<Page>

                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                    FORM 10-Q

/X/ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 For the Quarterly Period Ended December 31, 2003

or

/ / Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the transition period from ____________ to


COMMISSION FILE NUMBER 0-22153

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

           Delaware                                   52-2102424
 (State or other jurisdiction of                   (I.R.S. Employer
 incorporation or organization)                   Identification No.)

       747 Third Avenue
         Fourth Floor
      New York, New York                                 10017
    (Address of Registrant's                          (Zip Code)
  principal executive office)

Registrant's telephone number, including area code: (800) 214-1047. 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 / /

The number of shares of Common Stock, par value $.0001 per share, outstanding as
of February 17, 2004: 2,035,600

<Page>

                         AMERITRANS CAPITAL CORPORATION

                                    FORM 10-Q

                                Table of Contents

<Table>
<S>                                                                                                    <C>
PART I. FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements
      Consolidated Balance Sheets as of December 31, 2003 (unaudited) and June 30, 2003                  1 - 2

      Consolidated  Statements of Operations -- For the Three Months and Six Months Ended
        December 31, 2003 (unaudited) and 2002 (unaudited)                                                   3

      Consolidated Statements of Cash Flows -- For the Six Months Ended December 31, 2003
        (unaudited) and 2002 (unaudited)                                                                 4 - 5

      Notes to Consolidated Financial Statements                                                        6 - 11

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations          11 - 17

Item 3. Quantitative and Qualitative Disclosure about Market Risk                                      17 - 18
Item 4. Controls and Procedures                                                                        18 - 19

PART II. OTHER INFORMATION

Item 6. Exhibits and Reports on Form 8-K                                                                    19

Signatures                                                                                                  20
</Table>

                                      -ii-
<Page>

                 AMERITRANS CAPITAL CORPORATION AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

                                     ASSETS

<Table>
<Caption>
                                                              December 31, 2003
                                                                 (unaudited)       June 30, 2003
                                                              -----------------  -----------------
<S>                                                            <C>                <C>
Loans receivable                                               $    53,477,811    $    55,306,678
Less: unrealized depreciation on loans receivable                     (288,500)          (238,500)
                                                               ---------------    ---------------

     Loans receivable, net                                          53,189,311         55,068,178
Cash and cash equivalents                                              474,538            498,669
Accrued interest receivable, net of unrealized
  depreciation of $394,500 and $691,000, respectively                1,107,404          1,321,591
Assets acquired in satisfaction of loans                               854,189          1,142,189
Receivables from debtors on sales of assets acquired
  in satisfaction of loans                                             427,470            431,258
Equity securities                                                    1,043,379            929,405
Property and leasehold improvements, net                               446,298            173,100
Medallions -- See Note 2                                             1,418,901                  -
Prepaid expenses and other assets                                      591,114            527,511
                                                               ---------------    ---------------

     TOTAL ASSETS                                              $    59,552,604    $    60,091,901
                                                               ===============    ===============
</Table>

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

                                       -1-
<Page>

                 AMERITRANS CAPITAL CORPORATION AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS


                      LIABILITIES AND STOCKHOLDERS' EQUITY

<Table>
<Caption>
                                                                   December 31, 2003
                                                                      (unaudited)       June 30, 2003
                                                                   -----------------  -----------------
<S>                                                                 <C>                <C>
LIABILITIES
    Debentures payable to SBA                                       $    10,480,000    $     9,200,000
    Notes payable, banks                                                 32,779,902         34,130,000
    Accrued expenses and other liabilities                                  541,251            485,710
    Accrued interest payable                                                192,226            219,671
    Accrued dividend payable                                                 84,375             84,375
                                                                    ---------------    ---------------
         TOTAL LIABILITIES                                               44,077,754         44,119,756
                                                                    ---------------    ---------------

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                                                  (1,678,689)        (1,197,725)
    Accumulated other comprehensive income                                 (246,211)          (229,880)
                                                                    ---------------    ---------------

                                                                         15,544,850         16,042,145

    Less: Treasury stock, at cost, 10,000 shares of
          Common stock                                                      (70,000)           (70,000)
                                                                    ---------------    ---------------

           TOTAL STOCKHOLDERS' EQUITY                                    15,474,850         15,972,145
                                                                    ---------------    ---------------

           TOTAL LIABILITIES AND
             STOCKHOLDERS' EQUITY                                   $    59,552,604    $    60,091,901
                                                                    ===============    ===============
</Table>

