securities markets, (viii) competition from existing financial institutions and other participants in competition from existing financial institutions and other participants in the securities markets, (ix) legal developments affecting the litigation experience of the securities industry, and (x) changes in federal and state tax laws which could affect the popularity of products sold by the Company. The Company does not undertake any obligation to publicly update or revise any forward-looking statements. The reader is referred to the Company's previous filings on Form 10-Q for the period ended March 31, 2003 and Form 10-K for the year ended December 31, 2002. Overview First Montauk Financial Corp. ("FMFC" or the "Company") is a New Jersey-based financial services holding company whose principal subsidiary, First Montauk Securities Corp. ("FMSC"), has operated as a full service retail and institutional securities brokerage firm since 1987. FMSC provides a broad range of securities brokerage and investment services to a diverse retail and institutional clientele, as well as corporate finance and investment banking services to corporations and businesses. In 1997, FMSC established Century Discount Investments, a discount brokerage division. FMFC also sells insurance products through its subsidiary Montauk Insurance Services, Inc. FMSC has approximately 476 registered representatives and services over 60,000 retail and institutional customer accounts. With the exception of two Company-leased branch offices, all of FMSC's 185 other branch office and satellite locations in 33 states are owned and operated by affiliates, independent owners who maintain all appropriate licenses and are responsible for all office overhead and expenses. FMSC also employs registered representatives directly at its corporate office and the Company-leased branch offices. FMSC is registered as a broker-dealer with the Securities and Exchange Commission, the National Association of Securities Dealers Regulation, Inc., the Municipal Securities Rule Making Board, and the Securities Investor Protection Corporation and is licensed to conduct its brokerage activities in all 50 states, the District of Columbia, and the Commonwealth of Puerto Rico. All securities transactions are cleared through Fiserv Securities, Inc. of Philadelphia, PA. and various floor brokerage and specialist firms provide execution services. These arrangements provide FMSC with back office support, transaction processing services on all principal, national and international securities exchanges, and access to many other financial services and products which allows FMSC to offer products and services comparable to large brokerage firms. RESULTS OF OPERATIONS The results of operations for the six months and three months ended June 30, 2003 (the "2003 period" and the "2003 quarter," respectively) showed an increase in revenues over the same periods in the prior year (the "2002 period" and the "2002 quarter," respectively). Total revenue for the 2003 quarter reflects the single highest revenue quarter since March 31, 2000. The continued lower interest rate environment, combined with the end to the major conflict in Iraq, positively affected investor confidence, and aided in their decision to once again return to investing in the equity markets. The Company's primary source of revenue is derived from commissions generated on agency transactions, including the sales of listed and over-the-counter stocks and options. Revenues from agency transactions increased $727,000, or 11%, from $6,722,000 to $7,449,000 during the 2003 quarter. For the six months ended June 30, 2003, there was a slight decrease in these revenues, from $12,912,000 in the 2002 period, to $12,287,000 in the 2003 period. Revenues from mutual fund commissions decreased for both the 2003 quarter and the 2003 period. Mutual fund revenues decreased $474,000, from $3,275,000 in the 2002 period to $2,801,000, in the 2003 period, a decrease of 14%, and $221,000 from $1,811,000 to $1,590,000 in the 2002 and 2003 quarters, respectively, a decrease of 12%. Revenues from insurance commissions decreased $301,000, from $2,409,000 in the 2002 period, to $2,108,000 in the 2003 period, a decrease of 12%. For the 2003 quarter, there was a slight increase of $96,000 over the 2002 quarter. On the other hand, total revenues from principal transactions, which include mark-ups/mark-downs on transactions in which the company acts as principal, proprietary trading, syndicate commissions and fixed income securities, showed significant increases during both periods in 2003. For the 2003 quarter, gross revenue from mark-ups/mark-downs on principal transactions increased $784,000, from $505,000 to $1,289,000, an increase of 155% over the 2002 quarter. The significant increase in syndicate revenues of $644,000 for the 2003 quarter and $593,000 for the 2003 period, as compared to the comparable periods in 2002, reflects a heightened investor desire for new offerings. Revenues from trading in the firm's proprietary equity accounts decreased for the 2003 quarter by $47,000, from $241,000 in the 2002 quarter to $194,000 in the 2003 quarter. Due to the continued uncertainties in the equity markets, the firm reduced its exposure to trading risk by eliminating certain trading accounts and improving risk management. Revenues from principal transactions in the fixed income sector increased during both 2003 periods. Revenues from all fixed income sources, which includes municipal, government, corporate bonds and unit investment trusts increased to $1,041,000 from $822,000 and $2,201,000 