U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

                                   (Mark One)
                |X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                     FOR THE FISCAL YEAR ENDED JUNE 30, 2005
                                       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. 0-22153

                         AMERITRANS CAPITAL CORPORATION
             (Exact name of registrant as specified in its charter)

		DELAWARE			52-2102424

         (State of incorporation) (I.R.S. Employer Identification No.)

                   747 THIRD AVENUE, NEW YORK, NEW YORK 10017
               (Address of principal executive offices) (Zip Code)

                                 (800) 214-1047

               Registrant's Telephone Number, including Area Code:
           SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
                                      None

           SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
                         Common Stock, par value $.0001
              per share 9 3/8% Cumulative Participating Redeemable
                       Preferred Stock (face value $12.00)
                     Warrants exercisable into Common Stock
                                (Title of Class)

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 mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K |_|

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act). YES |_| NO |X|

As of June 30, 2005, the approximate aggregate market value of the Registrant's
common stock held by non-affiliates
 of the Registrant was approximately
$8,204,121 based upon a closing price of the Registrant's common stock of $5.90
per share as reported on the NASDAQ Capital Market on that date (For this
computation, the Registrant has excluded the market value of all shares of its
common stock reported as beneficially owned by executive officers and directors
of the registrant and certain other stockholders; such an exclusion shall not
be deemed to constitute an admission that any such person is an "affiliate" of
the registrant.)

There were 2,035,600 shares of the Registrant's Common Stock outstanding as of
September 19, 2005.

DOCUMENTS INCORPORATED BY REFERENCE.  Certain exhibits previously filed with
the Securities and Exchange Commission are incorporated by reference into Part
IV of this report.
<PAGE>

                         AMERITRANS CAPITAL CORPORATION
                          2005 FORM 10-K ANNUAL REPORT

                                             Table of Contents

<TABLE>
<CAPTION>
                                                                                                                  PAGE

PART I                                                                                                              1
<S>                                                                                                               <C>

     ITEM 1. BUSINESS OF AMERITRANS                                                                                 1
     ITEM 2. PROPERTIES                                                                                            26
     ITEM 3. LEGAL PROCEEDINGS
     ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                                   26

PART II                                                                                                            27
     ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND
             RELATED STOCKHOLDER MATTERS                                                                           27
     ITEM 6. SELECTED FINANCIAL DATA                                                                               29
     ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
             CONDITION AND RESULTS OF OPERATIONS                                                                   30
    ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
             MARKET RISK                                                                                           39
     ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                                                           42
     ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
             ACCOUNTING AND FINANCIAL DISCLOSURES                                                                  40
     ITEM 9A.CONTROLS AND PROCEDURES                                                                               42

PART III                                                                                                           42
     ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT MANAGEMENT                                        42
     ITEM 11. EXECUTIVE COMPENSATION                                                                               46
     ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND  MANAGEMENT                                      53
     ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                                                       57
     ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES                                                               59

PART IV                                                                                                            60
     ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
               FORM 8-K                                                                                            60

IMPORTANT FACTORS RELATING TO FORWARD-LOOKING STATEMENTS                                                           60

SIGNATURES                                                                                                         62

</TABLE>

<page>

                                     PART I

 ITEM 1. BUSINESS OF AMERITRANS

GENERAL

Ameritrans Capital Corporation (the "Company", "Ameritrans", "our", "us", or
"we") was formed in 1998 to engage in lending and investment activities,
primarily with small and medium-sized businesses, directly and through
subsidiaries. On December 16, 1999, Ameritrans acquired Elk Associates Funding
Corporation ("Elk") in a one-for-one share exchange in which Elk stockholders
received shares of common stock of Ameritrans, and Elk became a wholly-owned
subsidiary. Elk is a "small business investment company," or "SBIC," formed in
1979 and licensed by the U.S. Small Business Administration ("SBA") in 1980.
The Company's internet site is WWW.AMERITRANSCAPITAL.COM. Ameritrans makes
available, free of charge through its internet site its annual report on form
10-K, quarterly reports on form 10-Q, current reports on form 8-K and any
amendments to those reports filed or furnished pursuant to the Securities
Exchange Act of 1934, as amended (the "Exchange Act").

Elk makes loans to the owners of taxi cab businesses in the Chicago, New York
City, Miami and Boston markets and to other small businesses, using, among
other things, taxi medallions as collateral. Loans made to finance the purchase
or continued ownership of taxi medallions, taxis and related assets represented
approximately 74% of Elk's loan portfolio as of June 30, 2005. Loans made to
finance the acquisition and/or operation of other small businesses constitute
the balance of Elk's loan portfolio.

From inception through April 2002, the Company's only activity was the
operation of Elk. In May 2002, Ameritrans made its first loans to businesses
using the proceeds raised from the public offering of 300,000 units. Each unit
was comprised of one share of common stock, one share of 9 3/8% cumulative
participating preferred stock (face value $12.00) (the "Participating Preferred
Stock") and one warrant exercisable into one share of common stock for five (5)
years at an exercise price of $6.70 (the "Warrant"). The offering was completed
in April 2002 (the "Unit Offering"). Both Ameritrans and Elk are registered as
business development companies, or "BDCs," under the Investment Company Act of
1940 (the "1940 Act"). Accordingly, Ameritrans and Elk are subject to the
provisions of the 1940 Act governing the operations of BDCs. Both companies are
managed by their executive officers under the supervision of their Boards of
Directors. The executive officers and directors of both Elk and Ameritrans are
identical.

In addition, both Ameritrans and Elk have elected to be treated as "regulated
investment companies," or "RICs," for tax purposes. Under the Internal Revenue
Code, as a RIC, we will generally not be subject to U.S. federal corporate
income tax on our investment income if we make qualifying distributions of our
income to stockholders. As a RIC we qualify for this treatment as long as we
distribute at least 90% of our investment company taxable income to our
stockholders as dividends. Elk paid qualifying dividends from July 1983 through
June 1992 and continuously since June 1996. Since December 16, 1999, when we
acquired Elk, these dividends have been payable to Ameritrans as Elk's sole
stockholder. Ameritrans has paid common dividends to its shareholders since its
inception with the exception of the three (3) month periods ended June 30,
2000, September 30, 2000, March 31, 2003, and June 30, 2003 all periods of
fiscal year 2005. Also, the Company does not expect to be able to pay dividends
for the three month period ended September 30, 2005. All preferred dividends
have been duly paid each quarter.


Because it is an SBIC, Elk's operations are subject to other restrictions, and
all loans and investments must comply with applicable SBA Regulations. For
example, the interest rate that Elk can charge, the percentage of any other
company it can own, the size of the businesses to which it can make loans, and
the length of time to the maturity date are limited by SBA rules. Elk's
business is funded by loans from banks and, to a lesser extent, by the
proceeds of subordinated debentures issued to the SBA. Ameritrans is not an
SBIC and is not subject to SBA regulation. See "Elk's Loans" and
"Regulation -- The Small Business Act of 1958."

                                  1


<page>

CURRENT BUSINESS ACTIVITIES

AMERITRANS. From inception through April 2002, Ameritrans' only activity was
the operation of Elk. In May 2002, Ameritrans began making loans to businesses
using the proceeds raised from the Company's Unit Offering. Since July 2002,
Ameritrans has been making equity investments. Equity securities in
Ameritrans's investment portfolio at June 30, 2005 totaled $554,205 or 0.95%
of total assets.

ELK. Elk was organized primarily to provide long-term loans to businesses
eligible for investments by SBICs under the 1958 Act ("Small Business
Concerns"). Elk has made loans for financing the purchase or continued
ownership of taxi medallions, taxis and related assets.

Although Elk's certificate of incorporation provides Elk with the authority to
invest in the equity capital of Small Business Concerns, Elk makes equity
investments in Small Business Concerns on a selective basis, and only to a
limited extent. Equity securities in Elk's investment portfolio at June 30,
2005 totaled $354,252 or 0.61% of total assets. Elk may make additional equity
investments. However, unless necessary to protect a prior investment of Elk
that is at risk, equity investments shall not exceed 20% of Elk's total assets.

Elk has six (6) wholly-owned subsidiaries: EAF Holding Corporation, EAF
Enterprises LLC, Medallion Auto Management LLC, EAF Leasing LLC, EAF Leasing II
LLC and EAF Leasing III LLC.

EAF Holding Corporation was formed in 1992, and its sole activity is owning and
operating certain real estate assets acquired in satisfaction of loans. EAF
Enterprises LLC was formed in June 2003 to take title to some of the
Company's remaining Chicago foreclosure medallions, and to thereafter lease
them to taxi drivers on a 36-month lease. Medallion Auto Management LLC was
formed in June 2003 to own taxi vehicles used primary in conjunction with EAF
Enterprises LLC's taxi medallion leasing operation. In order to lease the
medallions, Medallion Auto Management LLC was formed to purchase taxi vehicles
and leases the vehicles to the operators whereby each operator will own the
vehicle for a nominal payment at the end of the term of the lease, or have an
option to purchase the vehicle for
 its then unamortized cost. EAF Leasing LLC,
EAF Leasing II LLC and EAF Leasing
III LLC were formed to take title to
approximately 35 foreclosed medallions and lease them to large medallion
operators.



TAXI MEDALLION FINANCE INDUSTRY AND MARKET OVERVIEW

CHICAGO TAXI MEDALLION INDUSTRY AND MARKET. As part of its geographic
diversification strategy, Elk studied the Chicago taxi medallion market in
1994, and began making loans in Chicago in April, 1995. The taxi market and
medallion system in Chicago is regulated by the City of Chicago Department of
Consumer Services, Public Vehicle Operations Division. The number of taxi
medallions is limited by city ordinances, and until 1988, these ordinances
gave control of the majority of the medallions to the two largest taxi
operators in Chicago; Yellow Cab Co., ("Yellow Cab") and Checker Taxi Co.,
Inc. ("Checker Taxi").  Since 1988, the taxi industry in Chicago has shifted
toward more individual ownership. Over the succeeding 10 years, Yellow Cab
and Checker Taxi, pursuant to the settlement of an anti-trust
legal action, gave 1,300 medallions back to the City of Chicago
("Chicago"), and Chicago added an additional 100 medallions each year
thereafter. These medallions were distributed in a lottery system to taxi
drivers who had never owned a medallion.  By July, 1997, there
were a total of 5,700 medallions issued in Chicago, of which Yellow Cab owned
approximately 2,071, and the remaining 3,629 were owned by individual owner
drivers, or by individual operators who had purchased multiple medallions.

                                   2

<page>

In December, 1997, the Chicago City Council increased the number of medallions
by
 1,000, which were then issued over a period of three years from 1998
through the end of the year 2000. Of these medallions, 500 were issued in
lotteries to taxi drivers who never owned a medallion, and the other 500 were
auctioned to the highest bidder. In the November 1998 auction of 150
medallions, there were 499 bids to purchase medallions. The winning bid prices
ranged from $57,000 to $63,000 per medallion, which was approximately the same
as open market prices for taxi medallions that were sold in Chicago at that
time. In the August 1999 auction of 150 medallions, the winning bid prices
ranged from $65,000 to $70,000.

In October, 2000 Chicago held its final auction of 200 medallions under the
program authorized in December, 1997. The City set a minimum bid of $60,000,
and all 200 medallions were sold at auction at prices that ranged from $60,000
to $68,000. In July, 2000 the last 200 medallions authorized under the lottery
program were distributed.



In November, 2000, the Chicago City Council passed a new ordinance authorizing
Chicago to auction up to 50 medallions per year through November, 2004,
representing a total of 150 medallions over three years. The Chicago City
Council, however, did not authorize any further lotteries of medallions. The
new ordinance also required purchasers of the medallions to operate taxi-vans
instead of the standard taxicab vehicle, which would cost the medallion
purchaser three times as much to purchase, equip and prepare as compared to a
standard taxicab. As a result, we believe that the 150 medallions, when
auctioned, will command lower prices than the prices that would otherwise be
available in the market place for the purchase of medallions without the
taxi-van requirement.

On January 21, 1999, Yellow Cab auctioned 175 medallions in a sealed bid
auction at prices equal to the current open market value price for medallions.
Subsequent to January, 1999, Yellow Cab has continued to sell medallions
 that
it owned, and the Company estimates that they have sold approximately 1,300
additional medallions to owner drivers, who they continue to service through
their taxi affiliation and through the Yellow Cab operations. We believe that
the sale of these additional medallions by Yellow Cab to owner-drivers will
continue to offer additional financing opportunities for the Company to service
their financing needs.

It has been our experience that as the Chicago market has expanded, it has also
become more competitive with more lenders entering the market.  In addition,
Chicago and Yellow supply medallions to the market place, we expect that the
taxi medallion market will continue to grow, with more and more owner-drivers
and individual owner-operators of multiple medallions. To the extent that there
are more owner-operators and individual owner-operators of multiple medallions
in the market, we believe that there will be increased opportunities for us to
serve this market.

Since 2001 the Chicago taxi medallion market has significantly weakened due to
the general economic slowdown and the events of September 11, 2001. The result
of the economic slowdown caused a large number of medallion loans to go into
default and caused a large number of foreclosure sales. The Company for the
first time in 23 years experienced a large number of medallion loan defaults
and foreclosures. As a result of these defaults and foreclosures, the Company
experienced a large amount of losses on accrued interest, and costs and
expenses incurred to foreclose and resell medallions in the Chicago market.

City regulations set forth certain qualifications that all owners of taxi
medallions must meet, and require that all security interests in medallions be
registered with the Department of Consumer Services. The Department of Consumer
Services is also involved (along with the Chicago City Council) in setting taxi
fares, and in setting maximum lease rates that may be charged by owners to
lessees of taxis, who drive them on a daily, weekly, or monthly basis.

                                   3
<PAGE>


CHICAGO MARKETING STRATEGY FOR MEDALLION FINANCING. At the present time, most
medallion sales in Chicago are handled through brokers or attorneys. An active
market place has developed in Chicago for the purchase and resale of
medallions.
Due to the current economic difficulties in the Chicago market, Elk's most
recent experience has been that medallions were selling for $48,000 and
$58,000 per medallion. Elk is reselling its foreclosed medallions for
approximately $55,000 to $58,000 per medallion, for which it provides full
financing to the purchaser. The City of Chicago imposed a 10% transfer tax on a
medallion held for the first year and 5% transfer tax thereafter, and for any
foreclosure sale. The imposition of the transfer taxes, in addition to
being a source of revenue to the City, was also scaled in order to inhibit
speculation in the purchase and resale of taxi medallions without the intent of
actually operating taxis. As of June 30, 2005, the total principal amount of
our outstanding taxi loans in Chicago was $23,881,163.


Elk set up subsidiary entities to take title to approximately 40 of our
remaining foreclosure medallions. Five medallions are held by EAF Enterprises
LLC, which leases the medallions out to taxi drivers on a 36-month lease.
Medallion Auto Management LLC, another Elk subsidiary, purchased taxi vehicles
and leases the vehicles to the operators.

Elk also entered into agreements with large operators of taxi medallions and
set up the subsidiary entities EAF Leasing LLC, EAF Leasing II LLC, and EAF
Leasing III LLC which took title to approximately 35 foreclosed medallions and
lease them to medallion operators. Unlike the above structure, the medallion
operator is not given an option to purchase the medallions.

At June 30, 2005, Elk had executed contracts with one (1) purchaser to purchase
a total of twenty (20) Chicago medallions being foreclosed and five (5) being
sold by one of Elks subsidiaries, EAF Enterprises LLC, at a price of $57,500
per medallion.  As part of the purchase contract, Elk agreed to finance the
purchaser for the entire purchase price plus applicable transfer taxes for a
period of 8 years with a balloon principal payment at the maturity date.
During the first year of the loan, the interest rate is one percent (1%) per
annum.  Thereafter, beginning in the second year the interest rate increases
to 1.5% above the prime rate of interest adjusted each time the prime rate
changes.  Twenty (20) of the medallions being sold were closed on August 31,
2005, the remaining five (5) medallions under contract are expected to close
in the near future.  The purchaser has also expressed interest in purchasing
five (5) additional Chicago medallions on similar terms and conditions.

THE NEW YORK CITY TAXI MEDALLION INDUSTRY AND MARKET. Prior to April 2004, the
number of taxi medallions that may be issued by New York City was limited to
12,187. In 2003, the City authorized the sale of an additional 900 medallions
over the course of three years by auctioning 300 medallions each year starting
fiscal year 2004. On April 16, 2004, the New York City Taxi and Limousine
Commission (the "TLC") auctioned the first 174 of 300 medallions that were
scheduled for fiscal year 2004. The 174 medallions were corporate medallions.
On April 23, 2004, the TLC auctioned the remaining 126
medallions, which were individual medallions.  For fiscal 2005, the TLC
auctioned a total of 300 medallions:  116 of the 300 medallions were individual
medallions.  130 of 300 medallions were corporate (or mini-fleet medallions),
27 of the 300 medallions were earmarked for use with wheelchair accessible
and 27 of the 300 medallions were set aside for vehicles powered by alternative
fuels.  2005 marked the first time in New York City history that such designated
taxicab medallions were sold.  A number of both accessible and alternative fuel
taxicab medallions were available at auction last spring, but there were no
successful bidders.


There are two types of medallions:  corporate and individual owner-driver.  A
corporate medallion is issued for a taxi owned by a corporation that owns a
minimum of two taxis and two corporate medallions (one corporate medallion
per taxi), these taxis do not have to be personally driven by their owners.  An
individual owner-driver may not own more than one taxi and one medallion and by
TLC regulation, must

                                    4

<page>

be personally driven by their owners a minimum of 210 shifts per year.
Corporate medallions are used by large fleet concerns with
many taxis and many drivers or by small corporations owning at least two
medallions and two taxis driven by two owner-drivers (the so-called
"mini-fleet").

At the present time, most medallion sales are handled through brokers.  As a
result, an active marketplace has developed for the purchase and resale of
medallions.  The price of a medallion varies with supply and demand. According
to the most recent data provided by the TLC, provided as of July 2005,
individual medallions are selling for approximately $333,000 and corporate
medallions are selling for approximately $375,000. In addition, a 5% New York
City transfer tax and various brokerage commissions are additional expenses
incurred in the acquisition and sale of a medallion.

In addition to financings for purchases and sales of medallions, a substantial
market exists for refinancing the indebtedness of existing minifleet or
individual medallions.  Management estimates this market to exceed that of the
market for financing transfers, and to be in excess of $100,000,000 per year.


A prospective medallion owner must meet the requirements of the TLC, which
approves all sales and transfers. In general, the requirements are that the
prospective owner have no criminal record, that the purchase funds be derived
from legitimate sources, and that the taxi vehicle and meter meet
specifications set by the TLC. Also required is a clearance from prior
insurers of the seller in the form of letters stating that there are no
outstanding claims for personal injuries in excess of insurance coverage.

NEW YORK MARKETING STRATEGY FOR MEDALLION FINANCING. Medallion transfers in the
New York City market are usually handled through medallion brokers, who have
frequent contact with taxi owners and drivers. Medallion brokers locate buyers
for sellers of medallions and sellers for buyers of medallions, and then
typically employ a financing broker to arrange for the financing of the
medallion purchases. In many cases the medallion broker and the financing
broker are the same party or related parties. As of June 30, 2005, the total
principal amount of outstanding taxi medallion loans in New York was
$8,203,726.

Elk receives referrals from certain medallion brokers in New York. Elk also
receives referrals from financing brokers and its borrowers. In addition, Elk
occasionally places advertisements in local industry newspapers and magazines.
Elk also uses brokers, advertising and referrals in connection with its taxi
lending business in the Chicago, Boston, and Miami markets.

BOSTON TAXI MEDALLION INDUSTRY AND MARKET. Elk began to review the Boston taxi
market in the fall of 1994 and began making loans in this market in 1995. Some
loans have also been made to medallion owners who own medallions issued by the
city of Cambridge, MA. Since 1930, the Boston Police Commissioner has had
exclusive jurisdiction over the regulation of taxi operations, including the
issuance and transfer of medallions. The Hackney Carriage Unit of the Boston
Police Department deals with taxi regulatory issues.

By statute, the number of medallions issued in Boston may not exceed 1,525,
subject to increase or decrease in the Police Commissioner's discretion. The
number of medallions remained essentially unchanged from the late 1940's until
January 1999, when Boston sold 75 additional medallions at auction. Prices at
this auction exceeded $140,000 per medallion. Boston auctioned another 75
medallions in September 1999 and 57 medallions in May of 2000. In 2001, the
city of Boston sold an additional 20 medallions for handicap use, bringing the
total of outstanding medallions to approximately 1,790. Market prices of Boston
medallions are currently approximately $310,000.

                                 5

<page>

Under the applicable statutes and rules, Boston taxi medallions are assignable,
subject to the approval of the Police Commissioner. In practice, transfer
applications are submitted to the Hackney Carriage Unit, which has issued
guidelines and forms for transfers. Loans by financial institutions or
individuals are secured by taxi medallions and liens on such assets are
routinely allowed in accordance with the Hackney Carriage Unit's "Procedures
for Recording Secured Party Interest."

BOSTON MARKETING STRATEGY FOR MEDALLION FINANCING. The Boston taxi market
services the city of Boston, which includes Logan Airport. Elk's marketing
efforts have included retention of a local attorney, advertising in the
Carriage News, a local trade newspaper, and the use of forwarding brokers. As
of June 30, 2005, the total principal amount of our outstanding taxi loans in
Boston was $2,843,964.

MEDALLION INDUSTRY IN METRO-DADE COUNTY, (MIAMI AREA), FLORIDA. Elk began to
investigate the Miami area taxi market in 1995, and began making loans in 1996.
The Miami taxi industry has been regulated on a county-wide basis in Metro-Dade
County, Florida since 1981. The Passenger Transportation Regulatory Division
(the "PTRD") of the Metro-Dade County Consumer Services Division oversees taxi
operations and licenses in accordance with the Metro-Dade County Code.

Until April 1999, each taxi operator in Metro-Dade County was required to
obtain a "For-Hire" license. The number of licenses was limited to one license
for each 1,000 residents in the county. Approximately 2,200 medallions have
been issued to date.  Transfers of licenses are subject to prior approval by
the PTRD and financing is authorized for purchased or refinance.

For-Hire licenses were previously considered a privilege, not a property
right. However, since licenses were limited in number, the marketplace created
a "market price" or value in connection with the transfer of the license
right to a purchaser.  In 1999, the Metro-Dade County Code was amended to
create a "medallion," or property right, system with a view to attracting
traditional financing providers to provide the taxi industry with additional
funding sources.  Existing For-Hire licenses were automatically converted into
medallions.

According to official Metro-Dade County publications issued in the year 2000,
approximately one-third of the currently outstanding licenses are owned by
individuals or corporations that own and operate only one license. Other than
106 licenses held by one owner, the balance of the licenses are owned mainly by
holders of two (2) to five (5) licenses. The number of license transfers has
been generally increasing in recent years.  Market prices have increased
substantially since 1997. We estimate that the present market price of
licenses/medallions in Metro-Dade County as of June 2005 is approximately
$195,000 per medallion.

MIAMI AREA MARKETING STRATEGY FOR MEDALLION FINANCING. We believe that the
recent change to a medallion system and an emphasis on individual
operator-ownership of medallions for the future will continue to open
additional opportunities for taxi medallion financing in the Miami area. We
have developed strategies to develop contacts and market our financing to
potential purchases of medallions, and to those owners who may wish to
refinance their medallions in the future. As of June 30, 2005, the total
principal amount of our outstanding taxi loans in the Miami area was
approximately $3,202,985.


                                       6

<PAGE>
COMMERCIAL (NON-TAXI) LOANS -- OVERVIEW

Elk began making loans to diversified (non-taxi) small businesses ("Commercial
Loans") in the New York City metropolitan area in 1985, in order to diversify
its loan portfolio, which until that time had consisted almost entirely of
loans to owners of New York City taxi medallions. After a period of losses in
its Commercial Loan portfolio from 1991 to 1994, Elk has been increasing this
portfolio on a selective basis since 1995, with a concentration on loans to
operators of retail dry cleaners and laundromats. Recently, Elk has also begun
geographically expanding its Commercial Loan portfolio, with loans in South
Florida, Massachusetts, and North Carolina.

Elk has chosen to concentrate its Commercial Loan portfolio in loans secured by
retail dry cleaning and coin-operated laundromat equipment because of certain
characteristics similar to taxi medallion lending that make these industries
attractive candidates for profitable lending. These factors include: (i)
relatively high fixed rates of interest ranging from approximately 325 to 700
basis points over the prevailing Prime Rate at the time of origination, (ii)
low historical repossession rates, (iii) vendor recourse in some cases, (iv)
significant equity investments by borrowers, (v) an active market for
repossessed equipment, and for resale of businesses as going concerns through
transfers of the leasehold and business equipment to new operators, and (vi) a
collateral service life that is frequently twice as long as the term of the
loans. We estimate that there are approximately 4,000 retail dry cleaners and
approximately 3,000 laundromats in the New York City metropolitan area. In
addition, we believe that specialization in the dry cleaning and laundromat
industries will permit relatively low administrative costs because
documentation and terms of credit are standardized, and the consistency among
the loans has simplified credit review and portfolio analysis.

We further believe that other niche industries with similar characteristics
will provide additional loan portfolio growth opportunities. Elk's other
Commercial Loans are currently spread among other industries, including auto
sales, retirement home, commercial construction, car wash, restaurants, and
financial services.

Elk's Commercial Loans finance either the purchase of the equipment and related
assets necessary to open a new business or the purchase or improvement of an
existing business, and Elk has originated Commercial Loans in principal amounts
up to $1,200,000 for its share of the loan. Elk generally retains these loans,
although from time to time it sells participation interests in its loans to
share risk, or purchases participation interests in loans generated by other
SBICs. At June 30, 2005, Elk's Commercial Loans totaled $13,354,062.


ELK'S LOANS

Elk's primary business has been to provide long-term business loans at
commercially competitive interest rates (which at June 30, 2005, ranged from
4.0% to 14% per annum). From 1979 through March 1997, Elk was a "Specialized
Small Business Investment Company" ("SSBIC") under the rules of the SBA. All of
its loans were required to be made to small businesses that were majority-owned
by socially or economically disadvantaged persons, known as "Disadvantaged
Concerns." In September 1996, the Small Business Investment Act of 1958 (the
"1958 Act") was amended to provide, among other things, that no further
subsidized funding would be made available to SSBICs.  Consequently, Elk
amended its Certificate of Incorporation and entered into an agreement with
the SBA in February 1997 in order to convert Elk from an SSBIC to an SBIC.
As such, Elk may now lend to persons who are not Disadvantaged Concerns.


SBA Regulations set a ceiling on the interest rates that an SBIC may charge its
borrowers. Under the current SBA Regulations, the basic maximum rate of
interest that an SBIC may charge is 19%. However, if either the weighted
average cost of the SBIC's qualified borrowings, as determined pursuant to
SBA

                                    7
<page>

Regulations, or the SBA's current debenture interest rate, plus, in either
case, 11% and rounded off to the next lowest eighth of 1%, is higher, the
SBIC may charge the higher rate. The maximum rate of interest that Elk was
allowed to charge its borrowers for loans originated during June, 2005 was
19%. See "Regulation -- The Small Business Act of 1958."


Elk may revise the nature of its loan portfolio at such time as its Board of
Directors determines that such revision is in the best interests of Elk. Elk
does not currently anticipate that its loan portfolio will realize an annual
turnover in excess of 50%. Elk will not lend to, or otherwise invest more than
the lesser of (i) 10% of its total assets, or (ii) 30% of its paid-in capital
attributable to its common stock in any one Small Business Concern. Elk has not
made, and is prohibited by applicable SBA Regulations from making, loans to
officers, directors or principal stockholders of Elk or "associates" of Elk, as
such term is defined in applicable SBA Regulations.

TAXI MEDALLION FINANCING LOANS

A portion of Elk's loans have been made to purchasers or owners of New York
City taxi medallions. Since Elk commenced operations it has made over
$175,000,000 of such loans. However, the New York market has become
increasingly more competitive. Medallion prices in New York City dropped from
$223,000 in July, 2000 for individual medallions to $200,000 by September
2002. Prices for individual medallions increased to $224,000 by May 2003 and
$333,000 by July 2005, as reported by the TLC. Prices for corporate medallions
fell from $257,000 per medallion in July, 2000, to $230,000 by September,
2002. As of May 2003, the corporate medallion price was back up to $259,000.
According to the data provided by the TLC, as of July 2005, corporate
medallions were selling for approximately $375,000 each. Interest rates
in the New York City market for taxi loans have recently been at
approximately six percent (6%) per annum. This has limited Elk's
opportunities to make profitable loans or expand its activities in this market.

In 1995 and 1996 Elk began expanding its taxi lending business into the
Chicago, Boston, and Miami markets, where its taxi lending business has
increased. During the time Elk has been making taxi loans in these markets,
the market prices of medallions have generally been increasing.  However, in
Chicago the market price for medallions dropped approximately 15% during the
fiscal year ended June 30, 2001. Since April 1995 when Elk began making loans
in the Chicago taxi medallion market, the market value of a medallion
increased from approximately $32,000 to a high of approximately $68,000. From
July, 2000 through June, 2005, the market value of a Chicago taxi medallion
decreased to approximately $50,000 to $60,000, depending on the terms and
conditions of the cash or financed sale. As of June 2005, medallions were
selling in a range of between approximately $48,000 to $58,000 per medallion
depending on financing and terms. Elk has made over $90,000,000 of loans to
Chicago medallion owners since it began operations in Chicago. During the time
Elk has been making taxi loans in Boston and the Miami area, the market price
of medallions has increased from approximately $90,000 to $250,000 in Boston
and from approximately $65,000 to $195,000 in Miami.

As of June 30, 2005, $8,264,223, or 15.9%, of the aggregate principal amount of
its outstanding loans of $52,060,254, represented loans made to finance the
purchase or continued ownership of New York City taxi medallions and related
assets; an aggregate of $23,881,163, or 45.9%, consisted of loans to finance
the purchase or refinancing of taxi medallions in Chicago, and the balance of
$19,914,868 or 38.2% consisted of loans to various commercial borrowers, of
which $2,843,964, or 5.47%, was invested in Boston taxi medallion financing and
$3,202,985 or 6.07%, was invested in Miami taxi medallion financing. See "Loan
Portfolio; Valuation," below.

Due to increasing competition, annual interest rates for new loans in the New
York taxi market are currently ranging between 6% to 7%. Interest rates on
Chicago taxi loans have ranged from 4% to 13.9% during this past year on new
loans, depending upon the size of the loan, the repayment schedule, the balloon
dates,

                               9
<page>


the loan-to-value ratio, and the credit history of the borrower. Rates
have been lowered to induce sales of our foreclosed medallions to purchasers of
such medallions. In addition, most loans that Elk has made in Chicago have been
for five (5) to fifteen (15) year terms and are generally self-amortizing.
Interest rates on loans in the Boston market currently range from 5.75 to 7.5%,
and in the Miami market currently range from 7.25 to 14% depending on the size
of the loan and other factors.