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

                                       -2-
<Page>

                 AMERITRANS CAPITAL CORPORATION AND SUBSIDIARIES

                CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

<Table>
<Caption>
                                                       Three Months Ended  Three Months Ended  Six Months Ended    Six Months Ended
                                                        December 31, 2003   December 31, 2002  December 31, 2003   December 31, 2002
                                                       ------------------  ------------------  -----------------   -----------------
<S>                                                       <C>                 <C>                 <C>                 <C>
INVESTMENT INCOME
   Interest on loans receivable                           $  1,331,027        $  1,543,557        $  2,721,202        $  3,094,557
   Fees and other income                                        57,222              45,312             108,446              99,569
                                                          ------------        ------------        ------------        ------------
         TOTAL INVESTMENT INCOME                             1,388,249           1,588,869           2,829,648           3,194,126
                                                          ------------        ------------        ------------        ------------
OPERATING EXPENSES
   Interest                                                    342,679             526,329             715,432           1,067,015
   Salaries and employee benefits                              241,019             214,135             487,566             434,048
   Occupancy costs                                              48,178              39,497              98,241              73,482
   Professional fees                                           241,999             147,786             354,882             262,371
   Miscellaneous administrative expenses                       315,423             235,784             606,509             455,496
   Loss on assets acquired in satisfaction of loans, net         6,168               4,940              36,069              14,664
   Foreclosure expenses                                         53,902              41,985             263,532             120,171
   Write off and depreciation of interest and
     loans receivable                                          355,662             119,126             611,554             192,354
                                                          ------------        ------------        ------------        ------------
         TOTAL OPERATING EXPENSES                            1,605,030           1,329,582           3,173,785           2,619,601
                                                          ------------        ------------        ------------        ------------

         OPERATING (LOSS) INCOME                              (216,781)            259,287            (344,137)            574,525
                                                          ------------        ------------        ------------        ------------
OTHER INCOME
   Rental income                                                23,712                   -              37,548                   -
   Gain on sale of securities                                        -                   -               5,665               2,976
                                                          ------------        ------------        ------------        ------------
         TOTAL OTHER INCOME                                     23,712                   -              43,213               2,976
                                                          ------------        ------------        ------------        ------------

         (LOSS) INCOME BEFORE INCOME TAXES                    (193,069)            259,287            (300,924)            577,501
                                                          ------------        ------------        ------------        ------------

INCOME TAXES                                                       747                   -              11,290              11,483
                                                          ------------        ------------        ------------        ------------

         NET (LOSS) INCOME                                    (193,816)            259,287            (312,214)            566,018
                                                          ------------        ------------        ------------        ------------

DIVIDENDS ON PREFERRED STOCK                                   (84,375)            (84,375)           (168,750)           (168,750)
                                                          ------------        ------------        ------------        ------------

         NET (LOSS) INCOME AVAILABLE TO
          COMMON SHAREHOLDERS                             $   (278,191)       $    174,912        $   (480,964)       $    397,268
                                                          ------------        ------------        ------------        ------------

WEIGHTED AVERAGE SHARES OUTSTANDING
- Basic                                                      2,035,600           2,035,600           2,035,600           2,035,600
                                                          ============        ============        ============        ============
- Diluted                                                    2,035,600           2,035,600           2,035,600           2,035,600
                                                          ============        ============        ============        ============

NET (LOSS) INCOME PER COMMON SHARE
- Basic                                                   $      (0.14)       $       0.09        $      (0.24)       $       0.20
                                                          ============        ============        ============        ============
- Diluted                                                 $      (0.14)       $       0.09        $      (0.24)       $       0.20
                                                          ============        ============        ============        ============
</Table>

    The accompanying notes are an integral part of these financial statements

                                       -3-
<Page>

                 AMERITRANS CAPITAL CORPORATION AND SUBSIDIARIES

                CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

<Table>
<Caption>
                                                                 December 31, 2003   December 31, 2002
                                                                 -----------------   -----------------
<S>                                                               <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES
     Net (loss) income                                            $      (312,214)    $       566,018
                                                                  ---------------     ---------------

     Adjustments to reconcile net income to net cash (used in)
      provided by operating activities:
       Depreciation and amortization                                       31,410              14,676
       Gain on sale of equity securities                                   (5,665)             (2,976)
      Change in operating assets and liabilities:
       Changes in unrealized depreciation on loans
        receivable and accrued interest receivable                       (246,500)             99,000
       Accrued interest receivable                                        510,687            (395,350)
       Prepaid expenses and other assets                                  (63,603)           (178,853)
       Accrued expenses and other liabilities                              55,541              30,980
       Accrued interest payable                                           (27,445)             (1,039)
                                                                  ---------------     ---------------