from $1,569,000 for the 2003 quarter and 2003 period, respectively. Unrealized gains in securities inventory increased by $132,000; from an unrealized loss of $121,000 for the 2002 quarter to an unrealized gain of $11,000 for the 2003 quarter. Investment banking revenues for the 2003 quarter were $168,000, an increase of $128,000, over the 2002 quarter. During the six month period ended June 30, 2003, revenues increased to $363,000 from $103,000 during the first six months of 2002, an increase of $260,000. Interest and other income for the 2003 quarter totalled $1,250,000 as compared to $896,000 in the 2002 quarter. For the six month period ended June 30, 2003, interest and other income increased to $2,100,000 from $1,777,000 for the first six months of 2002. While interest income remained relatively constant, the increase is primarily attributable to a recovery of bad debt write-offs and increases in charges to customers during the 2003 quarter. Compensation expense increased $1,553,000, or 14%, to $12,384,000 in the 2003 quarter, from $10,831,000 in the 2002 quarter. Commission expense, which is directly related to commissionable revenues, increased 18%, or $1,656,000, from $8,956,000 in the 2002 quarter, to $10,612,000 in the 2003 quarter. Salaries and benefits expense decreased $103,000, or 5%, from $1,875,000 in the 2002 quarter, to $1,772,000 in the 2003 quarter due to staff reductions implemented in 2002 and 2003. Compensation expense showed a slight increase of $173,000, or 1%, to $21,482,000 in the 2003 period, from $21,309,000 in the 2002 period. Commission expense increased 2%, or $339,000, from $17,623,000 in the 2002 period to $17,962,000 in the 2003 period. Salaries and benefits expense decreased $166,000, or 5%, from $3,686,000 in the 2002 period, to $3,520,000 in the 2003 period due to the same reasons described above. Communication and occupancy expenses decreased $198,000, or 22%, from $878,000 in the 2002 quarter to $680,000 in the 2003 quarter. The decrease is attributable to a one-time credit for excess CAM charges on the corporate headquarters' lease; the elimination of two company leased branch offices and their related costs and equipment rental expenses. Legal matters and related costs increased $1,983,000 to $2,356,000 during the 2003 quarter as compared to $373,000 in the 2002 quarter. This increase is primarily attributable to the costs to defend and settle asserted claims of approximately $13 million arising from customer purchases of high-yield corporate bonds. As discussed in Footnote 11 - Subsequent Events, the Company entered into a global settlement with a number of these claimants in July 2003. As of June 30, 2003, the Company has accrued approximately $2,130,000, including the cost of the July 2003 settlement, for litigation costs that are probable and can be reasonably estimated based on a review of existing claims, arbitrations and unpaid settlements. In addition to those claims settled in July, there remain nine additional arbitrations representing approximately $1.7 million in asserted damages arising from the same or similar allegations. The Company is vigorously defending these actions and believes that there are meritorious defenses in each case. There is no remaining insurance coverage available for the payment of settlements and/or judgments that may result from these claims. FMSC has also filed a claim against one of its competitors for raiding, unfair competition and use of proprietary and confidential information. The Company has obtained temporary injunctive relief from the Supreme Court of New York, as well as a consent injunctive order from an NASD arbitration panel. A hearing will be held later this year to determine the damages portion of the Company's claims. Management is unable to determine at this time what damages, if any, might be awarded. Other operating expenses decreased to $904,000 in the 2003 quarter, from $1,060,000 in the 2002 quarter. For the six month period ending June 30, 2003 and 2002, these expenses decreased to $1,533,000 from $1,969,000, respectively. Bad debt expenses decreased from $219,000 during the 2002 quarter to $3,000 in the 2003 quarter, and from $361,000 for the first six months of 2002 to $1,000 for the six month period ended June 30, 2003. The cost for errors and omission insurance increased by $153,000 for the 2003 six-month period, resulting from the substantial increase in premiums from the Company's policy renewal in January 2003. The Company has reported an effective tax rate of 0% for all periods presented due to net operating losses. The tax benefits of these losses and other temporary differences have been offset by increases in the tax valuation allowance due to management's uncertainty as to the ultimate realization of such benefits. For the six month period ended June 30, 2003, the Company reported a net loss available to common stockholders of $1,748,000 or $.20 per basic and diluted share, as compared to the net loss available to common stockholders reported for the same period in 2002 of $1,318,000 or $.15 per basic and diluted share. For the three months ended June 30, 2003, the Company reported a net loss applicable to common stockholders of $1,251,000, or $.15 per basic and diluted share, as compared to a net loss applicable to common stockholders of $998,000, or $.12 per basic and diluted share for the second quarter of 2002. LIQUIDITY AND CAPITAL RESOURCES As with most financial firms, the Company maintains a highly liquid balance sheet with 62% of the Company's assets consisting of cash, securities owned, and receivables from the