COMMERCIAL LOAN PORTFOLIO

Ameritrans began making diversified Commercial Loans in May 2002. At June 30,
2005, Ameritrans' Commercial Loan portfolio consisted of three (3) loans
totaling $513,857, of which two loans totaling $460,857 were to a debt
collection
 and one (1) loan totaling $53,000 to another small business
concern.  The proceeds of the loan to the debt collection business were used to
purchase an interest in a pool of charged off credit card receivables.

Elk began making non-taxi Commercial Loans in 1985. Due to the effects of the
nationwide recession of the early 1990's on the New York City metropolitan area
economy, between 1990 and 1994 Elk suffered significant losses in its
Commercial Loan portfolio. These losses were primarily written off against
income earned by Elk on its taxi loan portfolio. By 1995, the local economy
had improved and Elk again began making selective Commercial Loans, and its
activities in this area have been increasing steadily. At June 30, 1995, Elk's
Commercial Loans totaled $1,275,654, or 5.5%, of Elk's total loan portfolio,
while at June 30, 2005, Elk's Commercial Loans totaled $13,354,062 or 25.9%,
of Elk's total loan portfolio. On July 1, 2004, the Company had a beginning
balance in its unrealized depreciation on loans receivable account of $509,770
and this balance decreased to $150,000 at June 30, 2005. During the fiscal
year ended June 30, 2005, the Company had total write offs and depreciation
on interest and loans receivable of $728,710, most of which was attributable
to commercial loan losses and the Chicago taxi medallion foreclosures.

At June 30, 2005, Elk's Commercial Loan portfolio consisted of 79 loans, of
which, 18 loans totaling $741,633 were to dry-cleaning businesses, 22 loans
totaling $4,187,498 were to laundromat businesses, and 39 loans totaling
$8,424,931 were to a variety of other small businesses. Loans to dry cleaners
and laundromats represented 36.88% of the aggregate principal amount of Elk's
Commercial Loans outstanding at June 30, 2005.

Elk generally originates Commercial Loans by financing the cost of dry cleaning,
laundromat or other business-specific equipment, while the borrower is making
an equity investment to finance the cost of installation, building of
appropriate infrastructure to support the equipment, installation of other
equipment necessary for the business operations, other decorations and
working capital. Substantially all Commercial Loans are collateralized by
first security interests in the assets being financed by the borrower, or by
real estate mortgages. In addition, Elk generally requires personal
guaranties from the principals of the borrower and in limited cases obtains
recourse guaranties from the equipment vendors. Elk's Commercial Loans
ypically require equal monthly payments covering accrued interest and
amortization of principal over a four to eight year term and generally can be
prepaid with a fee of 60 to 90 days of interest during the first several years
of the loan. The term of, and interest rate charged on, Elk's Commercial Loans
are subject to SBA Regulations.

Elk generally obtains interest rates on its Commercial Loans that are higher
than it can obtain on New York City taxi medallion loans. The Company believes
that the increased yield on Commercial Loans compensate for their higher risk
relative to medallion loans and that it will benefit from the diversification
of its portfolio. Interest rates on currently outstanding Commercial Loans
range from 4% to 14%.


                                       10
<PAGE>

LOAN PORTFOLIO; VALUATION


<TABLE>
<CAPTION>

                                                   Number       Interest      Maturity Dates        Balance
      Type of Loan                                of loans        Rates        (In Months)        Outstanding
----------------------------------------------  ------------- -------------- -----------------  ----------------
<S>                                              <C>           <C>            <C>                <C>
Chicago:
      Taxi Medallion                                474         4 - 13.9%        1 - 175            23,881,163

New York City:
      Taxi Medallion                                 23         5 - 7.50%        4 - 30             $8,203,726
      Radio car service                              11        11 - 12%        2 - 18                 60,497
Miami:
      Taxi Medallion                                 64      7.25 - 12%          1 - 84              3,202,985
Boston:
      Taxi Medallion                                 22      6.75 -  9%          1 - 36              2,843,964

                                                                                                    38,192,335

Other loans:
      Laundromat                                     22         6 - 14%          1 - 111             4,187,498
      Commercial construction                        4       12.75-13.50%        6 - 11              1,638,701
      Restaurant Food Service                        12         9 - 12%         15 - 81              1,334,532
      Broadcasting/Telecommunications                1           10.50%              180               810,000
      Dry Cleaner                                    18       5.5 - 13%          1 - 72                741,633
      Food Market                                    2              12.50%       34 - 108              645,432
      Real Estate Holding                            2        8.5 - 10.5%          49-56               623,333
      Moving Company                                 1              12%              45                500,000
      Oil Distributor                                1              12%              80                496,571
      Debt Collection                                2          6 - 7%           72 - 84               460,857
      Trucking Company                               1              11%             105                450,000
      Black Car Service (real property)              2             8.5%              13                449,598
      Florist                                        1              7.25%            21                302,962
      Taxicab Advertising                            1              10%              41                285,668
      Auto Sales                                     2          7 - 12%              19                241,578
      Retirement home                                1              14%              73                190,181
      ATM Manufacturer & Distributor                 1              12%              46                149,565
      Taxicab Distributor                            1              6%               24                118,755
      Car Wash / Auto Center                         1        	  9.25%            30                   77,405
      Miscellaneous                                  1              13.00%           12                 53,000
      Nail salon and spa                             1               9%              52                 45,947
      Software Company                               3              8%           20 - 42                41.307
      Computer Services                              1              9.5%             10                 23,396
                                                                                                  -------------
                                                                                                    13,867,919

               Total loans receivable                                                               52,060,254
Less unrealized depreciation on loans receivable                                                      (150,000)
                                                                                                  -------------
               Loans receivable, net                                                              $ 51,910,254
                                                                                                  =============

</TABLE>




Loans made by Elk to finance the purchase or continued ownership of taxi
medallions, taxis and related assets are typically secured by such medallions,
taxis and related assets. Loans made by Ameritrans and Elk to finance the
acquisition and/or operation of retail, service or manufacturing businesses are
typically secured by real estate and other assets. In the case of loans to
corporate owners, the loans are usually personally guaranteed by the
stockholders of the borrower. Elk generally obtains first mortgages, but
occasionally has participated in certain financings where it has obtained a
second mortgage on collateral. Elk has obtained a relatively higher rate of
interest in connection with these subordinated financings. Elk has not, to
date, committed more than 5% of its assets to any one business concern in its
portfolio. The interest rates charged by Elk on its currently outstanding loans
range from 4% to 14% per annum. As of June 30, 2005, the annual weighted
average interest rate on Elk's loans was approximately 9%. The average term
of Elk's currently outstanding loans is approximately 46 months.


                                       11
<PAGE>


VALUATION -- As an SBIC, Elk is required by applicable SBA Regulations to
submit to the SBA semi-annual valuations of its investment portfolio, as
determined by its Board of Directors, which considers numerous factors
including but not limited to the financial strength of its borrowers to
determine "good" or "bad" status, and fluctuations in interest rates to
determine marketability of loans. Reference is made to Footnotes 1, 2 and
3 of Notes to Financial Statements for a discussion of Elk's method of
valuation of its current portfolio of loans. The Company's loans are recorded
at fair value. Since no ready market exists for these 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, the fair value of the loans has been determined to
approximate cost less unrealized depreciation and no loans have been recorded
above cost.

COLLECTION EXPERIENCE -- Elk has not had a material loss of principal in any
taxi medallion loan. From time to time, Elk has experienced losses of principal
on its taxi lending operations. Recently in the last (3) fiscal years, Elk has
experienced losses on its Chicago Taxi medallion loan portfolio.  Elk has also
experienced some losses of principal in its diversified (non-taxi) loan
portfolio. Likewise, its collection experience (timely payments, collections on
foreclosure, etc.) with taxi medallion financings has historically been better
than with its non-taxi loans. From 1991 through 1994, substantially all of
Elk's provisions for loan losses and losses on assets acquired were related to
business loans secured by real estate and to radio car loans. In addition, from
1991 through 1995, Elk had difficulty selling off real estate acquired on
defaulted loans as a result of a depressed real estate market. Since 1995, Elk
has substantially increased its diversified loan portfolio, and its overall
collection experience with these loans has improved, although it has
experienced losses on selected loans.

Following September 11, 2001, the Chicago taxi market has suffered through an
economic slowdown which caused approximately 35% of our Chicago taxi loans to
default and the Company to commence foreclosure actions. When the tragic events
of September 11, 2001 occurred, the Chicago market was in the process of
absorbing 1,000 new medallions that had been sold by the city over the prior
three years between 1998 and the end of the year 2000. As a result of the
increase in supply of medallions and the reduction in demand for service, and
corresponding reduction in revenues by taxi operators, the Company, as well as
other lenders in the Chicago taxi medallion lending market, experienced a much
greater rate of default in their Chicago loan portfolio than they had
previously. It also became more difficult to resell these medallions due to the
fall in their market prices from their high of $68,000 to $70,000 per
medallion.


Market conditions began to improve during the first six months of 2002, during
which the Company sold some of its defaulted medallions directly to buyers and
through an arrangement with the Checker Taxi Association, Inc. By June 30,
2002, the Company had resold 30 Chicago taxi medallions. Another 35 Chicago
taxi medallions were resold by year ended June 30, 2003. During the year ended
June 30, 2004, an additional 87 Chicago taxi medallions were resold and 40 taxi
medallions were acquired by four of Elk's subsidiaries to lease to taxi drivers
and operators of taxi medallions.  During the year ended June 30, 2005, the
Company contracted to sell 20 foreclosed Chicago taxi medallions and completed
closings on 13 foreclosed Chicago taxi medallions.  In addition to the
medallion sales, some taxi owners who had defaulted were able to reinstate
their loans after paying certain fees and executing loan modification and
reinstatement agreements, and, accordingly, began operating their taxis again.

At June 30, 2005 Elk had pending executed contracts with one (1) purchaser to
purchase a total of twenty (20) Chicago medallions being foreclosed and five
(5) being sold by one of Elk's subsidiaries, EAF Enterprises LLC, at a price
of $57,500 per medallion.   As part of the purchase contract, Elk agreed to
finance the purchaser for the entire purchase price plus applicable transfer
taxes for a period of 8 years with a balloon principal payment at the maturity
date. During the first year of the loan, the interest rate is one percent (1%)
per annum.  Thereafter, beginning in the second year the interest rate
increases to 1.5% above the prime rate of interest adjusted each time the
prime rate changes.  Twenty (20) of the medallions being sold were closed on
August 31, 2005, the remaining five (5) medallions under contract are expected
to close in the near future.  The purchaser has also expressed interest in
purchasing five (5) additional Chicago medallions on similar terms and
conditions.

As a result of the Company's efforts to resell most of its defaulted
medallions during the fiscal year, the company increased its reserve on
accrued interest receivable from $30,500 to $59,000.  Although there were 37
remaining
 foreclosures as of June 30, 2005, the fair value of the collateral
remained higher than the amount owed in nearly all cases and thus principal
impairments, if any, will be small.

SOURCES OF FUNDS

Elk is authorized to borrow money and issue debentures, promissory notes and
other obligations, subject to SBA regulatory limitations. Other than the
subordinated debentures issued to the SBA, Elk has to date borrowed funds only
from banks. As of June 30, 2005, Elk maintained three lines of credit totaling
$40,000,000 with an overall lending limit of $40,000,000. At June 30, 2005, Elk
had $29,770,652 outstanding under these lines. The loans, which mature at
various dates between October 31, 2005 and December 31, 2005, bear interest
based on the Company's choice of the lower of either the reserve adjusted LIBOR
rate plus 150 basis points or the banks' prime rate minus 1/2% plus certain
fees as of June 30, 2005. Upon maturity, Elk anticipates extending the lines
of credit for another year as has been the practice in previous years.
Pursuant to the terms of the loan agreements, Elk is required to comply with
certain terms, covenants and conditions, and has pledged its loans receivable
and other assets as collateral for the above lines of credit. Elk is in
compliance with all covenants and credit terms at June 30, 2005.

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 to the Company on or prior to September 30, 2006. In July and December
2002, new debentures payable to the SBA were drawn from the reserved pool of
$12,000,000 in the amount of $2,050,000 and $3,000,000, respectively. The
interim interest rates assigned were 2.351 % and 1.927%, respectively. The
fixed rates of 4.67% and 4.628% were determined on the pooling dates of
September 25, 2002 and March 26, 2003, respectively. On September 15, 2003
and February 17, 2004, two new debentures payable to the SBA were drawn in
the amount of $5,000,000 and $1,950,000, respectively. The interim interest
rates assigned were 1.682% and 1.595%, respectively. The long term fixed rate
of 4.12% was determined on the pooling date of March 24, 2004 for these two
debentures. In addition to the fixed rates, there is an additional annual
SBA user fee on each debenture of 0.87% per annum that will also be charged
making the rates 5.54%, 5.498% and 4.99% before applicable amortization of
points and fees. The draw down in February 2004 was the final draw from the
$12,000,000 commitment.

                                       12
<PAGE>


As interest rates rise, our cost of funds increase while the rates on our
outstanding loans to our borrowers primarily remains fixed, and our
profitability therefore decreases.  In order to partially contain this risk,
from time to time we have purchased interest rate Swaps.  While these limited
our exposure to upward movement in interest rates on our bank loans, they
initially increased the effective interest rates that we pay on loans subject
to these agreements.  However, general rises in interest rates will reduce our
interest rate spread in the short term on the floating portion of our bank debt
that is not hedged by interest rate Swaps. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations -- Results of
Operations -- Interest Expense" and Note 13 of Notes to Consolidated Financial
Statements.

Pursuant to the SBA Agreement, Elk agreed to limit the aggregate of its
indebtedness based on a computation of a borrowing base each quarter. The
borrowing base computation is calculated to determine that the total amount of
debt due on the senior bank debt and SBA debentures does not exceed
approximately 80% of the value of performing loans and investments in Elk's
portfolio and on a temporary basis, until March 1, 2002, up to 85% of
performing taxi medallion loans. Loans that are more than 90 days in arrears
are valued at a lower amount in computing the borrowing base.

In connection with the SBA Agreement, Elk has also entered into an
intercreditor agreement (the "Intercreditor Agreement") and a custodian
agreement (the "Custodian Agreement") with its banks and the SBA. Pursuant to
the Custodian Agreement, the banks and the SBA appointed Israel Discount Bank
of New York as the custodian to hold certain notes, security agreements,
financing statements, assignments of financing statements, and other
instruments and securities as part of the collateral for Elk's indebtedness to
the banks and the SBA. The Intercreditor Agreement sets forth the respective
rights and priorities of the banks and the SBA with respect to the repayment
of indebtedness to the banks and the SBA and as to their respective interests
in the collateral. Pursuant to the Intercreditor Agreement, the banks
consented to the grant by Elk to the SBA of a security interest in the
collateral, which security interest ranks junior in priority to the security
interests of the banks.

On July 29, 2005, Ameritrans commenced a private offering of Common Stock with
warrants to "accredited investors," as that term is defined in Rule 501 of
Regulation D promulgated under the 1933 Act.  The shares of Common Stock are
offered at a price of no less than book value as of the date of the offering.
For every four (4) shares of Common Stock purchased, the Company will issue
to the investor one (1) warrant, exercisable for five (5) years from the date
of issuance, to purchase one (1) share of Common Stock of the Company at an
exercise price no less than the purchase price and no more than 110% of the
purchase price of the Shares.  The Offering period will expire on
October 27, 2005, unless extended in the sole discretion of the Company for
up to an additional ninety (90) days.  The Board of Directors and Management
believe that raising additional capital pursuant to a private offering will
allow the Company to expand its investment portfolio and diversify the
Company's investments beyond the SBA-regulated loans and investments of Elk.
This diversification will provide the Company with the flexibility to
participate in a wide range of investment opportunities.

SBIC BENEFITS

GENERAL. As an SBIC, Elk is eligible to receive certain financing from the SBA
on favorable terms, and Elk and its stockholder are entitled to certain tax
benefits, both described below. The SBA has a certain amount of discretion in
determining the type and amount of financing that will be made available to an
SBIC. Therefore, there can be no assurance as to the nature and amount of SBA
financing that may actually be obtained by Elk. Furthermore, there are certain
restrictions and requirements to which Elk is subject by virtue of it being an
SBIC.

                                       13
<PAGE>

BACKGROUND. SBICs were created under the 1958 Act as vehicles for providing
equity capital, long-term loan funds and management assistance to small
businesses. In general, the SBA considers a business to be "small," and
therefore eligible to receive loans from an SBIC, only if (i) its net worth does
not exceed $18,000,000 and if the average of its net annual income after taxes
for the preceding two years was not more than $6,000,000 or (ii) it meets the
size standard for the industry in which it is primarily engaged, pursuant to SBA
Regulations. In addition, an SBIC is required to allocate a portion of its
portfolio to the financing of concerns that (i) together with their affiliates
do not have net worth in excess of $6 million and do not have an average net
income after taxes for the preceding two years in excess of $2 million or (ii)
meet the size standard for the industry in which they are primarily engaged.
SBICs are licensed, regulated, and sometimes partially financed, by the SBA.

BENEFITS. The principal benefits to Elk of being licensed as an SBIC are as
follows:

The SBA is authorized to guaranty full repayment of all principal and interest
on debentures issued by an SBIC to the extent of 300% of the SBIC's
"Leverageable Capital," as defined in the applicable SBA Regulations. However,
the percentage of allowable leverage decreases if the SBIC's Leverageable
Capital exceeds $15,000,000. The term of such debentures is typically 10 years.
The SBA will guarantee such debentures only after such an SBIC has demonstrated
a need for such debentures as evidenced by the SBIC's investment activity and
its lack of sufficient funds available for investments; provided, however, that
an SBIC that has invested at least 50% of its Leverageable Capital and
outstanding leverage shall be presumed to lack sufficient funds available for
investment. Generally, such debentures will bear interest at a fixed rate that
is based on the rate which is set by the underwriters of the pooled debentures
sold through SBIC Funding Corp.

With respect to debentures guaranteed after July 1, 1991, the SBA's claim
against an SBIC is subordinated, in the event of such SBIC's insolvency, only
in favor of present and future indebtedness outstanding to lenders and only
to the extent that the aggregate amount of such indebtedness does not exceed
the lesser of 200% of such SBIC's paid-in capital and paid-in surplus (as
adjusted pursuant to SBA Regulations), or $10,000,000. However, the SBA may
agree to a subordination in favor of one or more loans from certain lenders,
in its sole discretion. Pursuant to the SBA Agreement and the Intercreditor
Agreement, the SBA agreed to a subordination in favor of Elk's banks;
provided, however, that Elk is required to keep its overall debt to certain
levels based upon the performance of its portfolio.


COMPETITION

Banks, credit unions, other finance companies, some of which are SBICs, and
other private lenders compete with Elk in the origination of taxi medallion
loans and commercial installment loans. Finance subsidiaries of equipment
manufacturers also compete with Elk. Many of these competitors have greater
resources than Elk and certain competitors are subject to less restrictive
regulations than Elk. As a result, Elk expects to continue to encounter
substantial competition from such lenders. Therefore, there can be no assurance
that Elk will be able to identify and complete financing transactions that will
permit it to compete successfully.

EMPLOYEES

As of June 30, 2005, we employed a total of ten (10) employees and one part
time administrative clerk.

                                    14

<page>

SBA Matter

On August 29, 2005, the Company received a letter from the US Small Business
Administration together with a copy of the Examination Report for the period
ending March 31, 2004.  The letter and Examination Report contained findings
that Elk had potentially violated certain provisions of the SBA regulations,
relating to (1) the sale of certain foreclosed Chicago medallions to an
associate of Elk without obtaining the SBA's final written approval, and (2)
the creation of subsidiary companies and completion of certain related
financings to those subsidiary companies without obtaining the SBA's prior
written approval.  The letter contained certain other comments with
respect to partial use of proceeds concerning one loan that the company made
to a third party borrower, and the prepayment provision contained in loan
documents to a different borrower.  Management has already responded to SBA
in writing concerning the findings, and Management recently met with the
SBA in an effort to resolve these findings in a timely manner.

The Company believes that it was acting in good faith when it effectuated the
transactions with respect to the sale of the foreclosed Chicago medallions to
an associate, as it had applied for prior permission from SBA prior to
completion of the loan in questions, had obtained an indication of approval and
SBA was in the process of taking the steps to obtain formal written approval
for the transaction.  The Company believes that it was also acting in good
faith when it created the subsidiary companies (deemed "associates" under
SBA regulations) to purchase the foreclosed medallions, as it was having
ongoing discussions with the SBA at the time to obtain the SBA's approval of
the transaction and had received verbal indications that it felt it had or
would, in due course, subsequently obtain SBA's written approval to the
transactions. The Company believes that it has adequate explanations for
the use of proceeds issue the third party loan and the prepayment issue.

The Company believes that the tone of the meeting with SBA to reach resolution
the of issues on these matters was positive and the Company anticipates a
speedy resolution by the SBA.  Neither the Company nor its counsel, however
can predict when these matters will be resolved, or the manner in which they
will be resolved.  The COmpany believes that the resolution of these matters
with the BSA will not have any material adverse financial or regulatory
consequences to the Company.

INVESTMENT POLICIES

ELK INVESTMENT POLICIES

The investment policies described below are the fundamental policies of Elk.
Under the 1940 Act, these policies may be changed only by the vote of the lesser
of (i) a majority of Elk's outstanding Common Stock, or (ii) 67% of the number
of shares of Common Stock present in person or by proxy at a stockholder meeting
at which at least 50% of the outstanding shares of Common Stock are present.
Because Ameritrans is the only stockholder of Elk, we have agreed with the SEC
that Elk's fundamental investment policies will be changed only by the vote of
the Ameritrans stockholders.

(a) ISSUANCE OF SENIOR SECURITIES. Elk may issue subordinated debentures to the
SBA in the maximum amounts permissible under the 1958 Act and the applicable
regulations. Elk has no preferred stock authorized.

(b) BORROWING OF MONEY. Elk has the power to borrow funds from banks, trust
companies, other financial institutions, the SBA or any successor agency and/or
other private or governmental sources, if determined by Elk's Board of Directors
to be in its best interests.
                                        15

<page>

(c) UNDERWRITING. Elk has not engaged, and does not intend to engage, in the
business of underwriting the securities of other issuers.

(d) CONCENTRATION OF INVESTMENTS. Elk may not concentrate 25% or more of its
total assets in securities of issuers in any industry group except the taxi
industry. Elk will make at least 25% of its investments for financing the
purchase or continued ownership of taxi medallions, taxis and related assets.
The balance of its investments includes, and Elk intends to continue to finance,
the acquisition and/or operation of other small businesses.



(e) REAL ESTATE. Elk has not engaged, and does not intend to engage, in the
purchase and sale of real estate. However, Elk may elect to purchase and sell
real estate in order to protect any of its prior investments which it considers
at risk.

(f) COMMODITIES CONTRACTS. Elk has not engaged, and does not intend to engage,
in the purchase and sale of commodities or commodities contracts.

(g) LOANS. Elk has made, and will continue to make, loans to Small Business
Concerns in accordance with the provisions of the 1958 Act and the SBA
Regulations.
(h) WRITING OPTIONS. Elk has not engaged, and does not intend to engage, in the
writing of options.

(i) SHORT SALES. Elk has not engaged, and does not intend to engage, in short
sales of securities.

(j) PURCHASING SECURITIES ON MARGIN. Elk has not engaged, and does not intend to
engage, in the purchase of securities on margin.

(k) FUTURES CONTRACTS. Elk has not engaged, and does not intend to engage, in
the purchase or sale of futures contracts.

(l) RESTRICTED SECURITIES. Elk may invest up to 100% of its assets in restricted
securities.

(m) TYPES OF INVESTMENTS. Although Elk was organized primarily to provide long
term loan funds to Small Business Concerns, Elk's certificate of incorporation
provides Elk with the authority to invest in the equity capital of Small
Business Concerns. Accordingly, Elk may make equity investments in Small
Business Concerns if determined by its Board of Directors to be in the best
interests of Elk.

(n) MAXIMUM INVESTMENT. Elk will not lend or otherwise invest more than the
lesser of (i) 10% of its total assets or (ii) 30% of its paid-in capital
attributable to its Common Stock with respect to any one Small Business Concern.

(o) PERCENTAGE OF VOTING SECURITIES. The percentage of voting securities of any
one Small Business Concern which Elk may acquire may not exceed 49% of the
outstanding voting equities of such Small Business Concern.

(p) MANAGEMENT CONTROL. Elk does not intend to invest in any company for the
purpose of exercising control of management. However, Elk may elect to acquire
control in order to protect any of its prior investments which it considers at
risk.


                                       16
<PAGE>

(q) INVESTMENT COMPANIES. Elk has not invested, and does not intend to invest,
in the securities of other investment companies.

(r) PORTFOLIO TURNOVER. Elk intends to make changes in its portfolio when, in
the judgment of its Board of Directors, such changes will be in the best
interest of our stockholders in light of the then existing business and
financial conditions. We do not anticipate that Elk's loan portfolio will
realize an annual turnover in excess of 50%, although there can be no assurance
with respect thereto.

AMERITRANS INVESTMENT POLICIES

Ameritrans' only fundamental policies, that is, policies that cannot be changed
without the approval of the holders of a majority of Ameritrans' outstanding
voting securities, as defined under the 1940 Act, are the restrictions described
below. A "majority of Ameritrans' outstanding voting securities" as defined
under the 1940 Act means the lesser of (i) 67% of the shares represented at a
meeting at which more than 50% of the outstanding shares are represented or (ii)
more than 50% of the outstanding shares. The other policies and investment
restrictions referred to in this Annual Report, including Ameritrans' investment
objectives, are not fundamental policies of Ameritrans and may be changed by the
Board of Directors of Ameritrans without stockholder approval. Unless otherwise
noted, whenever an investment policy or limitation states a maximum percentage
of Ameritrans' assets that may be invested in any security or other asset, or
sets forth a policy regarding quality standards, such standard or percentage
limitation will be determined immediately after and as a result of Ameritrans'
acquisition of such security or other asset. Accordingly, any subsequent change
in values, assets, or other circumstances will not be considered when
determining whether the investment complies with Ameritrans' investment policies
and limitations. Ameritrans' fundamental policies are as follows:

(a) Ameritrans will at all times conduct its business so as to retain its status
as a BDC under the 1940 Act. In order to retain that status, Ameritrans may not
acquire any assets (other than non-investment assets necessary and appropriate
to its operations as a BDC) if, after giving effect to such acquisition, the
value of its "Qualifying Assets," amount to less than 70% of the value of its
total assets. Ameritrans believes that the temporary investments it makes with
its funds will generally be Qualifying Assets. See "Regulations."

(b) Ameritrans may borrow funds and issue "senior securities" to the maximum
extent permitted under the 1940 Act. As a BDC, Ameritrans may issue senior
securities if, immediately after such issuance, the senior securities will have
an asset coverage of at least 200%. Under the 1940 Act, subordinated debentures
issued to or guaranteed by the SBA, the preferred stock issued to the SBA by Elk
and Elk's bank borrowings may be considered senior securities issued by
Ameritrans requiring asset coverage of 200%; however, pursuant to an Exemptive
Order issued by the SEC on December 7, 1999, such debentures, preferred stock
and bank borrowings are exempt from the asset coverage requirements of the 1940
Act.

(c) Ameritrans will not (i) underwrite securities issued by others (except to
the extent that it may be considered an "underwriter" within the meaning of the
Securities Act in the disposition of restricted securities), (ii) engage in
short sales of securities, (iii) purchase securities on margin (except to the
extent that it may purchase securities with borrowed money), (iv) write or buy
put or call options, or (v) engage in the purchase or sale of commodities or
commodity contracts, including futures contracts (except where necessary in
working out distressed loan or investment situations). Ameritrans and Elk may
purchase Swaps covering up to 100% of their variable rate debt. In addition,
Ameritrans may sponsor the securitization of loan portfolios.



(d) Ameritrans and Elk may originate loans and loans with equity features. To
the extent permitted under the 1940 Act and the regulations promulgated
thereunder, Ameritrans may also make loans as permitted (i) under its existing
stock option plans, (ii) under plans providing for options for disinterested
directors that might be adopted by Ameritrans in the future, and (iii) to
officers and directors for the purchase of Ameritrans Common Stock.

(e) Ameritrans holds all of the outstanding common stock of Elk and Elk Capital
and may organize additional subsidiaries in the future. Ameritrans may acquire
restricted securities of small businesses.However, see "SBA Audit" under Note
19 to the consolidated financial statements.



                                       17
<PAGE>


                        FEDERAL INCOME TAX CONSIDERATIONS

The following discussion is a general summary of the federal income tax
principles applicable to Ameritrans, based on the currently existing provisions
of the Internal Revenue Code and the regulations thereunder. This summary does
not purport to be a complete description of the tax considerations applicable to
Ameritrans or to the holders of its Common Stock. These principles, in general,
also apply to Elk, because the sole direct stockholder of Elk is Ameritrans.

Ameritrans has elected to be treated as a "regulated investment company" (a
"RIC") under Section 851 of the Internal Revenue Code, Elk has been treated as a
RIC since 1984. A regulated investment company may deduct, for federal income
tax purposes, most dividends paid to stockholders, thereby avoiding federal
income taxation at the corporate level on stockholder dividends. In addition,
because Elk currently qualifies for treatment as a RIC, Ameritrans anticipates
that the dividends it receives from Elk will not be subject to corporate
taxation at the level of Elk.

TAXATION OF REGULATED INVESTMENT COMPANIES

In order to qualify as a RIC for a given fiscal year, a company must meet each
of the following conditions for that fiscal year:

a) The company must be registered as an investment company under the 1940 Act at
all times during the year.

b) At least 90% of the company's gross income for the year must be derived from
interest, gains on the sale or other disposition of stock or other securities,
dividends and payment with respect to securities loans.

c) Less than 30% of the company's gross income must be derived from the sale or
other disposition of securities held for less than three months.

d) At the close of each quarter, at least 50% of the value of the company's
total assets must be represented by cash, cash items (including receivables),
securities of other RICs and securities of other issuers, except that the
investment in a single issuer of securities may not exceed 5% of the value of
the RIC's assets, or 10% of the outstanding voting securities of the issuer.

e) At the close of each quarter, and with the exception of government securities
or securities of other RICs, no more than 25% of the value of a RIC's assets may
be made up of investments in the securities of a single issuer or in the
securities of two or more issuers controlled by the RIC and engaged in the same
or a related trade or business. However, if a non-RIC entity controlled by the
RIC subsequently sustains internally generated growth (as opposed to growth via
acquisitions), the diversification requirement will not be violated even if the
non-RIC subsidiary represents in excess of 25% of the RIC's assets.

f) The company must distribute as dividends at least 90% of its investment
company taxable income (as defined in Section 852 of the Internal Revenue Code),
as well as 90% of the excess of its tax-exempt income over certain disallowed
tax-exempt interest deductions. This treatment substantially eliminates the
"double taxation" (i.e., taxation at both the corporate and stockholder levels)
that generally results from the use of corporate investment vehicles. A RIC is,
however, generally subject to federal income tax at regular corporate rates on
undistributed investment company taxable income.