               TOTAL ADJUSTMENTS                                          254,425            (433,562)
                                                                  ---------------     ---------------

               NET CASH (USED IN) PROVIDED BY
               OPERATING ACTIVITIES                                       (57,789)            132,456
                                                                  ---------------     ---------------

CASH FLOWS FROM INVESTING ACTIVITIES
       Loans receivable                                                   409,967          (2,064,506)
       Assets acquired                                                    288,000              24,500
       Receivables from debtors on sales of assets acquired
         in satisfaction of loans                                           3,788             (65,266)
       Sale of equity securities                                           25,959              27,727
       Purchases of equity securities                                    (150,600)           (172,061)
       Sale of automobiles                                                 60,125                   -
       Capital expenditures                                              (364,733)            (58,401)
                                                                  ---------------     ---------------

               NET CASH PROVIDED BY (USED IN)
               INVESTING ACTIVITIES                                       272,506          (2,308,007)
                                                                  ---------------     ---------------

CASH FLOWS FROM FINANCING ACTIVITIES
       Proceeds of notes payable, banks                                   400,000           7,635,000
       Repayments of notes payable, banks                              (1,750,098)         (6,325,000)
       Proceeds of debentures payable, SBA                              5,000,000           5,050,000
       Repayments of debentures payable, SBA                           (3,720,000)         (3,710,000)
       Dividends paid                                                    (168,750)           (500,564)
                                                                  ---------------     ---------------

               NET CASH (USED IN) PROVIDED BY
               FINANCING ACTIVITIES                                      (238,848)          2,149,436
                                                                  ---------------     ---------------
</Table>

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

                                       -4-
<Page>

                 AMERITRANS CAPITAL CORPORATION AND SUBSIDIARIES

          CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - CONTINUED

<Table>
<Caption>
                                                      December 31, 2003   December 31, 2002
                                                      -----------------   -----------------
<S>                                                     <C>                 <C>
     NET DECREASE IN CASH AND CASH EQUIVALENTS                (24,131)            (26,115)

     CASH AND CASH EQUIVALENTS - Beginning                    498,669             774,062
                                                        -------------       -------------

     CASH AND CASH EQUIVALENTS - Ending                 $     474,538       $     747,947
                                                        =============       =============

SUPPLEMENTAL DISCLOSURES OF NON-CASH
  INVESTING ACTIVITIES:

     Acquisition of medallions through
       foreclosure of loans                             $  (1,418,901)      $           -
                                                        =============       =============
</Table>

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

                                       -5-
<Page>

                 AMERITRANS CAPITAL CORPORATION AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Financial Statements

The consolidated balance sheets of Ameritrans Capital Corporation
("Ameritrans") as of December 31, 2003, and the related statements of
operations, and cash flows for the three months and six months ended December
31, 2003 and December 31, 2002 included in Item 1 have been prepared by the
Company, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission (the "Commission"). Certain information
and footnote disclosures normally included in financial statements prepared
in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations. In the opinion
of management, the accompanying consolidated financial statements include all
adjustments (consisting of normal, recurring adjustments) necessary to
summarize fairly the Company's financial position and results of operations.
The results of operations for the six months ended December 31, 2003 are not
necessarily indicative of the results of operations for the full year or any
other interim period. These financial statements should be read in
conjunction with the audited financial statements and notes thereto included
in the Company's Annual Report on Form 10-K for the fiscal year ended June
30, 2003 as filed with the Commission.

Organization and Principal Business Activity

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. The historical financial
statements of the Company prior to December 16, 1999 were those of Elk.

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

Ameritrans is a specialty finance company that through its subsidiary, Elk,
primarily makes loans to taxi 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. 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.

                                       -6-
<Page>

Basis of Consolidation

The consolidated financial statements include the accounts of Ameritrans,
Elk, EAF Holding Corporation ("EAF"), EAF Enterprises LLC, Medallion Auto
Management LLC, EAF Leasing LLC and EAF Leasing II LLC and are collectively
referred to as the "Company". EAF, EAF Enterprises LLC, Medallion Auto
Management LLC, EAF Leasing LLC and EAF Leasing II LLC are all wholly owned
subsidiaries of Elk. All significant inter-company transactions have been
eliminated in consolidation.

EAF was formed in June 1992 and began operations in December 1993. The
purpose of EAF is to own and operate certain real estate assets acquired in
satisfaction of loans by Elk.

