10-K/A
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Form 10-K/A
Amendment No. 1
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 |
For the fiscal year ended September 30, 2007
OR
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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: 0-26906
ASTA FUNDING, INC.
(Exact Name of Registrant Specified in its Charter)
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Delaware
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22-3388607 |
(State or other jurisdiction of
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(I.R.S. Employer |
incorporation or organization)
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Identification No). |
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210 Sylvan Avenue, Englewood
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07632 |
Cliffs, NJ
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(Zip Code) |
(Address of principal executive offices)
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Issuers telephone number, including area code: (201) 567-5648
Securities registered pursuant to Section 12(b) of the Exchange Act: None
Securities registered pursuant to Section 12(g) of the Exchange Act:
Common Stock, par value $.01 per share
(Title of Class)
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule
405 of the Securities Act
Yes o No þ
Indicate by check mark if the registrant is not required to file reports pursuant to Section
13 or Section 15(d) of the Act
Yes o No þ
Indicate by check mark whether the registrant: (1) filed all reports required to be filed by
Section 13 or 15(d) of the 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 þ No o
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation
S-K (Section 229.405 of this chapter) is not contained herein, and will not be contained, to the
best of the registrants 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. o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer,
a non-accelerated filer, or a smaller reporting company.
See the definitions of large
accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer
o Accelerated filer
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Non-accelerated filer
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Smaller reporting company
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(Do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of
the Act). Yes o No þ
The aggregate market value of voting and nonvoting common equity held by non-affiliates of the
registrant was approximately $456,419,000, as of the last business day of the registrants most
recently completed second fiscal quarter.
As of February 1, 2008, the registrant had [ ] shares of Common Stock issued and
outstanding.
FORM 10-K/A
TABLE OF CONTENTS
Explanatory Note
This Amendment No. 1 on Form 10-K/A (this Amendment No. 1) to our Annual Report on Form
10-K for the year ended September 30, 2007 (the Annual Report) is being filed to correct the
format and presentation of information contained in Item 9A of the Annual Report and to
specifically include the Managements Annual Report on Internal Control Over Financial Reporting.
Information relevant to the Managements Annual Report on Internal Control Over Financial
Reporting had been included under the heading Disclosure Controls and Procedures of Item 9A of
the Annual Report. Except as described above, no other changes have been made to the Annual
Report, and this Amendment No. 1 does not amend or update any other information contained in the
Annual Report.
Caution Regarding Forward Looking Statements
This Amendment No. 1 contains certain forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Forward-looking statements typically are
identified by use of terms such as may, will, should, plan, expect, anticipate,
estimate, and similar words, although some forward-looking statements are expressed differently.
Forward looking statements represent our judgment regarding future events, but we can give no
assurance that such judgments will prove to be correct. Such statements are subject to risks and
uncertainties that could cause actual results to differ materially from those projected in such
forward-looking statements. Certain factors which could materially affect our results and our
future performance are described under Risk Factors and Critical Accounting Policies in Item 7
- Managements Discussion and Analysis of Financial Condition and Results of Operations in the
Annual Report, as amended by this Amendment No. 1. Forward-looking statements are inherently
uncertain as they are based on current expectations and assumptions concerning future events and
are subject to numerous known and unknown risks and uncertainties. We caution you not to place
undue reliance on these forward-looking statements, which are only predictions and speak only as of
the date of the Annual Report or this Amendment No. 1, as the case may be. Except as required by
law, we undertake no obligation to update or publicly announce revisions to any forward-looking
statements to reflect future events or developments. Unless the context otherwise requires, the
terms we, us, the Company, or our as used herein refer to Asta Funding, Inc. and our
subsidiaries.
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Item 9A. Controls and Procedures.
Disclosure Controls and Procedures
Under the supervision and with the participation of our management, our Chief Executive
Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our
disclosure controls and procedures, as such term is defined under Rule 13a-15(e) of the Securities
Exchange Act of 1934, as amended (the Exchange Act), as of the end of the period covered by this
report. Based on this evaluation, our Chief Executive Officer and our Chief Financial Officer
concluded that our disclosure controls and procedures were deficient and not effective as of the
end of the period covered by the Annual Report in timely providing them with the material
information relating to the Company required to be disclosed in the reports the Company files or
submits under the Exchange Act because of the material weaknesses in internal control over
financial reporting discussed in Managements Annual Report on Internal Control Over Financial
Reporting below.
We maintain disclosure controls and procedures that are designed to ensure that information
required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized
and reported within the time periods specified in the Securities and Exchange Commissions rules
and forms, and that such information is accumulated and communicated to our management, including
our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions
regarding required disclosures. Any controls and procedures, no matter how well designed and
operated, can provide only reasonable assurance of achieving the desired control objectives. Our
management, with the participation of our Chief Executive Officer and Chief Financial Officer, has
evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2007.
Based upon that evaluation and subject to the foregoing, our Chief Executive Officer and Chief
Financial Officer concluded that our disclosure controls and procedures were deficient for the
reasons set forth below.