<page>

In order to avoid the imposition of a non-deductible 4% excise tax on its
undistributed income, a company is required, under Section 4982 of the Internal
Revenue Code, to distribute within each calendar year at least 98% of its
ordinary income for such calendar year and 98% of its capital gain net income
(reduced by the RIC's net ordinary loss for the calendar year, but not below its
net capital gain) for the one-year period ending on October 31 of such calendar
year.

The tax benefits available to a qualified RIC are prospective, commencing with
the fiscal year in which all the conditions listed above are met, and would not
permit Ameritrans to avoid income tax at the corporate level on income earned
during prior taxable years. If Ameritrans fails to qualify as a RIC for a given
fiscal year, Ameritrans will not be entitled to a federal income tax deduction
for dividends distributed, and amounts distributed as stockholder dividends by
Ameritrans will therefore be subject to federal income tax at both the corporate
level and the individual level.

Dividends distributed by Elk to Ameritrans will constitute ordinary income to
Ameritrans to the extent derived from non-capital gain income of Elk, and will
ordinarily constitute capital gain income to Ameritrans to the extent derived
from capital gains of Elk. However, since Ameritrans is also a RIC, Ameritrans
will, in general, not be subject to a corporate level tax on its income to the
extent that it makes distributions to its stockholders. If Elk does not qualify
as a RIC for any reason in any fiscal year, it will not be entitled to a federal
income tax deduction for dividends distributed, and will instead be liable to
pay corporate level tax on its earnings. Further, if Elk does not qualify as a
RIC, such failure will cause Ameritrans to fail to qualify for RIC status as
well, as long as Elk stock held by Ameritrans represents more than 25% of
Ameritrans' assets. In such a case, Ameritrans will be taxed on dividends
received from Elk, subject to the deduction for corporate dividends received,
which is currently 70%. Thus, if Elk fails to qualify as a RIC for any reason,
its earnings would be taxed at three levels: to Elk, in part to Ameritrans, and
finally, when they are distributed by Ameritrans, to our stockholders.

As long as Ameritrans qualifies as a RIC, dividends distributed by Ameritrans to
its stockholders out of current or accumulated earnings and profits constitute
ordinary income to such stockholders to the extent derived from ordinary income
and short-term capital gains of Ameritrans (such as interest from loans by
Ameritrans). Any long-term capital gain dividends distributed by Ameritrans
would constitute capital gain income to Ameritrans stockholders. To the extent
Ameritrans makes distributions in excess of current and accumulated earnings and
profits, these distributions are treated first as a tax-free return of capital
to the stockholder, reducing the tax basis of the stockholder's stock by the
amount of such distribution, but not below zero, with distributions in excess of
the stockholder's basis taxable as capital gains if the stock is held as a
capital asset.

TAXATION OF SBICS

As a result of Elk's status as a licensed SBIC under the 1958 Act, Elk and its
stockholders qualify for the following tax benefits:

(i) Under Section 243 of the Internal Revenue Code, Elk may deduct 100% of the
dividends received by it from domestic corporations in which it has made equity
investments, regardless of whether such corporations are subsidiaries of Elk (in
contrast to the generally applicable 70% deduction under the Code). Because Elk
generally makes long-term loans rather than equity investments, this potential
benefit is not likely to be of practical significance to Elk or its stockholder.

(ii) Under Section 1243 of the Internal Revenue Code, losses sustained on Elk's
investments in the convertible debentures, or stock derived from convertible
debentures, of Small Business Concerns are treated as ordinary losses rather
than capital losses to Elk. Because Elk does not presently intend to purchase
convertible debentures, however, this potential benefit is not likely to be of
practical significance to Elk or its stockholder.

                                       18
<page>

STATE AND OTHER TAXES

Ameritrans is also subject to state and local taxation. The state, local and
foreign tax treatment may not conform to the federal tax treatment discussed
above. Stockholders should consult with their own tax advisors with respect to
the state and local tax considerations pertaining to Ameritrans.

THE INVESTMENT COMPANY ACT OF 1940

Ameritrans and Elk are closed-end, non-diversified management investment
companies that have elected to be treated as BDCs and, as such, are subject to
regulation under the 1940 Act. The 1940 Act contains prohibitions and
restrictions relating to transactions between investment companies and their
affiliates, principal underwriters and affiliates of those affiliates or
underwriters. In addition, the 1940 Act provides that a BDC may not change the
nature of its business so as to cease to be, or to withdraw its election as, a
BDC unless so authorized by the vote of a "majority of its outstanding voting
securities," as defined under the 1940 Act.

BDCs are permitted, under specified conditions, to issue multiple classes of
indebtedness and one class of stock (collectively, "senior securities," as
defined under the 1940 Act) senior to the shares of Common Stock offered hereby
if their asset coverage of such indebtedness and all senior securities is at
least 200% immediately after each such issuance. Subordinated SBA debentures,
preferred stock guaranteed by or issued to the SBA by Elk, and Elk bank
borrowings are not subject to this asset coverage test. In addition, while
senior securities are outstanding, provision must be made to prohibit the
declaration of any dividend or other distribution to stockholders (except stock
dividends) or the repurchase of such securities or shares unless we meet the
applicable asset coverage ratios at the time of the declaration of the dividend
or distribution or repurchase. The Exemptive Order issued by the SEC grants
certain relief from the asset coverage ratios applicable to BDCs.

Under the 1940 Act, a BDC may not acquire any asset other than Qualifying Assets
unless, at the time the acquisition is made, certain Qualifying Assets represent
at least 70% of the value of the company's total assets. The principal
categories of Qualifying Assets relevant to our proposed business are the
following:

(1) Securities purchased in transactions not involving a public offering from
the issuer of such securities, which issuer is an eligible portfolio company. An
"eligible portfolio company" is defined in the 1940 Act as any issuer which:

(a) is organized under the laws of, and has its principal place of business in,
the United States;

(b) is not an investment company other than an SBIC wholly-owned by the BDC; and

(c) satisfies one or more of the following requirements:



                                      19
<PAGE>

(i) the issuer does not have a class of securities with respect to which a
broker or dealer may extend margin credit; or

(ii) the issuer is controlled by a BDC and the BDC has an affiliated person
serving as a director of issuer;

(iii) the issuer has total assets of not more than $4,000,000 and capital and
surplus (stockholders' equity less retained earnings) of not less than
$2,000,000, or such other amounts as the SEC may establish by rule or
regulation; or

(iv) the issuer meets such requirements as the SEC may establish from time to
time by rule or regulation.

(2) Securities for which there is no public market and which are purchased in
transactions not involving a public offering from the issuer of such securities
where the issuer is an eligible portfolio company which is controlled by the
BDC.

(3) Securities received in exchange for or distributed on or with respect to
securities described in (1) or (2) above, or pursuant to the exercise of
options, warrants or rights relating to such securities.

(4) Cash, cash items, government securities, or high quality debt securities
maturing in one year or less from the time of investment.

In addition, a BDC must have been organized (and have its principal place of
business) in the United States for the purpose of making investments in the
types of securities described in (1) or (2) above. In order to count securities
as Qualifying Assets for the purpose of the 70% test, the BDC must either
control the issuer of the securities or must make available to the issuer of the
securities significant managerial assistance; except that, where the BDC
purchases such securities in conjunction with one or more other persons acting
together, one of the other persons in the group may make available the required
managerial assistance. We believe that the common stock of Elk held by
Ameritrans are Qualifying Assets.

THE SMALL BUSINESS INVESTMENT ACT OF 1958

Elk was formerly an SSBIC and, as explained in further detail below, was
converted to an SBIC in February 1997 in accordance with an agreement with the
SBA. The 1958 Act authorizes the organization of SBICs as vehicles for providing
equity capital, long term financing and management assistance to Small Business
Concerns. A Small Business Concern, as defined in the 1958 Act and the SBA
Regulations, is a business that is independently owned and operated and which is
not dominant in its field of operation. In addition, at the end of each fiscal
year, at least 20% of the total amount of loans made since April 25, 1994 by
each SBIC must be made to a subclass of Small Business Concerns that (i) have a
net worth, together with any affiliates, of $6 million or less and average
annual net income after U.S. federal income taxes for the preceding two (2)
years of $2 million or less (average annual net income is computed without the
benefit of any carryover loss), or (ii) satisfy alternative criteria under SBA
Regulations that focus on the industry in which the business is engaged and the
number of persons employed by the business or its gross revenues. SBA
Regulations also prohibit an SBIC from providing funds to a Small Business
Concern for certain purposes, such as relending and reinvestment.

The 1958 Act authorized the organization of SSBICs to provide assistance to
Disadvantaged Concerns, i.e., businesses that are at least 50% owned and managed
by persons whose participation in the free enterprise system is hampered because
of social or economic disadvantages. Certain 1996 amendment to the 1958 Act
provided, among other things, that no further subsidized funding would be made
available to SSBICs. Thereafter, pursuant to an agreement with the SBA, Elk was
converted to an SBIC, subject to certain conditions imposed by the SBA. Under
this agreement, Elk may now lend to persons who are not Disadvantaged Concerns.

                                      20
<page>

Under current SBA Regulations and subject to local usury laws, the maximum rate
of interest that Elk may charge may not exceed the higher of (i) 19% or (ii) a
rate calculated with reference to Elk's weighted average cost of qualified
borrowings, as determined under SBA Regulations or the SBA's current debenture
interest rate. The current maximum rate of interest permitted on loans
originated by Elk is 19%. At June 30, 2005, Elk's outstanding loans had a
weighted average rate of interest of 9%.  SBA Regulations also require that each
loan originated by SBICs have a term of between one year and twenty years.

The SBA restricts the ability of SBICs to repurchase their capital stock, to
retire their subordinated SBA debentures and to lend money to their officers,
directors and employees or invest in affiliates thereof. The SBA also prohibits,
without prior SBA approval, a "change of control" or transfers which would
result in any person (or group of persons acting in concert) owning 10% or more
of any class of capital stock of an SBIC. A "change of control" is any event
which would result in the transfer of the power, direct or indirect, to direct
the management and policies of an SBIC, whether through ownership, contractual
arrangements or otherwise.

Under SBA Regulations, without prior SBA approval, loans by licensees with
outstanding SBA leverage to any single Small Business Concern may not exceed 20%
of an SBIC's Leveragable Capital. Under the terms of the SBA Agreement, however,
Elk is authorized to make loans to Disadvantaged Concerns in amounts not
exceeding 30% of its respective Leveragable Capital.

SBICs must invest funds that are not being used to make loans in investments
permitted under SBA Regulations. These permitted investments include direct
obligations of, or obligations guaranteed as to principal and interest by, the
government of the United States with a term of 15 months or less and deposits
maturing in one year or less issued by an institution insured by the FDIC. The
percentage of an SBIC's assets so invested will depend on, among other things,
loan demand, timing of equity infusions and SBA funding and availability of
funds under credit facilities.


SBICs may purchase voting securities of Small Business Concerns in accordance
with SBA Regulations. SBA Regulations prohibit SBICs from controlling a Small
Business Concern except where necessary to protect an investment. SBA
Regulations presume control when SBICs purchase (i) 50% or more of the voting
securities of a Small Business Concern if the Small Business Concern has less
than 50 stockholders or (ii) more than 20% (and in certain situations up to 25%)
of the voting securities of a Small Business Concern if the Small Business
Concern has 50 or more stockholders.

ITEM 2. PROPERTIES

We rent office space from a law firm, the principals of which are officers and
directors of Ameritrans, and we share certain office expenses with that firm.
The law firm, at our request, rented an additional 1,800 square feet of office
space contiguous with our offices (the "Additional Space"). Until we require the
Additional Space, the law firm sublets the Additional Space to outside tenants.
In the event all or a portion of the Additional Space is vacant, Elk has agreed
to reimburse the law firm for any additional rent due. During the year ended
June 30, 2004, Elk paid the law firm approximately $2,200 on account of this
agreement. In August, 2001 the Company's Board of Directors approved the
execution of a formal sublease with the law firm on financial terms and
conditions consistent with the prior arrangement for the period July 1, 2001
through April 30, 2004. In November 2003, the Board of Directors approved a new
sublease with the law firm to take effect upon the expiration of the prior
sublease, May 1, 2004, and to continue through April 20, 2014 and accounts for
certain retroactive adjustments per the agreement. The Company is presently
utilizing 37% of the landlord's space and therefore committed to the minimum 37%
utilization factor on all rent, additional rent and electricity charges billed
to landlord, and subject to annual increases as per the master lease agreement
between the landlord and the law firm. In the event that more space is utilized,
the percentage of the total rent shall be increased accordingly. In addition,
the Company is also obligated to pay for its share of overhead expenses as noted
in the agreement, currently a minimum of $3,000 a month, and to reimburse the
law firm for certain office costs.

                                           21
<page>

Effective July 1, 2003, the Company entered into a new ten-year sublease for
additional office and storage space with an entity in which an officer and
shareholder of the Company has an interest. The new sublease calls for rental
payments ranging from $38,500 to $54,776 per annum from the first year ending
June 30, 2004 through the year ending June 30, 2013. The sublease contains a
provision that either party may terminate the lease in years seven through ten
with six months' notice.

ITEM 3. LEGAL PROCEEDINGS

The Company is not currently a party to any material legal proceeding. From time
to time, the Company is engaged in various legal proceedings incident to the
ordinary course of its business. In the opinion of the Company's management and
based upon the advice of legal counsel, there is no proceeding pending, or to
the knowledge of management threatened, which in the event of an adverse
decision would result in a material adverse effect on the Company's results of
operations or financial condition.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

On June 27, 2005, the Company filed a definitive proxy statement soliciting
proxies for and inviting all Shareholders of Ameritrans to a Special Meeting of
Shareholders (the "Meeting") held on July 21, 2005.  The purpose of the Meeting
was (i) to consider the approval of a private offering of shares of the
Company's Common Stock, at a fixed purchase price of no less than book value
to a limited number of "accredited investors," as that term is
defined in Rule 506 of Regulation D, promulgated under the 1933 Act (the
"Offering").  For every four (4) shares of Common Stock purchased, the Company
will issue to the investor one (1) warrant, exercisable for five (5) years from
the date of issuance, to purchase one (1) share of Common Stock at an
exercise price to be fixed at a specified dollar amount that is no less than the
Purchase Price and no more than 110% of the Purchase Price; and (ii) to consider
and act upon other matters as may properly come before the meeting or any
adjournment thereof.

At the Meeting on July 21, 2005, represented in person and by proxy were
1,479,698 shares of the Company's Common Stock and the Participating Preferred
Stock, voting together, representing 63% of the outstanding voting securities of
the Company.  Being that a quorum was present, the meeting duly commenced and
the Offering was approved by the Shareholders.  A total of 1,413,658 of votes
were cast for approval of the Offering, and 65,914 votes were cast against
approval of the Offering.  Additionally, 126 abstentions were recorded.  No
other business was brought before the meeting.

                                   22
<page>

                                     PART II


ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS

The Elk Common Stock was listed on the Nasdaq Capital Market on June 22, 1998,
under the symbol EKFG, prior to which it had traded in the "pink sheets." Since
December 16, 1999, when Ameritrans acquired Elk, its Common Stock has been
listed on the Nasdaq Market under the symbol AMTC.

The following table shows the high and low sale prices per share of Common Stock
as reported by Nasdaq, for each quarter in the fiscal years ended June 30, 2004
and June 30, 2005.  No dividends were declared on our common stock.

AMERITRANS                                    HIGH                  LOW
FISCAL 2004
1st Quarter                                   5.06                 4.16
2nd Quarter                                   4.90                 4.02
3rd Quarter                                   4.69                 3.95
4th Quarter                                   5.70                 4.01
FISCAL 2005
1st Quarter                                   5.25                 4.06
2nd Quarter                                   5.90                 4.36
3rd Quarter                                   7.00                 4.26
4th Quarter                                   8.50                 4.53
FISCAL 2006                                   6.67                 4.36
1st Quarter (through September 19, 2005)


<page>



The following table details information regarding the Company's existing equity
compensation plans as of June 30,2005:

Plan Category                  (a)              (b)                 (c)

Equity compensation           80,757(1)        $5.05           194,243(1)
plans approved by
security holders

Equity compensation
plans not approved by          --                --             --
security holders

TOTALS                         80,757(1)          $5.05          194,243(1)



(1) Includes options to purchase up to 33,800 shares of common stock granted to
employees under the 1999 Employee Plan and optiosn to purchase up to 46,957
shares granted under the Non-Employee Director Plan,  See "Stock Option Plans"

(2) All of our compensation plans have been approved by our shareholders.



Elk registered under the 1940 Act for the fiscal year commencing July 1, 1983,
and declared and paid dividends to holders of the Common Stock for the fiscal
years ended June 30, 1984 through June 30, 1992. Elk did not pay dividends
during the fiscal years ended June 30, 1993, 1994 and 1995. Elk recommenced
paying dividends for the fiscal year beginning July 1, 1995, and paid dividends
quarterly since that time and up until its share exchange with Ameritrans.
Thereafter, Ameritrans has declared and paid dividends to holders of its Common
Stock for each quarter except for the fourth quarter of 2000, the first quarter
of 2001, the third and fourth quarters of 2003, fiscal year 2004, and fiscal
year 2005.

On April 18, 2002, the Company's registration statement filed on Form N-2 was
declared effective by the Securities and Exchange Commission. The offering
closed on April 24, 2002 on the total sale of 300,000 units. Each unit was
comprised of one share of Common Stock, one share of 9 3/8% cumulative
participating preferred stock (face value $12.00) (the "Participating Preferred
Stock"), and one warrant exercisable for five years into one share of Common
Stock at an exercise price of $6.70 per share (the "Warrants"). The units were
split in May, 2002. The Participating Preferred Stock and the Warrants trade on
the NASDAQ Market under the symbols, respectively, "AMTCP" and "AMTCW".
The gross proceeds from the sale of the units was $5,750,000 less costs and
commissions of $1,704,399, resulting in net proceeds of $3,995,601. The
underwriter of the offering was granted an option to purchase up to 30,000
units, each unit consisting of one share of Common Stock, one share of
Participating Preferred Stock and one warrant exercisable at $8.40 per share.
The option to purchase the 30,000 units is exercisable for five (5) years
commencing one (1) year after the date of the offering at an exercise price of
$21.45 per unit.

The Company has declared and paid the quarterly dividend on the Participating
Preferred Stock since the Participating Preferred Stock was issued.  Most
recently, the Company's Board of Directors declared a dividend of $0.28125 per
share on September 20, 2005 on the Participating Preferred Stock for the period
April 1, 2005 through June 30, 2005 payable on October 17, 2005 for all holders
of the Participating Preferred Stock of record as of September 30, 2005.

As of September 19, 2005, there were 174 holders of record of the
Ameritrans Common Stock, and 4 holders of record of the Participating Preferred
Stock and 3 holders of record Warrants, which is exclusive of securities held
in street name.

<page>

ITEM 6. SELECTED FINANCIAL DATA



                                       29
<PAGE>

The tables below contains certain summary historical financial information of
Ameritrans. You should read these tables in conjunction with the consolidated
financial statements of Ameritrans (the "Financial Statements") included
elsewhere in this Annual Report and "Management's Discussion and Analysis of
Financial Condition and Results of Operations."

<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS DATA                      FISCAL YEAR ENDED JUNE 30,
                                               2005          2004           2003          2002           2001
                                               ----          ----           ----          ----           -----

<S>                                          <C>           <C>            <C>           <C>            <C>
Investment income                            $ 6,132,066   $ 5,639,492    $ 6,285,055   $ 6,269,719    $ 6,439,792
                                          =========================================================================
Interest expense                               1,837,633     1,443,416      2,076,861     2,632,918      3,392,202

Other expenses                                 4,169,867     4,517,124      3,805,083     2,591,751      2,188,636
                                          -------------------------------------------------------------------------
Total expenses                                 6,007,500     5,960,540      5,881,944     5,224,669      5,580,838
                                          =========================================================================
Operating (loss) income                          124,566     (321,048)       403,111     1,045,050        858,954
                                          =========================================================================
Other (expense) income                            (4,081)     (29,634)         -             2,700       (276,549)
Provision for income taxes (1)                    (7,711)     (16,501)        (7,897)       (8,854)        (7,896)
                                          -------------------------------------------------------------------------
Net (loss) income                             $  112,774    $ (367,183)    $  395,214     $1,038,896      $ 574,509
                                          =========================================================================
Dividends on preferred stock                  $ (337,500)   $ (337,500)    $ (337,500)    $ (68,438)     $ -
                                          -------------------------------------------------------------------------
Net (loss) income available to
     common shareholders                      $ (224,726)   $ (704,683)      $ 57,714     $ 970,458     $  574,509
                                          =========================================================================
Net (loss) income per common share            $    (0.11)       $ (0.35)      $ 0.03        $ 0.54         $ 0.33
                                          =========================================================================
Common stock dividends paid                   $        -    $  -            $ 552,312     $ 994,991     $  528,045
                                          =========================================================================
Common stock dividends paid per
     common share                             $        -    $   -            $   0.27      $    0.57         $ 0.30
                                          =========================================================================
Weighted average number of shares of
     common stock outstanding                  2,035,600     2,035,600      2,035,600     1,800,614      1,745,600
                                          =========================================================================
Net change to accumulated other
    comprehensive income                     $   146,608   $  (19,003)     $ (200,338)   $  (43,612)    $ (123,364)
                                          =========================================================================
BALANCE SHEET DATA                                                        AT JUNE 30,
                                               2005          2004           2003          2002           2001
                                               ----          ----           ----          ----           -----
Loans receivable                            $ 52,060,254  $ 49,900,989   $ 55,306,678  $ 55,029,831   $ 54,559,970
Unrealized depreciation of loans receivable     (150,000)     (509,770)      (303,170)     (303,170)      (318,500)
                                          -------------------------------------------------------------------------
Loans receivable, net                       $ 51,910,254  $ 49,391,219   $ 55,003,508  $ 54,726,661   $ 54,241,470
                                          =========================================================================
Total assets                                $ 57,886,595  $ 57,091,906   $ 60,027,231  $ 58,943,546   $ 57,984,869
                                          =========================================================================
Notes payable and demand notes              $ 29,770,652  $ 28,908,652   $ 34,130,000  $ 33,720,000   $ 35,550,000
                                          =========================================================================
Subordinated SBA debentures                 $ 12,000,000   $ 12,000,000  $ 9,200,000   $ 7,860,000    $ 8,880,000
                                          =========================================================================
Total liabilities                           $ 42,716,254  $ 41,843,447   $ 44,055,086  $ 42,276,465   $ 45,177,743
                                          =========================================================================
Total stockholders' equity                  $ 15,170,341  $ 15,248,459   $ 15,972,145  $ 16,667,081   $ 12,807,126
                                          =========================================================================
</TABLE>

(1) Ameritrans since inception and Elk, since the fiscal year ended June 30,
1984, have elected and qualified to be taxed as a regulated investment company
and substantially all taxable income was required to be distributed to
stockholders. Therefore, only minimal taxes were required to be paid.

                                26
<page>


ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
       RESULTS OF OPERATIONS

You should read the following discussion in conjunction with the financial
statements and notes to financial statements. The results described below are
not necessarily indicative of the results to be expected in any future period.
Certain statements in this discussion and analysis, including statements
regarding our strategy, financial performance, and revenue sources, are
forward-looking statements based on current expectations and entail various
risks and uncertainties that could cause actual results to differ materially
from those expressed in the forward-looking statements, including those
described in "risk factors" and elsewhere in this annual report.

CRITICAL ACCOUNTING POLICIES

In the preparation of the Company's financial statements in conformity
with accounting principles generally accepted in the United States, management
uses judgment in selecting policies and procedures and making estimates and
assumptions that affect amounts reported and disclosed in the financial
statements and related notes.  Significant estimates that the Company makes
include valuation of loans and equity investments, evaluation of the
recoverability of various receivables and the assessment of litigation and
other contingencies.  The Company's ability to collect receivables and recover
the value of its loans depends on a number of factors, including the financial
condition of the debtors and its ability to enforce provisions of its contracts
in the event of disputes, through litigation if necessary. Although the Company
believes that estimates and assumptions used in determining the recorded amounts
of net assets and liabilities at June 30, 2005 are reasonable, actual results
could differ materially from the estimated amounts recorded in the Company's
financial statements.  Our key critical accounting policies are those applicable
to the valuation of loans receivable and other investments including medallions
and contingencies from daily operations, as discussed below:

Valuation of Loans Receivable.  For loans receivables, fair value generally
approximates cost less unrealized depreciation.  Overall financial condition
of the borrower, the adequacy of the collateral, individual credit risks,
historical loss experience and other factors are criteria considered in
quantifying the unrealized depreciation, if any, that might exist at the
valuation date.

Equity Securities. The fair value of publicly traded corporate equity securities
is based on quoted market prices. Privately held corporate equity securities are
recorded at the lower of cost or estimated fair value.  For these non-quoted
investments, the Company reviews the financial performance of the privately held
companies in which the investments are maintained. If and when a determination
is made that a decline in fair value below the cost basis is other than
temporary, the related investment is written to its estimated fair value.

Assets Acquired in Satisfaction of Loans.  Assets acquired in satisfaction of
loans are carried at the lower of the net value of the related foreclosed loan
or the estimated fair value less cost of disposal.  Losses incurred at the
time of foreclosure are charged to the unrealized depreciation on loans
receivable.  Subsequent reductions in estimated net realizable value are
charged to operations as losses on assets acquired in satisfaction of loans.

Medallions.  The Company obtained medallions through foreclosures of loans and
the value of such medallions are carried at the lower of the net value of the
related foreclosed loans or the fair market value of the medallions.  The
medallions are being treated as having indefinite lives, therefore, the assets
are not being amortized.  However, the Company periodically tests their carrying
value for impairment.

                                       27
<PAGE>

Contingencies.  The Company is subject to legal proceedings in the course of
its daily operations from enforcement of its rights in disputes pursuant to
the terms of various contractual arrangements.  In this connection, the Company
assesses the likelihood of any adverse judgment or outcome to these matters as
well as a potential range of probable losses.  A determination of the amount
of reserve required, if any, for these contingencies is made after careful
analysis of each individual issue.  The required reserves may change in the
future due to new developments in each matter or changes in approach, such as
a change in settlement strategy in dealing with these matters.

GENERAL

Ameritrans acquired Elk on December 16, 1999. Elk is an SBIC that has been
operating since 1980, making loans to (and, to a limited extent, investments in)
small businesses, primarily businesses that are majority-owned by persons who
qualify under SBA Regulations as socially or economically disadvantaged. Most of
Elk's business has consisted of originating and servicing loans collateralized
by New York City, Boston, Chicago and Miami taxi medallions, but Elk also makes
loans to and investments in other diversified businesses and to persons who
qualify under SBA Regulations as "non-disadvantaged."

Historically, Elk's earnings derived primarily from net interest income, which
is the difference between interest earned on interest-earning assets (consisting
of business loans), and the interest paid on interest-bearing liabilities
(consisting of indebtedness to Elk's banks and subordinated debentures issued to
the SBA). Net interest income is a function of the net interest rate spread,
which is the difference between the average yield earned on interest-earning
assets and the average interest rate paid on interest-bearing liabilities, as
well as the average balance of interest-earning assets as compared to
interest-bearing liabilities. Unrealized depreciation on loans and investments
is recorded when Elk adjusts the value of a loan to reflect management's
estimate of the fair value, as approved by the Board of Directors. See Note 1 of
"Notes to Consolidated Financial Statements."

RESULTS OF OPERATIONS FOR THE YEARS ENDED JUNE 30, 2005 AND 2004

TOTAL INVESTMENT INCOME

The Company's investment income increased $492,574 or 8.73% to $6,132,066 as
compared with the prior year ended June 30, 2004. This increase is the result of
an increase in the net gain on the sale of securities of $683,209 as well as
increases in other fees of $141,039 and leasing income of $92,113
 generated by
the leasing activities of Elk's subsidiaries, offset by a decrease in interest
income of $423,787 due to the impact of lower average interest rates charged on
new and modified loans.

OPERATING EXPENSES

Interest expense for the year ended June 30, 2005 increased $394,217 or 27% to
$1,837,633 when compared to the year ended June 30, 2004.  This reflects the
impact of higher interest charged on outstanding bank borrowing as well as
higher outstanding bank notes payable when compared with the prior year.
Salaries and employee benefits increased $105,999 or 10% when compared with the
prior year.  This increase reflects the increases that were put in effect from
the recently amended officer's employment agreements.  Occupancy costs decreased
$18,613 or 9%, when compared with the year ended June 30, 2005 due to the first
full year under the amended sublease and shared office expense terms.
Professional fees increased $70,231 or 12% when compared with the prior year.
This increase reflects the additional legal fees incurred relating to the
foreclosures of the Chicago medallion loans as well as fees related to
significant new loans issued.  Miscellaneous administrative expenses decreased
$87,978 or 8% when

<page>


compared with the prior year.  Loss and impairments on both
medallions under lease and assets acquired increased by $153,815 due to
additional write-downs of related assets to estimated fair value.  Foreclosure
expenses decreased $275,176 or 76% and write off and depreciation of interest
and loans receivable decreased $295,535 or 29% when compared with the year
prior.

Total write off and depreciation on interest and loans receivable was $728,710,
net of an increase in unrealized depreciation of interest of $28,500 offset by a
decrease of unrealized depreciation on loans receivable of $359,770.  The
foreclosure expenses incurred by the Company as it satisfies outstanding
balances incurred by the default borrowers on the medallions with the City of
Chicago were $87,695 for the year ended June 30, 2005.  This expense primarily
consisted of back taxes, interest and penalties owed to the City of Chicago
Department of Revenue by defaulted medallion owners which was required to be
paid as a condition of completing the medallion foreclosures sales and transfer
to new purchasers, as well as professional fees related to these foreclosures.

Net Income (Loss)

Net income increased from a loss of $367,183 for the year ended June 30, 2004
as compared to net income of $112,774 for the year ended June 30, 2005.  The
increase in the net income for the year ended June 30, 2005 was attributable
primarily to the net gain on the sale of securities of $688,874.  Dividends of
Participating Preferred Stock for each of the years ended June 30, 2005 and
2004 amounted to $337,500, respectively.

RESULTS OF OPERATIONS FOR THE YEARS ENDED JUNE 30, 2004 AND 2003

Total Investment Income

The Company's investment income decreased $645,563 or 10% to $5,639,492 as
compared with the prior year ended June 30, 2003.  This decrease was mainly
due to the impact of lower average interest rates charged on new and modified
loans as well as lower outstanding loans receivable, offset by an increase
in other fees of $108,879 and leasing income of $119,527 generated by the
leasing activities that commenced during the 2004 fiscal year from Elk's
subsidiary entities EAF Enterprises LLC, Medallion Auto Management LLC, EAF
Leasing II LLC and EAF Leasing III LLC.