EAF Enterprises LLC was formed in June 2003 and began operations in July
2003. The purpose of EAF Enterprises LLC is to own, lease and resell
medallions acquired in satisfaction of foreclosures by Elk.

Medallion Auto Management LLC was formed in June 2003 and began operations in
July 2003. The purpose of Medallion Auto Management LLC is to own, lease and
resell automobiles in conjunction with the medallions owned by EAF
Enterprises LLC.

EAF Leasing LLC was formed in August 2003 and began operations in October
2003. The purpose of EAF Leasing LLC is to own and lease medallions acquired
in satisfaction of foreclosures by Elk.

EAF Leasing II LLC was formed in August 2003 and began operations in October
2003. The purpose of EAF Leasing II LLC is to own and lease medallions
acquired in satisfaction of foreclosures by Elk.

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

Reclassifications

Certain amounts in the prior financial statements have been reclassified for
comparative purposes to conform with the presentation in the financial
statements for the three months and six months ended December 31, 2003.

Income Taxes

The Company has elected to be taxed as a Regulated Investment Company under
the Internal Revenue Code. A Regulated Investment Company will generally not
be taxed at

                                       -7-
<Page>

the corporate level to the extent its income is distributed to its
stockholders. In order to be taxed as a Regulated Investment Company, the
Company must pay at least 90 percent of its net investment company taxable
income to its stockholders as well as meet other requirements under the Code.
In order to preserve this election for fiscal 2004, the Company intends to
make the required distributions to its stockholders in accordance with
applicable tax rules.

Net Income (Loss) Per Common Share

Net income (loss) per share has been computed in accordance with Statement of
Financial Accounting Standards No. 128 "Earnings per Share" ("SFAS No. 128"),
which requires presentation of basic and diluted earnings per share ("EPS").
Basic EPS is computed by dividing income (loss) available to common
stockholders by the weighted-average number of common shares outstanding for
the period. Diluted EPS is based on the weighted-average number of shares of
common stock and common stock equivalents outstanding for the period. Common
stock equivalents have been excluded from the weighted-average shares for
2003 and 2002 as inclusion is anti-dilutive.

Loan Valuations

The Company's loans are 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. In determining the fair value, the Board of Directors considers
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. The fair value of the loans has been determined
to approximate cost less unrealized depreciation.

Use Of Estimates In The Financial Statements

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make 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 financial instruments.

NOTE 2 - ACQUISITION OF MEDALLIONS AND OTHER PROPERTY

During the six months ended December 31, 2003, the Company transferred
Chicago medallions related to defaulted and foreclosed loans to certain newly
formed subsidiaries, which, in turn, are leasing those medallions to
customers. Although Elk never had title to the medallions, which serve as
collateral for loans, the subsidiaries gained title by paying market purchase
price, related transfer fees and satisfying any outstanding liens with the
City of Chicago. The subsidiaries borrowed funds from Elk to complete the
purchases of the medallions.

                                       -8-
<Page>

In connection with the above, another subsidiary, Medallion Auto Management
LLC, purchased vehicles for $163,233 to be leased in conjunction with the
medallions owned by EAF Enterprises LLC to individual taxi operators. Other
capital expenditures include the purchases of furniture and equipment and
additional leasehold improvements related to the additional office and
storage space acquired in July 2003.

NOTE 3 -- DEBENTURES PAYABLE TO SBA

At December 31, 2003 and June 30, 2003 debentures payable to the SBA consist
of subordinated debentures with interest payable semiannually, as follows:

<Table>
<Caption>
                                Current
                               Effective       12/31/03      6/30/03
                                Interest       Principal    Principal
  Issue Date       Due Date       Rate          Amount        Amount
  ----------       --------    ---------       ---------    ---------
<S>             <C>              <C>        <C>           <C>
September 1993  September 2003   6.12(3)    $          -  $ 2,220,000
September 1993  September 2003   6.12(3)    $          -  $ 1,500,000
March 1997      March 2007       7.38(1)    $    430,000  $   430,000
July 2002       September 2012   4.67(2)    $  2,050,000  $ 2,050,000
December 2002   March 2013       4.63(2)    $  3,000,000  $ 3,000,000
September 2003  March 2014       1.68(2)(4) $  5,000,000  $         -
                                            ------------  -----------

                                            $ 10,480,000  $ 9,200,000
                                            ============  ===========
</Table>

(1) Elk is also required to pay an additional annual user fee of 1% on this
debenture.

(2) Elk is also required to pay an additional annual user fee of 0.866% on these
debentures.

(3) The debentures matured and were paid in full during September 2003.