Company's clearing firm and other broker-dealers. The balances in the Company's cash, inventory and clearing firm accounts can and do fluctuate significantly from day to day, depending on market conditions, daily trading activity, and investment opportunities. The Company monitors these accounts on a daily basis in order to ensure compliance with regulatory capital requirements and to preserve liquidity. Cash and cash equivalents decreased during the first six months of 2003 by $76,000, to $2,563,000. Net cash used in operating activities was $49,000 for the 2003 period. The primary components of the decrease are the loss of $1,723,000 and an increase in other assets, comprised mainly of an increase in prepaid insurance of $1,097,000, offset by an increase in commissions payable of $2,046,000. Under the financing agreement with Fiserv, the Company is eligible to receive its fourth and final advance of $1,250,000 in November 2003, subject to meeting certain performance criteria. Advances are subject to income taxes in the year of receipt. Additions to capital expenditures accounted for the entire use of cash from investing activities of $57,000 during the first quarter of 2003. The Company projects $150,000 in capital expenditures over the next twelve months. Financing activities provided cash of $30,000 during the 2003 period. The Company received gross proceeds of $210,000 from the second closing of its private offering of 6% convertible debentures. This was offset by payments of notes payable, capital leases and preferred stock dividends of $48,000, $107,000 and $25,000, respectively. During fiscal 2001, the Company entered into two capital leases under a sale-leaseback financing with a leasing company. The sale of the fixed assets resulted in a gain of approximately $45,000, which has been deferred and is being amortized over the related lease terms. The leases, totaling $662,000, are together payable in 36 monthly installments of $21,000 and an additional 12 installments of $3,900. Consolidated Contractual Obligations and Lease Commitments The tables below summarize information about the consolidated contractual obligations as of June 30, 2003 and the effects these obligations are expected to have on the Company's consolidated liquidity and cash flows in future years. These tables do not include any projected payment amounts related to the Company's potential exposure to arbitrations and other legal matters. Future minimum operating lease payments as of June 30, 2003 are as follows: Future minimum operating lease payments as of June 30, 2003 are as follows: Operating Leases 2003 $ 555,003 2004 1,103,126 2005 296,302 2006 169,500 --------- Total minimum lease payments $2,123,931 ========= Future minimum lease payments as of June 30, 2003 are as follows: Capital Leases 2003 $124,458 2004 114,396 2005 15,711 2006 -- -------- Total minimum lease payments 254,565 Less: Amount representing interest (18,397) $236,168 In 1999, the Company completed a private offering of Series A Convertible Preferred Stock in connection with the settlement with holders of leases of Global Financial Corp. Under the terms of the offering, each Global lease investor who participated in the offering received one share of Preferred Stock in exchange for every $5 of lease investment value that the investor was entitled to receive from Global after certain adjustments. Each leaseholder was required to assign their interest in all lease payments to which they were entitled. Each share of the Preferred Stock is convertible into two shares of Common Stock and pays a quarterly dividend of 6%. Pursuant to the offering, the Company issued an aggregate of 349,511 shares of Series A Preferred Stock. The offering was exempt from registration pursuant to Sections 4(2) and 4(6) of the Securities Act of 1933, as amended, and Regulation D, promulgated thereunder. The Company has suspended the quarterly payments of its Series A Preferred Stock dividend in accordance with applicable state law (See Note 10 to the financial statements and Part II Item 5.) In October 2002, the Company commenced a private offering of up to $3,000,000 of 6% convertible debentures to accredited investors. Each debenture is convertible at an initial conversion price of $0.50 per share, subject to adjustment for stock dividends, combinations, splits, recapitalizations, and like events. Interest on the debentures accrues at the rate of 6% per annum and is payable in cash on a semi-annual basis on April 1st and October 1st of each year until maturity or conversion. Each debenture is due and payable five (5) years from issuance, unless previously converted into shares of Common Stock. The offering expired on March 1, 2003. In the offering, the Company sold an aggregate amount of $1,240,000 of debentures, $1,030,000 in fiscal 2002 and $210,000 in fiscal 2003. The proceeds of the financing will be used to satisfy general working capital needs. The debentures have not been registered for offer or sale under the Securities Act; such securities are being issued on the basis of the statutory exemption provided by Section 4(2) of the Securities Act, as amended, and/or Rule 506 of Regulation D, promulgated thereunder relating to transactions by an issuer not involving any public offering. APPLICATION OF CRITICAL ACCOUNTING POLICIES Generally accepted accounting principles are complex and require management to apply significant judgments to various accounting, reporting and disclosure matters. Management of the Company must use assumptions and estimates to apply these principles where actual measurement is not possible