Operating Expenses

Interest expense for the year ended June 30, 2004 decreased $633,445 or 31% to
$1,443,416 when compared to the year ended June 30, 2003. This reflects the
impact of lower interest charged on outstanding bank borrowing as well as lower
outstanding bank notes payable when compared with the prior year, combined with
interest savings due to the refinancing of certain SBA debentures at lower rates
during the year. These interest savings were offset by interest payments related
to Swap agreements since the fixed rates in connection with the Swaps were
consistently above the floating one month LIBOR rates during the year. Salaries
and employee benefits increased $143,890 or 16% when compared with the prior
year. This increase reflects the increases that were put in effect from the
recently amended officer's employment agreements and from recent additional
administrative employees hired. Occupancy costs increased $62,800 or 44%, when
compared with the year ended June 30, 2003, primarily due to the rental of
additional office and storage space which started in July 2003. Professional
fees increased $30,146 or 5% when compared with the prior year. This increase
reflects the additional legal fees incurred relating to the foreclosures of the
Chicago medallion loans. Miscellaneous administrative expenses increased
$287,260 or 30% when compared with the prior year. This increase relates
primarily to increases in commissions, insurance and depreciation. Foreclosure
expenses increased $49,193 or 16% and write off and depreciation of interest and
loans receivable increased $171,733 or 20% when compared with the year prior.
Both of these increases relate primarily to the foreclosures of the Chicago
medallion loans.



The increase in write off and depreciation of interest and loans receivable is
primarily due to the increase in Chicago loan portfolio delinquencies and
defaults and the increase in unrealized depreciation on loans receivable due to
the some delinquencies in the diversified portfolio. Total write off and
depreciation on interest and loans receivable was $1,024,245, net of a decrease
in unrealized depreciation of interest of $660,500 offset by an increase of
unrealized depreciation on loans receivable of $206,600. The foreclosure
expenses incurred by the Company as it satisfies outstanding balances incurred
by the default borrowers on the medallions with the City of Chicago were
$362,871 for the year ended June 30, 2004. This expense primarily consisted of
back taxes, interest and penalties owed to the City of Chicago Department of
Revenue by defaulted medallion owners which was required to be paid as a
condition of completing the medallion foreclosures sales and transfer to new
purchasers, as well as professional fees related to these foreclosures.

NET INCOME (LOSS)

Net income decreased from $395,214 for the year ended June 30, 2003 as compared
to a net loss of $367,183 for the year ended June 30, 2004. The decrease in the
net income for the year ended June 30, 2004 was attributable primarily to a
decrease in loan activity, the write down of the Chicago loan portfolio and
related foreclosure expenses, as well as increases in salaries, occupancy costs,
professional fees and miscellaneous administrative expenses, which were only
partially offset by favorable interest rates obtained from debt refinancing.
Dividends of Participating Preferred Stock for each of the years ended June 30,
2004 and 2003 amounted to $337,500, respectively.

BALANCE SHEET AND RESERVES

Total assets increased by $794,689 as of June 30, 2005 when compared to total
assets as of June 30, 2004. This increase was due to higher outstanding loans
receivable partially offset by decreases in medallions owned, and property
improvements, assets acquired in satisfaction of loan, and equity securities.
During January 2002, the Company and the SBA entered into an agreement where by
the SBA committed to reserve debentures in the amount of $12,000,000 to be
issued by the Company prior to September 30, 2006. In February 2004, Elk made
the final draw down from this commitment pool. During the year ended June 30,
2004, Elk utilized the net proceeds received from the SBA debenture draw downs
to pay down on its short-term bank borrowings, as well as fund new loans and
increase equity investments.


ASSET / LIABILITY MANAGEMENT

INTEREST RATE SENSITIVITY

Ameritrans, like other financial institutions, is subject to interest rate risk
to the extent its interest- earning assets (consisting of medallion loans and
commercial loans) rise or fall at a different rate over time in comparison to
its interest-bearing liabilities (consisting primarily of its credit facilities
with banks and subordinated SBA debentures).

A relative measure of interest rate risk can be derived from Ameritrans'
interest rate sensitivity gap, i.e. the difference between interest-earning
assets and interest-bearing liabilities, which mature and/or reprice within
specified intervals of time. The gap is considered to be positive when
repriceable assets exceed repriceable liabilities and negative when repriceable
liabilities exceed repriceable assets.

                                   29

<page>

 A relative measure of interest rate sensitivity is provided by the cumulative
difference between interest sensitive assets and interest sensitive liabilities
for a given time interval expressed as a percentage of total assets.

Ameritrans' interest rate sensitive assets were approximately $51.9 million and
interest rate sensitive liabilities were approximately $41.8 million at June 30,
2005. Having interest-bearing liabilities that mature or reprice more frequently
on average than assets may be beneficial in times of declining interest rates,
although such an asset/liability structure may result in declining net earnings
during periods of rising interest rates. Abrupt increases in market rates of
interest may have an adverse impact on our earnings until we are able to
originate new loans at the higher prevailing interest rates. Conversely, having
interest-earning assets that mature or reprice more frequently on the average
than liabilities may be beneficial in times of rising interest rates, although
this asset/liability structure may result in declining net earnings during
periods of falling interest rates. This mismatch between maturities and interest
rate sensitivities of our interest-earning assets and interest-bearing
liabilities results in interest rate risk.

The effect of changes in interest rates is mitigated by regular turnover of the
portfolio. Based on past experience, Ameritrans anticipates that approximately
20% of the portfolio will mature or be prepaid each year. Ameritrans believes
that the average life of its loan portfolio varies to some extent as a function
of changes in interest rates. Borrowers are more likely to exercise prepayment
rights in a decreasing interest rate environment because the interest rate
payable on the borrower's loan is high relative to prevailing interest rates.
Conversely, borrowers are less likely to prepay in a rising interest rate
environment.


INTEREST RATE SWAP AGREEMENTS

Ameritrans manages the exposure of the portfolio to increases in market interest
rates by entering into interest rate Swap agreements to hedge a portion of its
variable-rate debt against increases in interest rates and by incurring
fixed-rate debt consisting primarily of subordinated SBA debentures.

On June 11, 2001, Elk entered into an interest rate Swap transaction for
$15,000,000 with this bank which expired June 11, 2003. On February 11, 2003,
Elk purchased another interest rate Swap contract for $5,000,000 with the same
bank which expired February 11, 2005.  These Swap transactions were entered
into to protect the Company from an upward movement in interest rates relating
to outstanding bank debt. These Swap transactions provided for a fixed rate of
4.95% and 3.56%, respectively for the Company and if the floating one-month
LIBOR rate fell 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 differences
in rates annually or at the settlement date.  As of June 30, 2005, no swaps
were in effect.

Ameritrans believes that its bank credit facilities and cash flow from
operations (after distributions to stockholders) will be adequate to fund the
continuing operations of the Company's loan portfolio. Nevertheless, the
Company continues to explore additional options, which may increase available
funds for its growth and expansion strategy. In addition, to the application
for SBA funding described above, these financing options would provide
additional sources of funds for both external expansion and continuation of
internal growth.
                                          30

<page>


INVESTMENT CONSIDERATIONS

The Company is affected by the steady increases in the prime rate of interest
due to the federal reserve increase in interest rates due to a corresponding
increase in interest rates by the banks.  During the past sixteen (16) months
ended September 27, 2005, interest rates have increased by approximately 2.7%
or 275 basis points.  The dollar amount of the Company's adjustable rate loans
receivable is approximately $8,625,000, with the remainder being fixed rate
loans.  Interest rate fluctuations may adversely affect the interest rate
spread we receive on our taxicab medallion and commercial loans.

Because we borrow money to finance the origination of loans, our income is
dependent upon the differences between the rate at which we borrow funds and
the rate at which we loan funds. While the loans in our portfolio in most
cases bear interest at fixed-rates or adjustable-rates, we finance a
substantial portion of such loans by incurring indebtedness with floating
interest rates. As short-term interest rates rise, our interest costs increase,
decreasing the net interest rate spread we receive and thereby adversely affect
our profitability. Although we intend to continue to manage our interest rate
risk through asset and liability management, including the use of interest rate
Swaps, general rises in interest rates will tend to reduce our interest rate
spread in the short term. In addition, we rely on our counterparties to perform
their obligations under such interest rate Swaps. A decrease in prevailing
interest rates may lead to more loan prepayments, which could adversely affect
our business. A borrower is likely to exercise prepayment rights at a time when
the interest rate payable on the borrower's loan is high relative to prevailing
interest rates. In a lower interest rate environment, we will have difficulty
re-lending prepaid funds at comparable rates, which may reduce the net interest
spread we receive.

Our commercial loan activity has increased in recent years. Lending to small
businesses involves a high degree of business and financial risk, which can
result in substantial losses and should be considered speculative. Our borrower
base consists primarily of small business owners that have limited resources and
that are generally unable to achieve financing from traditional sources. There
is generally no publicly available information about these small business
owners, and we must rely on the diligence of our employees and agents to obtain
information in connection with our credit decisions. In addition, these small
businesses often do not have audited financial statements. Some smaller
businesses have narrower product lines and market shares than their competition.
Therefore, they may be more vulnerable to customer preferences, market
conditions, or economic downturns, which may adversely affect the return on, or
the recovery of, our investment in these businesses.

LIQUIDITY AND CAPITAL RESOURCES

The Company has funded its operations through private and public placements of
its securities, bank financing, the issuance to the SBA of its subordinated
debentures and internally generated funds.

On April 24, 2002, Ameritrans completed a public offering of 300,000 units,
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. The gross proceeds from the
sale were $5,700,000 less offering expenses of approximately $1,704,399. A
portion of the proceeds was used temporarily to reduce banks and SBA
indebtedness. Ameritrans also used part of the proceeds to start its own loan
portfolio.

On July 29, 2005 Ameritrans commenced a private offering of Common Stock with
warrants to "accredited investors," as that term is defined in Rule 501 of
Regulation D promulgated under the 1933 Act.  The shares of Common Stock are
offered at a price no less than book value. For every four (4) shares of
Common Stock purchased, the Company will issue to the investor one (1) warrant,
exercisable for five (5) years from the date of issuance, to purchase one (1)
share of Common Stock of the Company at an exercise price equal to no more than
110% of the purchase price of the Shares.  The Offering period will expire on
October 27, 2005, unless extended in the sole discretion of the Company for
up to an additional ninety (90) days.  This private offering was approved by
the requisite vote of  shareholders on July 21, 2005.

At June 30, 2005, 71% of Elk's indebtedness was represented by indebtedness to
its banks and 29% by the debentures issued to the SBA with fixed rates of
interest plus user fees which results in rates ranging from 4.99% to 5.54%. Elk
currently may borrow up to $40,000,000 under its existing lines of credit,
subject to the limitations imposed by its borrowing base agreement with its
banks and the SBA, the statutory and regulatory limitations imposed by the SBA
and the availability of funds. In addition, 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 to the Company on or prior
to September 30, 2006. In July and December 2002, new debenture payable to the
SBA were drawn from the reserved pool of $12,000,000 in the amount of $2,050,000
and $3,000,000, respectively. The interim interest rates assigned were 2.351 %
and 1.927%, respectively. The fixed rates of 4.67% and 4.628% were determined on
the pooling dates of September 25, 2002 and March 26, 2003, respectively. On
September 15, 2003 and February 17, 2004, two new debentures payable to the SBA
were drawn in the amount of $5,000,000 and $1,950,000, respectively. The interim
interest rates assigned were 1.682% and 1.595%, respectively. The long term
fixed rate of 4.12% was determined on the pooling date of March 24, 2004 for
these two debentures. In addition to the fixed rates, there is an additional
annual SBA user fee on each debenture of 0.87% per annum that will also be
charged making the rates 5.54%, 5.498% and 4.99% before applicable amortization
of points and fees. The draw down in February 2004 was the final draw from the
$12,000,000 commitment.

Contractual obligations expire or mature at various dates through March 1, 2014.
The following table shows all contractual obligations at June 30, 2005.


<TABLE>
<CAPTION>
                                                          Payments due by period
                  ----------------------------------------------------------------------------------------------
                                                                                        More than
                  Less than 1 yea  1 - 2 years    2 - 3 years 3 - 4 years  4 - 5 years   5 years         Total
                  --------------- -------------- ------------ ------------ ----------- ----------  ---------------
<S>               <C>               <C>          <C>         <C>          <c>          <C>         <C>

Floating rate
borrowings        $29,770,652     $ -             $ -          $ -          $ -          $ -             $ 29,770,652


Fixed rate
    borrowings             --            --              --             --             --     12,000,000    12,000,000

Operating lease
   obligations        180,661        182,105        183,599        186,055        192,202        713,340     1,638,052
                  -----------    -----------    -----------    -----------    -----------    -----------   -----------
     Total        $29,951,313    $   182,105    $   183,599    $   186,055    $   192,202    $12,713,430   $43,408,704
                  ===========    ===========    ===========    ===========    ===========    ===========   ===========
</TABLE>


Our sources of liquidity are credit lines with banks, long-term SBA debentures
that are issued to or guaranteed by the SBA, loan amortization and prepayment.
As a RIC, we distribute at least 90% of our investment company taxable income.
Consequently, we primarily rely upon external sources of funds to finance
growth.

Loan amortization and prepayments also provide a source of funding for Elk.
Prepayments on loans are influenced significantly by general interest rates,
economic conditions and competition.

                                   31
<page>

Like Elk, Ameritrans will distribute at least 90% of its investment company
taxable income and, accordingly, we will continue to rely upon external sources
of funds to finance growth. In order to provide the funds necessary for our
expansion strategy, we expect to raise additional capital and to incur, from
time to time, additional bank indebtedness and (if deemed necessary by
management) to obtain SBA loans. There can be no assurances that such additional
financing will be available on acceptable terms.

NEW ACCOUNTING STANDARDS

In December 2004, the Financial Accounting Standards Board ("FASB") issued the
SFAS No. 123(R), "Share-Based Payment" ("SFAS 123(R)"), which replaced SFAS No.
123, "Accounting for Stock-Based Compensation," and superseded APB Opinion 25,
"Accounting for Stock Issued to Employees."  SFAS 123(R) requires that all
share-based payments to employees be recognized in the financial statements
based on their fair values on the date of grant. The Company currently uses the
intrinsic value method to measure compensation expense for stock-based awards.
On April 14, 2005, the SEC amended the compliance dates for SFAS 123(R), which
extended the Company's required adoption date of SFAS 123(R) to its fiscal
third quarter.  Its fiscal year ended June 30, 2006.  The Company is
evaluating the requirements of SFAS 123(R) and expects that its adoption
will not have a material impact on its financial position or results of
operations and earnings per share.

Also in December 2004, the FASB issued Statement No. 153, "Exchanges of
Nonmonetary Assets," ("SFAS No. 153") which addresses the measurement of
exchanges of No monetary assets and eliminates the exception from fair value
measurement for nonmonetary exchanges of similar productive assets and replaces
it with an exception for exchanges that do not have commercial substance.
SFAS No. 153 is effective for nononetary asset exchanges occurring in fiscal
periods beginning after June 15, 2005, with earlier application permitted.
The adoption of SFAS No. 153 will have no impact on the Company's results of
operations or its financial position.



In June 2005, the FASB issued Statement No. 154, "Accounting Changes and Error
Corrections," ("SFAS No. 154") which changes the requirements for accounting
for and reporting of a change in accounting principle.  SFAS No. 154 requires
retrospective application to prior periods' financial statements of a voluntary
change in accounting principle unless it is impracticable.  SFAS No. 154 also
requires that a change in method of depreciation, amortization, or depletion
for long-lived, non-financial assets be accounted for as a change in accounting
estimate that is effected by a change in accounting principle.  SFAS No. 154 is
effective for accounting changes and corrections of errors made a fiscal years
beginning after December 15, 2005, but does not change the transition
provisions of any existing accounting pronouncements, including those that
are in a transition phase as of the effective date of the Statement.
The adoption of SFAS No. 154 will not have a material effect on results of
operations or the Company's financial position.

                                       32
<PAGE>

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company's business activities contain elements of risk. The Company
considers the principal types of risk to be fluctuations in interest rates and
portfolio valuations. The Company considers the management of risk essential to
conducting its businesses. Accordingly, the Company's risk management systems
and procedures are designed to identify and analyze the Company's risks, to set
appropriate policies and limits and to continually monitor these risks and
limits by means of reliable administrative and information systems and other
policies and programs.

The Company values its portfolio at fair value as determined in good faith by
the Company's Board of Directors in accordance with the Company's valuation
policy. Unlike certain lending institutions, the Company is not permitted to
establish reserves for loan losses. Instead, the Company must value each
individual investment and portfolio loan on a quarterly basis. The Company
records unrealized depreciation on investments and loans when it believes that
an asset has been impaired and full collection is unlikely. Without a readily
ascertainable market value, the estimated value of the Company's portfolio of
investments and loans may differ significantly from the values that would be
placed on the portfolio if there existed a ready market for the investments. The
Company adjusts the valuation of the portfolio quarterly to reflect the Board of
Directors' estimate of the current fair value of each component of the
portfolio. Any changes in estimated fair value are recorded in the Company's
statement of operations as net unrealized appreciation (depreciation) on
investments.

In addition, the illiquidity of our loan portfolio and investments may adversely
affect our ability to dispose of loans at times when it may be advantageous for
us to liquidate such portfolio or investments. Also, if we were required to
liquidate some or all of the investments in the portfolio, the proceeds of such
liquidation may be significantly less than the current value of such
investments. Because we borrow money to make loans and investments, our net
operating income is dependent upon the difference between the rate at which we
borrow funds and the rate at which we loan and invest these funds. As a result,
there can be no assurance that a significant change in market interest rates
will not have a material adverse effect on our interest income. As interest
rates rise, our interest costs increase, decreasing the net interest rate spread
we receive and thereby adversely affect our profitability. Although we intend to
continue to manage our interest rate risk through asset and liability
management, including the use of interest rate swaps, general rises in interest
rates will tend to reduce our interest rate spread in the short term.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The response to this item is submitted in the response found under
Item 15(a)(1) in this Annual Report on Form 10-K.


ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURES


During the two most recent fiscal years through June 30, 2005, the Company has
had no reportable events (as defined in Item 304(a)(2) of Regulation S-K).


ITEM 9A. CONTROLS AND PROCEDURES

The Company maintains disclosure controls and procedures as defined under the
Securities Exchange Act Rule 13a-15(e), that are designed to ensure that
information required to be disclosed in our periodic reports filed pursuant to
the rules promulgated under the Exchange Act are recorded,processed, summarized
and reported within the time periods specified in the
 SEC's rules and forms,
and that such information is accumulated and communicated to our management
including our Chief Executive Officer (also acting as Chief Financial Officer),
to allow timely decisions regarding required disclosure.  In designing and
evaluating the disclosure controls and procedures, management recognized that
any controls and procedures, no matter how well designed and operated, can
provide only reasonable assurance of achieving the desired control objectives.
As of the end of the period covered by this report, we carried out an
evaluation, under the supervision and with the participation of our management
including our Chief Executive Officer (also acting as Chief Financial Officer),
of the effectiveness of the design and operation of our disclosure controls and
procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act.
Based on that evaluation, the Company concluded that as of the end of the
period covered by this report our disclosure controls and procedures are
effective in timely communicating the material information required to be
included in our periodic SEC filings.
                                       33

<PAGE>

     There was no change in our internal control over financial reporting (as
defined in Rule 13a-15(f) of the Exchange Act) during the period covered by
this report that materially affected, or is reasonably likely to materially
affect,the Company's internal control over financial reporting.


                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The Board of Directors and executive officers of Ameritrans and Elk are
identical. The following table sets forth certain information concerning our
directors and executive officers:

         NAME                       POSITION
         ----
Gary C. Granoff(1)         President, CEO, CFO and
                           Chairman of Board of Directors
Ellen M. Walker(1)         Executive Vice President and Director
Lee A. Forlenza(1)         Senior Vice President and Director
Steven Etra(1)             Vice President and Director
Silvia M. Mullens(1)       Vice President
Margaret Chance(1)         Vice President and Secretary
Paul Creditor              Director
Allen Kaplan               Director
John R. Laird              Director
Howard F. Sommer           Director
Wesley Finch               Director

(1) As a BDC under the 1940 Act, a majority of the directors of both Ameritrans
    and Elk are required to be individuals who are not "interested persons" of
    the company. Gary C. Granoff, Ellen M. Walker, Lee A. Forlenza, Steven Etra,
    Margaret Chance and Silvia M. Mullens are each "interested persons" with
    respect to both Ameritrans and Elk, as such term is defined in the 1940 Act.


Gary C. Granoff, age 57, has been President and a director of Ameritrans since
its formation and of Elk since its formation in July 1979 and Chairman of the
Board of Directors since December 1995. Mr. Granoff has been a practicing
attorney for the past 31 years and is presently an officer and stockholder in
the law firm of Granoff, Walker & Forlenza, P.C. Mr. Granoff is a member of the
bar of the State of New York and the State of Florida and is admitted to the
United States District Court of the Southern District of New York. Mr. Granoff
is also President and a stockholder of GCG Associates, Inc. ("GCG"), Elk's
former investment adviser. He has served as President and the sole stockholder
of Seacrest Associates, Inc., a hotel operator, since August 1994.  Mr. Granoff
has also been a director of Titanium Holdings Group, Inc., formerly known as
Enviro-Clean of America, Inc. from September 1999 through May 2003. In February
1998, Mr. Granoff was elected to and served as a trustee on the Board of
Trustees of The George Washington University for a term which expired on June
30, 2003.  In June 2005, Mr. Granoff was re-elected to and currently serves as,
a trustee on the Board of Trustees of The George Washington University for a
term which expires in June 2009.  Mr. Granoff also serves as a Trustee of
the Parker Jewish Institute for Healthcare and Rehabilitation. Mr. Granoff
holds a Bachelor of Business Administration degree in Accounting and a Juris
Doctor degree (with honors) from The George Washington University.

                                       34
<PAGE>

Ellen M. Walker, age 50, has been a Vice President, and a director of Ameritrans
since its formation and a Vice President and General Counsel of Elk since July
1983. In August 2000, Ms. Walker was elected to be the Executive Vice President
of the Company. She was a director of Elk from July 1983 to August 1994, and has
been a director of Elk since 1995. Ms. Walker has been a practicing attorney for
more than twenty-five years and she is presently an officer and stockholder in
the law firm of Granoff, Walker & Forlenza, P.C. Ms. Walker is a member of the
Bar of the State of New York and she is admitted to the United States District
Court of the Southern District of New York. Since August 1983 Ms. Walker has
been Vice President of GCG. Ms. Walker has been a director, Vice President
and General Counsel of Gemini since June 1996. Ms. Walker received a Bachelor of
Arts degree from Queens College and obtained her Juris Doctor degree with
honors from Brooklyn Law School.

Lee A. Forlenza, age 48, has been a Vice President and a director of Ameritrans
since its formation, a Vice President of Elk since March 1992, and a director of
Elk since January 1995. In August 2000, Mr. Forlenza was elected to be Senior
Vice President of the Company. Mr. Forlenza has been a practicing attorney since
February 1983 and is presently an officer and stockholder in the law firm of
Granoff, Walker & Forlenza, P.C. Since March 1992 Mr. Forlenza has been an
investment analyst for GCG. Mr. Forlenza has also been Vice President, Secretary
and a director of Gemini since June 1996. Mr. Forlenza was Vice President of
True Type Printing, Inc. from 1976-1995 and has been President since May 1995.
From 1983 through 1986 Mr. Forlenza was an attorney with the SBA. Mr. Forlenza
graduated Phi Beta Kappa from New York University and obtained his Juris Doctor
degree from Fordham University School of Law.

Steven Etra, age 56, has been a Vice President and a director of Ameritrans
since its inception, a Vice President of Elk since January 1999, and a director
of Elk since November 1995. Mr. Etra has been Sales Manager since 1975 of
Manufacturers Corrugated Box Company, a company owned by Mr. Etra's family for
more than seventy-five years. Mr. Etra has also been a director of Gemini since
June 1996. Mr. Etra has also been a director of Titanium Holdings Group, Inc.,
formerly known as Enviro- Clean of America, Inc. since March 1999. Mr. Etra has
extensive business experience in investing in emerging companies.

Paul Creditor, age 69, has been a director of Ameritrans since its inception and
a director of Elk since November 1995. Mr. Creditor has been a practicing
attorney since 1961, engaging in the general practice of law and specializing in
corporate law. From 1974 through 1979 he served as an elected Judge in Suffolk
County, New York. He also served as counsel to the New York State Constitutional
Convention and various state agencies and commissions.


Allen Kaplan, age 55, has been a director of Ameritrans since its inception and
a director of Elk since November 1995. Mr. Kaplan has been since November 1986,
Vice President and Chief Operating Officer of Team Systems, Inc., a company
which manages and operates more than 200 New York City medallion taxis. Mr.
Kaplan is currently Vice President of the Metropolitan Taxicab Board of Trade, a
trade association consisting of 22 member fleets representing 1,200 New York
City medallions.

John R. Laird, age 63, has been a director of Ameritrans and of Elk since
January 1999. Mr. Laird has been a private investor since 1994, when he retired
from Shearson Lehman Brothers Inc. ("Shearson"). Mr. Laird served as President
and Chief Executive Officer of the Shearson Lehman Brothers Division of Shearson
and as a member of the Shearson Executive Committee from 1992 to 1994. Mr. Laird
was also Chairman and Chief Executive Officer of The Boston Company, a
subsidiary of Shearson, from 1990 until its sale by Shearson in 1993. From 1977
to 1989 Mr. Laird was employed by American Express in various capacities
including Senior Vice President and Treasurer. Mr. Laird received a B.S. in
finance and an M.B.A. from Syracuse University and attended the Advanced
Management Program at Harvard Business School.

Howard F. Sommer, age 65, has been a director of Ameritrans and of Elk since
January 1999. Mr. Sommer is currently Chief Administrative Officer and Chief
Financial Officer of SellJewelry, Inc., a nationally-based buyer of pre-owned
jewelry.  Mr. Sommer was President and Chief Executive Officer of New York
Community Investment Company L.L.C., an equity investment fund providing
long-term capital to small businesses throughout the State of New York, from
1995 to 2005.  Mr. Sommer was President of Fundex Capital Corporation from
1978 to 1995, President of U.S. Capital Corporation from 1973 to 1995, worked
in management consulting from 1971 to 1973 and held various positions at IBM and
Xerox Corporations from 1962 to 1971. Mr. Sommer was also a member of the board
for the National Association of Small Business Investment Companies, serving on
its executive committee from 1989 to 1993 and as Chairman of the Board in 1994.
He received a B.S. in electrical engineering from City College of New York and
attended the Graduate School of Business at New York University.

                                  36
<page>

Wesley Finch, age 58, was elected to the Board of Directors September 2002. Mr.
Finch is the principal of The Finch Group, a real estate development and
management company, specializing in the management, restructuring and
revitalization of affordable, subsidized and assisted housing. Over the last 20
years, The Finch Group has developed, or advised government entities, on more
than $1.5 billion of low-income housing. During 1992-1993, Mr. Finch served as a
member of President Clinton's transition team at the U.S. Department of Housing
and Urban Development. Previously, Mr. Finch served as Finance Chairman for U.S.
Senator John F. Kerry's 1984 campaign, and as the Chairman of Senator Kerry's
successful 1990 and 1996 campaigns. In addition, during 1987-1988, Mr. Finch was
the National Coordinating Chairman of the Democratic Senatorial Campaign
Committee, a legal extension of the U.S. Senate. Mr. Finch earned his bachelors
degree in accounting from the Bernard M. Baruch School of the City College of
New York, and is a non-practicing certified public accountant (CPA).

Silvia Maria Mullens, age 54, has been a Vice President of Ameritrans since its
inception, a Vice President of Elk since 1996, and the Loan Administrator of Elk
since February 1994. Prior to joining Elk, she was the Legal Coordinator for
Castle Oil Corporation from September 1991 through June 1993 and from June 1993
through January 1994, a legal assistant specializing in foreclosures in the law
firm of Greenberg & Posner. Ms. Mullens received a B.A. from Fordham University
and an M.B.A. from The Leonard Stern School of Business Administration of New
York University.

Margaret Chance, age 51, has been Secretary of Ameritrans since its inception
and Secretary of Elk and involved in loan administration since November 1980. In
August 2000, Ms. Chance was elected to be a Vice President of the Company. Ms.
Chance is the office manager of Granoff, Walker & Forlenza, P.C. and has served
as the Secretary of GCG, since January 1982. Ms. Chance holds a paralegal
certificate.

Our directors are actively involved in the oversight of our affairs, including
financial and operational issues, credit and loan policies, asset valuation, and
strategic direction.  No officer or director of Ameritrans has been involved in
any legal proceeding requiring disclosure under Item 401 of Regulation S-K.

COMPLIANCE WITH SECTION 16(A) OF THE 1934 ACT

     Section 16(a) of the Securities Exchange Act of 1934 (the "1934 Act")
requires the Company's officers and directors, and persons who own more than ten
percent (10%) of the Company's Common Stock, to file initial reports of
beneficial ownership and changes in beneficial ownership with the SEC and to
furnish the Company with copies of all reports filed.

     Based solely on a review of the forms furnished to the Company, or written
representations from certain reporting persons, Ameritrans believes that while
as of June 30, 2005, all changes in beneficial ownership have been disclosed to
the SEC as required by Section 16(a) of the 1934 Act, certain Reporting Persons
failed to timely disclose changes in beneficial ownership with the SEC.

                                  37
<page>



     Ellen Walker, Lee Forlenza, Steven Etra, Margaret Chance, Silvia Mullens,
Gary Granoff, Paul Creditor, Allen Kaplan, John Laird, and Howard Sommer each
submitted one (1) late Form 4 to report one (1) transaction that was not
reported on a timely basis.  The Directors and Officers named above
unintentionally failed to disclose their change in beneficial ownership on SEC
Form 4 within the required two business days.  The above failures to timely
disclose the changes in beneficial ownership were mistakes made in good faith.
The Company, however, has disclosed timely the transactions on all Company
filings made pursuant to the 1934 Act and other federal securities laws.

COMMITTEES OF THE AMERITRANS BOARD

Ameritrans has a standing Audit Committee, a standing 1999 Employee Plan
Committee and a Compensation Committee.

The Audit Committee is presently comprised of Paul Creditor, John Laird and
Howard Sommer. The function of the Audit Committee is to review our internal
accounting control procedures, review our consolidated financial statements and
review with the independent public accountants the results of their audit. The
Audit Committee held four (4) meetings during fiscal year
2005. The Audit Committee's financial expert is John Laird. The members of the
Audit Committee have adopted a formal written charter which they will review and
assess the adequacy of on an annual basis. The Audit Committee Charter is filed
as an exhibit to this Annual Report. The Charter and any changes or updates
thereto will also be posted on the Company's internet website at
http://www.ameritranscapital.com.