(4) During September 2003, a new debenture payable to SBA was drawn from the
reserve pool of $12,000,000 in the amount of $5,000,000 with an interim interest
rate of 1.682%. This outstanding interim debenture issued since last pooling
will be combined into a new pool or an aggregation of SBA debentures and the
long term fixed rate for the pool will be established at the next pooling date.
Debenture pooling occurs twice a year, in March and September. The long term
fixed rate for the ten year term for this $5,000,000 debenture will be
determined on the pooling date of March 24, 2004. In addition to the fixed rate,
there is an additional annual SBA user fee of 0.866% per annum that will also be
charged making the initial rate 2.548% before applicable amortization of points
and fees.

                                       -9-
<Page>

Under the terms of the subordinated debentures, Elk 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.

SBA Commitment

During January 2002 Elk 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
Elk on or prior to September 30, 2006. A 2.5% leverage fee will be deducted
pro rata as the commitment proceeds are drawn down. A $120,000 non-refundable
fee was paid by Elk at the time of obtaining the $12,000,000 commitment.

NOTE 4 -- NOTES PAYABLE TO BANKS

At December 31, 2003 and June 30, 2003 Elk had loan agreements with three (3)
banks for lines of credit aggregating $40,000,000 and had $32,779,902 and
$34,130,000 respectively, outstanding under these lines. The loans, which
mature March 31, 2004 through December 31, 2004, bear interest at the lower
of either the reserve adjusted LIBOR rate plus 1.5% or the banks' prime rates
minus 0.5%. 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 agreements Elk is required to comply with certain terms,
covenants and conditions. At December 31, 2003 and June 30, 2003, Elk is in
compliance with all terms, covenants and conditions. Elk pledged its loans
receivable and other assets as collateral for the above lines of credit.

NOTE 5 -- COMMITMENTS AND CONTINGENCIES

Interest Rate Swaps

On June 11, 2001 Elk entered into an interest rate Swap transaction for
$15,000,000 with a bank, which expired June 11, 2003. On February 11, 2003,
Elk entered into another interest rate Swap transaction for $5,000,000 with
the same bank expiring February 11, 2005. These Swap transactions were
entered into to protect Elk from an upward movement in interest rates
relating to outstanding bank debt. These Swap transactions call for a fixed
rate of 4.95% and 3.56% respectively for Elk. If the floating one month LIBOR
rate is below the fixed rate then Elk is obligated to pay the bank the
difference in rates. When the one-month LIBOR rate is above the fixed rate
then the bank is obligated to pay Elk the differences in rates.

Lease Agreement

In November 2003, the Board of Directors approved a new sublease for office
space to take effect upon the expiration of the existing sublease, May 1,
2004, and to continue

                                      -10-
<Page>

through April 30, 2014 with an affiliated entity. The Company is presently
utilizing 37% of the space and therefore committed to the minimum of 37%
utilization factor on all rent, additional rent and electricity charges
billed to landlord. The Company's share is currently $8,327 a month and
subject to annual increases as per the master lease agreement between the
landlord and Granoff Walker & Forlenza, P.C., whose stockholders are officers
and directors of the Company. 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 shared overhead expenses as
noted in the agreement, currently a minimum of $3,000 a month.

NOTE 6 -- OTHER MATTERS

Quarterly Dividend

The Company's Board of Directors declared a dividend of $0.28125 per share or
$84,375 on September 25, 2003 on the Company's 9 3/8% Cumulative
Participating Redeemable Preferred Stock (the "Participating Preferred
Stock") for the period July 1, 2003 through September 30, 2003, which was
paid on October 15, 2003 to all holders of the Participating Preferred Stock
of record as of October 7, 2003.

The Company's Board of Directors declared a dividend of $0.28125 per share or
$84,375 on December 31, 2003 on the Company's 9 3/8% Cumulative Participating
Redeemable Preferred Stock (the "Participating Preferred Stock") for the
period October 1, 2003 through December 31, 2003, which was paid on January
20, 2004 to all holders of the Participating Preferred Stock of record as of
January 12, 2004.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

The information contained in this section should be used in conjunction with
the consolidated Financial Statements and Notes therewith appearing in this
Form 10-Q and the Company's Annual Report on Form 10-K for the year ended
June 30, 2003.

General

Ameritrans acquired Elk on December 16, 1999 in a share for share exchange.
Elk 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. Both Ameritrans and Elk are registered as an
investment company under the Investment Company Act of 1940.

