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

February 16, 2010 | About:
10qk

10qk

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Ameritrans Capital Corp. (AMTC) filed Quarterly Report for the period ended 2009-12-31.

Ameritrans Capital Corp. has a market cap of $4.28 million; its shares were traded at around $1.26 with and P/S ratio of 1.28.

Highlight of Business Operations:

Corporate Loans outstanding as of December 31, 2009 decreased by $159,825, or 1%, to $12,652,285, as compared with December 31, 2008. The interest rate earned on Corporate Loans increased in 2009, as compared with the prior year, primarily due to interest rate resets on Corporate Loans due to covenant defaults. The decrease in Corporate Loans outstanding was due to the sale of one (1) loan totaling approximately $940,000, amortization of other loans totaling approximately $500,000, and the reduction of the fair value of certain loans of approximately $715,000 partially offset by the addition of two (2) new loans totaling approximately $2,000,000. As these loans were originated in December, 2009, their contribution to income was minimal.

Professional fees for the three months ended December 31, 2009 decreased $53,266 to $301,773, or approximately 15%, when compared to the three months ended December 31, 2008. Accounting fees for internal controls decreased approximately $41,000 to $35,829 when compared to the three months ended December 31, 2008. In 2008, documentation with regard to controls was being improved, therefore considerably more fees were spent on implementation. Legal fees to non-related parties decreased approximately $6,000 to $113,123 when compared to the three months ended December 31, 2008. Legal fees to related parties decreased approximately $7,300 to $6,677 when compared to the three months ended December 31, 2008. Accounting fees decreased approximately $2,200 to $49,925 when compared to the three months ended December 31, 2008. Audit fees decreased approximately $34,000 to $63,868 when compared to the three months ended December 31, 2008. This decrease was due to a reduction in audit fees attributable to the Companys smaller portfolio. These decreases were partially offset by increases in legal fees associated with the Companys life settlement portfolio of $32,000. Advisory Fees increased approximately $219,537 when compared to the three months ended December 31, 2008. This increase was primarily due to a one-time payment of $225,000 as specified in the Advisory Agreement. Miscellaneous administrative expenses decreased $28,401, or 19%, when compared with the three months ended December 31, 2008. These decreases were primarily due to a reduction in line and facility fees as a result of the reduction in loan portfolio size.

Corporate Loans outstanding as of December 31, 2009 decreased by $159,825, or 1%, to $12,652,285, as compared with the six months ended December 31, 2008. The interest rate earned on Corporate Loans decreased in 2009, as compared with the prior year, primarily due to decreases in LIBOR. This LIBOR decrease was partially offset by higher rates earned on loans originated in this fiscal year, the use of LIBOR floors in loan agreements, and further offset by increases in rates on existing loans due to covenant resets. The decrease in loans outstanding was due to a sale of a loan for approximately $940,000 and amortization on other corporate loans totaling approximately $500,000 and a fair value adjustment of loans of approximately $715,000, partially offset by the funding of two (2) new loans totaling $2,000,000.

Professional fees for the six months ended December 31, 2009 decreased $279,362 to $510,611, or approximately 35%, when compared to the six months ended December 31, 2008. Accounting fees for internal controls decreased approximately $129,906 to $78,850 when compared to the six months ended December 31, 2008. In 2008 documentation with regard to controls was being improved, therefore considerably more fees were spent on implementation. Legal fees to non-related parties decreased approximately $117,957 to $153,600 when compared to the six months ended December 31, 2008. Through better management of professional resources, the Company reduced the costs of preparing its SEC filings. Audit fees decreased approximately $69,275 to $103,524 when compared to the six months ended December 31, 2008. This decrease was due to a reduction in audit fees attributable the Companys smaller portfolio. These decreases were partially offset by increases in legal fees for Vibrant life services of $59,175 and accounting fees of $4,362. Advisory Fees increased approximately $264,537 when compared to the six months ended December 31, 2008. This increase was primarily due to a one-time payment of $225,000 as specified in the Advisory Agreement and further impacted by an increase in Corporate Loans outstanding when compared to the prior period. Miscellaneous administrative expenses decreased $111,694, or 27%, when compared with the six months ended December 31, 2008.

Net assets from operations decreased to $3,694,879 for the six months ended December 31, 2009 as compared to $1,768,003 for the six months ended December 31, 2008. The decrease in net assets from operations between periods was attributable primarily to a decrease in investment income of approximately $1,600,000. This decrease was due to lower interest rates and smaller investment portfolio. Unrealized losses increased by approximately $900,000 reflected the restructuring of investments. Realized losses increased by approximately $200,000. The decreases were partially offset by a reduction in operating expenses of approximately $900,000 as discussed above.

Total assets increased $7,529,339 to $35,815,495, at December 31, 2009 as compared to June 30, 2009 total assets of $28,286,156. This increase was primarily due to an increase in cash and equivalents of approximately $10,000,000, from funding of $9,175,000 in new debentures by the SBA and debt financing of approximately $2,000,000 partially offset by the funding of new loans of $2,000,000. This was partially offset by a decrease in investments of $2,596,506 due to a decrease in the fair value of the investments due to a revaluation of certain loans. Total liabilities increased by $11,197,321, to $24,339,635 at December 31, 2009 as compared to June 30, 2009, primarily due to an increase in SBA debentures and debt offering financing of $11,200,000.

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