The 1999 Employee Plan Committee administers our 1999 Employee Plan. The
committee is comprised of Allen Kaplan and John Laird. See "Stock Option Plans"
below.

The Compensation Committee reviews the Company's employment and compensation
agreements with its employees. The committee is comprised of Allen Kaplan and
John Laird.

The Board of Directors held 3 formal meetings during fiscal 2005. All of the
Company's directors attended each of the meetings of the Board and one director
missed one (1) meeting.

Coe of Ethics of the Company

Information regarding the Company's code of Ethics, as amended is set forth in
Item 13.  The Code of Ethics, as amended, is included as Exhibit 14.1 to this
filing.
                                  38

<page>

ITEM 11. EXECUTIVE COMPENSATION

The following table sets forth all remuneration for services rendered to the
Company to (i) each of the executive officers and (ii) all executive officers as
a group during the fiscal year ended June 30, 2004. No non-employee director
received compensation in excess of $60,000 during that period.



                           SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                                                                    LONG-TERM COMPENSATION
                                                                               --------------------------------
                                                   ANNUAL COMPENSATION          SECURITIES
                                             -------------------------------    UNDERLYING         ALL OTHER
NAME AND PRINCIPAL POSITION                 YEAR    Base Salary    BONUS          OPTIONS             COMPENSATION
                                                       ($)(1)        ($)            (#)(2)            ($)(3)
-----------------------------------------   ----    ------------   ----------   --------------  ----------------
<S>                                         <C>     <C>     <C>      <C>         <C>             <C>
Gary C. Granoff                             2005    321,500 (4)      15,000              --              32,625
     President, Chief Executive Officer,    2004    296,500 (4)      15,000              --              34,238
     Chief Financial Officer and Director   2003    255,000 (4)      15,750              --              28,763

Ellen M. Walker                             2005    127,447             --             5,000             19,628
     Vice President and Director            2004    119,801              --              --              17,846
                                            2003    117,832              --              --              17,675

Lee A. Forlenza                             2005     79,300          10,000             4,375            13,395
     Senior Vice President and Director     2004     77,075          10,000              --              12,938

                                            2003     53,560           7,500              --               9,159

Steven Etra                                 2005     78,000                              --              11,700
     Vice President and Director            2004     68,000          10,000             4,375             8,775
                                            2003     60,000              --              --                  --

Silvia Mullens                              2005    106,180          20,000             3,350            18,927
     Vice President                         2004    103,688           7,500              --              16,451
                                            2003    100,782          10,000              --              16,443

Margaret Chance                             2005     83,520          15,000             3,350            14,768
     Vice President and Secretary           2004     84,680          13,375              --              14,336
                                            2003     81,193          15,000              --              14,202
</TABLE>


(1) Officers' salaries constitute a major portion of Elk's total "management fee
compensation," which must be approved by the SBA. The SBA has approved total
officer and employee compensation of Elk in the amounts paid to date and for the
projected amounts for the fiscal year ending June 30, 2005. This amount includes
officers' salaries, other salaries, employee benefits, insurance, and expenses.

(2) Grants of stock options received during the fiscal year.
(3) Amounts received under Simplified Employee Pension Plan.

(4) Does not include $35,000 of reimbursable expenses.

Compensation of Directors

Ameritrans and Elk have a policy of paying their directors who are not
employees fees for each meeting attended.  Since September 24, 2004, Eligible
Directors have been paid a fee of $1,000 for each meeting attended.  Prior to
September 24, 2004, Eligible Directors were paid $750 for each meeting
attended.  Since July 1, 1996, non-employee directors have been paid annual
fees of $2,000 per year in addition to the fees paid for each meeting attended.
As of September 24, 2004, Ameritrans began paying the Audit Committee a fee for
each committee meeting attended.  Regular members of the Audit Committee are
paid $1,000 for each meeting, and the head of the Audit Committee receives
$1,250 for each meeting.  Fees and expenses paid to non-affiliated directors
were, in the aggregate, $29,750 for the year ended June 30, 2002, $36,250 for
the year ended June 30, 2003, $32,500 for the year ended June 30, 2004, and
31,250 for the year ended June 30, 2005.

                            39
<page>

The following table sets forth information regarding individual stock option
grants made during the last completed fiscal year to each executive officer
of the Company.

<TABLE>
<CAPTION>

                            Percentage of                               Potential Value at
                Number of   total option                                assumed annual rates of
                Securities  granted to                                  stock price appreciation
                underlying  employees in  Exercise   Expiration         for option term (2)
Name		the option  fiscal year   Price(1)     Date
_________________________________________________________________________________________________

<S>                <c>         <c>         <c>         <c>                 <c>        <c>
                                                                           5%        10%
Ellen M. Walker 5,000       14.7%         $4.50    October 29, 2009       $23,625   $24,750
Lee A. Forlenza	4,375       12.9%         $4.50    October 29, 2009       $20,672   $21,656
Steven Etra	4,375       12.9%         $4.50    October 29, 2009       $20,672   $21,656
Margaret Chance	3,350       10%           $4.50    October 29, 2009       $15,829   $16,583
Silvia Mullens	3,350       10%           $4.50    October 29, 2009       $15,829   $16,583
Gary Granoff   13,350       39.5%         $4.95    October 29, 2009       $63,079   $66,083



</TABLE>

(1)  The exercise of these options is equal to the closing price of Company's
Stock on the date of grant, as reported by the NASDAQ Capital Market

(2)  The dollar amount under these columns are the results of calculations at
the 5% and 10% rates set by the Commission and, therefore, are not intended to
forecast possible future appreciations, if any, in the price of the underlying
Common Stock.  No gain to the optionees is possible without an increase in
price of the underlying Common Stock which will benefit all stockholders
proportionately.


REPORT OF THE BOARD OF DIRECTORS AS TO COMPENSATION MATTERS

The objectives of Ameritrans' executive compensation program are to establish
compensation levels designed to enable Ameritrans to attract, retain and reward
executive officers who contribute to the long-term success of Ameritrans so as
to enhance stockholder value. The Board of Directors makes decisions each year
regarding executive compensation, including annual base salaries and bonus
awards, and the 1999 Employee Plan Committee, consisting of non-interested
directors, will make decisions each year regarding stock option grants. Option
grants are key components of the executive compensation program and are intended
to provide executives with an equity interest in Ameritrans so as to link a
meaningful portion of the compensation of Ameritrans' executives with the
performance of Ameritrans' Common Stock.

COMPENSATION PHILOSOPHY

Ameritrans' executive compensation philosophy is based on the belief that
competitive compensation is essential to attract, motivate and retain highly
qualified and industrious employees. Ameritrans' policy is to provide total
compensation that is competitive for comparable work and comparable corporate
performance. The compensation program includes both motivational and
retention-related compensation components. Bonuses may be included to encourage
effective performance relative to current plans and objectives. Stock options
are included to help retain productive people and to more closely align their
interest with those of stockholders.

                           40
<page>

In executing its compensation policy, Ameritrans seeks to relate compensation
with Ameritrans' financial performance and business objectives, reward high
levels of individual performance and tie a significant portion of total
executive compensation to both the annual and long-term performance of
Ameritrans. While compensation survey data are useful guides for comparative
purposes, Ameritrans believes that a successful compensation program also
requires the application of judgment and subjective determinations of individual
performance, and to that extent the Board of Directors applies judgment in
reconciling the program's objectives with the realities of retaining valued
employees.

EXECUTIVE COMPENSATION PROGRAM

Annual compensation for Ameritrans' executives consists of two principal
elements: cash compensation, consisting of salaries, bonuses and contributions
from the Simplified Employee Pension Plan, and stock options.

CASH COMPENSATION

In setting the annual base salaries made pursuant to the terms of the employment
agreements for Ameritrans' executives, the Compensation Committee reviews the
aggregate salary and bonus compensation for individuals in comparable positions
with other companies, including competitors of Ameritrans, and adjusts such
amounts to reflect individual performance. Many of these companies are specialty
finance companies. Ameritrans also regularly compares the salary levels of its
executive officers with other leading companies.

Bonuses are based on a review and evaluation of the performance of the activity
for which the executive has responsibility, the impact of that activity on
Ameritrans and the skills and experience required for the job, coupled with a
comparison of these elements with similar elements for other executives both
inside and outside Ameritrans.

EMPLOYMENT AGREEMENTS

We have entered into employment agreements with six of our employees. We are
required to disclose the terms of the agreements for five of those individuals:

Gary Granoff. We entered into an amended and restated employment agreement
with Gary Granoff dated December 31, 2002, for a term of five (5) years
commencing July 1, 2003, which replaces the employment agreement by and between
the Company and Mr. Granoff dated July 1, 2001. The agreement automatically
renews for a five (5) year term, unless either party gives notice of non-renewal
as provided therein. The agreement provides that Mr. Granoff be paid an annual
salary of which presently is $321,500 for fiscal year ending June 30, 2005,
which increases each year the agreement is in effect.
The agreement also
provides that Mr. Granoff be paid a yearly bonus, based on his and Ameritrans'
performance, an amount of which is determined by the Board of Directors but
which may not be less than $15,000 per year for the first five (5) years of the
employment agreement. If renewed, any bonus will be given solely in the Board's
discretion. The agreement also provides for compensation to Mr. Granoff if he
is terminated prior to the expiration of his employment term, the amount of
which varies depending upon the nature of his termination. If, for instance,
Mr. Granoff is terminated without cause (as defined in the agreement) he is
entitled to a lump-sum payment in an amount equal to (i) his salary, as in
effect at the time of termination, through the date of termination and an
amount equal to his salary multiplied by the number of years remaining under
the agreement, and (ii) an amount equal to all of the consulting fees payable
under the terms of Mr. Granoff's consulting agreement with Ameritrans, as
discussed below. The employment agreement also provides for confidentiality
and for non-competition, and non-solicitation during the term of the agreement
and for one (1) year thereafter.

                                          41
<page>

In conjunction with the employment agreement we also entered into an amended and
restated consulting agreement with Mr. Granoff, which replaces the consulting
agreement by and between the Company and Mr. Granoff dated as of July 1, 2001.
The consulting agreement does not become effective and does not commence unless
and until the employment agreement is terminated due to (i) Mr. Granoff's
voluntary resignation from the Company or (ii) a notice of non-renewal of the
employment agreement from either the Company or the Consultant. Upon the
effectiveness of the consulting agreement Mr. Granoff shall be paid as a
consultant at a rate equal to 1/2 the monthly salary in effect at the time the
employment agreement is terminated plus any bonus received, if any, for that
employment year and other benefits. The agreement also provides for
confidentiality and non-competition for the term of the agreement, and
non-solicitation during the term of the agreement and for one (1) year
thereafter.

Ellen Walker. We entered into an employment agreement with Ellen Walker for a
term of five (5) years dated as of October 1, 2001. The agreement automatically
renews for another five (5) year term unless either party terminates prior to
renewal. The agreement provides that Ms. Walker is paid an annual salary,
which presently is $128,685 for the twelve months ending September 30, 2005,
and increases each year the agreement is in effect. The agreement also provides
that Ms. Walker will be paid a yearly bonus, at the discretion of Ameritrans,
based on her and the Company's performance. The agreement provides for
compensation to Ms. Walker if she is terminated prior to the expiration of
her employment term, the exact amount of which varies depending upon the nature
of the termination. If, for instance, Ms. Walker terminates the employment
agreement for good reason (as defined in the agreement) she is entitled to a
lump-sum payment equal to the sum of her salary, as in effect at the time of
termination, and an amount equal to her salary multiplied by the number of
years remaining under the agreement or two-and-one half years, whichever is
greater. The agreement also provides for confidentiality and for
non-competition and non-solicitation during the term of the agreement and for
one (1) year thereafter.

Silvia M. Mullens. The agreement with Ms. Mullens is for a term of five years
dated as of January 1, 2002. The agreement automatically renews for another
five-year term unless either party terminates prior to renewal. The agreement
provides that Ms. Mullens will be paid an annual salary which presently is
$106,180 for calendar year 2005, which increases five percent (5%) each year
the agreement is in effect. In fiscal year ended June 30, 2005 Ms. Walker
received a payment in the gross amount of $3,569 for compensation due her not
paid in the fiscal year due to an error. The agreement also provides  that Ms.
Mullens will be paid a yearly bonus, at the discretion of Ameritrans, based on
her and the Company's performance. Ms. Mullens was paid a bones of $20,000
during the fiscal year ended June 30, 2005.  The agreement provides for
compensation to Ms. Mullens if she is terminated prior to the expiration of her
employment term, the exact amount of which varies depending upon the nature of
the termination. If, for instance, Ms. Mullens terminates the employment
agreement for good reason (as defined in the agreement), she is entitled to a
lump-sum payment equal to the sum of her salary, as in effect at the time of
termination, and an amount equal to her salary multiplied by the number of
years remaining under the agreement or two-and-one-half (2 1/2) years,
whichever is greater. The agreement also provides for confidentiality and for
non-competition and non-solicitation during the term of the agreement and for
one year thereafter.

Lee Forlenza. We entered into an amended and restated employment agreement
with Lee Forlenza dated December 31, 2002, for a five (5) year term commencing
as of July 1, 2003, which replaces the employment agreement by and between the
Company and Mr. Forlenza dated October 1, 2001. The agreement automatically
renews for a five (5) year term, unless either party gives notice of
non-renewal prior to the expiration of the initial term. The agreement
provides that Mr. Forlenza is paid an annual salary which presently is $79,300
for the fiscal year ended June 30, 2005, and increases each year the agreement
is in effect. The agreement also provides that Mr. Forlenza will be paid a
yearly bonus based on his and the Company's performance, an amount of which is
determined by the Board of Directors but which may not be less than $10,000 for
the first five (5) years of the employment agreement, and an initial bonus of
$7,500. If the employment agreement is renewed, any bonus after the initial
term will be paid solely in the discretion of the Board. The agreement provides
for compensation to Mr. Forlenza if he is terminated prior to the expiration
of his employment term, the exact amount of which varies depending upon the
nature of the termination. If Mr. Forlenza terminates the  employment
agreement for good reason (as defined in the agreement, he is entitled to a
lump-sum payment equal to the sum of his salary, as in effect at the time of
termination, and an amount equal to his salary multiplied by the number of
years remaining under the agreement or two-and-one half years, whichever is
greater. The agreement also provides for confidentiality and for
non-competition, and for non-solicitation during the term of the agreement
and for one (1) year thereafter.

                                       42
<PAGE>

Margaret Chance. The agreement with Ms. Chance is for a term of five (5)
years dated as of January 1, 2002. The agreement automatically renews for
another five-year term unless either party terminates prior to renewal. The
agreement provides that Ms. Chance is paid an annual salary which presently
is $83,520 for calendar year 2005
which increases four percent (4%) each year
the agreement is in effect. The agreement also provides that Ms. Chance will
be paid a yearly bonus, at the discretion of Ameritrans but which shall not
be less than $8,500 per year, based on her and the Company's performance. Ms.
Chance was paid a bonus of $15,000 during the fiscal year ended June 30, 2005.
The agreement provides for compensation to Ms. Chance if she is terminated prior
to the expiration of her employment term, the exact amount of which varies
depending upon the nature of the termination. If, for instance, Ms. Chance
terminates the employment agreement for good reason (as defined in the
agreement), she is entitled to a lump-sum payment equal to the sum of her
salary, as in effect at the time of termination, and an amount equal to her
salary multiplied by the number of years remaining under the agreement or
two-and-one-half (2 1/2) years, whichever is greater. The agreement also
provides for confidentiality and for non-competition and non-solicitation
during the term of the agreement and for one year thereafter.

STOCK OPTION PLANS

The descriptions of the 1999 Employee Plan and the Director Plan set forth below
are qualified in their entirety by reference to the text of the plans.

1999 EMPLOYEE PLAN

An employee stock option plan (the "1999 Employee Plan") was adopted by the
Ameritrans Board of Directors, including a majority of the non-interested
directors, and approved by a stockholder vote, in order to link the personal
interests of key employees to our long-term financial success and the growth of
stockholder value. An amendment to the 1999 Employee Plan was approved by the
shareholders in January, 2002. The amendment increased the number of shares
reserved under the plan from 125,000 to 200,000 shares.


The 1999 Employee Plan authorizes the grant of incentive stock options within
the meaning of Section 422 of the Internal Revenue Code for the purchase of an
aggregate of 200,000 shares (subject to adjustment for stock splits and similar
capital changes) of common stock to our employees. By adopting the 1999 Employee
Plan, the Board believes that we will be better able to attract, motivate and
retain as employees people upon whose judgment and special skills our success in
large measure depends. On October 29 2004, options to purchase an aggregate of
20,450 shares of Common Stock exercisable at $4.50 per share were granted to
certain
 officers of Ameritrans as set forth in Item  12 below.  On the same
date, Gary Granoff was granted options to purchase 13,350 shares of Common Stock
exercisable at $4.95 per share.  All of these options expire On October 29,
2009.  On May 27, 2005, options to purchase an aggregate of 70,000 shares of
Common Stock exercisable at $8.88 per share were cancelled pursuant to a
unanimous written consent of the Board and consent of each option holder.
 Accordingly, as of June 30, 2005, options to purchase an aggregate of 33,800
 shares of Common Stock were outstanding, and 166,200 shares of Common Stock
 are available for future awards under the 1999 Employee Plan.

                                  43

<page>


The 1999 Employee Plan is administered by the 1999 Employee Plan Committee of
the Board of Directors, which is comprised solely of non-employee directors (who
are "outside directors" within the meaning of Section 152(m) of the Internal
Revenue Code and "disinterested persons" within the meaning of Rule 16b-3 under
the Securities Exchange Act of 1934 (the "1934 Act")). The committee can make
such rules and regulations and establish such procedures for the administration
of the 1999 Employee Plan as it deems appropriate.

NON-EMPLOYEE DIRECTOR PLAN

A stock option plan for non-employee directors (the "Director Plan") was
adopted by the Ameritrans Board of Directors and approved by a stockholder
vote, in order to link the personal interests of non-employee directors to
our long-term financial success and the growth of stockholder value. The
Director Plan is substantially identical to, and the successor to, a
non-employee director stock option plan adopted by the Board of Directors of
Elk and approved by its stockholders in September 1998 (the "Elk Director
Plan"). Ameritrans and Elk submitted an application for, and received on
August 31, 1999, an exemptive order relating to these plans from the SEC.
The Director Plan was amended by the Board of Directors on November 14, 2001
and approved by the shareholders at the Annual Meeting on January 18, 2002.
The amendment is still subject to the approval of the Securities and Exchange
Commission. The amendment (i) increases the number of shares reserved under
the plan from 75,000 to 125,000 and (ii) authorizes the automatic grant of an
option to purchase up to 1,000 shares at the market value at the date of grant
to each eligible director who is re-elected to the Board of Directors.

The Director Plan provides for the automatic grant of options to directors who
are not employees, officers or interested persons of the Company (an "Eligible
Director") who are elected and serve one year on the Board of Directors. By
adopting the Director Plan, the Board believes that the Company will be better
able to attract motivate and retain as directors people upon whose judgment and
special skills our success in large measure depends. The goal, policy and
purpose of the Director Plan is to attract, motivate and retain as directors,
individuals upon whose judgment and special skills the Company's success
depends. As such, the Director Plan, in an effort to retain these individuals
serving on the Board, allows for automatic grants of new options under the Plan
upon expiration of the initial five (5) year term. Upon expiration of these
options, and with approval of the Board, new options may be automatically
granted to the Directors, with an exercise price equal to the last sales price
as of the close of business on date of expiration.


The total number of shares for which options may be granted from time to time
under the Director Plan is 75,000 shares, which will be increased to 125,000
shares upon SEC approval of the Amended Director Plan.  As of June 30, 2005,
options to purchase an aggregate of 46,957 shares were outstanding. On August
31, 2004, options to purchase an aggregate of 11,112 shares of common stock,
exercisable at $9.00 per share
 expired.  Pursuant to the automatic grant
provisions of the Director Plan, on the same date the options expired, options
to purchase an aggregate of 20,040 shares of Common Stock exercisable at $4.99
per share were granted. On January 12, 2005 options to purchase an aggregate of
11,112 shares of Common Stock, exercisable at $6.25 per share were granted to
purchase an aggregate of 16,000 shares of Common Stock exercisable at $6.25 per
share were granted pursuant to the automatic grant provisions of the Director
Plan.  The Director Plan is administered by a committee of directors who are
not eligible to participate in the Director Plan.

                                  44
<page>


SIMPLIFIED EMPLOYEE PENSION PLAN

In 1996, Elk adopted a simplified employee pension plan covering, at present,
all eligible employees of the Company. Contributions to the plan are at the
discretion of the Board of Directors. During the fiscal year ended June 30, 2005
contributions amounted to $127,376.

GARY C. GRANOFF'S FISCAL 2004 COMPENSATION

The Board of Directors has set Gary C. Granoff's total annual compensation at a
level it believes to be competitive with the chief executive officers of
similarly capitalized specialty finance companies. Gary C. Granoff, in his
capacity as Chief Executive Officer, is eligible to participate in the same
executive compensation program available to Ameritrans' other senior executives.

STOCK PERFORMANCE GRAPH

Although Ameritrans' Common Stock is listed on the Nasdaq  Market trading in
Ameritrans' Common Stock has been extremely limited, making it difficult to
meaningfully compare the performance of Ameritrans' Common Stock to that of
other similar companies or a broad market index. Therefore, Ameritrans has
not included a stock performance graph.

                      45
<page>

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

As of September 20, 2005, there were 2,035,600 shares of the Company's Common
Stock, $.0001 par value, and 300,000 shares of Participating Preferred Stock
outstanding. The following table sets forth certain information as to (i)
those persons who, to our knowledge, owned 5% or more of our outstanding
common stock as of September 19, 2005, (ii) each of our directors and
(iii) all of our officers anddirectors as a group. Except as set forth below,
the address of each personlisted below is the address of Ameritrans.


<TABLE>
<CAPTION>
                                                                                    NUMBER OF
                                            NUMBER OF            PERCENTAGE OF       SHARES OF           PERCENTAGE OF
                                             SHARES OF            OUTSTANDING       PARTICIPATING         OUTSTANDING
                                           COMMON STOCK           COMMON STOCK       PREFERRED             PREFERRED
NAME                                           OWNED                  OWNED          STOCK OWNED          STOCK OWNED
------------------------------           -------------------     -----------------  ------------------   --------------
<S>                                            <C>                      <C>               <C>                 <C>
*Gary C. Granoff                               339,975(1)               16.70%            7,038(a)            2.34%

*Ellen M. Walker                                42,374(2)                2.08%               **                 **

*Lee A. Forlenza                                43,523(3)                2.14%            1,000                 **

*Steven Etra                                   124,681(4)                6.13%               **                 **

Paul Creditor                                    12,020(5)                 **                **                 **

Allen Kaplan                                     15,020(6)                 **                **                 **

John R. Laird                                    8,100(7)                  **                **                 **

Howard F. Sommer                                 8,000(8)                  **                **                 **

Wesley Finch                                    40,788(9)                2.00%           10,000               3.33%

Dan M. Granoff                                 164,579(10)               8.08%               **                 **

Paul D. Granoff                                143,179(11)               7.03%               **                 **
c/o Rush-Copley Medical Center
1900 Ogden Avenue
Aurora, IL 60504

Infinity Capital Partners, L.P.                202,200                   9.90%               **                 **
767 Third Avenue, 16th Floor
New York, New York 10017

*Margaret Chance                                 7,240(12)                  **               220(b)             **

*Silvia Mullens                                  3,350(13)                 **                **                 **

Mitchell Partners L.P.                         188,585                   9.26%           12,000               4.00%
3187-D Airway Avenue
Costa Mesa, CA 92626

All Officers and Directors, as                 645,071                  31.68%           18,258               6.09%
a group (11 persons)***
</TABLE>

*    Gary C. Granoff, Ellen M. Walker, Lee A. Forlenza, Steven Etra, Margaret
     Chance, and Silvia Mullens are each "interested persons" with respect to
     Ameritrans and Elk, as such term is defined in the 1940 Act.

**   Less than 1%.


                                       46
<PAGE>

(1)    Includes (i) 155,180 ("Shares") owned directly by Mr. Granoff; (ii) 3,300
       Public Warrants (iii) 16,900 Shares owned by the Granoff Family
       Foundation, a charitable foundation for which Mr. Granoff and his mother
       and brother are trustees; (iv) 261 Shares held by GCG Associates Inc., a
       corporation controlled by Mr. Granoff; (v) 78,584 Shares and 500 Public
       Warrants owned by DAPARY Management Corp., a corporation controlled by
       Mr. Granoff; (vi) 12,000 Shares and 1,000 Warrants owned by J & H
       Associates Ltd. Pts., a partnership whose general partner is GCG
       Associates Inc., a corporation controlled by Mr. Granoff; (vii)
       57,100 Shares, and 1800 Warrants held by Mr. Granoff in various IRA or
       pension accounts, and (viii) 13,350 Shares issuable upon exercise of
       five-year options issued under the 1999 Employee Plan. Excludes (A)
       12,937 Shares, and 1,000 Public Warrants owned directly by Leslie
       Granoff, Mr. Granoff's wife, of which Shares he disclaims beneficial
       ownership; and (B) 47,855 Shares held by JR Realty Corp., a company owned
       in part and controlled in part by Mr. Granoff's wife, where Mr. Granoff
       serves as Treasurer.

     a.   Includes (i) 500 shares of Participating Preferred Stock, owned by
          DAPARY Management Corp., a corporation controlled by Mr. Granoff; (ii)
          1,000 shares of Participating Preferred Stock owned by J & H
          Associates Ltd. Pts., a partnership whose general partner is GCG
          Associates Inc., a corporation controlled by Mr. Granoff; (iii) 5,538
          shares of Participating Preferred Stock held by Mr. Granoff in various
          IRA or pension accounts. Excludes 1,000 shares of Participating
          Preferred Stock directly owned by Leslie Granoff, Mr. Granoff's wife,
          of which Shares he disclaims beneficial ownership.

(2)    Includes (i) 200 Shares held by Ms. Walker as custodian for her son,
       Paul; (ii) 22,800 Shares held by various trusts of which Ms. Walker is a
       trustee and as to which she disclaims beneficial ownership (Gary C.
       Granoff retains a reversionary interest in 21,000 of such Shares), and
       (iii) 5,000 Shares issuable upon the exercise of ten-year options issued
       under the 1999 Employee Plan


(3)  Includes (i) 35,218 Shares held directly by Mr. Forlenza, (ii) 3,230 Shares
     held for the benefit of Mr. Forlenza's IRA, (iii) 700 Public Warrants, and
     (iv) 4,375 Shares issuable upon the exercise of five-year options issued
     under the 1999 Employee Plan.

(4)  Includes (i) 8,294 Shares held directly by Mr. Etra; (ii) 29,022 Shares
     owned jointly by Mr. Etra and his wife; (iii) 27,000 Shares held by Mr.
     Etra's wife; (iv) 35,990 Shares held by Fiserv Securities Inc. for the
     benefit of Mr. Etra's IRA; (v) 10,000 Shares held by SRK Associates LLC, a
     limited liability company controlled by Mr. Etra, (vi) 10,000 Shares held
     by Lance's Property Development Corp. Pension Plan, of which Mr. Etra is a
     trustee; and (vii) 4,375 Shares issuable upon the exercise of five-year
     options issued under the 1999 Employee Plan.

(5)  Includes 10,020 Shares issuable upon the exercise of five-year options
     issued under the Non-Employee Director Plan (the "Director Plan").

(6)   Includes 10,020 Shares issuable upon exercise of five-year options issued
     under the Director Plan.

(7)  Includes 100 Shares owned directly by Mr. Laird and 8,000 Shares issuable
     upon exercise of five-year options issued under the Director Plan.

(8)  Includes 8,000 Shares issuable upon exercise of five-year options issued
     under the Director Plan.

(9)  Includes (i) 19,871 Shares owned directly by Mr. Finch; (ii) 10,917 Shares
     issuable upon exercise of five-year options issued under the Director Plan,
     and (iii) 10,000 Public Warrants. Excludes (A) 6,000 Shares owned directly
     by Mr. Finch's wife as to which he disclaims beneficial ownership and (B)
     26,300 Shares held by the Tudor Trust, a grantor trust, of which Mr. Finch
     is the grantor, Mr. Finch's wife and their two children are the
     beneficiaries, and Mr. Finch's wife is one of the two trustees. Mr. Finch
     disclaims beneficial ownership of the trust's 26,300 Shares.

                             47
<page>


(10) Includes (i) 143,179 Shares owned by Dr. Dan Granoff directly; (ii) 16,900
     Shares owned by the Granoff Family Foundation, a charitable foundation, of
     which Jeannette Granoff, Gary C. Granoff, and Dr. Dan M. Granoff are the
     trustees; and (iii) 4,000 Shares held in an IRA Rollover Account for the
     benefit of Dr. Granoff.

(11) Includes 40,049 Shares held by Dr. Paul Granoff directly, 77,630 held by
     Granoff Family Partners Ltd., of which Dr. Granoff is a general partner,
     and 25,500 Shares held by the Granoff Pediatric Associates Profit Sharing
     Plan. Excludes 14,127 Shares held by Suzanne Granoff, Dr. Granoff's wife,
     of which Shares he disclaims beneficial ownership.

(12) Includes (i) 1,200 Shares owned directly by Ms. Chance, (ii) 200 Shares
     held by Ms. Chance as custodian for her daughter, Alexis Chance; (iii) 50
     Shares held directly by her daughter, Alexis Chance; (iv) 2,220 Shares held
     by Ms. Chance in various IRA or pension accounts, (v) 220 Public Warrants
     and (vi) 3,350 Shares issuable upon the exercise of five-year options
     issued under the 1999 Employee Plan.


(13) Includes 3,350 Shares issuable upon the exercise of five-year options
     issued under the 1999 Employee Plan.

        (b) Participating Preferred Stock held in a pension account.

Except pursuant to applicable community property laws or as described above,
each person listed in the table above has sole voting and investment power, and
is both the owner of record and the beneficial owner of his or her respective
Shares.



The following table details information regarding the Company's existing equity
compensation plans as of June 30, 2005:

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Elk pays legal fees, on a fixed or hourly basis, for loan closing services
relating to loans other than New York taxi and radio car loan closings to
Granoff, Walker & Forlenza, P.C. ("GWF") whose stockholders are officers and
directors of Elk and Ameritrans. Such services related to New York taxi and
radio car loans are provided by the officers and employees of Elk. Elk paid GWF
approximately $115,000 in fees during the fiscal year ended June 30, 2005. Elk
generally charges its borrowers loan origination fees to generate income to
offset the legal fees paid by Elk for loan closing services.