Elk primarily makes loans to persons who qualify under SBA regulation as
socially or economically disadvantaged and loans and investments in entities
which are at least 50% owned by such persons. Elk also makes loans and
investments to persons who qualify under SBA regulation as "non-disadvanged".
Elk's primary lending activity is to originate and service loans
collateralized by the cities of New York, Boston, Chicago and Miami taxicab
medallions. Elk also makes loans and investments in other diversified
businesses.

                                      -11-
<Page>

At December 31, 2003, 75% of Elk's portfolio was invested in loans secured by
taxi medallions and 25% of Elk's loans were to other diversified businesses.

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.

Elk established two additional wholly owned subsidiaries, EAF Enterprises LLC
and Medallion Auto Management LLC, in June 2003. Starting July 2003, EAF
Enterprises LLC took title to 5 of Elk's foreclosed medallions and leased
them to new individual operators and Medallion Auto Management LLC purchased
vehicles which it leased with the medallions. The taxi operators have the
option to purchase both the medallions and the vehicles.

Elk also set up another two wholly owned subsidiaries, EAF Leasing LLC and
EAF Leasing II LLC, in August 2003. Commencing in October 2003, EAF Leasing
LLC took title to 10 of Elk's foreclosed medallions and EAF Leasing II LLC
took title to another 9 of Elk's foreclosed medallions. Both subsidiaries
will lease the medallions to a large medallion operator. No option to
purchase the medallions has been offered to the medallion operator.

Critical Accounting Policies

The preparation of the Company's consolidated financial statements requires
management to make estimates and assumptions that affect amounts reported and
disclosed in the financial statements and related notes. Significant
estimates made by the Company include valuation of loans, 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 financial
conditions, collateral values, and its ability to enforce provisions of its
contracts in the event of disputes, through litigation if necessary. Such
estimates and assumptions are inherently uncertain and may require complex
and subjective judgments. Although the Company believes that estimates and
assumptions used in determining the recorded amounts of net assets and
liabilities at December 31, 2003, are reasonable, actual results could differ
materially from the estimated amounts recorded in the Company's financial
statements. The critical accounting policies are those applicable to the
valuation of loans receivable and various investments discussed below.

VALUATION OF LOANS AND DEBT SECURITIES. For loans and debt securities, fair
value generally approximates cost less unrealized depreciation and no loans
have been recorded above cost. Overall financial condition of the borrower,
the adequacy of the collateral, individual credit risks, historical loss
experience and other factors lead to a determination of fair value.

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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 fair value. For these
non-quoted investments, the Company makes a careful review of the assumptions
underlying 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 cost is other than temporary, the related
investment is written down to its new estimated fair value.

ASSETS ACQUIRED IN SATISFACTION OF LOANS. Assets acquired in satisfaction of
loans are carried at estimated fair value less selling costs. Losses incurred
at the time of foreclosure are charged to the unrealized depreciation on
loans receivable. Subsequent reductions in estimated net realizable value are
recorded as losses on assets acquired in satisfaction of loans.

RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED DECEMBER 31, 2003 AND 2002

Total Investment Income

The Company's investment income for the period ended December 31, 2003
decreased $364,478 or 11% to $2,829,648 as compared with the prior period
ended December 31, 2002. This decrease was mainly due to the impact of lower
average interest rates charged on new and modified loans.

Operating Expenses

Total operating expenses increased $554,184 or 21% from $2,619,601 to
$3,173,785. Lower interest costs were more than offset by increases in
salary, foreclosure expenses, depreciation in the value of loans and other
administrative expenses. Interest expense for the period ended December 31,
2003 decreased $351,583 or 33% when compared to the period ended December 31,
2002. This reflects the lower interest charged on outstanding bank borrowings
and certain SBA debentures refinanced at lower rates during the current
period. Salary and employee benefits increased $53,518 or 12% when compared
with the similar period in the prior year. This increase reflects the
increases that were put into effect from recently amended officers'
employment agreements. Occupancy costs increased $24,759 or 34%, when
compared with the period ended December 31, 2002, primarily due to the rental
of additional office and storage space starting July 2003. Professional fees
increased $92,511 or 35% when compared with the similar period in the prior
year. This increase reflects the additional legal fees incurred related to
the foreclosures of the Chicago medallion loans. Foreclosure expenses
increased $143,361 or 119% and depreciation in the value of loans increased
$419,200 or 218% when compared with the similar period in the prior year.
Both of these increases relate primarily to the foreclosures of the Chicago
medallion loans. Other administrative expenses increased $151,013 or 33% when
compared with the similar period in the prior

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year. This increase relates primarily to increases in Chicago service fees,
commissions and insurance.

