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Ameritrans Capital Corp. Reports Operating Results (10-Q)

November 15, 2010 | About:
10qk

10qk

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Ameritrans Capital Corp. (AMTC) filed Quarterly Report for the period ended 2010-09-30.

Ameritrans Capital Corp. has a market cap of $3.57 million; its shares were traded at around $1.05 with and P/S ratio of 2.15.

Highlight of Business Operations:

Corporate Loans outstanding as of September 30, 2010, increased by $8,706,901, or 80%, to $19,649,901, as compared with September 30, 2009. The interest earned on Corporate Loans increased in 2010, as compared with the prior year, primarily due to new loans at higher interest rates. The increase in Corporate Loans outstanding was due to new funding of $15,000,000; partially, offset by the sale of three loans for $3,600,000; payoff of loans of approximately $1,900,000 and the aggregate decrease of fair value of certain Corporate Loans of approximately $400,000.

Life settlement contracts outstanding as of September 30, 2010 increased by $1,192,000, or 304%, to $1,584,000, as compared with $392,000 at September 30, 2009. The fair value of our life settlement portfolio of $1,584,000 as of September 30, 2010, represents our estimate of the policies fair value based upon various factors, including a discounted cash flow analysis of anticipated life expectancies, future premium payments, anticipated death benefits related to to the five life insurance policies which have an aggregate face value of $17,659,809.

Professional fees for the three months ended September 30, 2010 increased $57,451 to $266,289, or approximately 28%, when compared to the three months ended September 30, 2009. Consulting fees related to accounting and compliance increased by approximately $35,000, of which $33,000 was attributable to the engagement of a new chief financial officer. Legal fees to non-related parties increased approximately $58,000 to $98,897, or approximately 144% when compared to the three months ended September 30, 2009. This increase was primarily attributable to foreclosure expenses of approximately $14,000; SEC-related matters of approximately $12,000; issues related to sublease of space aggregating approximately $10,000; SBA-related matters of approximately $10,000; and various other general and employment-related matters aggregating approximately $12,000. Legal fees associated with the Companys life settlement portfolio decreased by $26,825 when compared to September 30, 2009. These decreases were primarily due to the fact that restructuring of the investment has been completed. Accounting fees decreased approximately $5,575 to $55,450 when compared to the three months ended September 30, 2009. Audit fees increased approximately $3,310 to $42,976, when compared to the three months ended September 30, 2009. Offsetting this increase was a decrease in accounting fees for internal controls of $9,778 to $20,222 when compared to the three months ended September 30, 2009. This decrease in our accounting fees was primarily attributable to the Companys prior implementation of, and compliance with, Section 404 of the Sarbanes Oxley Act of 2002, including the improvement of documentation related to our internal control over financial reporting.

Director fees for the three months ended September 30, 2010 increased $14,360, or 46%, to $45,158 when compared to the three months ended September 30, 2009. Effective January 1, 2010, non-employee directors will be paid $25,000 per annum or $6,250 per quarter. In addition each non-employee director will receive a fee of $1,000 for each meeting attended and $500 for each telephone or brief board meeting attended.

Miscellaneous administrative expenses increased $41,615, to $166,733, or 33%, when compared with the three months ended September 30, 2009. This increase was due to one-time moving expenses of approximately $18,000, website expense of approximately $7,500, office expense fees of approximately $7,200, market data fees of approximately $4,000, transfer agent fees of approximately $5,800, SBA Commitment fees of approximately $7,600, and other miscellaneous fees of approximately $5,300 partially offset by a decrease in line fees of approximately $3,400, insurance expenses of approximately $3,000, and computer fees of approximately $7,000.

Total assets decreased $1,349,712 to $32,559,650, at September 30, 2010, as compared with total assets of $33,909,362 at June 30, 2010. This net decrease was primarily due to an overall decrease in cash and cash equivalents of approximately $6,500,000, which was utilized, primarily, to fund additional investments and general operations during the period. The decrease in cash and cash equivalents was partially offset by an overall increase in investments of approximately $5,100,000, which was, primarily, attributable to funding of new loans of approximately $7,900,000 and net appreciation of investments of approximately $170,000, partially offset by payoffs of loans receivable aggregating approximately $1,800,000 and the sale of loans aggregating $1,100,000. Total liabilities decreased by, approximately $670,000, to $24,863,000 at September 30,2010, as compared to $25,533,000 at June 30, 2010, primarily, due to the payoff of outstanding bank credit lines of $370,000 and a reduction in interest payable and accounts payable of approximately $300,000.

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