We also rent office space from GWF and share certain office expenses with that
firm. In November 2003, the Board of Directors approved a new sublease with the
law firm to take effect upon the expiration of the prior sublease, May 1, 2004,
and to continue through April 20, 2014 and accounts for certain retroactive
adjustments per the agreement. The Company is presently utilizing 37% of the
landlord's space and therefore committed to the minimum 37% utilization factor
on all rent, additional rent and electricity charges billed to landlord, and
subject to annual increases as per the master lease agreement between the
landlord and the law firm. In the event that more space is utilized, the
percentage of the total rent shall be increased accordingly. In addition, the
Company is also obligated to pay for its share of overhead expenses as noted in
the agreement, currently a minimum of $3,000 a month. For the fiscal year ended
June 30, 2005, we paid $84,226 in rent, $36,000 in shared overhead expense, and
$20,664 of other reimbursable shared overhead expense.



                                       48
<PAGE>

During the fiscal year ended June 30, 1998, GWF exercised an option in its
lease, at our request, and rented an additional 1,800 square feet of office
space contiguous with our offices at a below market rent (the "Additional
Space"). In August, 2001, the Company's Board of Directors approved the
execution of a formal sublease with the law firm on financial terms and
conditions consistent with the prior arrangement for the period July 1, 2001
through April 30, 2004. The terms for the Additional Space are included in the
new sublease with the law firm approved by the Board of Directors in November
2003 to take effect upon the expiration of the prior sublease, May 1, 2004, and
to continue through April 20, 2014. Until we require the Additional Space, the
law firm sublets the Additional Space to outside tenants under short-term
arrangements. In the event all or a portion of the Additional Space is vacant,
Elk's Board of Directors has agreed to reimburse the law firm for the additional
rent due. During the year ended 2005, No additional amount was paid in
connection with this agreement.

Effective July 1, 2003, the Company entered into a new ten-year sublease for
additional office and storage space with an entity in which an officer and
shareholder of the Company has an interest. The new sublease calls for rental
payments ranging from $38,500 to $54,776 per annum from the first year ending
June 30, 2004 through the year ending June 30, 2013. The sublease contains a
provision that either party may terminate the lease in years seven through ten
with six months' notice. Rent expense under the lease amounted to $47,576 for
the year ended June 30, 2005.

CONFLICTS OF INTEREST POLICIES AND CODE OF ETHICS

The Boards of Directors of Ameritrans and Elk have adopted policies governing
potential conflicts of interest between the companies and their directors and
officers. Together, these policies comprise our "Code of Ethics" as required
under the 1940 Act.  On July 5, 2005, the Board adopted an amended Code of
Ethics, which is included as Exhibit 14.1 to his filing.

These policies generally provide that no officer, director or employee of the
respective company will make any loan which might be deemed to be appropriate
for that company, unless and until such transaction is first approved by a
majority of the directors of that company who are not "interested persons" of
that company within the meaning of the 1940 Act and who have no financial or
other material interest in the transaction. A loan would not be deemed to be
appropriate for Elk if in any manner such loan (or investment) would in any way
violate SBA Regulations in effect at the time of making such loan or investment.
In reviewing any such transaction, the directors will examine, among other
factors, whether the transaction would deprive the company of an opportunity or
whether it would otherwise conflict with our best interests and those of our
stockholders. A complete record of any such review and the results of the review
will be maintained by the respective company as part of its permanent records.

The Code of Ethics and any changes or updates thereto will also be posted on the
Company's internet website at the internet address:
http://www.ameritranscapital.com. Copies of the code may be obtained free of
charge from the Company's website at the above internet address.

INDEMNIFICATION OF DIRECTORS AND OFFICERS

The Ameritrans Certificate of Incorporation limits the liability of our
directors for monetary damages arising from a breach of their fiduciary duty as
directors, except to the extent otherwise required by the Delaware General
Corporation Law. This limitation of liability does not affect the availability
of equitable remedies such as injunctive relief or rescission.

The Ameritrans by-laws provide that Ameritrans shall indemnify its officers and
directors to the fullest extent permitted by Delaware law, including in
circumstances in which indemnification is otherwise discretionary under Delaware
law. We have entered into indemnification agreements with our officers and
directors containing provisions that may require Ameritrans, among other things,
to indemnify its officers and directors against certain liabilities that may
arise by reason of their status as directors or officers (other than liabilities
arising from willful misconduct of a culpable nature) and to advance their
expenses incurred as a result of any proceeding against them as to which they
could be indemnified.
                                     49
<page>

Ameritrans has directors' and officers' liability insurance. This policy was
previously held by Elk for the benefit of its officers and directors and was
assumed by Ameritrans upon the completion of the Share Exchange.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

The fees for services provided by Rosen Seymour Shapss Martin & Company LLP, the
Company's independent public accountants, are as follows:

AUDIT FEES

Fees for the audit of the Company's annual financial statements and the review
of the financial statements included in the Company's Form 10-Q for the years
ended June 30, 2005 and 2004 were $115,400 and $85,100, respectively.


AUDIT-RELATED FEES

Fees for audit related services for the years ended June 30, 2005 and 2004
were $5,300 and $11,700 respectively.

TAX FEES

Fees for professional services by the accountants for tax compliance, tax
advice, and tax planning for the years ended June 30, 2005 and 2004 are $0.

ALL OTHER FEES

Fees for services provided by the accountants, other than the services rendered
in the above paragraphs, for the years ended June 30, 2005 and 2004 were $0.

AUDIT COMMITTEE POLICIES AND PROCEDURES

The Audit Committee will recommend to the Board the selection of the independent
accountants, considering independence and effectiveness and approve the fees
and other compensation to be paid to the independent accountants.  On an annual
basis, the Committee shall review and discuss with the independent accountants
all significant relationships the independent accountants have with the
Corporation and relevant third parties to determine the independent
accountants' independence.  In making this determination, the Committee
shall consider not only auditing and other transitional accounting functions
performed by the independent accountants and their affiliates.  The Committee
will also require the independent accountants to submit on an annual basis a
formal written statement delineating all relationships among the Corporation,
 the independent accountants, and their respective affiliates.

   1.  The independent accountants are ultimately accountable to the Audit
       Committee and the Board of Directors.  The Audit Committee shall
       review the independence and performance of the accountants and shall be
       responsible for the annual appointment of the independent accountants
       when circumstances warrant.
   2.  The Audit Committee shall approve the audit fees and other compensation
       to be paid to the independent accountants or approve any discharge of
       accountants when circumstances warrant.
   3.  Prior to releasing the year-end earnings, the Audit Committee shall
       discuss the results of the audit with the independent accountants.
       Discuss certain matters required to be communicated to Audit Committee.
   4.  In making this determination, the Committee shall consider not only
       auditing and other traditional accounting functions performed by the
       independent accountants and their affiliates.  The Committee will
       also require the independent accountants to submit on an annual basis
       a formal written statement delineating all relationships among the
       Corporation, the independent accountants, and their respective
       affiliates.
   5.  Review the performance of the independent accountants and approve any
       proposed discharge of the independent accountants when circumstances
       warrant.
   6.  Periodically consult with the independent accountants out of the presence
       of management about internal controls and the fullness and accuracy of
       the organization's financial statements.  Among the items to be
       discussed in these meetings are the independent accounts' evaluation of
       the Corporation's financial, and accounting personnel, and the
       cooperation that the independent accountants received during the course
       of each audit.

IMPORTANT FACTORS RELATING TO FORWARD-LOOKING STATEMENTS

The Private Securities Litigation Reform Act of 1995 provides a "safe harbor"
for forward-looking statements so long as those statements are identified as
forward-looking and are accompanied by meaningful cautionary statements
identifying important factors that could cause actual results to differ
materially from those projected in such statements. In connection with certain
forward-looking statements contained in this Form 10-K and those that may be
made in the future by or on behalf of Ameritrans, Ameritrans notes that there
are various factors that could cause actual results to differ materially from
those set forth in any such forward-looking statements. The forward looking
statements contained in this Form 10-K were prepared by management and are
qualified by, and subject to, significant business, economic, competitive,
regulatory and other uncertainties and contingencies, all of which are
difficult or impossible to predict and many of which are beyond the control of
Ameritrans. Accordingly, there can be no assurance that the forward-looking
statements contained in this Form 10-K will be realized or that actual results
will not be significantly higher or lower. Readers of this Form 10-K should
consider these facts in evaluating the information contained herein.
In addition, the business and operations of Ameritrans are subject to
substantial risks which increase the uncertainty inherent in the
forward-looking statements contained in this Form 10-K. The inclusion of
the forward-looking statements contained in this form 10-K should
not be regarded as a representation by Ameritrans or any other person that the
forward-looking statements contained in this Form 10-K, will be achieved. In
light of the foregoing, readers of this Form 10-K are cautioned not to place
undue reliance on the forward-looking statements contained herein. These risks
and others that are detailed in this Form 10-K and other documents that
Ameritrans files from time to time with the Securities and Exchange Commission,
including quarterly reports on Form 10-Q and any current reports on Form 8-K
must be considered by any investor or potential investor in Ameritrans.

<page>

<PAGE>

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of Securities Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized, on this 28th day of September, 2005.
AMERITRANS CAPITAL CORPORATION


By: /s/ Gary C. Granoff

   -----------------------------------
   Gary C. Granoff, President

As required by the Securities Exchange Act of 1934, this report has been signed
by the following persons in the capacities and on the dates indicated.

SIGNATURE                  TITLE                              DATE

/s/ Gary C. Granoff       President, Chairman of the Board ofSeptember 28, 2005
                          Directors, Chief Executive Officer
                          and

-----------------------
Gary C. Granoff           Chief Financial Officer

/s/ Ellen M. Walker      Executive Vice President            September 28, 2005
                         and Director

-------------------
Ellen M. Walker


/s/ Lee A. Forlenza      Senior Vice President and Director  September 28, 2005

-----------------------
Lee A. Forlenza

/s/ Steven Etra          Vice President and Director         September 28, 2005

-----------------------
Steven Etra


/s/ Paul Creditor        Director                            September 28, 2005

-----------------------
Paul Creditor
/s/ Allen Kaplan         Director                            September 28, 2005

-----------------------
Allen Kaplan

/s/ John R. Laird        Director                            September 28, 2005


-----------------------
John R. Laird

/s/ Howard F. Sommer     Director                            September 28, 2005
-----------------------
Howard F. Sommer

/s/ Wesley Finch         Director                            September 28, 2005

-----------------------
Wesley Finch


<page>

                                     PART IV


ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

a) 1 and 2 FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES

1. The financial statements and financial statement schedules as listed in the
Index to Financial Statements are filed as part of this Annual Report on Form
10-K.

2. No financial statement schedules are filed herewith because the information
required has been presented in the aforementioned financial statements.

b) REPORTS ON FORM 8-K

On September 20, 2005, the Company filed a current report on Form 8-K reporting
under Item 2.02 that the Company issued a press release announcing the
its third quarter results 9 3/8% Preferred Stock. (11)

On July 22, 2005 the Company filed a current report on Form 8-K reporting under
Item 8.01 that the Company issued a press release announcing the results of a
vote at a Special Meeting of Shareholders held on July 21, 2005 approving a
private offering of the Company's common stock. (12)

On July 1, 2005 the Company filed a current report on Form 8-K reporting under
Item 2.02 (Regulation FD Financial Disclosure) that the Company issued a press
release announcing the receipt of sales proceeds from the Arlington, Virginia
hotel investment. (13)

On June 27, 2005 the Company filed a current report on Form 8-K reporting under
item 8.01 that the Company issued a press release announcing a Special Meeting
of Shareholders to be held July 21, 2005.  (14)

On June 20, 2005 the Company filed a current report on Form 8-K reporting under
Item 2.02 (regulation FD Financial Disclosure) that the Company issued a press
release announcing the declaration of a quarterly dividend on its 9 3/8%
Preferred Stock. (15)

On May 19, 2005 the Company filed a current report on Form 8-K reporting under
Item 2.02 (Regulation FD Financial Disclosure) that the Company issued a press
release announcing a development with an Arlington, Virginia hotel investment.
(16)

On May 16, 2005 the Company filed a current report on Form 8-K reporting under
Items 2.02 and 9.01 that the Company issued a press release announcing its
third quarter results. (17)

On March 22, 2005, the Company filed a current report on Form 8-K reporting
under Items 2.02 and 9.01 that the Company issued a press release announcing
the declaration of a quarterly dividend on its 9 3/8% Preferred Stock. (18)


<page>

On February 23, 2005, the Company filed a current report on Form 8-K reporting
under Item 2.02 that the Company issued a press release announcing its share
ownership in Fusion Telecommunications Internation Inc. (19)

On February 14, 2005, the Company filed current report on Form 8-K reporting
under items 2.02 and 9.01 that the Company issued a press release announcing
its second quarter results. (20)

On December 20, 2005, the Company filed a current report on Form 8-K reporting
under item 9.01 that the Company issued a press release announcing the
declaration of a quarterly dividend on its 9 3/8% Preferred Stock. (21)

On November 15, 2004, the Company filed a current report on Form 8-K reporting
under items 2.02 and 9.01 that the company issue a pre release announcing its
first quarter results. (22).

On September 21, 2004, the Company filed a current report on Form 8-K reporting
under Item 2.02 that the Company issued a press release announcing the
declaration of a quarterly dividend on its 9 3/8% Preferred Stock. (23)

On May 17, 2004 the Company filed a current report on Form 8-K reporting under
Item 9 (Regulation FD Financial Disclosure) that the Company issued a press
release announcing its third quarter results.

c) EXHIBITS

The Exhibits filed as part of this Annual Report on Form 10-K are listed on the
Exhibit Index immediately preceding such Exhibits, which Exhibit Index is
incorporated by reference.




EXHIBIT INDEX
Exhibit
Number    Exhibit
--------  -------
2.1        Agreement and Plan of Merger dated as of May 4, 2000 by and among
           Medallion Financial Corp., AMTC Merger Corp., and Ameritrans Capital
           Corporation.(1)

2.2        Amendment No. 8 dated as of August 29, 2000 to the Agreement and Plan
           of Merger dated as of May 4, 2000 by and among Medallion Financial
           Corp., AMTC Merger Corp., and Ameritrans Capital Corporation.(2)

3(i)       Certificate of Incorporation(3)

3(ii)      By-laws(3)

4          Form of subordinated debentures issued to the U.S. Small Business
           Administration ("SBA") by Elk Associates Funding Corporation ("Elk")
           - Debenture issued March 26, 1997 - principal amount - $430,000;
           Maturity Date - March 1, 2007; Stated Interest Rate - 7.38%.(4)

The following debentures are omitted pursuant to Rule 483:
           a.         Debenture issued September 22, 1993 - principal amount -
                      $1,500,000; Maturity Date - September 1, 2003; Stated
                      Interest Rate - 6.12%.

           b.         Debenture issued September 22, 1993 - principal amount -
                      $2,220,000;  Maturity Date - September 1, 2003; Stated
                      Interest Rate - 6.12%.

           c.         Debenture issued September 28, 1994 - principal amount -
                      $2,690,000; Maturity Date - September 1, 2004; Stated
                      Interest Rate - 8.20%.

           d.         Debenture issued December 14, 1995 - principal amount -
                      $1,020,000; Maturity Date - December 1, 2005; Stated
                      Interest Rate - 6.54%.

           e.         Debenture issued June 26, 1996 - principal amount -
                      $1,020,000; Maturity Date - June 1, 2006; Stated Interest
                      Rate - 7.71%.


<PAGE>

10.1       Security Agreement between Elk and the SBA, dated September 9,
           1993.(4)

10.3       1999 Employee Stock Option Plan.(5)

10.4       Non-Employee Director Stock Option Plan.(5)

10.5       Custodian Agreement among Elk; Bank Leumi Trust Company of New York
           ("Leumi"), Israel Discount Bank of New York ("IDB"), Bank Hapoalim
           B.M. ("Hapoalim") and Extebank; the SBA, and IDB as Custodian; dated
           September 9, 1993 (the "Custodian Agreement").(4)

10.6        Agreements between Elk and the SBA.(4)

10.7       Intercreditor Agreement among Elk, Leumi, IDB, Hapoalim, Extebank and
           the SBA dated September 9, 1993 (the "Intercreditor Agreement") (4)

10.8       Amendments to the Custodian and Intercreditor Agreements.(4)
           a. Amendment removing Hapoalim and Extebank and adding
                      European American Bank ("EAB"), dated September 28,
                      1994.

           b. Form of Amendment adding bank:

                      i.         Amendment adding United Mizrahi Bank and Trust
                                 Company ("UMB"), dated June, 1995 was
                                 previously filed.

                      ii.        Amendment adding Sterling National Bank and
                                 Trust Company of New York ("Sterling"), dated
                                 April, 1996 - omitted pursuant to Rule 483.

10.9       Bank Intercreditor Agreement among Elk, Leumi, IDB, Hapoalim and
           Extebank, dated September 9, 1993 (the "Bank Intercreditor
           Agreement").(4)

10.10      Amendments to the Bank Intercreditor Agreement.(4)

           a. Amendment removing Hapoalim and Extebank and adding
              European American Bank ("EAB"), dated September 28, 1994.

           b. Form of Amendment adding bank:

                      i.  Amendment adding UMB, dated June, 1995 was
                          previously filed.

                      ii. Amendment adding Sterling, dated April, 1996 -
                          omitted pursuant to Rule 483.

10.11      Letter Agreement renewing line of credit for Elk with IDB Bank dated
           April 13, 2004.(6)

10.12      Promissory Note dated March 3, 2003 between Ameritrans and Bank Leumi
           USA and Letter Agreement dated March 11, 2003 between aforementioned
           parties.(6)

10.13      Master Note dated October 4, 1999 between Ameritrans and European
           American Bank.(6)

10.14      Line of Credit Agreement dated January 3, 2002 between Elk and
           Citibank.(7)

10.15      Form of indemnity agreement between Ameritrans and each of its
           directors and officers.(3)

10.16      Amended and Restated Employment Agreement dated as of December 31,
           2002 between Ameritrans and Gary Granoff.(8)

10.17      Amended and Restated Consulting Agreement dated as of December 31,
           2002 between Ameritrans and Gary Granoff.(8)

10.18      Amended and Restated Employment Agreement dated as of December 31,
           2002 between Ameritrans and Lee Forlenza.(8)

10.19      Employment Agreement dated as of October 1, 2001 between Ameritran
           and Ellen Walker.(9)

10.20      Employment Agreement dated as of January 1, 2002 between Ameritrans
           and Silvia Mullens.(9)

10.21      Employment Agreement dated as of January 1, 2002 between Ameritrans
           and Margaret Chance.(9)



<PAGE>

14.1       Code of Ethics of Ameritrans Capital Corporation.

21.1       List of Subsidiaries of Ameritrans.(10)

31.1       Certification pursuant to 18 USC Section 1350, as adopted pursuant to
           Section 302 of the Sarbanes-Oxley Act of 2002.

32.1       Certification pursuant to 18 USC Section 1350, as adopted pursuant to
           Section 906 of the Sarbanes-Oxley Act of 2002.
99.1       Ameritrans Audit Committee Charter(10)

------------

(1)  Incorporated by reference from the Registrant's Current Report on 8-K
      (Item V) (File No. 333-63951) filed on May 12, 2000.

(2)  Incorporated by reference from the Registrant's Current Report on 8-K
     (Item V) (File No. 333-63951) filed on September 6, 2000.

(3)  Incorporated by reference from the Registrant's Registration
     Statement on Form N-14 (File No. 333-63951) filed September 22, 1998.

(4)  Incorporated by reference from the Registrant's Registration
     Statement filed on Form N-2 (File No. 333-82693) filed July 12, 1999.

(5)  Incorporated by reference from the Registrant's Proxy Statement on
     Form 14A (File No. 811-08847) filed on December 14, 2001.

(6)  Incorporated by reference from the Registrant's 10-Q (File No.
     811-08847) filed May 14, 2004.

(7)  Incorporated by reference from the amendment to the Registrant's N-2
     (File No. 333-82693) filed March 1, 2002.

(8)  Incorporated by reference from the Registrant's 10-Q (File No.
     811-08847) filed February 14, 2003.

(9)  Incorporated by reference from the Registrant's 10-Q (File No.
     811-08847) filed February 14, 2002.

(10) Incorporated by Reference from the Registrants 10-K (File No. 811-08847
     filed September 28, 2004.

11.  Incorporated by reference from the Registrants Current Report on form 8-K
     (File No. 811-08847) filed on September 20, 2005.

12.  Incorporated by reference from the Registrants's Current Report form 8-K
     (File No. 811-08847 filed on July 22, 2005.

13.  Incorporated by reference from the Registrants's Current Report form 8-K
     (File No. 811-08847) filed on July 1, 2005.

14.  Incorporated by reference from the Registrants's Current Report form 8-K
     (File No. 811-08847) filed on June 27, 2005.

15.  Incorporated by reference from the Registrants's Current Report form 8-K
     (File No. 811-08847) filed on June 20, 2005.

16.  Incorporated by reference from the Registrants's Current Report form 8-K
     (File No. 811-08847) filed on May 19, 2005.

17.  Incorporated by reference from the Registrants's Current Report form 8-K
     (File No. 811-08847) filed on May 16, 2005.

18.  Incorporated by reference from the Registrants's Current Report form 8-K
     (File No. 811-08847) filed on March 22, 2005.

19.  Incorporated by reference from the Registrants's Current Report form 8-K
     (File No. 811-08847) filed on February 23, 2005.

20.  Incorporated by reference from the Registrants's Current Report form 8-K
     (File No. 811-08847) filed on February 14, 2005

21.  Incorporated by reference from the Registrants's Current Report form 8-K
     (File No. 811-08847) filed on December 20, 2005.

22.  Incorporated by reference from the Registrants's Current Report form 8-K
     (File No. 811-08847) filed on November 15, 2004.

23.  Incorporated by reference from the Registrants's Current Report form 8-K
     (File No. 811-08847) filed on September 21, 2004.


<page>

 AMERITRANS CAPITAL CORPORATION AND SUBSIDIARIES
--------------------------------------------------------------------------------
CONTENTS



June 30, 2005, 2004 and 2003
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>




                                                                                                                   PAGE

REPORTS OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMS

<S>                                                                                                                   <C>
   Rosen Seymour Shapss Martin & Company LLP                                                                  F-2



CONSOLIDATED FINANCIAL STATEMENTS

   Balance Sheets at June 30, 2005 and 2004                                                                   F-3 - F-4

   Statements of Operations for the Years Ended
      June 30, 2005, 2004, and 2003                                                                           F-5

   Statements of Comprehensive Income (Loss) for the Years Ended
      June 30, 2005,  2004, and 2003                                                                          F-6

   Statements of Stockholders' Equity for the Years Ended
      June 30, 2005, 2004 and 2003                                                                            F-7

   Statements of Cash Flows for the Years Ended
      June 30, 2005, 2004 and 2003                                                                           F-8 - F-9

   Notes to Consolidated Financial Statements                                                               F-10 - F-32

   Schedule of Loans as of June 30, 2005                                                                           F-33

</TABLE>


                                      F-1
<PAGE>

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


To the Board of Directors and Stockholders of
Ameritrans Capital Corporation and Subsidiaries:

We have audited the accompanying consolidated balance sheets of Ameritrans
Capital Corporation and Subsidiaries (the "Company") as of June 30, 2005 and
2004, and the related consolidated statements of operations, comprehensive
income (loss), stockholders' equity, and cash flows for each of the three
years in the period ended June 30, 2005, and the schedule of loans as of
June 30, 2005. These consolidated financial statements and schedule are
the responsibility of the Company's management. Our responsibility is to
express an opinion on these consolidated financial statements and schedule
based on our audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

As explained in Note 1, the consolidated financial statements include loans
valued at $51,910,254 and $49,391,219 as of June 30, 2005 and 2004,
respectively, whose values have been estimated by the Board of Directors in the
absence of readily ascertainable market values. We have reviewed the procedures
used by the Board of Directors in arriving at their estimate of the value of
such loans and have inspected underlying documentation and, in the
circumstances, we believe the procedures are reasonable and the documentation is
appropriate. However, because of the inherent uncertainty of valuation, those
estimated values may differ significantly from the values that would have been
used had a ready market for such loans existed.

In our opinion, the consolidated financial statements and schedule referred to
above present fairly, in all material respects, the financial position of
Ameritrans Capital Corporation and Subsidiaries as of June 30, 2005 and 2004,
and the results of their operations and their cash flows for each of the three
years in the period ended June 30, 2005, in conformity with U.S. generally
accepted accounting principles.


                                  /s/ Rosen Seymour Shapss Martin & Company LLP

                                   CERTIFIED PUBLIC ACCOUNTANTS

New York, New York
August 30, 2005

                                      F-2
<PAGE>









<PAGE>



AMERITRANS CAPITAL CORPORATION AND SUBSIDIARIES
--------------------------------------------------------------------------------
CONSOLIDATED BALANCE SHEETS





June 30, 2005 and 2004
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>



                                                                                      2005                   2004
                                                                                ----------------       ----------------

ASSETS
------

<S>                                                                             <C>                    <C>
Loans receivable                                                                $     52,060,254       $     49,900,989
Less unrealized depreciation on loans receivable                                        (150,000)              (509,770)
                                                                                ----------------       ----------------

           Loans receivable, net                                                      51,910,254             49,391,219
Cash and cash equivalents                                                                327,793                416,600
Accrued interest receivable, net of unrealized depreciation
   of $59,000 in 2005 and $30,500 in 2004                                                756,701                969,912

Assets acquired in satisfaction of loans                                                 384,528              1,421,723
Receivables from debtors on sales of assets acquired in satisfaction of loan             455,184                422,158
Equity securities                                                                        908,457              1,038,617
Furniture, equipment and leasehold improvements, net                                     329,573                439,262
Medallions under lease                                                                 2,282,201              2,382,201
Prepaid expenses and other assets                                                        531,904                610,214
                                                                                ----------------       ----------------

           Total assets (Note 8)                                                $     57,886,595       $     57,091,906
                                                                                ================       ================



--------------------------------------------------------------------------------

(Continued)
</TABLE>

                                      F-3
<PAGE>



AMERITRANS CAPITAL CORPORATION AND SUBSIDIARIES
--------------------------------------------------------------------------------
CONSOLIDATED BALANCE SHEETS (Continued)




June 30, 2005 and 2004
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>


                                                                                      2005                   2004
                                                                                   ----------             ----------

Liabilities and Stockholders' Equity
------------------------------------

Liabilities:
<S>                                                                             <C>                    <C>
   Debentures payable to SBA                                                    $     12,000,000       $     12,000,000
   Notes payable, bank                                                                29,770,652             28,908,652
   Accrued expenses and other liabilities                                                604,942                578,790
   Accrued interest payable                                                              256,285                271,630
   Dividends payable                                                                      84,375                 84,375
                                                                                      ----------             ----------

           Total liabilities                                                          42,716,254             41,843,447
                                                                                      ----------             ----------

Commitments and Contingencies

Stockholders' Equity:
   Preferred stock 500,000 shares authorized, none issued or outstanding                       -                      -

   9-3/8% cumulative participating redeemable preferred stock $.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, $.0001 par value; 5,000,000 shares authorized, 2,045,600
      shares issued, 2,035,600 outstanding                                                   205                    205
   Additional paid-in capital                                                         13,869,545             13,869,545
   Accumulated deficit                                                                (2,127,134)            (1,902,408)
   Accumulated other comprehensive loss                                                 (102,275)              (248,883)
                                                                                      ----------             ----------
           Total                                                                      15,240,341             15,318,459
   Less:  Treasury stock, at cost, 10,000 shares
      of common stock                                                                    (70,000)               (70,000)
                                                                                      ----------             ----------

           Total stockholders' equity                                                 15,170,341             15,248,459

           Total liabilities and stockholders' equity                           $     57,886,595       $     57,091,906
                                                                                ================       ================


--------------------------------------------------------------------------------

The accompanying notes are an integral part of these financial statements.
</TABLE>

                                      F-4
<PAGE>


AMERITRANS CAPITAL CORPORATION AND SUBSIDIARIES
--------------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF OPERATIONS



Years Ended June 30, 2005, 2004 and 2003
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>

                                                                              2005             2004              2003
                                                                            ---------         ---------        ---------

Investment Income:
<S>                                                                     <C>               <C>              <C>
  Interest on loans receivable                                          $   4,771,954     $   5,195,741    $   6,072,399
  Gain on sale of equity securities, net (Note 4)                             688,874             5,665            2,976
  Fees and other income                                                       459,598           318,559          209,680
  Leasing income
                                                              211,640           119,527                -

                                                                            ---------         ---------        ---------

        Total investment income                                             6,132,066         5,639,492        6,285,055
                                                                            ---------         ---------        ---------

Operating Expenses:
  Interest                                                                  1,837,633         1,443,416        2,076,861
  Salaries and employee benefits                                            1,128,963         1,022,964          879,074
  Occupancy costs                                                             188,466           207,079          144,279
  Professional fees                                                           675,399           605,168          575,022
  Other administrative expenses                                             1,162,457         1,250,435          963,175
  Loss and impairments on both medallions under lease and
   assets acquired in satisfaction of loans, net                              198,177            44,362           77,343

  Foreclosure expenses                                                         87,695           362,871          313,678
  Write off and depreciation on interest and loans receivable                 728,710         1,024,245          852,512
                                                                            ---------         ---------        ---------

        Total operating expenses                                            6,007,500         5,960,540        5,881,944
                                                                            ---------         ---------        ---------

        Operating income (loss)                                               124,566           (321,048)        403,111
                                                                            ---------         ---------        ---------

Other Expense:
  Equity in loss of investee (Note 4)                                          (4,021)         (29,634)                -
  Loss on sale of automobile                                                      (60)                -                -
                                                                            ---------         ---------        ---------

        Total other expense                                                   (4,081)           (29,634)               -
                                                                            ---------         ---------        ---------

        Income (loss) before income taxes                                     120,485          (350,682)         403,111


Income Taxes                                                                   7,711             16,501            7,897
                                                                            ---------          ---------       ---------
        Net income (loss)                                                    112,774           367,183           395,214

Dividends on preferred stock                                                 (337,500)         (337,500)        (337,500)
                                                                            ---------         ---------        ----------

        Net income (loss) available to common shareholders              $    (224,726)    $    (704,683)    $      57,714
                                                                        =============     =============    ==============


Weighted Average Number of Common Shares Outstanding
  Basic                                                                     2,035,600         2,035,600         2,035,600
                                                                        =============     =============    ==============

  Diluted                                                                   2,035,600         2,035,600         2,035,600
                                                                        =============     =============    ==============


Net (Loss) Income Per Common Share
  Basic                                                                      $ (0.11)          $ (0.35)           $ 0.03
                                                                        =============     =============    =============

  Diluted                                                                    $ (0.11)          $ (0.35)           $ 0.03
                                                                        =============     =============    =============


--------------------------------------------------------------------------------

The Accompanying Notes are an Integral Part of These Financial Statements.
</TABLE>

                                      F-5
<PAGE>


AMERITRANS CAPITAL CORPORATION AND SUBSIDIARIES
--------------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)




Years Ended June 30, 2005, 2004 and 2003
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>





                                                                             2005             2004              2003
                                                                         -----------       -----------     -------------

<S>                                                                      <C>               <C>             <C>
Net income (loss)                                                        $   112,774      $  (367,183)     $     395,214


Other comprehensive income (loss)
  Unrealized gain (loss) on equity securities arising
  during the period                                                           46,583          (13,338)          (200,338)
  Reclassification adjustment for (gain) loss included
  in net income (loss)                                                       100,025           (5,665)                 -
                                                                         -----------       -----------     -------------

        Total comprehensive income (loss)                                $   259,382      $   (386,186)     $    194,876
                                                                         ===========       ===========     =============




--------------------------------------------------------------------------------

The accompanying notes are an integral part of these financial statements.


