Business: Ameritrans Capital Corp., 9 3/8% Cumulative Participating Redeemable Preferred Stock, face value $12.00 per share, redeemable at the issuer's option at any time at a 10% premium to face value ($13.20 per share), declining 2% per year to $12.00 after 5 years from the 4/18/2002 date of the prospectus, plus accrued and unpaid dividends, and with no stated maturity. Distributions of 9 3/8% per annum paid quarterly to holders of record on 3/31, 6/30, 9/30 & 12/31 and to be paid within 20 days of the record date (NOTE: the ex-dividend date is one business day prior to the record date). The preferred shares will participate in the gains if the company is sold at a common stock price in excess of 120% net asset value at the time of sale. Dividends paid by this preferred security are eligible for the preferential income tax rate of 15% to a maximum of 20% depending on the holder's tax bracket (and under IRS specified holding restrictions) and are also eligible for the dividends received deduction for corporate holders. In regards to payment of dividends and upon liquidation, the preferred shares rank senior to the common shares of the company. See page 54 of the IPO prospectus for further information on the preferred stock by clicking on the ‘Link to IPO Prospectus’ provided below.