Net Income (Loss)

Net income decreased 155% from $566,018 for the period ended December 31,
2002 as compared to a net loss of $312,214 for the period ended December 31,
2003. The decrease in the net income for the period was attributable
primarily to the write down of the Chicago loan portfolio and related
foreclosure expenses, increases in salaries and certain other administrative
costs, which were only partially offset by favorable interest rates obtained
from debt refinancing. Dividends of Participating Preferred Stock for the
quarter amounted to $84,375 in each of the quarters ended December 31, 2003
and 2002.

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED DECEMBER 31, 2003 AND 2002

Total Investment Income

The Company's investment income for the three months ended December 31, 2003
decreased $200,620 or 13% to $1,388,249 as compared with the prior period
ended December 31, 2002. This decrease was mainly due to the impact of lower
average interest rates charged on new and refinanced loans.

Operating Expenses

Total operating expenses increased $275,448 or 21% from $1,329,582 to
$1,605,030. Lower interest costs were more than offset by increases in
salary, foreclosure expenses, depreciation in the value of loans and other
administrative expenses. Interest expense for the three months ended December
31, 2003 decreased $183,650 or 35% when compared to the period ended December
31, 2002. This reflects the lower interest charged on outstanding bank
borrowings and certain SBA debentures refinanced at lower rates during the
current quarter. Salary and employee benefits increased $26,884 or 13% when
compared with the similar quarter in the prior year. This increase reflects
the increases that were put into effect from recently amended officers'
employment agreements. Professional fees increased $94,213 or 64% when
compared with the similar quarter in the prior year. This increase reflects
the additional legal fees incurred related to the foreclosures of the Chicago
medallion loans. Foreclosure expenses increased $11,917 or 28% and
depreciation in the value of loans increased $236,536 or 199% when compared
with the similar quarter in the prior year. Both of these increases relate
primarily to the foreclosures of the Chicago medallion loans. Other
administrative expenses increased $79,639 or 34% when compared with the
similar quarter in the prior year. This increase relates primarily to
increases in Chicago service fees, commissions and insurance.

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Net Income (Loss)

Net income decreased 175% from $259,287 for the three months ended December
31, 2002 as compared to a net loss of $193,816 for the quarter ended December
31, 2003. The decrease in the net income for the period was attributable
primarily to the write down of the Chicago loan portfolio and related
foreclosure expenses, increases in salaries and certain other administrative
costs, which were only partially offset by favorable interest rates obtained
from debt refinancing.

Balance Sheet and Reserves

Total assets decreased by $539,297 as of December 31, 2003 when compared to
total assets as of June 30, 2003. A decrease in loans receivable was
partially offset by an increase in medallions owned, and property and
improvements. In September 2003 a new debenture payable to the SBA for
$5,000,000 was drawn from the commitment pool of $12,000,000. In the same
month, Elk also paid off two SBA debentures in the amount of $2,220,000 and
$1,500,000 that matured in September 2003. In addition, Elk also paid down
$1,750,098 on its bank borrowings.

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 $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.

At December 31, 2003, 76% of Elk's indebtedness was represented by
indebtedness to its banks and 24% by the debentures issued to the SBA with
fixed rates of interest plus user fees which results in rates ranging from
5.50% to 8.38%. 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 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%,

                                      -15-
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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, another new debenture payable to the SBA was drawn in the
amount of $5,000,000 with an interim interest rate of 1.682%. The long term
fixed rate will be determined on the pooling date of March 24, 2004. In
addition to the fixed rates, there is an additional annual SBA user fee of
0.87% per annum that will also be charged making the rate 5.54%, 5.49% and
2.55% before applicable amortization of points and fees.

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.

During the six months ended December 31, 2003, the Company transferred
Chicago medallions related to defaulted and foreclosed loans to certain newly
formed subsidiaries, which, in turn, are leasing those medallions to
customers. Although Elk never had title to the medallions, which serve as
collateral for loans, the subsidiaries gained title by paying market purchase
price, related transfer fees and satisfying any outstanding liens with the
City of Chicago. The subsidiaries borrowed funds from Elk to complete the
purchases of the medallions. In connection with the above, another
subsidiary, Medallion Auto Management LLC, purchased vehicles for $163,233 to
be leased in conjunction with the medallions owned by EAF Enterprises LLC to
individual taxi operators. Other capital expenditures include the purchases
of furniture and equipment and additional leasehold improvements related to
the additional office and storage space acquired in July 2003.