</TABLE>

                                      F-6
<PAGE>



AMERITRANS CAPITAL CORPORATION AND SUBSIDIARIES
--------------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY


Years Ended June 30, 2005, 2004 and 2003

--------------------------------------------------------------------------------
<TABLE>
<CAPTION>



                                                  9-3/8%
                                                 Cumulative
                                                Participating                                  Accumulated
                                                 Redeemable   Additional                          Other
                                         Common  Preferred     Paid-In   Treasury Accumulated  Comprehensive
                                          Stock     Stock       Capital    Stock     Deficit   Income (Loss)   Total
                                          -----     -----       -------    -----     -------   -------------   -----

<S>           <C>                         <C>             <C>                  <C>  <C>             <C>     <C>
Balance--June 30, 2002                     $205  $ 3,600,000 $13,869,545 $ (70,000) $(703,127)    $ (29,542) $16,667,081
 Dividends declared on common stock          -             -           -        -    (552,312)            -    (552,312)
 Dividends declared on preferred stock       -             -           -        -    (337,500)            -    (337,500)
 Net income                                  -             -           -        -     395,214             -     395,214
 Unrealized loss on equity securities        -             -           -        -           -      (200,338)   (200,338)
                                            --     ---------     -------  -------    --------     ----------   ---------

Balance--June 30, 2003                     205     3,600,000  13,869,545  (70,000)   (1,197,725)   (229,880)  15,972,145
 Dividends declared on preferred stock       -             -           -        -    (337,500)            -    (337,500)
 Net loss                                    -             -           -        -    (367,183)            -    (367,183)
 Unrealized loss on equity securities        -             -           -        -           -      (13,338)     (13,338)
 Reclassification adjustment for gain
  included in net income                     -             -           -        -           -        (5,665)     (5,665)
                                           ---     ---------     -------  -------   ---------            --     -------

Balance--June 30, 2004                     205     3,600,000  13,869,545  (70,000) (1,902,408)     (248,883) 15,248,459
 Dividends declared on preferred stock       -             -           -        -    (337,500)            -    (337,500)
 Net income                                  -             -           -        -     112,774             -     112,774
 Unrealized loss on equity securities        -             -           -        -           -        46,583      46,583
 Reclassification adjustment for gain
  included in net income                     -             -           -        -           -       100,025     100,025
                                            --     ---------     -------  -------   ---------      ---------    --------

Balance--June 30, 2005                    $205    $3,600,000 $13,869,545 $(70,000)$(2,127,134)    $(102,275)$15,170,341
                                          ====    ========== =========== ======== ===========     ========= ===========

--------------------------------------------------------------------------------

The accompanying notes are an integral part of these financial statements.

</TABLE>

                                      F-7
<PAGE>



AMERITRANS CAPITAL CORPORATION AND SUBSIDIARIES
--------------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS




Years Ended June 30, 2005, 2004 and 2003
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>


                                                                             2005             2004              2003
                                                                        -------------     -------------    -------------
Cash flows from operating activities:
<S>                                                                     <C>               <C>              <C>
  Net income (loss)                                                     $     112,774    $    (367,183)    $     395,214
                                                                        -------------     -------------    -------------
  Adjustments to reconcile net income (loss) to net
  cash (used in) provided by operating activities:
    Depreciation and amortization                                             148,677           133,685           77,660
    Gain on sale of equity securities, net                                   (688,874)           (5,665)          (2,976)
    Equity in loss of investee                                                  4,021            29,634                -
    Loss on sale of automobile                                                     60                 -
    Loss on impairment of medallions under lease                              100,000                 -                -
    Changes in operating assets and liabilities:
      Changes in unrealized depreciation on loans
        receivable and accrued interest receivable                           (331,270)         (453,900)         455,670
      Accrued interest receivable                                             184,711         1,012,179         (609,244)
      Prepaid expenses and other assets                                        30,254          (142,716)        (214,478)
      Accrued expenses and other liabilities                                   26,152           157,750          (13,299)
      Accrued interest payable                                                (15,345)           51,959          (38,687)
                                                                        -------------     -------------    -------------

        Total adjustments                                                    (541,614)          782,926        (345,354)

        Net cash (used in) provided by operating activities                  (428,840)          415,743           49,860

Cash flows from investing activities:
  Loans receivable                                                         (2,312,465)        3,023,488          (276,847)
  Assets acquired                                                             751,762           279,534           (34,101)
  Receivables from debtors on sales of assets
    acquired in satisfaction of loans                                         405,607             9,100           (63,987)
  Proceeds from sales of equity securities                                   1,090,774          109,084            27,726
  Purchases of equity securities                                             (129,153)         (261,268)         (711,166)
  Proceeds from sale of automobiles                                            13,000            60,125                -
  Capital expenditures                                                         (3,992)         (399,959)         (143,003)
                                                                        --------------     -------------    --------------

        Net cash (used in) provided by investing activities                  (184,467)        2,261,036       (1,201,378)
                                                                        -------------     --------------    -------------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from notes payable, banks                                       47,397,883         6,590,000       52,385,000
  Repayment of notes payable, banks                                       (46,535,883)      (11,811,348)     (51,975,000)
  Proceeds from debentures payable to SBA                                           -         6,950,000        5,050,000
  Repayment of debentures payable to SBA                                            -        (4,150,000)      (3,710,000)
  Dividends paid                                                             (337,500)         (337,500)        (873,875)
                                                                        -------------     -------------    -------------

        Net cash provided (used in) by financing activities                   524,500        (2,758,848)         876,125


                                                               -------------     -------------    -------------

        Net decrease in cash and cash equivalents                             (88,807)         (82,069)        (275,393)

CASH AND CASH EQUIVALENTS:
  Beginning of year                                                           416,600           498,669          774,062
                                                                        -------------     -------------    -------------

  End of year                                                           $     327,793     $     416,600    $     498,669
                                                                        =============     =============    =============


--------------------------------------------------------------------------------

(Continued)

</TABLE>

                                      F-8
<PAGE>



AMERITRANS CAPITAL CORPORATION AND SUBSIDIARIES
--------------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)




Years Ended June 30, 2005, 2004 and 2003
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>




                                                                             2005             2004              2003
                                                                        -------------     -------------    -------------

Supplemental disclosures of cash flow information: cash paid during the years
  for:
<S>                                                                     <C>               <C>              <C>
    Interest                                                            $   1,852,993     $  1,391,457    $   2,115,548
                                                                        =============     ============     ============

    Income taxes                                                        $       7,711     $     17,276    $      15,759
                                                                        =============     ============     ============


Supplemental disclosures of non-cash investing activities:
    Unrealized gain (loss) on equity securities arising during the
    period                                                              $      46,583     $    13,338    $    (200,338)
                                                                        =============     ============     ============

    Reclassification adjustment for loss (gain) included in net income  $     100,025     $    (5,665)   $          _
                                                                        =============     ============     ============

    Conversion of loans receiable
    to assets acquired in satisfaction of loans                         $    (153,200)    $  (668,534)   $   (200,000)
                                                                        =============     ============     ============

    Reclassification of assets acquired to receivables from debtors     $    (438,633)    $          _     $           _
     on sales of assets acquired.                                       =============     ============     ============


    Acquisition of medallions through foreclosure of loans
      receivable                                                        $           _     $ (2,382,201)     $          -
                                                                        =============     ============     ============

--------------------------------------------------------------------------------



The accompanying notes are an integral part of these financial statements.

</TABLE>

                                      F-9
<PAGE>



AMERITRANS CAPITAL CORPORATION AND SUBSIDIARIES
--------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


June 30, 2005, 2004, and 2003
--------------------------------------------------------------------------------



1.     Organization and Summary of Significant Accounting Policies

         Organization and Principal Business Activity
         --------------------------------------------

            Ameritrans Capital Corporation ("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.

            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 is
also registered as an investment company under the Investment Company Act of
1940 to make business loans.

            Ameritrans is a specialty finance company that primarily through its
subsidiary Elk, makes loans to taxicab owners to finance the acquisition and
operation of taxi medallions 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 Elk's wholly owned subsidiaries, EAF Holding Corporation
("EAF"), EAF Enterprises LLC, Medallion Auto Management LLC, EAF Leasing LLC,
EAF Leasing II LLC and EAF Leasing III LLC, (collectively referred to as the
"Company"). All significant inter-company transactions have been eliminated in
consolidation.

            EAF, which was formed in June 1992 and began operations in December
1993, owns and operates certain real estate assets acquired in satisfaction of
defaulted loans by Elk.

            EAF Enterprises LLC, which was formed in June 2003 and began
operations in July 2003, owns, leases and resells medallions acquired in
satisfaction of foreclosures by Elk.

            Medallion Auto Management LLC, which was formed in June 2003 and
began operations in July 2003, owns, leases and resells automobiles in
conjunction with the medallions owned by EAF Enterprises LLC.

            EAF Leasing LLC, which was formed in August 2003 and began
operations in October 2003, owns and leases medallions acquired in satisfaction
of foreclosures by Elk.

            EAF Leasing II LLC, which was formed in August 2003 and began
operations in October 2003, owns and leases medallions acquired in satisfaction
of foreclosures by Elk.

            EAF Leasing III LLC, which was formed in January 2004, owns and
leases medallions acquired in satisfaction of foreclosures by Elk.


                                      F-10
<PAGE>
AMERITRANS CAPITAL CORPORATION AND SUBSIDIARIES
--------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


June 30, 2005, 2004 and 2003
--------------------------------------------------------------------------------

            Ameritrans organized another subsidiary on June 8, 1998 Elk Capital
Corporation ("Elk Capital"), which may engage in lending and investment
activities similar to its parent. Since its inception, Elk Capital has had no
operations.

            From inception through April 2002, Ameritrans' only activities have
been the operations of Elk. In May 2002, Ameritrans made its first loans to
businesses using the proceeds raised from a public offering, which was
completed in April 2002.

         Loan Valuations
         ---------------

            The Company's loan portfolio is carried at fair value. Since no
ready market exists for these loans, the fair value is determined in good faith
by the board of directors of the Company ("the Board"). In determining the fair
value, the Board considers factors such as the financial condition of the
borrower, the adequacy of the collateral to support loans, individual
credit risks, historical loss experience and the relationships between current
and projected market rates and portfolio rates of interest and maturities. The
fair value of the loans approximates cost less unrealized depreciation.

            Unrealized depreciation in loan values has generally been caused by
specific events related to credit risk. Loans are considered "non-performing"
once they become 90 days past due as to principal or interest. These past due
loans are periodically evaluated by management and if, in the judgment of
management, the amount is not collectible and the fair value of the collateral
is less than the amount due, a reserve is established. If the fair value of the
collateral exceeds the loan balance at the date of valuation, the Company makes
no write-down of the loan amount.

         Cash and Cash Equivalents
         -------------------------

            For the purposes of the statement of cash flows, the Company
considers all short-term investments with an original maturity of three months
or less when acquired to be cash equivalents.  The Company maintains its cash
balances with various banks with high quality ratings, however, at times
balances may exceed federally insured limits.

         Equity Securities
         -----------------

            Equity securities are comprised principally of common stock
investments in various companies. The Company currently classifies equity
securities as available-for-sale. Securities classified as available-for-sale
are required to be reported at fair value with unrealized gains and losses, net
of taxes, excluded from earnings and recorded in the statement of comprehensive
(loss) income, and separately as a component of accumulated other comprehensive
income (loss) within stockholder's equity unless an unrealized loss is deemed
to be other than temporary, in which case, the cost basis of the individual
security is written down to fair value as a new cost basis and such loss is
charged to earnings. Realized gains and losses on the sale of securities
available-for-sale are determined using the specific-identification method and
are reported in earnings.  In addition, any unrealized gains and losses
deferred in accumulated other comprehensive income (loss) is recognized in
determining net gain or loss on disposition.

                                     F-11

<PAGE>

AMERITRANS CAPITAL CORPORATION AND SUBSIDIARIES
--------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


June 30, 2005, 2004 and 2003
-------------------------------------------------------------------------------

        Income Taxes
        ------------


            The Company has elected to be taxed as a Regulated Investment
Company ("RIC") under the Internal Revenue Code (the "Code"). An RIC generally
is not taxed at the corporate level to the extent its income is distributed to
its stockholders. In order to qualify as an RIC, a company must payout at
least 90 percent of its net taxable investment income to its stockholders as
well as meet other requirements under the Code. In order to preserve this
election for fiscal 2005, the Company intends to make the required
distributions to its stockholders in accordance with applicable tax code.

            The Company is subject to certain state and local franchise taxes,
as well as related minimum filing fees assessed by state taxing authorities.
Such taxes and fees are reported as provisions for income taxes and reflected
in each of the fiscal years presented.

         Depreciation and Amortization
         -----------------------------

            Depreciation and amortization are computed using the straight-line
method over the useful lives of the respective assets. Leasehold improvements
are amortized over the life of the respective leases.

         Deferred Loan Costs and Fees
         ----------------------------

            Deferred loan costs are included in prepaid expenses and other
assets. Amortization of deferred loan costs is computed on the straight-line
method over the respective loan term. Amortization of deferred loan costs and
fees for the years ended June 30, 2005, 2004, and 2003 was $48,056, $60,013,
and $45,864
 respectively.At June 30, 2005 and 2004, deferred loan costs and
commitment fees amounted to $309,880 and $357,936, respectively, net of
accumulated amortization of $354,101 and $306,045 respectively.

         Assets Acquired in Satisfaction of Loans
         ----------------------------------------

            Assets acquired in satisfaction of loans are carried at the lower
of the net value of the related foreclosed loan or the estimated fair value
less cost of disposal  Losses incurred at the time of foreclosure are charged
to the unrealized depreciation on loans receivable. Subsequent reductions in
estimated net realizable value are charged to operations as losses on assets
acquired in satisfaction of loans.



                                      F-12
<PAGE>


AMERITRANS CAPITAL CORPORATION AND SUBSIDIARIES
--------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


June 30, 2005, 2004 and 2003
--------------------------------------------------------------------------------


          Impairment of Long-lived Assets and Acquired Intangible Assets
          --------------------------------------------------------------

            The Company monitors events and changes in circumstances that could
indicate carrying amounts of long-lived assets, including intangible assets,
may not be recoverable. When such events or changes in circumstances occur, the
Company assesses the recoverability of long-lived assets by determining whether
the carrying value of such assets will be recovered through undiscounted
expected future cash flows. If the undiscounted cash flows are less than the
carrying amount, an impairment loss is recorded to the extent that the carrying
amount exceeds the fair value. During the fiscal year ended June 30, 2004 the
Company obtained medallions through foreclosure of loans and the value of such
medallions are carried at the net value of the related foreclosed loans. The
medallions are being treated as having indefinite lives, therefore, the assets
are not being amortized. However, the Company periodically tests their carrying
value for impairment. During the year ended June 30, 2005, the medallions were
written down by $100,000 to their estimated fair value, based on current market
conditions.  The amount is included in loss and impairments on medallions under
lease and assets acquired in satisfaction of loans, net, in the accompanying
consolidated statements of operations.

         Use of Estimates
         ----------------

            The preparation of financial statements in conformity with U.S.
generally accepted accounting principles requires management to make extensive
use of 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 fair value of loans receivable and other
financial instruments.

         Treasury Stock
         --------------

            Treasury stock is carried at cost. Gains and losses on disposition
of treasury stock, if any, are recorded as increases or decreases to additional
paid-in capital with losses in excess of previously recorded gains charged
directly to retained earnings.

         Earnings Per Share
         ------------------

            Basic earnings (loss) per share includes no dilution and is
computed by dividing current income (loss) available to common stockholders by
the weighted average number of common shares outstanding for the period.
Diluted earnings per share reflect, in periods in which they have a dilutive
effect, the effect of common shares issuable upon the exercise of stock options
and warrants. The difference between reported basic and diluted weighted
average common shares results from the assumption that all dilutive stock
options outstanding were exercised. For the years presented, the effect of
common stock equivalents has been excluded from the diluted calculation since
the effect would be antidilutive.



                                      F-13
<PAGE>

AMERITRANS CAPITAL CORPORATION AND SUBSIDIARIES
--------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


June 30, 2005, 2004 and 2003
--------------------------------------------------------------------------------

         Income Recognition
         ------------------

            Interest income, including default interest, is recorded on an
accrual basis and in accordance with loan terms to the extent such amounts are
expected to be collected. The Company recognizes interest income on loans
classified as non-performing only to the extent that the fair market value of
the collateral exceeds the loan balance. Loans that are not fully
collateralized and in the process of collection are placed on non accrual
status when, in the judgment of management, the collectibility of interest
and principal is doubtful.


          Stock Options
         -------------

            The Company uses the intrinsic value method of accounting for
employee stock options in accordance with APB No. 25 as permitted by Statement
of Financial Accounting Standards No. 123, "ACCOUNTING FOR STOCK-BASED
COMPENSATION" (SFAS No. 123). Under APB No. 25, compensation cost for stock
options is measured as the excess, if any, of the quoted market price of the
stock at the date of the grant over the option price. However, companies that
do not adopt SFAS No. 123 must provide additional pro forma disclosure as if
they had adopted SFAS No. 123 for valuing stock-based compensation to
employees. SFAS No. 123 requires the measurement of such compensation using
the Black-Scholes or similar option-pricing model to value the amount of
compensation granted. The compensation cost is then recognized over the vesting
period of the options (see "Recently Issued Accounting Standards"
below and Note 17).

         Financial Instruments
         ---------------------

            The carrying value of cash and cash equivalents, accrued interest
receivable and payable, and other receivables and payables approximates fair
value due to the relative short maturities of these financial instruments.
Loans receivable are carried at their estimated fair value. The estimated fair
values of publicly traded equity securities are based on quoted market prices
and the estimated fair values of privately held equity securities are recorded
at the lower of cost or fair value. The carrying value of the bank debt is a
reasonable estimate of their fair values as the interest rates are variable,
based on prevailing market rates.  The fair value of the SBA debentures were
computed using the discounted amount of future cash flows using the Company's
current incremental borrowing rate for similar types of borrowings
(see Note 13).

         Derivatives
         -----------

          The Company from time to time entered into interest rate swap
agreements in order to manage interest rate risk.  The Company does not use
interest rate swaps or other derivatives for trading or other speculative
purposes.  In accordance with Statement of Financial Accounting Standards No.
133, "Accounting for Derivative Instruments and Hedging Activities," as
subsequently amended, all derivative instruments are recorded at fair value.
For derivative instruments designed as cash flow hedges, the effective portion
of that hedge is deferred and recorded as a component of other comprehensive
income.  Any portion of the hedge deemed to be ineffective is recognized
promptly in the consolidated statements of income.

                                        F-14

<page>



AMERITRANS CAPITAL CORPORATION AND SUBSIDIARIES
-------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


June 30, 2005, 2004 and 2003
-------------------------------------------------------------------------------



Recently Issued Accouting Standards

          In December 2004, the Financial Accounting Standards Board ("FASB")
issued the SFAS No. 123(R), "Share-Based Payment" ("SFAS 123(R)"), which
replaced SFAS No. 123, "Accounting for Stock-Based Compensation," and
superceded APB Opinion 25, "Accounting for Stock Issued to Employees."
SFAS 123(R) requires that all share-based payments to employees be
recognized in the financial statements based on their fair values on the date
of grant. The Company currently uses the intrinsic value method to measure
compensation expense for stock based awards.On April 14, 2005, the SEC amended
the compliance dates for SFAS 123(R), which extended the Company's required
adoption date of SFAS 123(R) to its fiscal third quarter in its fiscal year
ended June 30, 2006.  The Company is evaluating the requirements of SFAS 123(R)
and expects that its adoption will not have a material impact on its financial
position or results of operations and earnings per share.

        Also in December 2004, the FASB issued Statement No. 153, "Exchanges of
Nonmonetary Assets," ("SFAS No. 153") which addresses the measurement of
exchanges of nonmonetary assets and eliminates the exception from fair value
measurement for nonmonetary exchanges of similar productive assets and
replaces it with an exception for exchanges that do not have commercial
substance.  SFAS No. 153 is effective for nonmonetary asset exchanges occurring
in fiscal periods beginning after June 15, 2005, with earlier application
permitted.  The adoption of SFAS No. 153 will have no impact on the Company's
results of operations or its financial position.

          In June 2005, the FASB issued Statement No. 154, "Accounting Changes
and Error Corrections," ("SFAS No. 154") which changes the requirements for
accounting for and reporting of a change in accounting principle. SFAS No. 154
requires retrospective application to prior periods' financial statements of a
voluntary change in accounting principle unless it is impracticable.  SFAS No.
154 also requires that a change in method of depreciation, amortization, or
depletion for long-lived, non-financial assets be accounted for as a change in
accounting estimate that is effected by a change in accounting principle.
SFAS No. 154 is effective for accounting changes and corrections of
errors made in fiscal years beginning after December 15, 2005, but does not
change the transition provisions of any existing accounting pronouncements,
including those that are in a transition phase as of the effective date of the
Statement.  The adoption of SFAS No. 154 will not have a material effect on
results of operations or the Company's financial position.


                                      F-15

<PAGE>

AMERITRANS CAPITAL CORPORATION AND SUBSIDIARIES
--------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


June 30, 2005, 2004 and 2003
--------------------------------------------------------------------------------

2.     Assets Acquired in Satisfaction of Loans
       ----------------------------------------

            Assets acquired in satisfaction of loans consist of the following as
of June 30, 2005 and 2004:
<TABLE>
<CAPTION>
                                                         Assigned
                                                         Mortgage
                                      Real Estate        and Note         Equipment           Other            Total
                                      -----------        --------         ---------           -----            -----

<S>           <C>                      <C>              <C>               <C>               <C>             <C>
Balance--July 1, 2003                  $   287,500      $   616,439       $   200,000       $    38,250     $   1,142,189
  Additions                                573,668                -            94,866                 -           668,534
  Sales                                   (287,500)          (1,500)                -                 -          (289,000)
  Write-offs                                     -                -          (100,000)                           (100,000)
                                       -----------      -----------       -----------       -----------     -------------

Balance--June 30, 2004                     573,668          614,939           194,866            38,250         1,421,723
  Additions                                 40,647             -               93,200                 -           133,847
  Sales                                $  (333,626)        (612,350)         (100,066)                -        (1,046,042)
  Write-offs                                    -             -              (125,000)                -          (125,000)
                                       -----------      -----------       -----------       -----------     -------------

Balance--June 30, 2005                 $   280,689      $     2,589       $    63,000      $    38,250     $      384,528
                                       ===========      ===========       ===========       ===========     =============

</TABLE>

3.     Loans Receivable
       ----------------

            Loans are considered non-performing once they become 90 days past
due as to principal or interest. The Company has loans of approximately
$2,928,000 and $2,182,000 at June 30, 2005 and 2004, respectively, which are
considered non-performing. These loans, which were made predominantly in the
Chicago market, are either fully or substantially collateralized and are
personally guaranteed by the debtor. Included in the total non-performing loans
are approximately $720,000 and $571,000 at June 30, 2005
 and 2004,
respectively, which are no longer accruing interest since the loan principal
and accrued interest exceed the collateral value.  The followoing table sets
forth certain information concerning performing, nonperforming, and non accrual
loans as of June 30, 2005 and 2004:

<TABLE>
<CAPTION>


1
                                                                       2005              2004
                                                                    ----------       ----------

<S>                                                              <C>             <C>
Loans receivable, net                                            $  51,910,254   $   49,391,219
Performing loans                                                    48,982,626       47,208,741
                                                                    ----------       ----------

Nonperforming loans                                              $   2,927,628   $    2,182,478
                                                                 =============   ==============

Nonperforming loans
  Accrual                                                         $  2,207,220   $    1,611,386
  Nonaccrual                                                           720,408          571,092
                                                                  -------------   --------------


Average balance of nonperforming loans                           $   2,927,628   $    2,182,478
                                                                 =============   ==============

</TABLE>

                                      F-16

<PAGE>
AMERITRANS CAPITAL CORPORATION AND SUBSIDIARIES
--------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


June 30, 2005, 2004 and 2003
--------------------------------------------------------------------------------

            Changes in the unrealized depreciation on loans receivable and
interest receivable are summarized as follows:
<TABLE>
<CAPTION>

                                                                  Unrealized
                                                                 depreciation       Unrealized
                                                                  on interest    depreciation on
                                                                  receivable     loans receivable
                                                                  ----------     ----------------

<S>           <C> <C>                                               <C>             <C>
Balance--June 30, 2003                                         $     691,000   $      303,170

Increases, net                                                             -          206,600

Decreases, net                                                      (660,500)               -
                                                                     -------          -------

Balance--June 30, 2004                                                30,500          509,770

Increase, net                                                         96,500          316,903

Decreases, net                                                      (68,000)         (676,673)
                                                                     -------          -------

Balance--June 30, 2005                                          $     59,000    $     150,000
                                                                =============    =============
</TABLE>

            The Company has pledged its loans receivable and all other assets of
the Company as collateral for its lines of credit (see Note 8).


4.     Equity Securities
       -----------------

       Equity securities consist of the following as of June 30, 2005 and 2004:

<TABLE>
<CAPTION>



                          Telecom-
                         munications                Taxi
                            and                     Vehicle     Real
                         Technology     Hotel       Distributor Estate    Other      Total
                          ----------   -----------  ----------  --------- -------    --------
<S>           <C>           <C>        <C>          <C>         <C>       <C>        <C>
Balance--July 1, 2003     $ 246,185   $ 310,000   $ 100,000    $232,261   $ 40,959  $ 929,405
Purchase of securities       30,668           -     100,000     130,600        -      261,268
Sale of securities          (25,000)    (58,125)       -          -        (20,294)  (103,419)
Unrealized loss on equity
 securities arising

 during the period          (13,005)         -          -           -      (5,998)    (19,003)
 Equity in loss of investee      -           -     (29,634)         -          -      (29,634)
                           --------    --------    --------    --------   --------   ---------

Balance--June 30, 2004      238,848     251,875     170,366     362,861     14,667   1,038,617
Purchase of securities        4,153           -           -     125,000          -     129,153
Sale of securities                -    (251,875)          -          -           -    (251,875)
Unrealized gain (loss)
on equity
 securities arising
 during the period           27,268         -       (50,000)         -    19,315      (3,417)
Equity in loss of
 investee                         -         -        (4,021)         -          -     (4,021)
                           --------    --------     --------   --------   --------   ---------

Balance--June 30, 2005     $270,269    $   -        $116,345   $487,861   $ 33,982   $ 908,457
                           ========    ========     ========   ========   ========   =========

</TABLE>

                                      F-17

<PAGE>

AMERITRANS CAPITAL CORPORATION AND SUBSIDIARIES
--------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


June 30, 2005, 2004 and 2003
--------------------------------------------------------------------------------


          In June 2005,the Company received $1,090,774 as proceeds from the
liquidation of its investment in a hotel. The proceeds represented a return
of the remaining carrying value of the investment of $251,875, and the
resulting gain for the balance of $838,899 is included in gain on sale of
equity securities, net in the accompanying consolidated statements of
operations.

         General
         -------

            The fair value of publicly traded corporate equity securities is
based on quoted market prices. Privately held corporate equity securities are
recorded at the lower of cost or fair value. For these non-quoted investments,
the Company reviews the assumptions underlying the financial performance of the
privately held companies in which the investments are held. If and when a
determination is made that a decline in fair value below the cost basis is
other than temporary, the related investment is written down to its estimated
fair value.

         Certain Investments
         -------------------

            Ameritrans invested $100,000 to obtain a 50% stock ownership
interest in a company in August 2003. Since control of the entity resided with
the other owner, as evidented by the management of the day-to-day operations as
well as the number of board seats, this investment was accounted for using the
equity basis of accounting.  In February 2005, the Company received common
shares of another entity in lieu of full liquidation of its initial investment.
The new shares represent an immaterial ownership percentage and are, therefore,
no longer accounted for by the equity basis of accounting.

            Elk also obtained a 48% stock ownership interest in another company
during December 2003 in exchange for providing 100% financing for this company
to acquire and gain title to certain Chicago medallions from Elk arising from
defaulted and foreclosed loans, to purchase vehicles, and for related start up
costs. The profit or loss of this company is to be retained by the majority
stockholder of this company. Commencing on or after July 1, 2007, and for a two
and one-half year period thereafter, the majority stockholder has the right to
purchase Elk's interest in this company at a price described in the
stockholders' agreement, by giving notice and exercising its right
to repurchase Elk's shares. Elk has the right (put option) under the agreement
to require the company to repurchase Elk's 48% interest in this company. Under
both purchase arrangements, the price is determined by the difference between
themarket value of the medallions and the outstanding balance on the loan on
the date the right is exercised.




                                      F-18

<PAGE>

AMERITRANS CAPITAL CORPORATION AND SUBSIDIARIES
--------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


June 30, 2005, 2004 and 2003
--------------------------------------------------------------------------------


The financing related to the purchase of medallions amounted to $1,449,000,
and is collateralized by such medallions. The loan bears interest at 4% per
annum, and requires two interest only payments of $4,830 due on the first of
the month beginning February 1, 2004, then fifty-nine monthly payments of
$10,718, including interest, based on a 15 year amortization schedule, with a
balloon payment of the balance due on March 1, 2009, the maturity date. The
Company also loaned the entity $222,000 on December 31, 2003 related to the
purchase of vehicles and such loan is collateralized by the vehicles. The loan
bears interest at 4% per annum, and requires three interest only payments of
$740 due on the first of the month beginning February 1, 2004, then twenty-six
monthly payments of $8,928, including interest, through June 1, 2006, the
maturity date. As of June 30, 2005 and 2004, the principal balance outstanding
on the loans was $1,538,224 and $1,654,597, respectively.


5.     Furniture, Equipment and Leasehold Improvements
       -----------------------------------------------

            Major  classes of  furniture,  equipment  and  leasehold
improvements  as of June 30, 2005 and 2004 are as follows:
<TABLE>
<CAPTION>
                                                                                      Estimated
                                                      2005             2004          Useful Lives
                                                  -----------       -----------      -------------

<S>                                               <C>               <C>                <C>
Furniture and fixtures                            $    66,061       $    64,380        7 years
Office equipment                                      308,940           306,629       3-5 years
Leasehold improvements                                175,633           175,633     Life of lease
Automobiles                                           110,487           131,108        5 years
                                                  -----------       -----------
                                                      661,121           677,750
Less accumulated depreciation
  and amortization                                    331,548           238,488
                                                  -----------       -----------

                                                  $   329,573       $   439,262
                                                  ===========       ===========
</TABLE>

            Depreciation and amortization expense for the years ended June 30,
2005, 2004 and 2003 was $100,621, $73,672, and $31,797 respectively.