Managements Annual Report on Internal Control Over Financial Reporting
The Companys management is responsible for establishing and maintaining adequate internal
control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Under the
supervision and with the participation of the Companys management, including its principal
executive officer and principal financial officer, the Company conducted an assessment of the
effectiveness of its internal control over financial reporting. In this assessment, the Company
used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission
in Internal Control Integrated Framework. Based on managements assessment the Company believes
that, as of September 30, 2007, the Companys internal control over financial reporting was not
effective based on those criteria.
The Companys internal control system was designed to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles in the U.S. The Companys
internal control over financial reporting includes those policies and procedures that:
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pertain to the maintenance of records that, in reasonable detail, accurately and
fairly reflect the transactions and dispositions of the assets of the Company; |
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provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with accounting principles
generally accepted in the U.S., and that receipts and expenditures of the Company are
being made only in accordance with authorization of management and directors of the
Company; and |
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provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of the Companys assets that could have a
material effect on the consolidated financial statements. |
There are inherent limitations to the effectiveness of any control system. A control system,
no matter how well conceived and operated, can provide only reasonable assurance that its
objectives are met. No evaluation of controls can provide absolute assurance that all control
issues and instances of fraud, if any, within the Company have been detected. Also, projections of
any evaluation of effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions or because the degree of compliance with the policies
and procedures may deteriorate.
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A material weakness is a control deficiency, or combination of deficiencies, that results in
more than a remote likelihood that a material misstatement of the annual or interim financial
statements will not be prevented or detected. In connection with the preparation of the Companys
consolidated financial statements for the year ended September 30, 2007, the Company noted the
following material weaknesses that became evident to management:
1. the Company had insufficient controls and procedures in place to ensure that information
relating to all material arrangements critical to accounting and effective review were available on
a timely basis to appropriate financial and accounting personnel; and
2. the Company did not have effective policies and procedures in place to assess the Companys
liquidity and compliance with debt covenants.
Eisner LLP, the independent registered public accounting firm who audited the Companys
consolidated financial statements included in the Annual Report issued an audit report on
managements assessment of the Companys internal control over financial reporting as of September
30, 2007. Eisners attestation report on managements assessment of the Companys internal control
over financial reporting is included in its Report of Independent Registered Public Accounting
Firm, dated December 27, 2007.
Changes in Internal Controls over Financial Reporting
There have been no changes in internal controls over financial reporting in the Companys
fourth fiscal quarter of 2007.
The Company intends to take a number of corrective actions to address the above mentioned
material weaknesses as promptly as practicable. These actions are expected to include the
establishment of an oversight committee comprised of the Chief Financial Officer and other key
management personnel, and if appropriate, members of the audit committee. This committee will
review all material transactions with a view to ensuring complete, accurate and timely financial
accounting and related disclosure. In addition the Company will undertake a review of its financial
reporting processes with an outside consultant and adopt such other procedures as might be
necessary.
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Part IV
Item 15. Exhibits, Financial Statement Schedules.
The following exhibits are filed with this Amendment No. 1 to Annual Report on Form 10-K/A.
The Company undertakes to furnish to any stockholder so requesting a copy of any of the
following exhibits upon payment to us of the reasonable costs incurred by us in furnishing any
such exhibit.
The following documents are filed as part of this Amendment No. 1 to Annual Report on Form
10-K/A.
2. Exhibits
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Exhibit |
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31.1
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Certification of Registrants Chief Executive
Officer, Gary Stern, pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002. |
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31.2
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Certification of Registrants Chief Financial
Officer, Mitchell Cohen, pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002. |
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32.1
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Certification of the Registrants Chief Executive Officer,
Gary Stern, pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002. |
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32.2
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Certification of the Registrants Chief Financial Officer,
Mitchell Cohen, pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002. |
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SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.
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ASTA FUNDING, INC.
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By: |
/s/ Gary Stern
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Gary Stern |
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President and Chief Executive Officer
(Principal Executive Officer)
Dated: February 11, 2008 |
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In accordance with the Exchange Act, this report has been signed below by the following
persons on behalf of the Registrant and in the capacities and on the dates indicated:
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Signature |
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Date |
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/s/ Gary Stern
Gary Stern |
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President, Chief
Executive Officer and
Director
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February 11, 2008 |
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/s/ Mitchell Cohen
Mitchell Cohen |
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Chief Financial Officer
Principal Financial and Accounting
Officer
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February 11, 2008 |
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/s/ Arthur Stern
Arthur Stern |
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Chairman of the Board and Executive
Vice President
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February 11, 2008 |
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/s/ Herman Badillo
Herman Badillo |
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Director
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February 11, 2008 |
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/s/ Edward Celano
Edward Celano |
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Director
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February 11, 2008 |
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/s/ Harvey Leibowitz
Harvey Leibowitz |
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Director
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February 11, 2008 |
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/s/ David Slackman
David Slackman |
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Director
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February 11, 2008 |
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/s/ Alan Rivera
Alan Rivera |
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Director
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February 11, 2008 |
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/s/ Louis A. Piccolo
Louis A. Piccolo |
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Director
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February 11, 2008 |
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