or practical. For a complete discussion of the Corporation's significant accounting policies, see "Management Discussion and Analysis" and "Notes to the Consolidated Financial Statements" in the Company's 2002 Annual Report filed on Form 10-K. Certain policies are considered critical because they are highly dependent upon subjective or complex judgments, assumptions and estimates. Changes in such estimates may have a significant impact on the financial statements. Item 3. Market Risk. Certain of the Company's business activities expose it to market risk. This market risk represents the potential for loss that may result from a change in value of a financial instrument as a result of fluctuations in interest rates, equity prices or changes in credit rating of issuers of debt securities. This risk relates to financial instruments held by the company as investment and for trading. The Company's securities inventories are exposed to risk of loss in the event of unfavorable price movements. The Company's securities inventories are marked to market on a daily basis. The Company's market-making activities are client-driven, with the objective of meeting clients' needs while earning a positive spread. At June 30, 2003 and December 31, 2002, the balances of the Company's equity securities positions owned and sold, not yet purchased were approximately $490,000 and $412,000 and $184,000 and $0, respectively. In the opinion of management, the potential exposure to market risk, trading volatility and the liquidity of securities held in the firm's inventory accounts, could potentially have a material effect on the Company's financial position. The Company's activities involve the execution, settlement, and financial of various transactions on behalf of its clients. Client activities are transacted on either a cash or margin basis. The Company's client activities may expose it to off-balance sheet credit risk. The Company may have to purchase or sell financial instruments at the prevailing market price in the event of the failure of a client to settle a trade on its original terms, or in the event that cash and securities in the client margin accounts are not sufficient to fully cover the client losses. The Company seeks to control the risks associated with client activities by requiring clients to maintain collateral in compliance with various regulations and Company policies. PART II OTHER INFORMATION Item 5. Other Information. The Company has declared and paid dividends on its Series A Preferred Stock at the rate of 6% per annum on a quarterly basis since the third quarter of 1999. Currently, the Company is unable to continue to pay such dividends pursuant to the New Jersey Business Corporation Act. The New Jersey Business Corporation Act prohibits a corporation from paying dividends if its total assets would be less than its total liabilities. Dividends will continue to accrue on the outstanding shares of Series A Preferred Stock and will be paid when the Company is legally authorized to do so under the New Jersey Business Corporation Act. Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits Exhibit 31.1 - Section 302 Certification of Herbert Kurinsky, Chief Executive Officer Exhibit 31.2 - Section 302 Certification of William J. Kurinsky, Chief Financial Officer Exhibit 32.1 - Certification pursuant to Section 1350 pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by Herbert Kurinsky Exhibit 32.2 - Certification pursuant to Section 1350 pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by William J. Kurinsky 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. FIRST MONTAUK FINANCIAL CORP. (Registrant) Dated: September 5, 2003 /s/ William J. Kurinsky ----------------------------- William J. Kurinsky Secretary/Treasurer Chief Financial Officer and Principal Accounting Officer /s/ Herbert Kurinsky ----------------------------- Herbert Kurinsky President Exhibit 31.1 CERTIFICATION I, Herbert Kurinsky, certify that: 1. I have reviewed this quarterly report on Form 10-Q/A of First Montauk Financial Corporation; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) [reserved]; c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: September 5, 2003 /s/ Herbert Kurinsky ----------------------------------------- Herbert Kurinsky, Chief Executive Officer Exhibit 31.2 CERTIFICATION I, William J. Kurinsky, certify that: 1. I have reviewed this quarterly report on Form 10-Q/A of First Montauk Financial Corporation; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) [reserved]; c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: September 5, 2003 /s/ William J. Kurinsky -------------------------------------------- William J. Kurinsky, Chief Financial Officer Exhibit 32.1 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Amendment No. 1 to the Quarterly Report of FIRST MONTAUK FINANCIAL CORP. (the "Company") on Form 10-Q for the period ending June 30, 2003 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Herbert Kurinsky, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. /s/ Herbert Kurinsky --------------------------------- Herbert Kurinsky Chief Executive Officer September 5, 2003 Exhibit 32.2 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Amendment No. 1 to the Quarterly Report of FIRST MONTAUK FINANCIAL CORP. (the "Company") on Form 10-Q for the period ending June 30, 2003 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, William J. Kurinsky, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. /s/ William J. Kurinsky -------------------------------- William J. Kurinsky Chief Financial Officer September 5, 2003