6.     Medallions
       ----------

            During the year ended June 30, 2004, Elk transferred City of
Chicago taxicab medallions obtained from defaulted and foreclosed loans to
certain newly formed wholly-owned subsidiaries. The subsidiaries borrowed
funds in the amount of $2,382,201 from Elk to complete the purchases of the
medallions and gained title by paying related transfer fees and satisfying
outstanding liens with Elk and the City of Chicago.



                                      F-19

<PAGE>
AMERITRANS CAPITAL CORPORATION AND SUBSIDIARIES
--------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


June 30, 2004, 2003 and 2002
--------------------------------------------------------------------------------


The subsidiaries, in turn  lease these medallions to taxicab
operators or companies in the Chicago market under weekly and long-term
operating lease terms. The weekly leases, which include both medallions and
automobiles, are with individuals and automatically renew each week, up to a
maximum period of 157 weeks, but may be terminated by the lessee at the
conclusion of any weekly period. The weekly leases also include an option for
the lessee to purchase either the medallion or automobile, at an amount defined
in the agreement, at any time throughout the term of the lease, with credit
given for a portion of the lease payments towards the purchase price. As of
June 30, 2005, no purchase options have been exercised. The long-term medallion
leases are with taxicab companies, which expire at various dates between
December 31, 2005 and February 28, 2006, and may be canceled by either party
with forty-five days advance written notice. Leasing income under all medallion
and taxi cab leases for the years ended June 30, 2005 and 2004 were $211,640
and $119,527, respectively. The minimum leasing income due underlong-term
lease agreements, during the year and in the aggregate, is approximately
$97,000, for the fiscal year ending June 30, 2006

          During theyear ended June 30, 2005, the medallions were written down
by $100,000 to their estimated fair value, based on current market conditions.
The amount is included in loss and impairments on medallions under lease and
assets acquired in satisfaction of loans, net, in the accompaying consolidated
statements of operations.



7.     Debentures Payable to SBA
       -------------------------

            At June 30, 2005 and 2004 debentures payable to the SBA consisted
of subordinated debentures with interest payable semiannually, as follows:
<TABLE>
<CAPTION>

      Issue Date             Due Date          % Interest Rate         2005              2004
      ----------             --------          ---------------         ----              ----

<S>       <C>                     <C>            <C>               <C>              <C>
July 2002               September 2012           4.67*             $   2,050,000    $   2,050,000
December 2002           March 2013               4.63*                 3,000,000        3,000,000
September 2003          March 2013               4.12*, **             5,000,000        5,000,000
February 2004           March 2014               4.21**                1,950,000        1,950,000
                                                                   -------------    -------------

                                                                   $  12,000,000    $  12,000,000
                                                                   =============    =============
</TABLE>

*          Elk is also required to pay an additional annual user fee of
           0.866% on these debentures.
**         The fixed rate of 4.12% was determined on the pooling date of
           March 24, 2004.  Prior to the dae, the interim interest rates
           assigned to the $5,000,000 and the $1,950,000 debentures were
           1.682% and 1.595%, respectively.

          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.
Dividends paid in 2005 and 2004 were in accordance with SBA regulations.



                              F-20

<PAGE>
AMERITRANS CAPITAL CORPORATION AND SUBSIDIARIES
--------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


June 30, 2005, 2004 and 2003
--------------------------------------------------------------------------------


         SBA Commitment
         --------------

            In 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. A 1%
non-refundable commitment fee of $120,000 was paid by Elk in 2002 at the time
of obtaining the $12,000,000 commitment. In February 2004, Elk made the final
 draw down under this commitment.


8.     Notes Payable to Banks
       ----------------------

            At June 30, 2005 and 2004 the Company had loan commitments with
three banks for lines of credit aggregating $40,000,000. At June 30, 2005 and
2004, the Company had $29,770,652 and $28,908,652, respectively, outstanding
under these lines. The loans, which mature at various dates between October 31,
2005 and December 31, 2005, bear interest at the lower of either the reserve
adjusted LIBOR rate plus 1.5% or the banks' prime rate minus 0.50%. At June 30,
2005, the weighted average interest rate on outstanding bank debt was
approximately 4.73%.


            Upon maturity, the Company anticipates that the banks will extend
these 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 covenants and conditions, as defined in the agreements.
The Company has pledged its loans receivable (see Note 3) and all other assets
as collateral for the above lines of credit.  Pursuant to the SBA agreement and
an "intercreditor agreement" among the lending banks, the SBA agreed to a
subordination in favor of the banks, provided that the Company maintains
certain debt levels based on performance of its portfolio.


9.     Preferred Stock
       ---------------

            Ameritrans had 1,000,000 shares of "blank check" preferred shares
authorized of which 500,000 shares were designated as 9 3/8% cumulative
participating preferred stock $.01 par value, $12.00 face value. The remaining
500,000 shares of these "blank check" preferred shares were unissued at June
30, 2005 and 2004.

            As part of the April 24, 2002 stock offering (see Note 10)
Ameritrans issued 300,000 shares of 9-3/8% cumulative participating redeemable
preferred stock $.01 par value, $12.00 face value. These preferred shares are
redeemable at the option of the Company at the face value plus a redemption
premium of up to 8% of face value, based on certain criteria, through April
2007.

                                       F-21
<PAGE>

AMERITRANS CAPITAL CORPORATION AND SUBSIDIARIES
--------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


June 30, 2005, 2004 and 2003
--------------------------------------------------------------------------------


10.    Common Stock
       ------------

            Ameritrans has 5,000,000 authorized common shares, $0.0001 par
value, of which 1,745,600 shares were issued and outstanding after the shares
exchange with Elk (see Note 1) as of June 30, 2001. As part of a stock offering
in April 2002, the Company issued an additional 300,000 shares of common stock.
(see Note 11).

            Pursuant to a foreclosure agreement with a borrower, Elk obtained
10,000 shares of Ameritrans common stock, which had previously been pledged by
the borrower as collateral. At June 30, 2005 and 2004 these shares are recorded
as treasury stock at cost, which was the market value of the shares at the
foreclosure date.


11.    Stock Offering
       --------------

            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 preferred stock, $.01 par value, 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, as defined until April 2007.
The warrants may be redeemed by the Company under certain conditions. The
Company has the right to redeem all the warrants at a price of $.10 per warrant
upon not less than 30 days prior written notice; provided that before any
redemption of warrants can take place, the average closing price of the
Company's common stock as reported on NASDAQ shall have been $8.70 per share
for 20 consecutive trading days ending within 30 days prior to the date on
which notice of redemption is sent. To date, no warrants have been
exercised. The gross proceeds from the offering was $5,700,000 less costs and
commissions of $1,704,399 resulting in net proceeds of $3,995,601. The
underwriter had the option to increase this offering by 45,000 units to cover
over-allotments through June 2, 2002, which option was not exercised. The
underwriter also earned the right in exchange for $2,500 to purchase up to
30,000 units at an exercise price of $21.45 per unit, each unit consisting of
one share of common stock, one share of 9-3/8% cumulative participating
preferred stock, $.01 par value, face value $12.00, and one redeemable warrant
exercisable at $8.40 per share. These units are exercisable over a five-year
period which commenced April 18, 2003. To date, the underwriter has not
exercised the right to purchase these units.


12.    Income Taxes
       ------------

            The provision for income taxes for the years ended June 30, 2005,
2004, and 2003 consists of the following:
<TABLE>
<CAPTION>

                                        2005             2004              2003
                                     ---------         ---------        ---------

<S>                                    <C>               <C>              <C>
Federal                              $       -         $   2,908        $     473
State and local                          7,711            13,593            7,424
                                     ---------         ---------        ---------

                                     $   7,711         $  16,501        $   7,897
                                      =========         =========        =========
</TABLE>




                               F-22
<PAGE>
AMERITRANS CAPITAL CORPORATION AND SUBSIDIARIES
-------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


June 30, 2005, 2004 and 2003
-------------------------------------------------------------------------------

In order to be taxed as a Regulated Investment Company, the Company
must payout at least 90% of its net taxable income to its stockholders in the
form of dividends. The above provision represents income taxes accrued on
undistributed income for the respective years.


13.    Financial Instruments
       ---------------------

            Fair value is defined as the amount at which the instrument
could be exchanged in a current transaction between willing parties. The fair
values presented below have been determined by using available market
information and by applying valuation methodologies. The methods and
assumptions described below were used in calculating the fair values of
the instruments:

Loans
            Loans receivable are recorded at their estimated fair value.

Investment Securities

            The estimated fair value of publicly traded equity securities is
based on quoted market prices and the estimated fair value of privately held
equity securities is recorded at the lower of cost or fair value.

Debt

            The carrying value of the bank debt is a reasonable estimate of
their fair values as the interest rates are variable, based on prevailing
market rates.

            The fair value of the SBA debentures were computed using the
discounted amount of future cash flows using the Company's current incremental
borrowing rate for similar types of borrowings.  The estimated fair values of
such debentures as of June 30, 2005 and, 2004 were approximately $11,440,000
and $11,630,000, respectively.

Other

            The carrying value of cash and cash equivalents, accured interest
receivable and payable, and other receivables and payables,approximates fair
value due to the relative short maturities of these financial instruments.


14.     Related Party Transactions
        --------------------------

        The Company paid approximately $115,000, $21,000 and $38,000 to a
law firm related to the President and other officers and directors of the
Company for the years ended June 30, 2005, 2004, and 2003, respectively,
for legal services provided.

                                   F-23
<PAGE>
AMERITRANS CAPITAL CORPORATION AND SUBSIDIARIES
-------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


June 30, 2005, 2004 and 2003
-------------------------------------------------------------------------------

          During the year ended June 30, 2001, the Company rented office space
on a month-to-month basis from the lawfirm owned by the President and other
officers and directors of the Company without a formal lease agreement. On
July 1, 2001 the Company entered into a sublease agreement with this
affiliated entity requiring rental payment of $3,292 per month, which
expired April 30, 2004. As part of this agreement the affiliated entity,
at the Company's request, rented an additional 1,800 square feet of office
space contiguous with the Company's offices. In November 2003,
the Board of Directors approved a new sublease with the affiliated entity to
take effect upon the expiration of the prior sublease, May 1, 2004, and to
continue through April 20, 2014. The Company's rent share is currently $8,327
per month and subject to annual increases as per the master lease agreement
between the landlord and the lawfirm of Granoff Walker & Forlenza, P.C., whose
stockholders are officers and directors of the Company. The Company is
presently utilizing 37% of the rented space and therefore committed to the
minimum 37% utilization factor on all rent, additional rent and electricity
charges billed to landlord, subject to annual increases as per the master lease
agreement between the landlord and the affiliated entity. In the event that
more space is utilized, the percentage of the total rent shall be increased
accordingly. Until the Company utilizes the additional space, the affiliated
entity sublets the additional space to unaffiliated tenants. In the event all
or a portion of the additional space is vacant, the Company has agreed to
reimburse the affiliated entity for the additional rent due. During the years
ended June 30, 2005, 2004 and 2003 the Company paid the affiliated entity
approximately $0, $2,200, and $3,500, respectively, relating to this space.
Rent expense under the lease amounted to $84,226, $101,116, and $59,290 for
the years ended June 30, 2005, 2004, and 2003, respectively.

            In addition, the Company was also obligated to pay for its share of
overhead expense as noted in the above lease agreement. Under the agreement
which expired April 30, 2004, minimum overhead cost payments were $7,333 per
month. Under the extended lease agreement, the current minimum amount is now
$3,000 a month, and the Company is also required to reimburse the affiliated
entity for certain office and salary costs. Overhead costs and reimbursed
office and salary expenses amounted to $56,664, $62,840 and $84,989 for the
years ended June 30, 2005, 2004 and 2003, respectively.

            Effective July 1, 2003, the Company entered into a new ten-year
sublease for additional office and storage space with another entity in which
an officer and director of the Company has a financial interest. The new
sublease calls for rental payments ranging from $38,500 to $54,776 per annum
from the first year ending June 30, 2004 through the year ending June 30, 2013.
The sublease contains a provision that either party may terminate the lease in
years seven through ten with six months' notice. Rent expense under the lease
amounted to $47,576 and $43,123 for the years ended June 30, 2005 and 2004,
respectively.

            Total occupancy costs under the above lease and overhead cost
reimbursement agreements amounted to $188,466, $207,079, and $144,279 for the
years ended June 30, 2005, 2004 and 2003, respectively.

                                               F-24

<PAGE>
AMERITRANS CAPITAL CORPORATION AND SUBSIDIARIES
--------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


June 30, 2005, 2004 and 2003
--------------------------------------------------------------------------------


            The future minimum rental and overhead payments for each of the
next five years and in the aggregate thereafter are as follows:


      Year Ending
        June 30                Rent           Overhead     Total Occupancy
     -------------        -------------      -----------   _______________

      2006                $     144,661        $  36,000   $  180,661
      2007                      146,105           36,000      182,105
      2008                      147,599           36,000      183,599
      2009                      150,055           36,000      186,055
      2010                      156,202           36,000      192,202


       Thereafter               575,430          138,000      713,430
                          -------------      -----------     -----------

                          $   1,320,052      $   318,000   $ 1,638,052
                          =============      ===========   ===========


15.    Commitments and Contingencies
       -----------------------------

         Interest Rate Swap
         ------------------

            On June 11, 2001, the Company entered into an interest rate
swap transaction for $15,000,000 notional amount with a bank which expired
June 11, 2003 and on February 11, 2003, the Company entered into another
interest rate swap transaction for $5,000,000 notional amount with the same
bank which expired February 11, 2005. These swap transactions were entered
into to protect the Company from an upward movement in interest rates
relating to outstanding bank debt and settle the 11th day of each month. These
swap transactions provided for a fixed rate of 4.95%, and 3.56%,
respectively for the Company and if the floating one month LIBOR rate fell
below the fixed rate then the Company was obligated to pay the bank for the
difference in rates. When the one-month LIBOR rate is above the fixed rate
the bank is obligated to pay the Company for the differences in rates. For
the twelve months ended June 30, 2005, 2004, and 2003, Elk incurred additional
interest expense of $5,551, $47,795 and $507,436, respectively, due to the
fluctuation of interest rates, under these agreements.

                                              F-25

<PAGE>

AMERITRANS CAPITAL CORPORATION AND SUBSIDIARIES
--------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


June 30, 2005, 2004 and 2003
--------------------------------------------------------------------------------



         Employment Agreements
         ---------------------

            In July 2001, the Company entered into an employment agreement with
an executive. This agreement was amended and restated in December 2002. The
amended and restated agreement calls for annual compensation of $296,500,
$321,500, $336,500, $348,900 and $361,800, respectively, for the five fiscal
years beginning July 1, 2003. The agreement also calls for a discretionary bonus
to be determined by the Board of Directors but in no event less than $15,000 per
year, as well as certain other benefits. The amended and restated agreement
expires July 1, 2008 but will automatically renew for an additional five (5)
years unless either the Company or the executive gives notice of non-renewal. In
July 2001, the Company also entered into a consulting agreement with this
executive. This agreement was amended and restated in December 2002. The amended
and restated agreement does not become effective unless the employment agreement
between the Company and the executive is terminated. If the employment agreement
is terminated under certain circumstances, as defined, the consulting agreement
becomes effective and continues for a period of five (5) years. The amended and
restated consulting agreement calls for compensation of one-half of the
executive's base salary in effect at the termination date of the employment
agreement plus any bonus paid.

            From October 2001 through December 2002, the Company entered into
employment agreements with five other executives of the Company which calls for
a minimum aggregate base salary, including minimum bonus, of approximately
$462,000 per annum plus discretionary bonuses. The agreements also call for
annual increases in base salary. These employment agreements expire between
October 2006 and June 2008, but will be automatically renewed for an additional
five (5) years unless either the Company or the executives give notice of
non-renewal.


16.    Defined Contribution Plan
       -------------------------

            The Company maintains a simplified employee pension plan covering
all eligible employees of the Company. Contributions to the plan are at the
discretion of the Board of Directors. During the years ended June 30, 2005,
2004 and 2003, contributions amounted to $127,376, $116,610, and $86,443,
respectively.


17.    Stock Option Plans
       ------------------

         Employee Incentive Stock Option Plan
         ------------------------------------

            During September 1998, Elk adopted an employee incentive stock
option plan. An aggregate of 125,000 shares of common stock were authorized for
issuance under the plan. Subsequently Ameritrans adopted an employee stock
option plan which is substantially identical to and successor to the Elk plan.
During January 2002, the plan was amended to increase the shares of common stock
authorized for issuance to an aggregate of 200,000 shares. The plan provides
that options may be granted to attract and retain key employees of the Company.
Options granted under the plan vest immediately and are exercisable for periods
ranging from five to ten years.


                                       F-26


<PAGE>
AMERITRANS CAPITAL CORPORATION AND SUBSIDIARIES
--------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


June 30, 2005, 2004 and 2003
--------------------------------------------------------------------------------




            Under the plan, each stock option granted will have an exercise
price equal to at least the market value of the common stock on the grant date
for all other employees, but 110% of market value for employees/stockholders
who own more than 5% of the common stock. In January 1999, the Company granted
100,000 options to certain key employees at an exercise price ranging from
$8.878 to $9.7625 per share which equaled market values at the dates of grant.
In January 2004, 30,000 options expired. During the year ended June 30, 2005,
70,000 options were canceled and 33,800 options were granted with exercise
prices ranging from $4.50 to $4.95 per share. No options were granted during
the years ended June 30, 2004, or 2003.

         Non-Employee Directors Stock Option Plan
         ----------------------------------------

            On August 31, 1999, the Company adopted a Non-Employee Directors
Stock Option Plan (the "Plan") with an aggregate of 75,000 options authorized
for issuance. During January 2002, the Board of Directors and shareholders
approved an amendment to the Plan to increase the aggregate of options
authorized for issuance to 125,000 and to provide for automatic grants of
options upon re-election of eligible directors. This amendment is still subject
to the approval of the Securities and Exchange Commission. The Plan provides
that options may be granted to attract and retain qualified persons to serve as
directors of the Company. Options granted under this Plan are exercisable
twelve months from the date of grant and expire five years from the date of
grant. In addition, the option price will not be less than the market value
of the common stock on the grant date. In August 1999, the Company granted
22,224 options to four directors at an exercise price of $9.00 per share.
In January 2000, the Company granted an additional 11,112 options to two
directors at an exercise price of $9.00 per share. During the year ended
June 30, 2002, 11,112 of these options were terminated. In September 2003,
the Company granted 10,917 options to a newly eligible director at an exercise
price of $4.58 per share. During the year ended June 30, 2005, 22,224 options
granted to four Directors expired and 36,040 options were automatically granted
with exercise prices ranging from $4.99 to $6.25 per share.  There were no
options granted for the year ended June 30, 2003.

                                      F-27
<PAGE>
AMERITRANS CAPITAL CORPORATION AND SUBSIDIARIES
--------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


June 30, 2005, 2004 and 2003
--------------------------------------------------------------------------------

            A summary of Stock Option Plan's transactions in fiscal periods
2005, 2004 and 2003 is as follows:
<TABLE>
<CAPTION>
                                                                                Options Outstanding
                                                                      -------------------------------
                                                                                                         Weighted
                                                                                                          Average
                                                                     Available for       Number of      Exercise Price
                                                                        Options           Shares          Per Share
                                                                   ----------------     ---------        -----------

<S>                         <C> <C>                                     <C>               <C>               <C>
Options outstanding at June 30, 2003 and 2002                           152,776           122,224           $9.12


  Granted                                                               (10,917)           10,917           $4.58
  Canceled                                                                    -                 -               -
  Expired                                                                30,000           (30,000)          $9.76
  Exercised                                                                   -                 -              -
                                                                        -------          ---------

Options outstanding at June 30, 2004                                    171,859           103,141           $8.45

  Granted                                                               (69,840)           69,840           $5.13
  Canceled                                                               70,000           (70,000)          $8.88
  Exercised                                                              22,224           (22,224)          $9.00
                                                                        -------           -------

Options outstanding at June 30, 2005                                    194,243            80,757           $5.06
                                                                      =========          =========
</TABLE>

            The following table summarizes information about the stock options
outstanding under the Company's option plans as of June 30, 2005:

<TABLE>
<CAPTION>
                Options Outstanding                        Options Exercisable
                -------------------                        -------------------
                                        Weighted
                         Number         Average        Weighted      Number
    Range of          Outstanding       Remaining      Average      Exercisable          Weighted
    Exercise          at June 30,      Contractual     Exercise     at June 30,          Average
    Prices               2005            Life          Price           2005            Exercise Price
  -------------          ----       --------------     ---------    -------------      --------------

<S>   <C>             <C>                <C>           <C>            <C>               <C>
   $4.50-$4.95          33,800          4.33 years     $4.68         33,800              $4.68
     $4.58              10,917          3.24 years     $4.58         10,917              $4.58
     $4.99              20,040          4.17 years     $4.99              -                  -
     $6.25              16,000          4.54 years     $6.25              -                  -
 -----------           --------                                      -------

  $4.50-$6.25           80,757          4.20 years     $5.06         44,717              $4.66
  ===========         =========                                      ======
</TABLE>


            Pro forma information regarding net income and earnings per share is
required by SFAS 123, and has been determined as if the Company had accounted
for its employee stock options under the fair value method required by SFAS 123.
The fair market value for these options was estimated at the date of grant using
a Black-Scholes option-pricing model and the following assumptions for the year
ended June 30, 2005:

                                      F-28

<PAGE>
AMERITRANS CAPITAL CORPORATION AND SUBSIDIARIES
--------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


June 30, 2005, 2004 and 2003
--------------------------------------------------------------------------------




                          Risk-free rate                    5.00%
                          Dividend yield                    0.00%
                          Volatility factor                  .27
                          Average life                      5 years

            The Black-Scholes option valuation model was developed for use in
estimating the fair value of traded options, which have no vesting restrictions
and are fully transferable. In addition, option valuation models require the
input of highly subjective assumptions including the expected stock price
volatility. Because the Company's employee stock options have characteristics
significantly different from those of traded options, and because changes in
the subjective input assumptions can materially affect the fair value estimate,
in management's opinion, the existing models do not necessarily provide a
reliable single measure of the fair value of its employee stock options.

            For purposes of pro forma disclosures, the estimated fair value of
the options is amortized to expense over the vesting period of the options. The
Company's pro forma information for the year ended June 30, 2005 is as follows:



                                             2005           2004        2003
                                             ----           ----        ----


Net loss available to common
shareholders as reported                   $ (224,726)     $(704,683)   $57,714

Deduct: stock-based compensation
expense determined under fair value
method                                        (66,028)          -           -
                                             __________      ________   _______

Pro forma net loss available
to common shareholders                      $ (290,754)     $(704,683)   $57,714


Net loss per common share:

      Basic      -as reported                $ (0.11)       $(0.35)       $0.03
                  -pro forma                 $ (0.14)       $(0.35)       $0.03
      Diluted    -as reported                $ (0.11)       $(0.35)       $0.03
                  -pro forma                 $ (0.14)       $(0.35)       $0.03



Since no options vested during the years ended June 20, 2004 and 2003, there
is no pro forma net (loss) income or (loss) income per share effect disclosed
for those years.


                                           F-29

<PAGE>
AMERITRANS CAPITAL CORPORATION AND SUBSIDIARIES
--------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


June 30, 2005, 2004 and 2003
--------------------------------------------------------------------------------




18.    Quarterly Financial Data (Unaudited)
       ------------------------------------

         For the year ended June 30, 2005:
<TABLE>
<CAPTION>

                                            First         Second          Third          Fourth
                                           Quarter        Quarter        Quarter        Quarter
                                           -------        -------        -------        -------

<S>                                      <C>            <C>            <C>            <C>
Investment income                        $ 1,281,134    $ 1,267,191    $ 1,393,656    $ 2,190,085

Operating income (loss)                       89,188       (326,432)       41,808         285,289

Income (loss) before taxes                    87,177       (326,558)       74,637         285,229

Net (loss) available to
common shareholders                              337       (411,615)      (14,075)         200,627


Net income (loss) per common share:

    Basic                                    0.00          (0.20)            (0.01)         0.09

    Diluted                                  0.00          (0.20)            (0.01)         0.09

    For the year ended June 30, 2004:

                                            First         Second          Third          Fourth
                                           Quarter        Quarter        Quarter        Quarter
                                           -------        -------        -------        -------

Investment income                        $ 1,460,900    $ 1,411,961    $ 1,428,311    $ 1,338,320

Operating income (loss)                     (107,856)      (193,069)       (22,770)         2,647

Loss before taxes                           (107,856)      (193,069)       (47,517)        (2,240)

Net income (loss) available to
  common shareholders                       (202,773)      (278,191)      (135,998)       (87,721)

Net income (loss) per
  common share:

    Basic                                   (0.10)         (0.14)          (0.07)         (0.04)

    Diluted                                 (0.10)         (0.14)          (0.07)         (0.04)

</TABLE>



                                           F-30

<PAGE>
AMERITRANS CAPITAL CORPORATION AND SUBSIDIARIES
--------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


June 30, 2005, 2004 and 2003
--------------------------------------------------------------------------------




19.     Subsequent Event
        ----------------

        Private Offering

        In July 2005, the shareholders of the Company approved the private
offering of the Company's common stock, $.0001 par value, at a fixed purchase
price of no les than book value to a limmited of "accredited investors," as
that term is defined in Rule 506 of Regulation D, promulgated under the
Securities Act of 1933, as amended.  Additionally, for evey four (4) shares
of common stock purchased, the Company will issuet to the inbvestor one (1)
warrant, exercisable for five (5) years from the date of issuance, to purchase
one (1) share of common stock at an exercise price to be fixed at a specified
dollar amount that is 110% of the purchase price of the shares.  The Company
proposes to raise aggregate gross proceeds between a minimum of $3,000,000 and
up to a maximum to $10,000,000.

SBA Audit

     On August 29 2005, the Company received a letter from the US Small
Business Administration together with a copy of the Examination Report for the
period ended March, 31, 2004.  The letter and Examination Report contained
findings that Elk had potentially violated certain provisions of the SBA
regulations, relating to (1) the sale of certain foreclosed Chicago medallions
to an associate of Elk without obtaining the SBA's final written approval, and
(2) the creation of subsidiary companies and completion of certain related
financings to those subsidiary companies without obtaining the SBA's prior
written approval.  The letter contained certain other comments with respect to
partial use of proceeds concerning one loan that the Company made to a third
party borrower, and the prepayment provision contained in the loan documents to
a different borrower. Management has already rsponded to the SBA in writing
concerning the findings, and Management recently met with the SBA in an effort
to resolve these findings in a timely manner.

     The Company believes that it was acting in good faith when it effectuated
the transactions with respect to the sale of the foreclosed Chicago medallions
to an associate, as it had applied for permissions from the SBA prior to
completion of the loan in question, had obtained an indication of approval and
SBA was in the process of taking the steps to obtain formal written approval
for the transaction.  The Company believes that it was also acting in good
faith when it created the subsidiary companies (deemed "associates" under SBA
regulations) to purchase the foreclosed medallions, as it was having ongoing
discussions with SBA at the time to obtain SBA's approval of the transaction
and had received verbal indications that it felt it had or would, in due
course, subsequently obtain SBA's written approval to the transactions.
The Company believes that it has adequate explanations for the use of proceeds
issue on the third party loan and the prepayment issue.

     The Company believes that the tone of the meeting with SBA to reach
resolution of the issues on these matters was positive and the Company
anticipates a speedy resolution by the SBA.  Neither the Company nor its
counsel, however, can predict when these matters will be resolved, or the
manner in which they will be resolved. The Company believes that the
resolution of these matters with SBA will not have any material adverse
financial or regulatory consquences to the Company.



                                           F-31

<PAGE>


AMERITRANS CAPITAL CORPORATION AND SUBSIDIARIES
--------------------------------------------------------------------------------
SCHEDULE OF LOANS


June 30, 2005
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>


                                                         Number of                       Maturity Dates       Balance
                     Type of Loan                          Loans       Interest Rates      (in Months)      Outstanding
                     ------------                          -----       --------------      -----------      -----------

<S>                                                          <C>           <C> <C>           <C> <C>       <C>

Chicago:
  Taxi medallion                                            474          4 - 13.9%           1 - 175        $ 23,881,163
New York City:
  Taxi medallion                                             23           5 - 7.50%          4 - 30            8,203,726
  Radio car service                                          11          11 - 12%            2 - 18               60,497
Miami:
  Taxi medallion                                             64          7.25 - 12%          1 - 84            3,202,985
Boston:
  Taxi medallion                                             22          6.75 - 9%           1 - 36            2,843,964
                                                                                                               ---------

                                                                                                              38,192,235
                                                                                                              ----------

Other loans:
  Laundromat                                                 22           6 - 14%            1 - 111           4,187,498
  Commercial construction                                     4         12.75-13.50%          6-11             1,638,701
  Restaurant/food service                                    12          9 - 12%            15 - 81            1,334,532
  Broadcasting/telecommunications                             1             10.50%            180                810,000
  Dry cleaner                                                18            5.5 - 13%         1- 72               741,633
  Food Market                                                 2             12.50%          34 - 108             645,432
  Real estate holding                                         2          8.5 - 10.5%         49-56               623,333
  Moving company                                              1             12%                45                500,000
  Oil distributor                                             1             12%                80                496,571
  Debt collection                                             2             6-7%              72-84              460,857
  Trucking company                                            1             11%                105               450,000
  Black car service (real property)                           2             8.50%              13                449,598
  Florist                                                     1            7.25%               21                302,962
  Taxicab advertising                                         1             10%                41                285,668
  Auto sales                                                  2           7 - 12%              19                241,578
  Retirement home                                             1             14%                73                190,181
  ATM manufacturer & distributor                              1             12%                46                149,565
  Taxicab distributor                                         1              6%                24                118,755
  Car wash/auto center                                        1              9.25%             30                 77,405
  Miscellaneous                                               1             13.00%             12                 53,000
  Nail salon and spa                                          1              9%                52                 45,947
  Software company                                            3              8%                20-42              41,307
  Computer services                                           1             9.5%               10                 23,39

                                                                                                              13,867,919
                                                                                                           -------------

        Total loans receivable                                                                                52,060,254

less unrealized depreciation on loans receivable                                                                (150,000)
                                                                                                           -------------

        Loans receivable, net                                                                              $  51,910,254
                                                                                                           =============

--------------------------------------------------------------------------------

The accompanying notes are an integral part of these financial statements.
</TABLE>

                                      F-32