In addition, Ameritrans invested $100,000 to obtain a 50% stock ownership in
a company during August 2003. Elk also obtained a 48% stock ownership in
another company during December 2003 in exchange for providing 100% financing
for this company to acquire and gain title to Chicago medallions transferred
from Elk related to defaulted and foreclosed loans, and also to purchase
vehicles and for related start up expenses. The profit or loss of this company
is to be retained by the majority stockholder of this company. Commencing on
and after July 1, 2007, and for a two and one-half year period after, the
majority stockholder shall have the right to purchase Elk's interest in this
company by giving notice and exercising its right to repurchase Elk's shares.
Elk shall also have the right to require the majority stockholder to
repurchase Elk's interest in this company.

                                      -16-
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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 2002, the FASB issued Statement of Financial Accounting Standards
No. 148 (SFAS 148), "Accounting for Stock-Based Compensation--Transition and
Disclosure." SFAS 148 amends SFAS 123, "Accounting for Stock-Based
Compensation," to provide alternative methods of transition for an entity
that voluntarily changes to the fair value based method of accounting for
stock-based employee compensation. The adoption of this pronouncement did not
have a material effect on the consolidated financial statements as the
Company continues to apply the intrinsic value method in accordance with APB
No. 25.

In January 2003 the FASB issued Interpretation No. 46, "Consolidation of
Variable Interest Entities." This standard will require all variable interest
entities ("VIEs") to be consolidated by the primary beneficiary. The primary
beneficiary is the entity that holds the majority of the beneficial interests
in the VIEs. These requirements are effective for financial statements issued
after January 31, 2003, and are not expected to have a material impact on the
Company's consolidated financial position or results of operations.

In May 2003, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 150 ("SFAS 150"), "Accounting
for Certain Financial Instruments With Characteristics of Both Liabilities
and Equity." This Statement establishes standards for users to follow in
classifying and measuring certain financial instruments with characteristics
of both liabilities and equity. This Statement is effective for the first
interim period after June 15, 2003. The adoption of this Standard did not
have a significant impact on the Company's consolidated results of operations
and financial position.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

The Company's business activities are subject to market risk. The Company
considers the principal types of market 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

                                      -17-
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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
investment in 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 the Company's loan portfolio and investments
may adversely affect its ability to dispose of loans at times when it may be
advantageous for it to liquidate such portfolio or investments. Also, if it
was required to liquidate some or all of the investments in the portfolio,
the proceeds of such liquidation might be significantly less than the current
value of such investments. Because the Company borrows money to make loans
and investments, its net operating income is dependent upon the difference
between the rate at which it borrows funds and the rate at which it loans and
invests 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 interest income. As interest rates rise, interest costs increase,
decreasing the net interest rate spread the Company receives and thereby
adversely affect profitability. Although the Company intends to continue to
manage its interest rate risk through asset and liability management,
including the use of interest rate swaps, general rises in interest rates
will tend to reduce the interest rate spread in the short term.

ITEM 4. CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures

Based on an evaluation of our disclosure controls and procedures conducted
within 90 days of the date of filing this report on Form 10-Q, the Chief
Executive Officer (also acting Chief Financial Officer) has concluded that
the Company's disclosure controls and procedures (as defined in Rules 13a -
14(c) and 15d - 14(c) promulgated under the Securities Exchange Act of 1934)
are effective.

(b) Changes in Internal Controls

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There have been no significant changes in internal controls or other factors
that could significantly affect these controls subsequent to the date of
their evaluation.

                           PART II. OTHER INFORMATION

ITEM 6-- EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

10.1 Letter Agreement between Bank Leumi and Elk dated February 12, 2004
extending line of credit.

31.1 Certification of the Chief Executive and Chief Financial Officer of the
Company pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1 Certification of the Chief Executive and Chief Financial Officer of the
Company pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(b) Reports on Form 8-K

On November 17, 2003 the Company filed a report on Form 8-K reporting under
Item 12 (Results of Operations and Financial Condition) that the Company
issued a press release announcing its results for the quarter ended September
30, 2003.

On October 10, 2003 the Company filed a report on Form 8-K reporting under
Item 12 (Results of Operations and Financial Condition) that the Company
issued a press release announcing its year end June 30, 2003 results.

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                         AMERITRANS CAPITAL CORPORATION

                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                         AMERITRANS CAPITAL CORPORATION

DATE: FEBRUARY 17, 2004             BY: /s/ GARY C. GRANOFF
                                        --------------------------
                                        GARY C. GRANOFF
                                        CHIEF FINANCIAL OFFICER
                                       (PRINCIPAL FINANCIAL OFFICER AND
                                        CHIEF ACCOUNTING OFFICER)

                                      -20-